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EXECUTION COPY
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT (the "Agreement") dated as of June 1, 1998,
between PLAYTEX PRODUCTS, INC., a Delaware corporation (the "Company"), and RCBA
PLAYTEX, L.P., a Delaware limited partnership (the "Principal Stockholder").
RECITALS
WHEREAS, X.X. Childs Equity Partners, L.P. (the "Seller") and the
Principal Stockholder are parties to a Stock Purchase Agreement, dated as of
June 1, 1998 (the "Purchase Agreement"), pursuant to which the Principal
Stockholder will purchase from the Seller, an aggregate 6,000,000 shares (the
"Purchased Shares") of common stock of the Company, par value $.01 ("Common
Stock"); and
WHEREAS, upon the Closing (as defined in the Purchase Agreement,
referred to herein as the "Effective Date"), the Principal Stockholder will
hold, in aggregate, 11,758,700 shares of the Common Stock (the "Shares");
NOW, THEREFORE, in consideration of the covenants and agreements set
forth herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions.The following terms, whenever used herein, shall
have the following meanings for all purposes of this Agreement.
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"1933 Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"1934 Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
An "Affiliate" of, or a person "affiliated" with, a specified
Person, means a Person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
the Person specified. The term "control" (including the terms "controlling,"
"controlled by" and "under common control with") means the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of a person, whether through the ownership of voting securities, by
contract, or otherwise.
"By-Laws" means the by-laws of the Company.
"By-Laws Amendment" means the proposed amendment to the By-Laws in
the form attached as Exhibit A hereto.
"Transfer" or "Transferred" means, in relation to any share of
Common Stock, any sale, assignment, transfer or disposition by gift or
otherwise, including without limitation, any distribution in liquidation or
otherwise by a corporation or partnership; provided, however, that "Transfer"
does not mean, with respect to any such share of Common Stock, any pledge,
mortgage, hypothecation or grant of a security interest therein.
"Person" means any individual, firm, corporation, partnership,
limited liability company or partnership, trust, incorporated or unincorporated
association, joint
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venture, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind, and shall include any successor (by merger
or otherwise) of such entity.
ARTICLE II
DIRECTORS
2.1 Increase in the Size of the Board of Directors. The Company
hereby agrees that it will upon or immediately following the Effective Date (i)
increase the size of its Board of Directors (the "Board") to a number necessary
to effect clause (ii) of this Section 2.1, and (ii) cause two of the vacancies
thus created (or created by resignation) to be filled by Xxxxxxx X. Xxxx and
Xxxxxxx X. Xxxxx.
2.2 Nomination of Designated Directors. The Company hereby agrees
that for so long as the Principal Stockholder owns, in the aggregate, at least
11% of the outstanding shares of Common Stock, the Company will use its best
efforts to ensure that, following any vote for the election of directors of the
Company at a stockholders' meeting or otherwise, two directors (each a
"Designated Director") designated by the Principal Stockholder are members of
the Board, provided, that (i) one Designated Director is either Xxxxxxx X. Xxxxx
or N. Xxxxx Xxxx for so long as he is an employee, officer, director, member or
partner of the Principal Stockholder or any of its Affiliates, (ii) any other
Designated Director shall be approved by a majority of the members of the Board
who are either Purchaser Directors (as defined in the By-Laws) or officers of
the Company (which such consent shall not be unreasonably
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withheld), and (iii) that the proposed Designated Directors are nominated in
accordance with the By-Laws.
