EXHIBIT (C)(4)
SHAREHOLDERS' AGREEMENT
SHAREHOLDERS' AGREEMENT, dated as of November 14, 1999 ("Agreement"),
is made and entered into by and among XXXXXXXXX P.P.S. NORTH AMERICA, INC., a
Delaware corporation ("Parent"); SHIELD ACQUISITION CORP., a wholly owned
subsidiary of Parent and a Texas corporation ("Purchaser"); and Xxxxxxx X.
Xxxxx, an individual residing in the State of Texas, Xxxxx Partners, Ltd., a
Texas limited partnership, and Xxxxx Interests Partnership, a Texas general
partnership (each a "Shareholder," and collectively, the "Shareholders").
WITNESSETH:
WHEREAS, on the date hereof, Parent, Purchaser, and Vallen Corporation, a
Texas corporation (the "Company"), entered into an Agreement and Plan of Merger
(as such agreement may hereafter be amended, restated or renewed from time to
time, the "Merger Agreement"), pursuant to which Purchaser will commence the
Offer (capitalized terms used and not otherwise defined herein having the
respective meanings ascribed to them in the Merger Agreement);
WHEREAS, each Shareholder is the Beneficial Owner (as defined below) and
has the sole right to vote and dispose of his or its respective shares of the
Company Common Stock listed on Schedule I attached hereto ("Shareholder's
Shares"); and
WHEREAS, as an inducement and a condition to their entering into the Merger
Agreement and incurring the obligations set forth therein, Parent and Purchaser
have required that the Shareholders enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements contained herein and in the Merger
Agreement, the parties hereto, intending to be legally bound, hereby agree as
follows:
1. DEFINITIONS. For purposes of this Agreement:
(a) "Affiliate" means, with respect to any specified Person, any
Person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, the Person
specified.
(b) "Beneficially Own" or "Beneficial Owner" or "Beneficial Ownership"
with respect to any securities shall mean having "beneficial ownership" of such
securities (as determined pursuant to Rule 13d-3 under the Securities Exchange
Act of 1934, as amended (the "Exchange Act")), including pursuant to any
agreement, arrangement or understanding, whether or not in writing. Without
duplicative counting of the same securities by the same holder, securities
Beneficially Owned by a Person shall include securities Beneficially Owned by
Persons with whom such Person would constitute a "group" within the meaning of
Section 13(d)(3) of the Exchange Act.
(c) "Person" shall mean an individual, corporation, partnership, joint
venture, association, trust, unincorporated organization or other entity.
(d) "Representative" means, with respect to any Person, as applicable,
such Person's officers, managing general partner, directors, employees, agents
and representatives (including any investment banker, financial advisor, agent,
representative or expert retained by or acting on behalf of such Person or its
subsidiaries).
(e) "Termination Event" shall mean the first to occur of: (i) purchase
of the Shareholders' Shares pursuant to the Offer; (ii) the Effective Time;
(iii) the termination of the Merger Agreement by any party thereto in accordance
with its terms; (iv) Purchaser's failure to commence the Offer within five (5)
business days following the date of the initial public announcement of the
execution of the Merger Agreement; (v) the termination or expiration of the
Offer without Purchaser's having accepted for payment and paid for all shares of
Company Common Stock tendered pursuant thereto, provided that each Shareholder's
right to terminate pursuant to this clause (vi) shall not be available to the
Shareholder if such Shareholder is then in material breach of this Agreement and
such breach has been the proximate cause of the Offer having so expired or
having been so terminated; (vii) any modification of any term or condition of
the Offer as to which prior written consent of the Company is required pursuant
to Section 1.1(b) of the Merger Agreement in the form executed and delivered as
of the date hereof (whether or not such consent is obtained); and (viii) the
applicable date set forth in Section 10.1(b) of the Merger Agreement.
