AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT
This Amended and Restated Stockholders Agreement (the
"Agreement") is made and entered into as of this _____ day of __________, 1996,
by and among GlenGate Apparel, Inc., a New Jersey corporation (the "Company"),
Xxxxxx X. Xxxxxx, an individual resident in the State of New Jersey ("Gatesy"),
Xxxxxxx X. Xxxxxxxxxx, an individual resident in the State of New Jersey
("Xxxxxxxxxx"), and Xxxxx X. Xxxxxx, an individual resident in the State of
Arizona ("Kostis"; Gatesy, Xxxxxxxxxx and Xxxxxx are sometimes referred to
herein, collectively, as "Stockholders").
WITNESSETH:
WHEREAS, the Stockholders entered into that certain
Stockholders Agreement dated September 12, 1995 which the Stockholders hereby
desire to amend and restate; and
WHEREAS, Gatesy is a director, the chief executive officer and
an employee of the Company, and Xxxxxxxxxx and Xxxxxx are also directors of the
Company; and
WHEREAS, the Stockholders believe that it is in their best
interest, and in the best interest of the Company, to provide certain
restrictions on each Stockholder's right to transfer his Shares (as defined
below) upon his death, and so the parties desire to enter into this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the
mutual promises set forth in this Agreement, the parties hereby agree as
follows:
Section 1. Definitions. As used herein, the following terms
shall have the following meanings:
1.1 "Agreed Price" means, with respect to any Shares, the
product of the Average Price and the number of such Shares.
1.2 "Average Price" means the average of the published bid
prices per share of Common Stock for the 60-day period immediately preceding the
date of a Stockholder's death. Published bid prices means: (i) if traded over
the counter and not listed on an automated quotation system sponsored by the
National Association of Securities Dealers, Inc., the average of the last bid
and ask prices for the Common Stock for each day during the period, with the
overall average of such prices to be obtained by totalling the applicable
average bid and ask prices for each regular business day within such 60-day
period and dividing the total by the number of such regular business days;
provided, that if there is not both a bid price and an ask price on any such
date, then such day shall be ignored, and the number of days in such period
shall accordingly be reduced; or (ii) the last sales price reported for the
Common Stock for each day during the period, (x) as reported by the principal
national securities exchange in the United States on which the Common Stock is
then traded, or (y) if not traded on any such exchange, as quoted on an
automated quotation system sponsored by the National Association of Securities
Dealers, Inc., with the overall average of such prices to be obtained by
totalling the prices for each regular business day within such 60-day period on
which the Common Stock was reported or quoted and dividing the total by the
number of such regular business days.
1.3 "Common Stock" means the Company's Common Stock, par
value $.001 per share.
1.4 "Representative(s)" means, with respect to any deceased
Stockholder, such Stockholder's personal representative(s), executor(s) or
administrator(s).
1.5 "Shares" means, with respect to any Stockholder, all
Common Stock owned by such Stockholder at the time of his death.
1.6 "Transfer" means, with respect to any Shares, any
transfer, sale, assignment, conveyance, bequest or other disposition, any pledge
or other encumbrance or any agreement that could result in any of the foregoing.
Section 2. Restrictions on Transfer of Shares.
2.1 Inter Vivos Transfers. Nothing in this Agreement shall
restrict or otherwise limit any Stockholder from making any Transfer of any or
all of his shares of Common Stock to any person during his lifetime, and in the
event of such a Transfer, the transferee may be issued a substitute certificate
representing the shares so transferred without any restrictive legend regarding
this Agreement.
2.2 Transfers Upon Death.
2.2.1 No Shares shall be Transferred upon the
death of any Stockholder except in accordance with the provisions of this
Agreement, and any attempted Transfer in violation of the terms and conditions
of this Agreement shall be void ab initio.
2.2.2 Upon the death of a Stockholder, such
Stockholder (hereinafter the "Deceased Stockholder") shall automatically, and
without further action by his estate or Representative(s), be deemed to have
offered to sell his Shares to the Company at the Agreed Price. The Company shall
be obligated to purchase from the estate or Representative of the Deceased
Stockholder the maximum amount of Stockholder's Shares that the Company can
purchase at the Agreed Price using all of the insurance proceeds payable to the
Company upon the death of the Deceased Stockholder, provided, however, that upon
the death of Gatesy, the Company may use $1,000,000 of any insurance proceeds
then payable to the Company to operate the Company and locate and hire a
replacement for Gatesy and the balance of such insurance proceeds shall be used
to purchase the maximum amount of Gatesy's Shares at the Agreed Price. The
Company may, but will not be obligated to, purchase any additional shares from
any Deceased Stockholder's estate or Representative to the extent insurance
proceeds payable to the Company upon the Deceased Stockholder's death are
insufficient to purchase all of the Deceased Stockholder's Shares. The Company
shall be entitled to keep the excess insurance proceeds payable to the Company
upon the Deceased Stockholder's death, if any, which remain after the Company
purchases all of the Deceased Stockholder's Shares at the Agreed Price. Within
30 days following the death of a Stockholder, the Company shall notify such
Stockholder's Representative(s) (as then known to the Company) as to: the number
of such Shares shown on the Company's books; the Average Price of such Shares;
the Agreed Price for such Shares, the availability of any insurance proceeds to
fund the Company's purchase of such Shares' and whether the Company will
purchase any such Shares for which insurance proceeds are not or will not be
available to pay the Agreed Price.