2.3 Stockholder Meeting; Proxy Material; By-Laws Amendment. The
Company shall cause proxies of its stockholders to be solicited, in accordance
with the By-Laws and the 1934 Act, for the purpose of voting for the adoption of
the By-Laws Amendment (the "Stockholder Meeting") at the annual meeting of the
Company's stockholders to be held in 1999 (the "Stockholders Meeting"). In
connection with the Stockholders Meeting, the Company: (A) shall prepare and
file with the Securities and Exchange Commission (the "SEC") in accordance with
the 1934 Act an information statement relating to the By-Laws Amendment (the
"Information Statement"), use all reasonable efforts to have the Information
Statement and/or any amendment or supplement thereto cleared by the SEC and
thereafter mail to its stockholders, as promptly as practicable following such
clearance, the Information Statement; (B) shall use its reasonable best efforts
to obtain the necessary approvals by its stockholders for the adoption of the
By-Laws Amendment (unless the Board shall have determined in good faith, based
upon advice of outside counsel, that taking such actions would be inconsistent
with the Board's fiduciary duties under applicable law); and (C) shall otherwise
comply with all legal requirements applicable to the Stockholders Meeting. The
Company shall make available to the Principal Stockholder prior to the filing
thereof with the SEC copies of the preliminary Information Statement and any
amendments or supplements thereto and shall make any changes therein reasonably
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requested by the Principal Stockholder insofar as such changes relate to any
matters relating to the Principal Stockholder.
2.4 Voting for Directors. For so long as the Principal Stockholder
owns at least 11% of the outstanding shares of Common Stock, the Principal
Stockholder agrees that it shall vote (and shall cause each of its affiliates
owning, directly or indirectly, any shares of Common Stock to vote) all the
shares of Common Stock owned directly or indirectly by the Principal Stockholder
or such Affiliate in favor of all the persons nominated by the Board in
accordance with the Amended By- Laws; provided this Section 2.4 shall terminate
upon the tenth anniversary of the Effective Date.
ARTICLE III
TRANSFERS OF SECURITIES
3.1 Restrictions on Transfer of Company Common Stock. The
Principal Stockholder agrees that, from the Effective Date to the date 364 days
after the Effective Date, it shall not (i) Transfer any of the Purchased
Shares, by distribution or otherwise, to any of its shareholders, partners,
members or owners (in each case other than Affiliates), (ii) sell any of the
Purchased Shares pursuant to Rule 144 under the 0000 Xxx.
3.2 Transfers Subject to Compliance with Securities Laws. After
the Effective Date, no Shares may be Transferred by the Principal Stockholder
(other than pursuant to an effective registration statement under the 0000 Xxx)
unless such
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Principal Stockholder first delivers to the Company an opinion of counsel,
reasonably satisfactory to the Company, to the effect that such Transfer is not
required to be registered under the 1933 Act.
3.3 Certificates for Shares To Bear Legends. (A) After the
Effective Date, so long as the Purchased Shares are not sold pursuant to an
effective registration statement under the 1933 Act or pursuant to Rule 144
under the 1933 Act, the Purchased Shares shall be subject to a stop-transfer
order and the certificates therefor shall bear the following legend by which
each holder thereof shall be bound:
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED
OR SOLD EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933, OR (ii) AN APPLICABLE EXEMPTION
FROM REGISTRATION THEREUNDER."
(B) So long as the Purchased Shares are
subject to the terms and conditions of Section 3.1, the Purchased Shares shall
be subject to a stop-transfer order and the certificates shall bear the
following legend:
"UNTIL JUNE __, 1999, THE SALE OR TRANSFER OF THE SHARES REPRESENTED
BY THIS CERTIFICATE IS FURTHER SUBJECT TO RESTRICTIONS WHICH ARE
CONTAINED IN A STOCKHOLDERS AGREEMENT DATED AS OF JUNE [1], 1998, A
COPY OF WHICH IS ON FILE WITH THE ISSUER OF THESE SHARES AND WILL BE
FURNISHED BY THE ISSUER OF THESE
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SHARES TO THE STOCKHOLDER ON REQUEST AND WITHOUT CHARGE."
(C) After the termination of the legend requirements
of either Section 3.3(A) or Section 3.3(B), the Company shall, upon the written
request of the holders of the Shares and receipt by the Company of evidence
reasonably satisfactory to it that such requirement has terminated (including,
with respect to the legend required by the Section 3.3(A), a written opinion of
counsel), issue certificates for such Shares that do not bear all or part of the
legend described in Section 3.3(A) or Section 3.3(B), as the case may be, and
release the applicable stop-transfer order.
