Exhibit 10(S)
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THE COSMETIC CENTER, INC.
STOCKHOLDERS' AGREEMENT
BY AND AMONG
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XXXXX X. XXXXXXXXX,
XXXX X. XXXXXXXXX,
XXXXX X. XXXXXXXXX,
XXXXXXXXX FAMILY LIMITED PARTNERSHIP
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AND
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REVLON CONSUMER PRODUCTS CORPORATION
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DATED AS OF NOVEMBER 27, 1996
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STOCKHOLDERS' AGREEMENT
This STOCKHOLDERS' AGREEMENT (this "Agreement") is entered into as of
November 27, 1996 by and among Xxxxx X. Xxxxxxxxx, Xxxx X. Xxxxxxxxx, Xxxxx X.
Xxxxxxxxx, Xxxxxxxxx Family Limited Partnership, a Maryland limited partnership
("Xxxxxxxxx Family Limited Partnership" and, together with Xxxxx X. Xxxxxxxxx,
Xxxxx X. Xxxxxxxxx and Xxxx X. Xxxxxxxxx, the "Principal Stockholders") and
Revlon Consumer Products Corporation, a Delaware corporation ("Revlon"). Unless
otherwise defined herein, capitalized terms shall have the meanings set forth in
Section 9 hereof or in the Merger Agreement (as defined).
WHEREAS, pursuant to the Agreement and Plan of Merger, dated as of the date
hereof (the "Merger Agreement"), by and among the Company, Revlon and Prestige
Fragrance & Cosmetics, Inc., a Delaware corporation and a wholly owned
subsidiary of Revlon ("PFC"), PFC will be merged with and into the Company and
the Company will continue as the surviving corporation (the "Surviving
Corporation") (the transactions contemplated by the Merger Agreement are
referred to herein as the "Merger"); and
WHEREAS, the parties agree, as a condition to entering into the Merger
Agreement, to enter into this Agreement;
NOW THEREFORE, in consideration of the mutual covenants herein contained
and for other good and valuable consideration, Revlon and the Principal
Stockholders hereby agree as follows:
SECTION 1. CASH ELECTION. Each of the Principal Stockholders hereby agrees
(a) to make a Cash Election, as contemplated by Section 2.03 of the Merger
Agreement, with respect to each share of Class A common stock, par value $.01
per share, of the Company (the "Class A Common Stock"), held by such Principal
Stockholder, and each share of Class B common stock, par value $.01 per share,
of the Company (the "Class B Common Stock" and, together with the Class A Common
Stock, the "Common Stock"), held by such Principal Stockholder, and (b) to make
an Option Cash Election, as contemplated by Section 2.06 of the Merger
Agreement, with respect to each stock option held by such Principal Stockholder
that is exercisable for any class of securities of the Company at an exercise
price of less than $7.63 per share.
SECTION 2. CANCELLATION OF OPTIONS. The Principal Stockholders hereby agree
to cancel, at or prior to the Effective Time, all outstanding stock options held
by the Principal Stockholders having an expiration date of January 15, 1997 and
exercisable for an aggregate of 20,000 shares of Common Stock.
