STOCKHOLDERS AGREEMENT
This STOCKHOLDER AGREEMENT (this "Agreement") is made and
entered into as of this 16th day of February 2000 by and among International
Paper Company, a New York corporation ("Parent"), International Paper-37, Inc.,
a Delaware corporation and a direct wholly owned subsidiary of Parent
("Purchaser"), and the individuals and other parties listed on SCHEDULE A
attached hereto (each, a "Stockholder" and, collectively the "Stockholders").
All capitalized terms not otherwise defined herein shall have the meanings set
forth in the Merger Agreement (as defined below).
RECITALS
WHEREAS, the Stockholders desire that Shorewood Packaging
Corporation, a Delaware corporation (the "Company"), Parent and Purchaser enter
into an Agreement and Plan of Merger dated as of the date hereof (as the same
may be amended or supplemented, the "Merger Agreement") with respect to a tender
offer by Purchaser to purchase any and all of the outstanding shares of common
stock, $.01 par value, of the Company ("Company Common Stock") and the
associated rights to purchase preferred stock, issued pursuant to the Rights
Agreement, dated as of June 12, 1995, between the Company and The Bank of New
York, and a business combination whereby Purchaser will be merged with and into
the Company (the "Merger"); and
WHEREAS, the Stockholders are executing this Agreement as an
inducement to Parent to enter into and execute, and to cause Purchaser to enter
into and execute, the Merger Agreement.
NOW, THEREFORE, in consideration of the execution and delivery
by Parent and Purchaser of the Merger Agreement, the foregoing premises and the
mutual covenants, conditions and agreements contained herein and therein, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS. Each
Stockholder represents and warrants to Parent and Purchaser in respect of
himself or itself as follows:
(a) The Stockholder is the beneficial owner of, and has good
and marketable title to, the number of shares of Company Common Stock set
forth opposite the Stockholder's name in SCHEDULE A hereto (as may be
adjusted from time to time pursuant to Section 5, the Stockholder's
"Shares"). Except for the Stockholder's Shares and any other shares of
Common Company Stock subject hereto, the Stockholder is not the record or
beneficial owner of any shares of capital stock of the Company other than
shares issuable upon the exercise of options and Shares otherwise subject
to this Agreement due to their ownership by other Stockholders party
hereto. The Stockholder has the sole right to vote such Stockholder's
Shares, and none of such Stockholder's Shares is subject to any voting
trust or other agreement, arrangement or restriction with
respect to the voting of such Stockholder's Shares, except as contemplated
by this Agreement.
(b) This Agreement has been duly authorized, executed and
delivered by the Stockholder and constitutes the legal, valid and binding
obligation of the Stockholder, enforceable against the Stockholder in
accordance with its terms, subject to applicable bankruptcy, insolvency,
moratorium or other similar laws relating to creditors' rights and general
principles of equity. Neither the execution and delivery of this Agreement
nor the consummation by the Stockholder of the transactions contemplated
hereby will result in a violation of, or a default under, or conflict with,
any contract, trust, commitment, agreement, understanding, arrangement or
restriction of any kind to which the Stockholder is a party or bound or to
which the Stockholder's Shares are subject. Except for filings under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended,
consummation by the Stockholder of the transactions contemplated hereby
will not violate, or require any consent, approval, or notice under, any
provision of any judgment, order, decree, statute, law, rule or regulation
applicable to the Stockholder or the Stockholder's Shares. If the
Stockholder is married and the Stockholder's Shares constitute community
property or otherwise need spousal or other approval to be legal, valid and
binding, this Agreement has been duly authorized, executed and delivered
by, and constitutes a valid and binding agreement of, the Stockholder's
spouse, enforceable against such spouse in accordance with its terms,
except as limited by applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of
creditors' rights generally. No trust of which such Stockholder is a
trustee requires the consent of any beneficiary to the execution and
delivery of this Agreement or to the consummation of the transactions
contemplated hereby. Each Stockholder hereby grants to Parent an
irrevocable proxy with full power of substitution and resubstitution which
shall be deemed coupled with an interest to vote such Stockholder's Shares
as contemplated by Sections 3(c) and 4 hereof.
(c) The Stockholder's Shares and the certificates representing
such Shares are now and at all times during the term hereof will be held by
the Stockholder, or by a nominee or custodian for the benefit of the
Stockholder, free and clear of all liens, claims, security interests,
proxies, voting trusts or agreements, understandings or arrangements or any
other encumbrances whatsoever, except for any such encumbrances or proxies
arising hereunder and except for such liens and encumbrances that will not
interfere with the Stockholder's ability to perform his or its obligations
hereunder.
(d) No broker, investment banker, financial adviser or other
person is entitled to any broker's, finder's, financial adviser's or other
similar fee or commission from Parent, Purchaser or the Company in
connection with the transactions contemplated hereby based upon
arrangements made by or on behalf of the Stockholder in his individual
capacity.