ARTICLE IV
RESTRICTIONS ON PURCHASE
4.1 Restricted Purchases. From the Effective Date through the
fifth anniversary of the Effective Date, the Principal Stockholder agrees that
it will not, nor will it permit any of its Affiliates to, directly or
indirectly, take any action, including, without limitation, to acquire, offer
to acquire, or agree to acquire, by purchase or otherwise, any shares of Common
Stock (or any options, warrants, convertible securities, or other rights to
purchase or subscribe for Common Stock), if immediately thereafter the number
of shares of Common Stock (including, for this purpose, shares of Common Stock
issuable pursuant to any options, warrants, convertible securities, or other
rights to purchase or subscribe for Common Stock) beneficially owned (within
the meaning of Rule 13d-3 of the Securities Exchange Act of 1934) by the
Principal
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Stockholder and its Affiliates exceeds the sum of (i) the number of Shares as of
the Effective Date (the "Effective Date Shares") plus (ii) 2,000,000 (in the
case of each of clause (i) and (ii), as adjusted for stock splits, combination
of stock, stock dividends or similar recapitalizations by the Company), provided
however that nothing in this Section 4.1 shall prohibit the Principal
Stockholder or any of its Affiliates from acquiring any Common Stock in
accordance with the provisions of Section 4.2 below.
4.2 Preemptive Rights.
(a) From and after the Effective Date, except as provided
below, the Company shall not issue, sell or transfer or allow any of its
subsidiaries to issue, sell or transfer any Common Stock (or any options,
warrants, convertible securities, or other rights to purchase or subscribe for
Common Stock) (collectively, the "Offered Securities") unless the Principal
Stockholder is offered in writing the right to purchase, at the same price and
on the same terms proposed to be issued and sold, a portion of the Offered
Securities (the "Stated Percentage") equal to the product of (i) the total
number of Offered Securities multiplied by (ii) a fraction, the numerator of
which is the lesser of (x) the number of Effective Date Shares or (y) the number
of shares of Common Stock then owned by the Principal Stockholder and the
denominator of which is the total number of the then outstanding shares of
Common Stock, computed on a fully diluted basis (the "Preemptive Rights"). If
the Offered Securities are being issued in connection with the issuance of any
other securities, or incurrence of any debt, by the Company ("Other Securities
or Debt"), each Principal Stockholder shall be required to purchase its Stated
Percentage of such Other Securities or Debt in
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order to exercise its Preemptive Rights. The Principal Stockholder shall have
the right, during the period specified in Section 4.2(b), to accept the offer
for any or all of their portion of the Offered Securities.
(b) Any Principal Stockholder who does not deliver to the
Company written notice of acceptance of any offer made pursuant to Section
4.2(a) within 10 business days after such Principal Stockholder's receipt of
such offer shall be deemed to have waived its right to purchase the Offered
Securities which are the subject of such offer (including, if the Offered
Securities include convertible securities, options, or other rights to acquire
other securities, such other securities.)
(c) Section 4.2 (a) shall not apply to (i) the grant of
options to purchase Common Stock, or the issuance of shares of Common Stock, to
employees of the Company or any of its subsidiaries, (ii) shares of Common Stock
issuable upon exercise of any option, warrant, convertible security or other
rights to purchase or subscribe for Common Stock which, in each case, had been
issued in compliance with Section 4.2(a) or under Section 4.2(c)(i), (iii)
securities issued pursuant to any stock split, combination of stock, stock
dividend or other similar stock recapitalization, (iv) shares of Common Stock
issued pursuant to an employee stock option or similar plan, (v) shares of
Common Stock issued in connection with the acquisition of stock or assets or of
any other Person, (vi) shares of Common Stock issued pursuant to any registered
public offering under the 1933 Act, or (vii) any issuance of Offered Securities
occurring after the Principal owns less than 11% of the outstanding shares of
Common Stock.