SECTION 3. EXCLUSIVITY AND BREAK-UP EXPENSES AND FEES. Until the Merger is
consummated in accordance with the terms of the Merger Agreement, or such
earlier time as the Merger Agreement is terminated in accordance with its terms:
(a)(i) None of the Principal Stockholders shall, and each of the Principal
Stockholders shall ensure that none of its respective representatives or agents
shall, after the date hereof, directly or indirectly, solicit or engage in
negotiations with or provide any information to, or otherwise cooperate with,
any person or entity that seeks to acquire or expresses an interest in acquiring
all or any substantial part of any class of the securities, business or assets
of the Company or any subsidiary thereof, or for the purpose of otherwise
effecting any transaction or business combination inconsistent with the Merger,
and none of the Principal Stockholders shall, and each of the Principal
Stockholders shall ensure that none of its respective representatives or agents
shall, enter into any agreement with or grant any proxy, option or other similar
right to any third person or entity in connection with any transaction or
business combination inconsistent with the Merger; PROVIDED, HOWEVER, that
nothing contained in this Section 3(a) or elsewhere herein shall prohibit the
Board of Directors of the Company from furnishing information to, or entering
into discussions or negotiations with, any person or entity that makes an
unsolicited bona fide proposal in writing to acquire the Company, whether by
merger, consolidation, or stock acquisition, or substantially all of the assets
of the Company on terms which, in the exercise of their fiduciary duty after the
consideration of advice from the Company's legal and financial advisors, a
majority of the Company's directors determines is likely to be more beneficial
to each of the holders of the Company's Common Stock than the Merger, and
PROVIDED FURTHER, that the Company's legal and financial advisors may engage in
discussions regarding such written offer to clarify the terms of such offer for
the purpose of rendering the advice referred to above to the Board of Directors
of the Company, in each case, PROVIDED that, the Company and its advisors, prior
to furnishing such information to, or entering into discussions or negotiations
with, such a person or entity, shall provide written notice to Revlon to the
effect that the Company is furnishing information to, or entering into
discussions with, such a person or entity, and shall keep Revlon informed of the
status (including the identity of such person or entity and the terms of any
proposal) of such discussions or negotiations. Nothing in this Section 3(a)
shall (A) permit the Principal Stockholders to terminate this Agreement, (B)
permit the Principal Stockholders to enter into any agreement with respect to a
Stockholder Alternate Transaction prior to the termination of the Merger
Agreement in accordance with its terms or (C) affect any other obligation of any
party under this Agreement.
(ii) None of the Principal Stockholders shall sell, pledge, agree to sell
or pledge or otherwise dispose of any of its shares of any class of securities
of the Company to any third person and, with respect to any Stockholder
Alternate Transaction or
any Cosmetic Center Alternate Transaction, each of the Principal Stockholders
shall vote all of its shares against any such Stockholder Alternate Transaction
or Cosmetic Center Alternate Transaction, as the case may be, and, if available,
exercise appraisal rights with respect to its shares.
(iii) Each of the Principal Stockholders shall cause a legend to be stamped
or printed on each certificate representing shares of any class of securities of
the Company owned by such Principal Stockholder indicating that such shares are
subject to the terms of this Agreement.
(b) If (i) any Stockholder Triggering Event or Cosmetic Center Triggering
Event occurs prior to the termination of the Merger Agreement in accordance with
its terms or (ii) any Stockholder Alternate Transaction or Cosmetic Center
Alternate Transaction is consummated during the 90-day period immediately
following the later of (A) the Drop Dead Date and (B) the termination of the
Merger Agreement in accordance with its terms, unless the Merger Agreement is
terminated by Revlon (other than due to a material breach by the Company of its
obligations under the Merger Agreement or due to a material breach of this
Agreement by the Principal Stockholders) or as a result of the failure of a
condition to either party's obligation to close under the Merger Agreement
(other than due to a material breach by the Company of its obligations under the
Merger Agreement or due to a material breach of this Agreement by the Principal
Stockholders) (the later of (A) and (B) being the "Company Termination Date"),
the Principal Stockholders jointly and severally agree to pay to Revlon within
two business days after such event the Revlon Expense Reimbursement Fee (without
duplication of any amounts paid to Revlon by the Company pursuant to Section
8.02(b) of the Merger Agreement).
(c) The Principal Stockholders shall advise Revlon of the receipt of any
proposal for a Stockholder Alternate Transaction and the details thereof within
48 hours of the receipt thereof, and none of the Principal Stockholders shall
act with respect to such proposal for three business days after the delivery of
such notice to Revlon. Nothing in this Section 3 shall be deemed to limit in any
way the claims Revlon may have at law or equity with respect to any breach by
the Principal Stockholders of their obligations under this Agreement.
(d) If the Company shall consummate any Cosmetic Center Alternate
Transaction or any Principal Stockholder shall consummate any Stockholder
Alternate Transaction at any time prior to the Company Termination Date or
during the 90-day period immediately following the Company Termination Date, the
Principal Stockholders jointly and severally agree to pay to Revlon upon the
date of consummation of such Cosmetic Center Alternate Transaction or such
Stockholder Alternate Transaction, as the case may be, the Principal
Stockholders Break-Up Fee.