(e) The Stockholder understands and acknowledges that Parent
is entering into, and causing Purchaser to enter into, the Merger Agreement
in reliance upon the Stockholder's execution and delivery of this
Agreement.
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SECTION 2. AGREEMENT TO TENDER OR SELL.
(a) Each Stockholder hereby agrees that he shall tender all of
his Shares into the Offer (as defined in the Merger Agreement) and that he
shall not withdraw any Shares so tendered. The parties agree that each of
the Stockholders will, for all Shares tendered thereby in the Offer and
accepted for payment by Purchaser, receive a price for each of its Shares
equal to $21.00, or such higher per share consideration paid to other
stockholders who have tendered into the Offer.
(b) Each Stockholder hereby agrees to enter into such
agreements and take such actions as are necessary to provide that all
Options held by such Stockholder are cashed out in connection with the
Merger.
SECTION 3. COVENANTS. Each Stockholder, severally and not jointly, agrees
with, and covenants to, Parent and Purchaser as follows:
(a) The Stockholder shall not, except as contemplated by the
terms of this Agreement, (i) transfer (the term "transfer" shall include,
without limitation, for the purposes of this Agreement, any sale, gift,
pledge or other disposition), any or all of the Stockholder's Shares 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) subject to Section 7, take
any other action that would in any way restrict, limit or interfere with
the performance of his obligations hereunder or the transactions
contemplated hereby. Notwithstanding anything to the contrary provided in
this Agreement, the Stockholder shall have the right to transfer Shares to
(i) any Family Member (as defined below), (ii) the trustee or trustees of a
trust solely (except for remote contingent interests) for the benefit of
the Stockholder and/or one or more Family Members, (iii) a charitable
remainder trust for the benefit of the Stockholder and/or one or more
Family Members and/or designated charities, (iv) a partnership of which the
Stockholder or a Family Member owns all of the partnership interests or (v)
the executor, administrator personal representative of the estate of the
Stockholder; PROVIDED, THAT in the case of any such transfer, the
transferee shall execute an agreement to be bound by the terms of this
Agreement. "Family Member" shall mean (i) the Stockholder's spouse and (ii)
any other natural person who is a lineal descendant of the Stockholder or
the Stockholder's spouse or is related to the Stockholder or the
Stockholder's spouse within the second degree.
(b) The Stockholder shall not, nor shall he permit any
investment banker, attorney or other adviser or representative of the
Stockholder to, directly or indirectly, (i) solicit, initiate or encourage
the submission of, any Acquisition Proposal or (ii) participate in any
discussions or negotiations regarding, or furnish to any person any
information with respect to, or take any other action to facilitate any
inquiries or the making of any proposal that constitutes, or may reasonably
be expected to lead to any Acquisition Proposal. Without limiting the
foregoing, it is understood that any violation of the restrictions set
forth in the preceding sentence by an investment banker, attorney or
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other adviser or representative of the Stockholder shall be deemed to be a
violation of this Section 3(b) by the Stockholder.
(c) At any meeting of stockholders of the Company called to
vote upon the Merger and the Merger Agreement or at any adjournment thereof
or in any other circumstances upon which a vote, consent or other approval
(including by written consent) with respect to the Merger and the Merger
Agreement is sought, the Stockholder shall, including by initiating a
written consent solicitation if requested by Parent, vote (or cause to be
voted) the Stockholder's Shares in favor of the Merger, the adoption by the
Company of the Merger Agreement and the approval of the terms thereof and
each of the other transactions contemplated by the Merger Agreement.
(d) Until after the Merger is consummated or the Merger
Agreement is terminated, the Stockholder shall use all reasonable efforts
to take, or cause to be taken, all actions, and to do, or cause to be done,
and to assist and cooperate with the other parties in doing, all things
necessary, proper or advisable to consummate and make effective, in the
most expeditious manner practicable, the Merger and the other transactions
contemplated by the Merger Agreement.
SECTION 4. COMPETING TRANSACTIONS. Each Stockholder hereby agrees to vote
against or refrain from giving any consent in favor of, and not to tender his
shares into any offer relating to, (i) any merger agreement or merger (other
than the Merger Agreement and the Merger), consolidation, combination, sale of
substantial assets, reorganization, joint venture, recapitalization,
dissolution, liquidation or winding up of or by the Company and (ii) any
amendment of the Company's certificate of incorporation or by-laws or other
proposal or transaction including any consent solicitation to remove or elect
any directors of the Company) involving the Company or any of its subsidiaries
which amendment or other proposal or transaction would in any manner impede,
frustrate, prevent or nullify, or result in a breach of any covenant,
representation or warranty or any other obligation or agreement of the Company
under or with respect to, the Offer, the Merger, the Merger Agreement or any of
the other transactions contemplated by the Merger Agreement (each of the
foregoing in clause (i) or (ii) above, a "Competing Transaction").