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ARTICLE V
MISCELLANEOUS
5.1 Amendment. This Agreement may be altered or amended only with
the consent of the Company and the Principal Stockholder.
5.2 Specific Performance. The parties recognize that the
obligations imposed on them in this Agreement are special, unique and of
extraordinary character, and that in the event of breach by any party, damages
will be an insufficient remedy; consequently, it is agreed that the parties
hereto may have specific performance (in addition to damages) as a remedy for
the enforcement hereof, without proving damages.
5.3 Assignment. Except as other provided herein, the terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the respective successors of the parties hereto; provided, however, that this
Agreement may not be assigned by any party without the prior written consent of
the Company and the Principal Stockholder except that the Company may assign its
rights herein to any successor to all or substantially all its assets (by merger
or otherwise). Any assignment of rights hereunder shall be coupled with the
assumption by the assignee of all of the obligations of the assignor hereunder
and shall thereby relieve such assignor of such obligations. Any purported
assignment made in violation of this Section 6.3 shall be void and of no force
and effect.
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5.4 Notices. Any and all notices, designations, consents, offers,
acceptances, or any other communication provided for herein shall be given in
writing and deemed received when delivered by overnight courier or hand
delivery, or when sent by facsimile transmission which shall be addressed, or
sent, as follows:
If to the Company, to it at:
Playtex Products, Inc.
000 Xxxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx,
Chief Executive Officer
Telecopier: (000) 000-0000
with a copy to:
Xxxx Wheat & Partners Incorporated
000 Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxx
Telecopier: (000) 000-0000
and another copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
Telecopier: (000) 000-0000
If to the Principal Stockholder, to:
Xxxxxxx X. Xxxx & Associates, L.P.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Telecopier: (000) 000-0000
With a copy to:
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Xxxxxx, Xxxxxx & Xxxxxxxxx
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Telecopier: (000) 000-0000
5.5 Counterparts. This Agreement may be executed in one or more
counterparts and each counterpart shall be deemed to be an original and which
counterparts together shall constitute one and the same agreement of the
parties hereto.
5.6 Section Headings. Headings contained in this Agreement are
inserted only as a matter of convenience and in no way define, limit or extend
the scope or intent of this Agreement or any provisions hereof.
5.7 Choice of Law. This Agreement shall be governed by the laws of
the State of New York, without regard to principles of conflicts of laws.
5.8 Entire Agreement. This Agreement, the Stock Purchase Agreement
and the Registration Rights Agreement contain the entire understanding of the
parties hereto respecting the subject matter hereof and thereof and supersede
all prior agreements, discussions, and understandings with respect to such
subject matters.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
PLAYTEX PRODUCTS, INC.
By:
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Name:
Title:
RCBA PLAYTEX, L.P.
By:
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Name:
Title:
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FORM OF AMENDMENT TO
THE BY-LAWS OF THE COMPANY
A. The existing Section 15(b)B shall be replaced in its entirety to
read as follows:
"(B) From the Effective Date until the earlier of (1) the date
upon which the Principal Stockholder holds, in the aggregate, less
than 11% of the outstanding shares of common stock of the Company or
(2) the tenth anniversary of the Effective Date, two of the Non-
Purchaser Directors shall be Designated Directors, provided, that
(1) one Designated Director is either Xxxxxxx X. Xxxxx or N. Xxxxx
Xxxx for so long as he is an employee, officer, director, member or
partner of the Principal Stockholder or any of its Affiliates, and
(2) any other Designated Director shall be approved by a majority of
the members of the Board who are either Purchaser Directors or
officers of the Company, which approval shall not be unreasonably
withheld. The "Effective Date" shall have the meaning given to that
term in the Stockholders Agreement, dated as of June 1, 1998, among
the Company, and RCBA PLAYTEX, L.P. (the "Principal Stockholder").
The "Designated Directors" means the Directors designated by the
Principal Stockholder."