(e) If (i) at a meeting of the stockholders of the Company held for the
purpose of voting on the Merger, the Principal Stockholders do not vote in favor
of the Merger or (ii) the Principal Stockholders vote in favor of any
Stockholder Alternate Transaction or any Cosmetic Center Alternate Transaction
at any time prior to the Company Termination Date, the Principal Stockholders
jointly and severally agree to pay to Revlon within two days after the date of
such vote of the stockholders of the Company a fee of $1 million; PROVIDED,
HOWEVER, that if the Principal Stockholders Break-Up Fee is payable
subsequently, the $1 million fee payable pursuant to this Section 3(e) shall be
credited against such Principal Stockholders Break-Up Fee.
SECTION 4. PRINCIPAL STOCKHOLDERS' REPRESENTATIONS. The Principal
Stockholders, jointly and severally, represent and warrant to Revlon as follows:
(a) ORGANIZATION AND AUTHORIZATION OF XXXXXXXXX FAMILY LIMITED PARTNERSHIP.
Xxxxxxxxx Family Limited Partnership is a limited partnership duly organized,
validly existing and in good standing under the laws of the State of Maryland
and has all requisite partnership power and authority and all necessary
government approvals to own, lease and operate its properties and to carry on
its business as now being conducted. Xxxxxxxxx Family Limited Partnership has
full partnership power and authority to execute and deliver this Agreement and
to consummate the transaction contemplated hereby.
(b) VALIDITY OF AGREEMENT. This Agreement has been duly executed and
delivered by each of the Principal Stockholders and, assuming due and valid
authorization, execution and delivery by Revlon, is a valid and binding
obligation of each of the Principal Stockholders enforceable against each of
them in accordance with its terms.
(c) CONSENTS AND APPROVALS; NO VIOLATIONS. Neither the execution, delivery
or performance of this Agreement and the agreements referred to herein or
contemplated hereby by the Principal Stockholders, nor the consummation by the
Principal Stockholders of the transactions contemplated hereby or thereby
(including the Merger), nor compliance by the Principal Stockholders with any of
the provisions hereof or thereof, will (i) require any filing, notice,
declaration or registration to or with, or any permit, authorization, consent or
approval of, any federal, state, local or foreign court, arbitral, tribunal,
administrative agency or commission or other governmental or other regulatory
authority, body or agency (collectively "Approvals"),
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except as set forth in the Merger Agreement or in the Company Disclosure
Schedule, (ii) result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, amendment, cancellation or acceleration) under, any of the
terms, conditions or provisions of any note, bond, mortgage, indenture, lease,
license, contract, agreement or other instrument, obligation or commitment to
which any of the Principal Stockholders is a party or by which any of them or
any of their respective properties or assets may be bound (including, in the
case of Xxxxxxxxx Family Limited Partnership, the partnership agreement thereof)
or (iii) violate any order, writ, injunction, judgment, decree, settlement, law,
statute, rule, regulation or requirement or other governmental approval or
authorization (whether federal, state, local or foreign) applicable to any of
the Principal Stockholders or any of their respective businesses, properties or
assets, except, in the case of clauses (i), (ii) and (iii), where such failure
to obtain Approvals or such violations, breaches or defaults would not,
individually or in the aggregate, be reasonably likely to have a Material
Adverse Effect on the Company or the ability of the Principal Stockholders to
perform their obligations under this Agreement and the agreements referred to
herein or contemplated hereby.
(d) OWNERSHIP OF SHARES. Xxxxx X. Xxxxxxxxx, Xxxx X. Xxxxxxxxx, Xxxxx X.
Xxxxxxxxx and Xxxxxxxxx Family Limited Partnership own 49,544, 88,223, 21,573
and 473,728 Class A Shares, respectively, and 1,020,539, 238,489, 133,695 and 0
Class B Shares, respectively. All of such Shares are owned of record and
beneficially by such respective Principal Stockholder, free and clear of all
Liens. Other than this Agreement, none of the Principal Stockholders is a party
to any voting trust, proxy or other agreement, understanding or restriction with
respect to such Shares or the voting thereof.
