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EXHIBIT B
STOCKHOLDERS AGREEMENT
THIS STOCKHOLDERS AGREEMENT, dated as of February 13, 1998 (the
"Agreement"), is made and entered into by APPLIED GRAPHICS TECHNOLOGIES, INC., a
Delaware corporation ("AGT"), AGT ACQUISITION CORP., a Delaware corporation and
a direct wholly-owned subsidiary of AGT ("Acquisition"), and Xxxxxx X. Xxxxx,
Xxxxxxx X. Xxxxx, Xxxxxx X. Xxxxxxxxxx, Xxxx X. Xxxxxxx, Xxxxxx X. Xxxxxxx,
Xxxxxxx X. Xxxxx, Xxxxx Xxxxxxxxx, Xxxxx Xxxxxxxxx, Xx. and Xxxxxx X. Xxxxxx
(collectively, the "Stockholders" and individually a "Stockholder"). In addition
to the above parties, DEVON GROUP, INC., a Delaware corporation (the "Company"),
hereby joins in the execution and delivery of this Agreement for purposes of
Section 5.
W I T N E S S E T H
WHEREAS, concurrently herewith, AGT, Acquisition and the Company are
entering into an Agreement and Plan of Merger (as such agreement may hereafter
be amended from time to time, the "Merger Agreement"; capitalized terms used and
not defined herein have the respective meanings ascribed to them in the Merger
Agreement), pursuant to which the Company will be merged with and into
Acquisition (the "Merger"); and
WHEREAS, as an inducement and a condition to entering into the Merger
Agreement, AGT has required that the Stockholders agree, and the Stockholders
have agreed, to enter into this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements contained herein, the parties hereto,
intending to be legally bound, hereby agree as follows:
1. Definitions. For purposes of this Agreement:
(a) "Beneficially Own" 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 all other Persons with whom such
Person would constitute a "group" as within the meaning of Section 13(d)(3) of
the Exchange Act.
(b) "Person" shall mean an individual, corporation, partnership, joint
venture, association, trust, unincorporated organization or other entity.
2. Provisions Concerning Company Common Stock.
(a) Each Stockholder hereby, severally and not jointly and severally,
agrees that during the period commencing on the date hereof and continuing until
the first to occur of the Effective Time, the termination of this Agreement or
the termination of the Merger Agreement in accordance with its terms, at any
meeting of the holders of Company Common Stock, however called, such Stockholder
shall vote (or cause to be voted) all of the issued and outstanding Shares held
of record or Beneficially Owned by such Stockholder, whether heretofore owned or
hereafter acquired: (i) in favor of the approval and adoption of the Merger
Agreement and the Merger; (ii) against any action or agreement that would result
in a breach in any respect of any covenant, representation or warranty or any
other obligation or agreement of the Company under the Merger Agreement or this
Agreement; and (iii) except as otherwise agreed to in writing in advance by AGT,
against the following actions (other than the Merger and the transactions
contemplated by the Merger Agreement): (A) any extraordinary corporate
transaction, such as a merger, consolidation or other business combination
involving the Company or its Subsidiaries except as permitted in the Merger
Agreement; (B) a sale, lease or transfer of a material amount of assets of the
Company or its Subsidiaries, or a reorganization, recapitalization, dissolution
or liquidation of the Company or its Subsidiaries except as permitted in the
Merger Agreement;
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(C)(1) any change in a majority of the persons who constitute the board of
directors of the Company; (2) any material change in the Company's Certificate
of Incorporation or Bylaws; (3) any other material change in the Company's
corporate structure or business except as permitted in the Merger Agreement; or
(4) any other action which, in the case of each of the matters referred to in
clauses (C)(1), (2), (3) or (4), is intended, or could reasonably be expected,
to impede, interfere with, delay, postpone, or materially adversely affect the
Merger and the transactions contemplated by this Agreement and the Merger
Agreement, and during such period such Stockholder shall not enter into any
agreement or understanding with any person or entity the effect of which would
be inconsistent or violative of the provisions and agreements contained in this
Section 2.
(b) Each Stockholder hereby grants to AGT a proxy to vote the Shares of
such Stockholder in the manner required under this Agreement. Each Stockholder
intends such proxy to be irrevocable and coupled with an interest and will take
such further action or execute such other instruments as may be necessary to
effectuate the intent of this proxy and hereby revokes any proxy previously
granted by such Stockholder with respect to such Shares.
3. Covenants, Representations and Warranties of Each Stockholder.
(a) Each Stockholder hereby, severally and not jointly and severally,
represents and warrants to AGT as follows:
(i) Ownership of Shares. Such Stockholder is either (i) the record
and Beneficial Owner of, or (ii) the Beneficial Owner but not the record
holder of, the number of Shares and Options respectively set forth opposite
the Stockholder's name on Schedule I and II hereto. On the date hereof, the
Shares and Options respectively set forth opposite such Stockholder's name
on Schedules I and II hereto constitute all of the Shares and Options owned
of record or Beneficially Owned by such Stockholder. Such Stockholder has
sole voting power and sole power to issue instructions with respect to the
matters set forth in Section 2 hereof, sole power of disposition, sole
power of conversion, 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 all of the Shares set forth opposite such Stockholder's
name on Schedule I hereto, with no material limitations, qualifications or
restrictions on such rights, subject to applicable securities laws and the
terms of this Agreement.