SECTION 5. CERTAIN EVENTS. Each Stockholder agrees that this Agreement
and the obligations hereunder shall attach to the Stockholder's Shares and shall
be binding upon any person or entity to which legal or beneficial ownership of
such Shares shall pass, whether by operation of law or otherwise, including
without limitation the Stockholder's heirs, guardians, administrators or
successors. In the event of any stock split, stock dividend, merger,
reorganization, recapitalization or other change in the capital structure of the
Company affecting the Company Common Stock, or the acquisition of additional
shares of Company Common Stock or other securities or rights of the Company by
any Stockholder, the number of Shares listed on SCHEDULE A beside the name of
the Stockholder shall be adjusted appropriately and this Agreement and the
obligations hereunder shall attach to any additional shares of Company Common
Stock or other securities or rights of the Company issued to or acquired by the
Stockholder.
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SECTION 6. VOIDABILITY. If prior to the execution hereof, the board of
directors of the Company shall not have duly and validly authorized and approved
by all necessary corporate action the acquisition of Company Common Stock by
Parent and Purchaser and the other transactions contemplated by this Agreement
and the Merger Agreement, so that by the execution and delivery hereof Parent or
Purchaser would become, or could reasonably be expected to become, an
"interested stockholder" with whom the Company would be prevented for any period
pursuant to Section 203 of the Delaware General Corporation Law from engaging in
any "affiliated transaction" (as such terms are defined in Section 203 of the
Delaware General Corporation Law), then this Agreement shall be void and
unenforceable until such time as such authorization and approval shall have been
duly and validly obtained.
SECTION 7. STOCKHOLDER CAPACITY. No person executing this Agreement who
is or becomes during the term hereof a director or officer of the Company makes
any agreement or understanding herein in his capacity as such director or
officer. Each Stockholder signs solely in his capacity as the record holder and
beneficial owner of, or the trustee of a trust whose beneficiaries are the
beneficial owners of, such Stockholder's Shares and nothing herein shall limit
or affect any actions taken by a Stockholder in his capacity as an officer or
director of the Company to the extent specifically permitted by the Merger
Agreement.
SECTION 8. FURTHER ASSURANCES. Each Stockholder shall, upon request of
Parent or Purchaser, execute and deliver any additional documents and take such
further actions as may reasonably be deemed by Parent or Purchaser to be
necessary or desirable to carry out the provisions hereof.
SECTION 9. TERMINATION. This Agreement, and all rights and obligations of
the parties hereunder, shall terminate upon the earlier of (a) the date upon
which the Merger Agreement is terminated in accordance with its terms or (b) the
date that Parent, Purchaser or the Company shall have purchased and paid for the
Shares of the Stockholders pursuant to Section 2; PROVIDED, HOWEVER, that the
termination of this Agreement shall not relieve any party of liability for
breach of this Agreement prior to termination.
SECTION 10. PUBLIC ANNOUNCEMENTS. Each Stockholder will consult with
Parent before issuing, and provide Parent with the opportunity to review an
comment upon, any press release or other public statements with respect to the
transactions contemplated by this Agreement and the Merger Agreement, and shall
not issue any such press release or make any such public statement prior to such
consultation, except as may be required by applicable law, court process or by
obligations pursuant to any listing agreement with any national securities
exchange.
SECTION 11. MISCELLANEOUS.
(a) Capitalized terms used and not otherwise defined in this
Agreement shall have the respective meanings assigned to such terms in the
Merger Agreement.
(b) All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given if delivered personally or sent by overnight courier (providing proof
of delivery) to the parties at the
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following addresses (or at such other address for a party as shall be
specified by like notice): (i) if to Parent or Purchaser, to the address
set forth in the Merger Agreement; and (ii) if to any Stockholder, to the
address set forth on SCHEDULE A hereto, or such other address as may be
specified in writing by such Stockholder.
(c) Headings of Sections of this Agreement are for the
convenience of the parties only, and shall be given no substantive or
interpretive effect whatsoever.
(d) This Agreement may be executed by the parties in separate
counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the
same instrument. Each counterpart may consist of a number of copies of this
Agreement each signed by less than all, but together signed by all of the
parties hereto. This Agreement shall become effective when one or more
counterparts have been signed by each of the parties and delivered to the
other parties.
(e) This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without regard to its
rules of conflict of laws or those of any other jurisdiction.