SECTION 5. REVLON REPRESENTATIONS. Revlon represents and warrants to the
Principal Stockholders as follows:
(a) VALIDITY OF AGREEMENT. This Agreement has been duly executed and
delivered by Revlon and, assuming due and valid authorization, execution and
delivery by each of the Principal Stockholders, is a valid and binding
obligation of Revlon enforceable against Revlon in accordance with its terms.
(b) CONSENTS AND APPROVALS; NO VIOLATIONS. Neither the execution, delivery
or performance of this Agreement and the agreements referred to herein or
contemplated hereby by Revlon, nor the consummation by Revlon of the
transactions contemplated hereby or thereby (including the Merger), nor
compliance by Revlon with any of the provisions hereof or thereof, will (i)
require any Approvals, except as set forth in the Merger Agreement or in the PFC
Disclosure Schedule, (ii) result in a violation or breach of, or constitute
(with or without due notice or lapse of time or both) a default (or give rise to
any right of termination, amendment, cancellation or acceleration) under, any of
the terms, conditions or provisions of any note, bond, mortgage, indenture,
lease, license, contract, agreement or other instrument, obligation or
commitment to which Revlon or PFC is a party or by which either of them or any
of their respective properties or assets may be bound or (iii) violate any
order, writ, injunction, judgment, decree, settlement, law, statute, rule,
regulation or requirement or other governmental approval or authorization
(whether federal, state, local or foreign) applicable to Revlon or PFC or any of
their respective businesses, properties or assets, except, in the case of
clauses (i), (ii) and (iii), where such failure to obtain Approvals or such
violations, breaches or defaults would not, individually or in the aggregate, be
reasonably likely to have a Material Adverse Effect on PFC or the ability of
Revlon to perform its obligations under this Agreement and the agreements
referred to herein or contemplated hereby.
SECTION 6. REGISTRATION RIGHTS. Revlon hereby agrees to cause the Surviving
Corporation to enter in a registration rights agreement with the Principal
Stockholders (the "Principal Stockholder Registration Rights Agreement") which
registration rights agreement shall include provisions to the following effect
and registration procedures substantially similar to those set forth in the
Parent Registration Rights Agreement.
(a) PIGGYBACK REGISTRATION RIGHTS. Whenever the Surviving Corporation
proposes to register any Subject Securities under the Securities Act of 1933, as
amended (the "Act"), and the registration form to be used may be used for the
registration of the Registrable Securities (other than a registration statement
on Form S-8 or any similar successor form) (a "Piggyback Registration"), the
Surviving Corporation shall give written notice to the Principal Stockholders,
at least 20 days prior to the anticipated filing date, of its intention to
effect such a registration, which notice will specify the proposed offering
price, the kind and number of securities proposed to be registered, the
distribution arrangements and such other information that at the time would be
appropriate to include in such notice, and will, subject to Section 6(c),
include in such Piggyback Registration all Registrable Securities held by the
Principal Stockholders with respect to which the Surviving Corporation has
received written requests for inclusion therein within 20 days after the
delivery of such notice; PROVIDED, HOWEVER, that if, at any time after giving
written notice of its intention to register any securities and prior to the
effective date of the Registration Statement filed in connection with such
registration, the Surviving Corporation shall determine for any reason not to
register
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or to delay registration of such securities, the Surviving Corporation may, at
its election, give written notice of such determination to each Principal
Stockholder and, thereupon, (A) in the case of a determination not to register,
the Surviving Corporation shall be relieved of its obligation to register any
Registrable Securities under this Section 6(a) in connection with such
registration (but not from its obligation to pay the registration expenses
incurred in connection therewith) and (B) in the case of a determination to
delay registering, the Surviving Corporation shall be permitted to delay
registering any Registrable Securities under this Section 6(a) during the period
that the registration of such other securities is delayed. The Surviving
Corporation further agrees to supplement or amend a Registration Statement if
required by applicable laws, rules or regulations or by the instructions
applicable to the registration form used by the Surviving Corporation for such
Registration Statement. Each Principal Stockholder shall be permitted to
withdraw all or any part of such Principal Stockholder's Registrable Securities
from a registration at any time prior to the effective date of the Registration
Statement by notifying the Surviving Corporation of such withdrawal not later
than five business days prior to such effective date, PROVIDED that the
Surviving Corporation has given the Principal Stockholders sufficient prior
notice of the anticipated effective date to enable the Principal Stockholders to
exercise such withdrawal rights. Any Principal Stockholder who withdraws any
such securities from a registration pursuant to the preceding sentence shall pay
to the Surviving Corporation any incremental expenses of such registration
specifically attributable to the withdrawal of such Principal Stockholder's
Registrable Securities. Registrable Securities with respect to which such
request for registration has been received will be registered by the Surviving
Corporation and offered to the public in a Piggyback Registration pursuant to
this Section 6 on the terms and conditions at least as favorable as those
applicable to the registration of Subject Securities to be sold by the Surviving
Corporation and by any other person selling under such Piggyback Registration.