2. AGREEMENT TO TENDER; VOTING OF THE SHARES.
(a) During the period commencing on the date hereof and until a
Termination Event, each Shareholder, severally, hereby agrees that such
Shareholder shall: (i) validly tender and sell (and not withdraw), pursuant to
and in accordance with the terms of the Offer, not later than the fifth business
day after the receipt by the Shareholder of the offer to purchase, transmittal
letter and other relevant Offer Documents (or as soon as practicable thereafter
as shall be permitted by the relevant court or governmental authority), such
Shareholder's Shares (as defined in Section 3(a)) and any shares of Company
Common Stock acquired by such Shareholder after the date hereof and prior to a
Termination Event, whether upon exercise of options, warrants or rights, the
conversion or exchange of convertible or exchangeable securities, or by means of
purchase, dividend, distribution or otherwise); (ii) at any meeting of the
Company's shareholders (whether annual or special, and whether or not an
adjourned or postponed meeting), however called, or in connection with any
written consent of the Company's shareholders, vote (or cause to be voted) all
of such Shareholder's Shares: (x) in favor of the Merger, the execution and
delivery by the Company of the Merger Agreement and the approval and adoption of
the Merger and 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; (y) against any action or agreement that would result in a
breach of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Merger Agreement; and (z) except as otherwise
agreed to in writing in advance by Parent and Purchaser, against the following
actions (other than the Merger and the transactions contemplated by the Merger
Agreement and this Agreement): (A) any extraordinary
2
corporate transaction, such as a merger, consolidation or other business
combination, involving the Company or any of its subsidiaries; (B) any sale,
lease or transfer of a material amount of the assets or business of the Company
or its subsidiaries, or any reorganization, restructuring, recapitalization,
special dividend, dissolution, liquidation or winding up of the Company or its
subsidiaries; (C) any change in the present capitalization of the Company,
including any proposal to sell any equity interest in the Company or any of its
subsidiaries or any amendment of the Articles of Incorporation or By-laws of the
Company; (D) any change in directors constituting a majority of the Company's
Board of Directors; (E) any other action that would impede, interfere with,
delay, postpone, discourage or adversely affect the Offer, the Merger, or the
transactions contemplated by the Merger Agreement; and (iii) such Shareholder
shall not enter into any agreement with any Person the effect of which would be
inconsistent with or violative of the provisions and agreement contained in this
Section 2(a).
(b) Each Shareholder hereby acknowledges that Purchaser's obligation
to accept for payment shares of the Company Common Stock purchased pursuant to
the Offer, including the Shares, is subject to the terms and conditions of the
Offer. Upon the terms and subject to the conditions of the Offer, Parent shall
cause Purchaser to accept for payment and pay for all shares of Company Common
Stock (including each Shareholder's Shares) validly tendered and not withdrawn
pursuant to the Offer as soon as Purchaser is permitted to do so under
applicable law.
(c) Each Shareholder shall permit Purchaser to publish and to disclose
in the Offer Documents and, if shareholder approval is required under applicable
law, the Proxy Statement, if any (including all documents and schedules filed
with the SEC), such Shareholder's identity and ownership of the Company Common
Stock and each Shareholder's commitments, arrangements and understandings under
this Agreement. Parent and Purchaser shall permit the Shareholders to disclose
the terms of this Agreement in each Shareholder's Schedule 13D, as applicable,
with respect to the Shareholder's Shares.
3. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER. Each Shareholder,
severally, hereby represents and warrants to Parent and Purchaser as follows:
(a) Ownership of Shares. Such Shareholder is the Beneficial Owner of
the number of shares of Company Common Stock Beneficially Owned by such
Shareholder on the date hereof set forth opposite such Shareholder's name on
Schedule I attached hereto under the heading "Shareholder's Shares." Such
Shareholder has sole power to issue instructions with respect to the matters set
forth in Section 2 hereof, sole power of disposition, sole power to demand
appraisal rights and sole power to agree to all of the matters set forth in this
Agreement, in each case with respect to such Shareholder's Shares with no
material limitations, qualifications or restrictions on such rights, subject to
applicable securities laws and the terms of this Agreement. Except for such
Shareholder's Shares, such Shareholder is not the Beneficial Owner of any shares
of Company Common Stock.