2.2.3 The closing of the sale and purchase of Shares pursuant
to this Section 2.2. shall take place at the office of the Company within 30
days after the insurance proceeds are received by the Company or as otherwise
agreed by the parties thereto, but no later than six months following the death
of the Stockholder. At the closing, the Company shall cause the Agreed Price to
be paid to the estate of the Stockholder (or otherwise as directed by his
Representative(s)), by wire transfer of immediately available funds, by
certified check of next day funds or otherwise, as designated by the
Stockholder's Representative(s). Against such payment, the Stockholder's
Representative(s) shall cause to be sold and delivered to the Company a
certificate or certificates representing the Shares, free and clear of any
liens, claims or encumbrances, in each case duly endorsed or accompanied by
appropriate stock powers.
2.2.4 Anything in this Agreement to the contrary
notwithstanding, if, in accordance with this Agreement, any Shares of a Deceased
Stockholder are not purchased by the Company, then such Shares shall be free
from any restrictions hereunder.
Section 3. Life Insurance. In order to provide the funds
necessary to purchase each Stockholder's shares in the manner set forth herein
at Section 2.2.2, the Company shall establish and maintain in full force and
effect, with a carrier or carriers reasonably acceptable to Gatesy, a
split-dollar or other life insurance policy or policies on the life of each of
Gatesy, Xxxxxxxxxx and Xxxxxx reasonably acceptable to the Stockholders. The
Company shall pay all out-of-pocket premiums on or before the dates on which
they have become due under such policy or policies, and the Company shall not
cause or suffer such policies to be encumbered in any respect without the
consent of the Stockholder whose life is covered thereby. This provision is a
material inducement for each Stockholder to enter into this arrangement.
Section 4. Miscellaneous.
4.1 Injunctive Relief. Each party hereto
acknowledges that it will be impossible to measure in money the damages that
would be suffered if any party fails to comply with any of the obligations
herein imposed on such party and that in the event of any such failure, an
aggrieved person will be irreparably damaged and will not have an adequate
remedy at law. Any such person shall, therefore, be entitled to injunctive
relief and/or specific performance to enforce such obligations, without the
necessity of posting any bond or furnishing any security, and if any action
should be brought in equity to enforce any of the provisions of this Agreement
none of the parties hereto shall raise the defense that there is adequate remedy
at law.
4.2 Further Assurances. Each party hereto
shall do and perform or cause to be done and performed all such further acts and
things and shall not execute and deliver all such other agreements,
certificates, instruments, and documents as any other party hereto reasonably
may request in order to carry out the intent and accomplish the purposes of this
Agreement and consummation of the transactions contemplated hereby.
4.3 Governing Law. This Agreement and the
rights and obligations of the parties hereunder shall be governed by, and
construed and interpreted in accordance with the laws of the State of [New
Jersey] without giving effect to such State's principles governing conflicts of
law.
4.4 Entire Agreement; Amendment; Waiver.
This Agreement contains the entire agreement among the parties hereto with
respect to the subject matter hereof, and supersedes any and all prior
agreements, arrangements and understandings (whether written or oral) among the
parties, including without limitation the Restricted Stockholders' Agreement
dated November 29, 1993 by and among the parties and Messrs. Xxxxxx X. Xxxxx and
Xxxxxxx X. Xxxxx, and any amendments thereto, all of which are hereby merged
herein. This Agreement may not be amended, modified, supplemented or terminated
except by an instrument or counterparts thereof in writing signed by all the
parties then subject to this Agreement. No waiver of any term or provision of
this Agreement shall be effective unless in writing and signed by the party to
be charged. The wavier by any party of a breach of any term or provision of this
Agreement shall not be construed as a waiver of any subsequent breach.
4.5 Successors and Assigns. This Agreement
shall be binding upon and inure to the benefit of the parties and their
respective successors and Representatives. Nothing in this Agreement, either
express or implied, is intended to confer on any person other than the parties
hereto and their respective successors and Representatives, any rights, remedies
or obligations under or by reason of this Agreement.
4.6 Notice. All notices and other
communications hereunder shall be in writing and shall be delivered by hand or
by first-class regular mail, postage prepaid, to the address set forth beneath
each party's name on the execution page hereof. Any party may change its address
for notices hereunder by similar notice to the other parties. All communications
and notices provided for in this Agreement shall be deemed to have been given
when sent, except notices as to changes of address, which notices shall be
deemed to have been given when received.
4.7 Headings, Counterparts. The headings and
captions contained herein are for convenience or reference only and shall not
control or affect the meaning or construction of any provision hereof. This
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original and all of which together shall constitute on and the
same instrument.
IN WITNESS WHEREOF, this Agreement has been executed by or on
behalf of each of the parties hereto as of the date first above written.
GLENGATE APPAREL, INC.
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxx Xxxxxx 00000
By:/s/ Xxxxxx X. Xxxxxx
---------------------------
Xxxxxx X. Xxxxxx, President
/s/ Xxxxxx X. Xxxxxx
--------------------
XXXXXX X. XXXXXX
0000 Xxxxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
/s/ Xxxxxxx X. Xxxxxxxxxx
-------------------------
XXXXXXX X. XXXXXXXXXX
000 Xxxxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
/s/ Xxxxx X. Xxxxxx
-------------------
XXXXX X. XXXXXX
0000 X. 00xx Xxxxxx
Xxxxxxxx Xxxxxx, XX 00000