(b) DEMAND REGISTRATION RIGHTS.
(i) RIGHT TO DEMAND BY THE INVESTORS. On any one occasion after the date
hereof, Principal Stockholders holding at least 25% of all Shares held by the
Principal Stockholders (a "Demanding Group") may make a written request of the
Surviving Corporation for registration with the Commission, under and in
accordance with the provisions of the Act, of all or part of the Registrable
Securities held by the Principal Stockholders (a "Demand Registration");
PROVIDED, HOWEVER, that (1) the Surviving Corporation shall not be required to
effect such Demand Registration unless the aggregate fair market value of
securities requested to be included in such Demand Registration pursuant to this
subsection (b)(i) and any similar registration rights granted to any person or
entity after the date hereof exceeds $5 million, (2) the Surviving Corporation
may, if its Board of Directors determines in the exercise of its reasonable good
faith judgment that to effect such Demand Registration at such time would have a
material adverse effect on the Surviving Corporation or would require the
disclosure in such Demand Registration of an action (including an acquisition,
disposition, merger, recapitalization, consolidation, reorganization or similar
transaction relating to or involving the Surviving Corporation or any of its
subsidiaries) or an event and such disclosure would be materially detrimental to
the Surviving Corporation, defer such Demand Registration for a single period
not to exceed 90 days; PROVIDED, FURTHER, that the Surviving Corporation may
exercise such deferral right only once during any 12-month period. If the
Surviving Corporation elects to defer any Demand Registration pursuant to the
terms of the proviso to the immediately preceding sentence, the request made by
the Demanding Group shall be automatically withdrawn without further action on
the part of the Demanding Group and no Demand Registration shall be deemed to
have occurred for purposes hereof. Within 20 business days after receipt of the
request for a Demand Registration, the Surviving Corporation shall send written
notice of such registration request and its intention to comply therewith to
each of the other Principal Stockholders and, subject to Section 6(c), the
Surviving Corporation shall include in such registration all Registrable
Securities of such Principal Stockholders with respect to which the Surviving
Corporation has received written requests for inclusion therein within 10
business days after the delivery of such notice. All requests made pursuant to
this subsection (b)(i) will specify the aggregate number of Registrable
Securities requested to be registered and will also specify the intended methods
of disposition thereof.
(ii) NUMBER OF DEMAND REGISTRATIONS. The Principal Stockholders shall be
entitled to one Demand Registration, and the expenses thereof (except fees and
expenses of counsel for the Principal Stockholders and underwriting discounts
and commissions, if any) shall be borne by the Surviving Corporation. A Demand
Registration shall not be counted as a Demand Registration hereunder until such
Demand Registration has been declared effective by the Commission and maintained
continuously effective for a period of at least six months or such shorter
period when all Registrable Securities included therein have been sold in
accordance with such Demand Registration (the "Effectiveness Period").