(f) Each of the parties hereto (1) (A) consents to submit
itself to the personal jurisdiction of any Federal court located in the
State of Delaware or any Delaware state court in the event any dispute
arises out of this Agreement or any of the transactions contemplated by
this Agreement and (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, and (2) (A) agrees that any action under this Agreement may
also be brought in any Federal or state court located in the City of New
York, Borough of Manhattan and (B) agrees that it will not by motion or
other action contest the bringing of any such action in the above mentioned
courts rather than in any other venue or forum.
(g) Neither this Agreement nor any of the rights, interests or
obligations under this Agreement shall be assigned, in whole or in part, by
operation of law or otherwise, by any of the parties without the prior
written consent of the other parties, except by laws of descent. Any
assignment in violation of the foregoing shall be void.
(h) If any term, provisions, covenant or restriction herein,
or the application thereof of any circumstance, shall, to any event, be
held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions herein and the application thereof to any other circumstances,
shall remain in full force and effect, shall not in any way be affected,
impaired or invalidated, and shall be enforced to the fullest extent
permitted by law.
(i) The parties hereto agree that irreparable damage would
occur if any of the provisions of this Agreement was not performed in
accordance with its specific terms or as 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
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specifically the terms and provisions of this Agreement in any court
referred to in Section 11(f) of this Agreement, this being in addition to
any other remedy to which they are entitled at law or in equity. In any
such action for specific performance, no party will be required to post a
bond.
(j) No amendment, modification or waiver in respect of this
Agreement shall be effective against any parry unless it shall be in
writing and signed by such party.
(k) This Agreement may be executed by facsimile signatures by
any party and such signature shall be deemed binding for all purposes
hereof, without delivery of an original signature being thereafter
required.
(l) This Agreement, including the Schedule hereto, constitutes
the entire agreement between the parties with respect to the subject matter
hereof and supersedes all prior agreements, understandings, negotiations,
representations and warranties, and discussions, whether oral or written,
among the parties hereto, with respect to the subject matter hereof. There
are no conditions, covenants, agreements, representations, warranties or
other provisions, express or implied, collateral, statutory or otherwise,
relating to the subject matter of this Agreement. No prior drafts of this
Agreement or portions thereof shall be admissible into evidence in any
action, suit or other proceeding involving this Agreement.
(m) Whenever this Agreement requires Purchaser to take any
action, such requirement shall be deemed to include an undertaking on the
part of Parent to cause Purchaser to take such action and a guarantee of
the performance thereof.
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IN WITNESS WHEREOF, Parent, Purchaser and the Stockholders have caused
this Agreement to be duly executed and delivered as of the date first written
above.
INTERNATIONAL PAPER COMPANY
By: /s/ Xxxxx X. Xxxxx
---------------------------
Name: Xxxxx X. Xxxxx
Title: Executive Vice President
INTERNATIONAL PAPER - 37, INC.
By: /s/ Xxxxx X. Xxxxxx
---------------------------
Name: Xxxxx X. Xxxxxx
Title: Presidents
/s/ Xxxxxx X. Xxxxx
--------------------------
Xxxxxx X. Xxxxx
/s/ Xxxx X. Xxxxx
--------------------------
Xxxx X. Xxxxx
SHORE FAMILY PARTNERSHIP, L.P.
By: SHORE FAMILY LLC, as sole
general partner
By: /s/ Xxxx X. Xxxxx
---------------------------
Name: Xxxx X. Xxxxx
Title: Manager
XXXX XXXXX ESTATE MARITAL TRUST
By: /s/ Xxxx X. Xxxxx
---------------------------
Name: Xxxx X. Xxxxx
Title: Trustee
/s/ Xxxxxx X. Xxxxxxx
---------------------------
Xxxxxx X. Xxxxxxx
S-1
XXXX XXXXX MARITAL TRUST
By: /s/ Xxxx X. Xxxxx
---------------------------
Name: Xxxx X. Xxxxx
Title: Trustee
S-2
SCHEDULE A
--------------------------------------------------------------------------------
NUMBER OF SHARES OF
NAME AND ADDRESS OF STOCKHOLDER COMPANY COMMON STOCK
--------------------------------------------------------------------------------
Shore Family Partnership, L.P. 2,700,000
c/o Shorewood Packaging Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
--------------------------------------------------------------------------------
Xxxx X. Xxxxx 1,007,687
c/o Shorewood Packaging Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
--------------------------------------------------------------------------------
Xxxx Xxxxx Estate Marital Trust (testamentary 586,062
trust)
c/o Shorewood Packaging Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
--------------------------------------------------------------------------------
Xxxxxx X. Xxxxx 163,402
c/o Shorewood Packaging Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
--------------------------------------------------------------------------------
Xxxx Xxxxx Marital Trust 108,258
c/o Shorewood Packaging Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
--------------------------------------------------------------------------------
Xxxxxx X. Xxxxxxx 86,736
0000 Xxxxx Xxxxx
Xxxxxxx Xxxxxx, XX 00000
--------------------------------------------------------------------------------