(b) No Conflicts. (i) Except for filings under the Exchange Act or the
HSR Act, no filing with, and no permit, authorization, consent or approval of,
any United States state or federal public body or authority is necessary for the
execution of this Agreement by such
3
Shareholder and the consummation by such Shareholder of the transactions
contemplated hereby, except where the failure to obtain such consent, permit,
authorization, approval or filing would not interfere with such Shareholder's
ability to perform its obligations hereunder, 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 shall (x) 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,
commitment, arrangement, understanding, agreement or other instrument or
obligation of any kind to which such Shareholder is a party or by which such
Shareholder or any of such Shareholder's properties or assets may be bound, or
(y) violate any order, writ, injunction, decree, judgment, order, statute, rule
or regulation applicable to such Shareholder or any of such Shareholder's
properties or assets, in each such case except to the extent that any conflict,
breach, default or violation would not interfere with the ability of such
Shareholder to perform its obligations hereunder.
(c) Execution, Delivery and Performance. This Agreement constitutes
the valid and binding obligation of such Shareholder and is enforceable in
accordance with its terms, except as enforceability may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally and general principles of
equity. The execution, delivery and performance of this Agreement will not
violate any other agreement to which such Shareholder is a party, including,
without limitation, any voting agreement, partnership agreement, other
shareholders agreement or voting trust. As to the Shareholder who is a natural
person, such Shareholder hereby represents that such Shareholder (i) has the
full power and capacity necessary to enter into and perform his obligations
under this Agreement, and (ii) has read all provisions of this Agreement, has
reviewed such provisions with counsel to the extent such Shareholder deemed
appropriate, understands each of such provisions and voluntarily agrees to be
bound thereby. As to the Shareholder that is a partnership, such Shareholder
hereby represents that such partnership is duly formed, validly existing and in
good standing under the laws of the state of its organization with full
partnership power and authority necessary to enter into this Agreement and to
perform its obligations hereunder.
(d) No Encumbrances. Such Shareholder's Shares are held by such
Shareholder, or by a nominee or custodian for the benefit of such Shareholder,
free and clear of all liens, claims, security interests, proxies, voting trusts
or agreements, understandings or arrangements or any other encumbrances
whatsoever, except this Agreement and applicable securities laws.
(e) Reliance. Such Shareholder understands and acknowledges that
Parent and Purchaser are entering into the Merger Agreement, and are incurring
the obligations set forth therein, in reliance upon such Shareholder's execution
and delivery of this Agreement.
4. REPRESENTATIONS OF PARENT AND PURCHASER. Parent and Purchaser, jointly
and severally, hereby represent and warrant to the Shareholders as follows:
4
(a) Organization, Standing and Corporate Power. Parent is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the State of Texas, and each has
adequate corporate power and authority to own its properties and carry on its
business as presently conducted. Each of Parent and Purchaser has the corporate
power and authority to enter into and perform all of its obligations under this
Agreement and to consummate the transactions contemplated hereby.
(b) No Conflicts. (i) Except, for filings under the Exchange Act and
the HSR Act, no filing with, and no permit, authorization, consent or approval
of, any state or federal public body or authority is necessary for the execution
of this Agreement by either Parent or Purchaser and the consummation by Parent
and Purchaser of the transactions contemplated hereby, except where the failure
to obtain such consent, permit, authorization, approval or filing would not
interfere with its ability to perform their respective obligations hereunder,
and (ii) none of the execution and delivery of this Agreement by Parent or
Purchaser, the consummation by Parent or Purchaser of the transactions
contemplated hereby or compliance by Parent and Purchaser with any of the
provisions hereof shall (x) conflict with or result in any breach of any
applicable organizational documents applicable to Parent or Purchaser, (y)
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, commitment, arrangement, understanding, agreement or other
instrument or obligation of any kind to which Parent or Purchaser is a party or
by which Parent or Purchaser or any of Parent's or Purchaser's properties or
assets may be bound, or (z) violate any order, writ, injunction, decree,
judgment, order, statute, rule or regulation applicable to Parent or Purchaser
or any of Parent's or Purchaser's properties or assets, in each such case except
to the extent that any conflict, breach, default or violation would not
interfere with the ability of Parent or Purchaser to perform their respective
obligations hereunder.