Notwithstanding the foregoing, if at any time the Board of Directors of the
Surviving Corporation determines in the exercise of its reasonable good faith
judgment that maintaining the effectiveness of the Demand Registration at such
time would have a material adverse effect on the Surviving Corporation or would
require the disclosure in such Demand Registration of an action (including an
acquisition, disposition, merger, recapitalization, consolidation,
reorganization or similar transaction relating to or involving the
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Surviving Corporation or any of its subsidiaries) or an event and such
disclosure would be materially detrimental to the Surviving Corporation, the
Surviving Corporation may allow the Demand Registration to fail to be effective
and usable as a result of such nondisclosure for up to 30 days during the
Effectiveness Period, but in no event for any period in excess of 15 consecutive
days, provided that the Effectiveness Period shall be extended by the number of
days during the Effectiveness Period that the Demand Registration shall have
failed to be effective by reason of this subsection (b)(ii).
(c) PRIORITY ON REGISTRATIONS. If in any Registration, the managing
underwriter or underwriters thereof advise the Surviving Corporation in writing
that, in its or their reasonable opinion, or, in the case of Registration not
being underwritten, the Surviving Corporation shall reasonably determine that,
after consultation with an investment banking firm of nationally recognized
standing, the total number of securities proposed to be sold in such
Registration exceeds the number that can be sold in such offering without having
a material adverse effect on the success of the offering (including any impact
on the selling price or the number of shares that any participant may sell), the
Surviving Corporation will include in such Registration only the number of
securities that, in the reasonable opinion of such underwriter or underwriters
or investment banking firm, as the case may be, can be sold without having a
material adverse effect on the success of the offering, in the following order
of priority:
(i) if the Surviving Corporation is registering securities pursuant to a
demand made by any person having demand registration rights (pursuant to the
Principal Stockholder Registration Rights Agreement, the Parent Registration
Rights Agreement or otherwise),
(A) FIRST, the securities the person making such demand proposes to
sell in such registration,
(B) SECOND, the securities requested to be included in such
Registration by the Surviving Corporation or by any other person or entity
granted piggyback registration rights (pursuant to the Principal
Stockholder Registration Rights Agreement, the Parent Registration Rights
Agreement or otherwise), except to the extent that the piggyback
registration rights granted to such person provide that securities to be
included by the Company or by any other holder of piggyback registration
rights shall have priority over the securities to be included by such
person, and
(C) THIRD, the securities requested to be included in such
Registration by any person granted piggyback registration rights, the terms
of which provide that securities to be included by the Company or by any
other holder of piggyback registration rights shall have priority over the
securities to be included by such person;
(ii) in any other event,
(A) FIRST, the securities the Surviving Corporation proposes to sell
in such registration,
(B) SECOND, the securities requested to be included in such
registration by any person or entity granted piggyback registration rights
(pursuant to the Principal Stockholder Registration Rights Agreement, the
Parent Registration Rights Agreement or otherwise), except to the extent
that the piggyback registration rights granted to such person provide that
securities to be included by the Company or by any other holder of
piggyback registration rights shall have priority over the securities to be
included by such person, and
(C) THIRD, the securities requested to be included in such
Registration by any person granted piggyback registration rights, the terms
of which provide that securities to be included by the Company or by any
other holder of piggyback registration rights shall have priority over the
securities to be included by such person.
To the extent that the privilege of including securities in any
Registration must be allocated among the parties pursuant to clauses (i)(B),
(i)(C), (ii)(B) or (ii)(C) above, the allocation shall be made pro rata based on
the number of securities that each such participant shall have requested to
include therein.
(d) NO INCONSISTENT AGREEMENTS. The Surviving Corporation will not enter
into any agreement with respect to its securities that is inconsistent with the
rights granted in, or otherwise conflicts with the provisions of, this Section
6.
SECTION 7. GOVERNANCE. (a) The Principal Stockholders hereby agree for
three years from the date of the consummation of the Merger to vote all of their
shares of Class C Common Stock in favor of Revlon's nominees for director
(including any "independent" directors required by the Nasdaq Stock Market) for
a number of seats on the Board of Directors so that Revlon shall at all times
maintain representation on the Board of Directors equal to Revlon's percentage
of ownership of Class C Common Stock (but in no event shall such number be less
than seven, which shall include two independent directors); and (b) Revlon
hereby agrees, for three years from the date of the consummation of the Merger,
to vote its shares of Class C Common Stock in favor of the Principal
Stockholders' nominees for director for a number of seats on the Board of
Directors so that the Principal Stockholders shall at all times maintain
representation on the Board of Directors equal to their aggregate
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percentage of ownership of Class C Common Stock after giving effect to the Cash
Election (but in no event shall such number be less than one nor more than two).
SECTION 8. MISCELLANEOUS.
(a) ENTIRE AGREEMENT; ASSIGNMENT. This Agreement (i) constitutes the entire
agreement among the parties with respect to the subject matter hereof and
supersedes all prior and contemporaneous agreements and understandings, both
written and oral, between the parties or any of them with respect to the subject
matter hereof, other than the Confidentiality Agreement and the Merger
Agreement, and (ii) shall not be assigned by operation of law or otherwise,
except that (A) this Agreement may be assigned by Revlon to the extent
assignment of the Merger Agreement by Revlon is permitted by the terms thereof
and (B) to the extent any Registrable Securities held by any Principal
Stockholder are assigned to any Permitted Transferee, such Permitted Transferee
shall be entitled to the benefits granted to the Principal Stockholders in
Section 6 and in the Principal Stockholder Registration Rights Agreement,
PROVIDED that such Permitted Transferee agrees in writing, in form and substance
reasonably satisfactory to Revlon, to be bound by the provisions of this
Agreement as if it were a Principal Stockholder.
(b) SEVERABILITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
(c) NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given upon receipt by the respective parties at the following addresses (or
such other address for a party as shall be specified by like notice):
(i) If to the Principal Stockholders at:
The Cosmetic Center, Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxx
with copies to:
Arent Fox Xxxxxxx Xxxxxxx & Xxxx
0000 Xxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Attention: Carter Strong
and to:
Xxxxxxx & Berlin
0000 X Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000-0000
Attention: Xxxxxx X. XxXxx, Xx.
(ii) If to Revlon at:
Revlon Consumer Products Corporation
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Vice President and Secretary
with copies to:
Xxxxxx & Xxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxx Xxxxx
(d) CAPACITY OF PRINCIPAL STOCKHOLDERS. The parties hereto acknowledge and
agree that each of Xxxxx X. Xxxxxxxxx, Xxxx X. Xxxxxxxxx and Xxxxx X. Xxxxxxxxx
is entering into this Agreement solely in such Principal Stockholder's capacity
as a stockholder of the Company and not in his or her capacity as a director,
officer or other employee of the Company. The
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execution and delivery of this Agreement by each of such Principal Stockholders
shall in no way alter or impair such Principal Stockholder's duties or
obligations to the Company as a director, officer or other employee of the
Company.
(e) 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.
(f) DESCRIPTIVE HEADINGS. The descriptive headings 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.
(g) PARTIES IN INTEREST. 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 or shall confer upon any other person or
persons any rights, benefits or remedies of any nature whatsoever under or by
reason of this Agreement.
(h) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
(i) OBLIGATIONS JOINT AND SEVERAL. All obligations and agreements of each
Principal Stockholder set forth herein shall be the joint and several
obligations and agreements of all of the Principal Stockholders.
(j) INTERPRETATION.
(i) The words "hereof," "herein" and "hereunder" and words of similar
import, unless otherwise specifically provided, shall refer to this Agreement as
a whole and not to any particular provision of this Agreement.
(ii) The meanings given to terms defined herein shall be equally applicable
to both the singular and plural forms of such terms.
(iii) References to "Sections" are to Sections of this Agreement unless
otherwise specifically provided.
(iv) Unless the context clearly requires otherwise, the term "including" is
not limiting.
SECTION 9. DEFINITIONS.
The following terms, as used herein, have the following respective
meanings:
CLASS C COMMON STOCK means the Class C common stock, par value $.01 per
share, of the Company.
COMMISSION means the Securities and Exchange Commission.
COMPANY means The Cosmetic Center, Inc., a Delaware corporation.