(c) Execution, Delivery and Performance. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of Parent and Purchaser. This Agreement constitutes the valid and
binding obligations of Parent and Purchaser and is enforceable in accordance
with its terms, except as enforceability may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally and general principles of equity.
5. CERTAIN COVENANTS.
(a) Restriction on Transfer, Proxies and Non-interference. Prior to
the occurrence of a Termination Event, except as required by this Agreement,
each Shareholder, severally, hereby agrees that such Shareholder shall not
directly or indirectly without the prior written consent of Parent and
Purchaser: (i) offer for sale, sell, transfer, tender, pledge, encumber, assign
or otherwise dispose of, or enter into any contract, option or other arrangement
or understanding with respect to the offer for sale, sale, transfer, tender,
pledge, encumbrance, assignment or other disposition of, any or all of such
Shareholder's Shares, or any interest
5
therein, (ii) grant any proxies or powers of attorney, deposit any of such
Shareholder's Shares into a voting trust or enter into a voting agreement,
understanding or arrangement with respect to any of such Shareholder's Shares,
or (iii) take any action that would make any representation or warranty of such
Shareholder contained in this Agreement untrue or incorrect or result in a
breach by such Shareholder of such Shareholder's obligations under this
Agreement.
(b) Waiver of Appraisal Rights. Each Shareholder hereby waives any
rights of appraisal or rights to dissent from the Merger that such Shareholder
may have.
(c) No Solicitation. Prior to the occurrence of a Termination Event,
each Shareholder, severally, hereby agrees that such Shareholder will not, and
will instruct such Shareholder's Representatives not to, take any action which,
if taken by the Company, would constitute a violation of Section 8.2(a) of the
Merger Agreement. Notwithstanding the foregoing, it is expressly stipulated
that any action that may be taken by the Company or the Company Board pursuant
to the proviso of Section 8.2(a) of the Merger Agreement may likewise be taken
by any Shareholder or any Representative of a Shareholder as such.
(d) Stop Transfer. Prior to a Termination Event, each Shareholder,
severally, agrees that such Shareholder shall not request that the Company
register the transfer (book-entry or otherwise) of any certificate or
uncertificated interest representing any of such Shareholder's Shares, unless
such transfer is made in compliance with this Agreement.
(e) HSR Act. Each Shareholder, severally, agrees that such
Shareholder shall cooperate with the Company to fulfill such Shareholder's
obligations, if any, under the HSR Act with respect to the transactions
contemplated by the Merger Agreement.
(f) Further Assurances. From time to time, at the other parties'
reasonable request and without further consideration, each Shareholder, Parent
and Purchaser shall execute and deliver such additional documents as may be
reasonably necessary or desirable to consummate and make effective, in the most
expeditious manner practicable, the tender of each Shareholder's Shares by such
Shareholder as contemplated by Section 2 of this Agreement.
6. MISCELLANEOUS.
(a) Entire Agreement. This Agreement constitutes the entire 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) Recapitalization. In the event of a stock dividend or
distribution, or any change in shares of Company Common Stock by reason of any
stock dividend, split-up, recapitalization, combination, exchange of shares of
Company Common Stock or the like, for each Shareholder the term "Shareholder's
Shares" shall be deemed to refer to and include the Shareholder's Shares as well
as all such stock dividends and distributions and any shares into which or for
which any or all of such Shareholder's Shares may changed or exchanged.
6
(c) Assignment. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned or delegated, in
whole or in part, by operation of law or otherwise, by any of the parties hereto
without the prior written consent of the other parties, except that Purchaser
may assign its rights and obligations, in whole or in part, to any of its
Affiliates, but no such assignment shall relieve Purchaser of its obligations
hereunder if such assignee does not perform such obligations. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit
of, and be enforceable by, the parties and their respective successors and
assigns.