PERMITTED TRANSFEREE means, with respect to any Principal Stockholder, any
other Principal Stockholder, any immediate family member of such Principal
Stockholder and any trust for the sole benefit of such Principal Stockholder or
any Permitted Transferee.
PRINCIPAL STOCKHOLDERS BREAK-UP FEE means, with respect to any Cosmetic
Center Alternate Transaction or any Stockholder Alternate Transaction, 25% of
the difference between (a) the value of all consideration paid to the Principal
Stockholders in such Cosmetic Center Alternate Transaction or such Stockholder
Alternate Transaction, as the case may be, with respect to all of their shares
and (b) the product of (i) the number of shares of Common Stock held by the
Principal Stockholders and (ii) $7.63. For purposes of this definition, any
non-cash consideration paid to the Principal Stockholders in such Cosmetic
Center Alternate Transaction or such Stockholder Alternate Transaction, as the
case may be, shall be valued (as of the date of the consummation of such
Cosmetic Center Alternate Transaction or such Stockholder Alternate Transaction,
as the case may be) at (a) if such consideration is in the form of securities
listed on a national stock exchange or qualified for trading on NASDAQ, the
closing price of such securities on such date on the principal national stock
exchange on which such securities are listed or the last trade on NASDAQ on such
date, as the case may be, and (b) with respect to all other consideration, at
the fair market value thereof (as determined by a nationally recognized
investment banking firm selected by the Principal Stockholders and reasonably
acceptable to Revlon).
REGISTRABLE SECURITIES means the Shares, but with respect to any Share,
only until such time as such Share (a) has been effectively registered under the
Act and disposed of in accordance with the Registration Statement covering it or
(b) has been sold to the public pursuant to Rule 144 (or any similar provision
then in force) under the Act or may be sold to the public pursuant to Rule
144(k) under the Act.
7
REGISTRATION means a Piggyback Registration or a Demand Registration.
REGISTRATION STATEMENT means any registration statement of the Surviving
Corporation filed pursuant to the Securities Act and which covers any of the
Registrable Securities pursuant to the provisions of this Agreement, including a
prospectus and any amendments and supplements to such Registration Statement,
including post-effective amendments, and all exhibits and all material
incorporated by reference in such Registration Statement.
REVLON EXPENSE REIMBURSEMENT FEE means an amount in immediately available
funds equal to the documented fees and expenses (up to a maximum of $1 million)
incurred since June 1, 1996 (including after the date hereof) by Revlon and its
representatives and agents in connection with the due diligence, preparation and
negotiation of legal documents, and preparation of financial statements of PFC
related to the Merger (including legal, tax and accounting fees (other than
accounting fees to the extent attributable to the audit of PFC's financial
statements) and disbursements).
SHARES means the shares of Class C Common Stock held by the Principal
Stockholders after giving effect to the Merger and the Cash Election.
STOCKHOLDER ALTERNATE TRANSACTION shall have occurred if any of the
Principal Stockholders sells or agrees to sell any shares of any class of the
outstanding equity securities or securities convertible into equity securities
of the Company to any person or group other than Revlon or its affiliates.
STOCKHOLDER TRIGGERING EVENT shall have occurred if any of the Principal
Stockholders shall breach in any material respect any of its obligations under
this Agreement or the Company shall breach in any material respects any of its
obligations under the Merger Agreement.
SUBJECT SECURITIES means Class C Common Stock, or securities convertible
into, or exercisable or exchangeable for, Class C Common Stock.
IN WITNESS WHEREOF, the parties have executed this Stockholders' Agreement
as of the date first above written.
/s/ XXXXX X. XXXXXXXXX
------------------------------
XXXXX X. XXXXXXXXX
/s/ XXXX X. XXXXXXXXX
------------------------------
XXXX X. XXXXXXXXX
/s/ XXXXX X. XXXXXXXXX
------------------------------
XXXXX X. XXXXXXXXX
XXXXXXXXX FAMILY LIMITED PARTNERSHIP
By: /s/ XXXX X. XXXXXXXXX
------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: General Partner
REVLON CONSUMER PRODUCTS CORPORATION
By: /s/ XXXXX X. XXXXX
------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Executive Officer
8