(d) Amendment, Waivers, etc. This Agreement may not be amended,
changed, supplemented, waived or otherwise modified or terminated, except upon
the execution and delivery of a written agreement executed by the parties
hereto.
(e) 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, 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, or by
transmission by telecopy, confirmed received. All communications hereunder
shall be delivered to the respective parties at the following addresses:
If to Parent or Purchaser:
Xxxxxxxxx P.P.S. North America, Inc.
000 Xxxxxxxx Xxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxxxxx
Telecopy: 000-000-0000
With a copy (which shall not constitute notice) to:
Xxxxxxxxx N.V.
Xxxxxxxx 00
X.X. Xxx 0000
0000 XX Xxxxxxx
Xxx Xxxxxxxxxxx
Attention: Xxx Xxxxxxx, Esq.
Telecopy: 00-00-000-0000
and
Xxxxxx, Xxxxxxx & Xxxxxx, P.C.
0000 Xxxxxx Xxxxx Xxxx, X.X., Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention Xxxxx X. Xxxxxx, Esq.
Telecopy: 000-000-0000
7
and
Powell, Goldstein, Xxxxxx & Xxxxxx LLP
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxxxx, Esq.
Telecopy: 000-000-0000
If to the Shareholders:
Xxxxxxx X. Xxxxx
0000 Xxxxx Xxxxx
Xxxxxxx, XX 00000
With a copy (which shall not constitute notice) to:
Mayor, Day, Xxxxxxxx & Xxxxxx, L.L.P.
000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxx X. Xxxxxxxxxxx
Telecopy: 000-000-0000
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.
(f) 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.
(g) 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.
(h) Remedies Cumulative. All rights, powers and remedies provided
under this Agreement or otherwise available in respect hereof at law or in
equity shall be cumulative
8
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.
(i) No Waiver. The failure of any party hereto to exercise any right,
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.
(j) No Third-Party Beneficiaries. This Agreement is not intended to
be for the benefit of, and shall not be enforceable by, any person or entity
who or which is not a party hereto.
(k) Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Texas, without giving effect to the
principles of conflicts of law thereof.
(1) 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.
(m) Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but all of which, taken
together, shall constitute one and the same Agreement. This Agreement shall not
be effective as to any party hereto until such time as this Agreement or a
counterpart thereof has been executed and delivered by each party hereto.
(n) Termination. This Agreement shall terminate for all purposes, and
shall have no further force and effect, upon the occurrence of any Termination
Event.
9
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their duly authorized officers effective as of the date and year
first above written.
XXXXXXXXX P.P.S. NORTH AMERICA, INC.
By:
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: President and Chief Executive Officer
SHIELD ACQUISITION CORP.
By:
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: President and Chief Executive Officer
SHAREHOLDERS:
-------------------------------------
Xxxxxxx X. Xxxxx
XXXXX PARTNERS, LTD.
By:
-------------------------------------
Xxxxxxx X. Xxxxx, its Managing General Partner
By:
-------------------------------------
Xxxxxx X. Xxxxx, its General Partner, with
respect to exercising joint power to vote the
Shareholder's Shares as agreed in Section 2(a)
10
XXXXX INTERESTS PARTNERSHIP
By:
-------------------------------------
Xxxxxx X. Xxxxx, partner
By:
-------------------------------------
Xxxxxxx Xxxxx, Xx., partner
By:
-------------------------------------
Xxxxx X. Xxxxx, partner
By:
-------------------------------------
Xxxxxx X. Xxxxx, partner
By:
-------------------------------------
Xxxxxxxxx X. Xxxxx, partner
11
SCHEDULE I
----------
XXXXXXX X. XXXXX 6,747
XXXXX PARTNERS, LTD. 3,943,665
XXXXX INTERESTS PARTNERSHIP 117,000
12