(ii) Power; Binding Agreement. Such Stockholder has the legal
capacity, power and authority to enter into and perform all of such
Stockholder's obligations under this Agreement. This Agreement has been
duly and validly executed and delivered by such Stockholder and constitutes
a valid and binding agreement of such Stockholder, enforceable against such
Stockholder in accordance with its terms. There is no beneficiary or holder
of a voting trust certificate or other interest of any trust of which such
Stockholder is trustee whose consent is required for the execution and
delivery of this Agreement or the consummation by such Stockholder of the
transactions contemplated hereby. If such Stockholder is married and such
Stockholder's Shares or Options constitute community property, this
Agreement has been duly authorized, executed and delivered by, and
constitutes a valid and binding agreement of, such Stockholder's spouse,
enforceable against such person in accordance with its terms.
(iii) No Conflicts. Except for filings under the Exchange Act or HSR
Act, if applicable, and the filings required under the Merger Agreement (A)
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 such Stockholder and the consummation by such Stockholder
of the transactions contemplated hereby, except where the failure to obtain
such consent, permit, authorization, approval or filing would not interfere
with such Stockholder's ability to perform its obligations hereunder, and
(B) none of the execution and delivery of this Agreement by such
Stockholder, the consummation by such Stockholder of the transactions
contemplated hereby or compliance by such Stockholder with any of the
provisions hereof shall (i) conflict with or result in any breach of any
applicable organizational documents applicable to such Stockholder, (2)
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
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instrument or obligation of any kind to which such Stockholder is a party
or by which such Stockholder or any of such Stockholder's properties or
assets may be bound, or (3) violate any order, writ, injunction, decree,
judgment, order, statute, rule or regulation applicable to such Stockholder
or any of such Stockholder'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 Stockholder to perform its obligations
hereunder.
(iv) No Encumbrances. Except the proxy granted under Section 2(b),
such Stockholder's Shares and the certificates representing such Shares are
now, and at all times during the term hereof will be, held by such
Stockholder, or by a nominee or custodian for the benefit of such
Stockholder, free and clear of all liens, claims, security interests,
proxies, voting trusts or agreements, understandings or arrangements or any
other encumbrances whatsoever.
(v) No Finder's Fees. 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 in connection with the transactions
contemplated hereby based upon arrangements made by or on behalf of such
Stockholder.
(vi) No Solicitation. Such Stockholder shall, in its capacity as
such, comply with the terms of Section 5.3(a) of the Merger Agreement.
(vii) Restriction on Transfer, Proxies and Non-Interference. At any
time during the period beginning on the date hereof and ending upon the
earlier to occur of the Effective Time or the termination of this Agreement
or the Merger Agreement, such Stockholder shall not, directly or
indirectly: (i) offer for sale, sell, transfer, tender, pledge (unless the
pledgee thereof agrees in writing to abide by the terms and conditions
hereof as if he/she were a Stockholder), encumber, assign or otherwise
dispose of, or enter into any contract, option or other arrangement or
understanding with respect to or consent to the offer for sale, sale,
transfer, tender, pledge, encumbrance, assignment or other disposition of,
any or all of such Stockholder's Shares, Options or any interest therein;
(ii) grant any proxies or powers of attorney, deposit any Shares into a
voting trust or enter into a voting agreement with respect to any Shares;
or (iii) take any action that could reasonably by expected to have the
effect of preventing or disabling such Stockholder from performing such
Stockholder's obligations under this Agreement.
(viii) Waiver of Appraisal Rights. Such Stockholder hereby waives any
rights of appraisal or rights to dissent from the Merger that the
Stockholder may have.
(ix) Reliance by AGT. Such Stockholder understands and acknowledges
that AGT is entering into, and causing Acquisition to enter into, the
Merger Agreement in reliance upon such Stockholder's execution and delivery
of this Agreement.
(x) Further Assurances. From time to time, at the other party's
request and without further consideration, each party hereto shall execute
and deliver such additional documents as may be necessary or desirable to
consummate and make effective, in the most expeditious manner practicable,
the transactions contemplated by this Agreement.
(b) AGT hereby represents and warrants to each Stockholder as follows:
(i) Organization, Standing and Corporate Power. AGT is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware, with adequate corporate power and authority to own its
properties and carry on its business as presently conducted. AGT has the
corporate power and authority to enter into and perform all of AGT's
obligations under this Agreement and to consummate the transactions
contemplated hereby.
(ii) No Conflicts. Except for filings under the HSR Act, if
applicable, and the filings required under the Merger Agreement, (A) 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 AGT and the consummation by AGT of the transactions
contemplated hereby, except where the failure to obtain such consent,
permit, authorization, approval or filing would not interfere with AGT's
ability to perform its obligations hereunder, and (B) none of the execution
and delivery of this Agreement by AGT, the consummation by AGT of the
transactions contemplated hereby or compliance by AGT with any of the
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provisions hereof shall (1) conflict with or result in any breach of any
applicable organizational documents applicable to AGT, (2) 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 AGT is a
party or by, which AGT or any of AGT's properties or assets may be bound,
or (3) violate any order, writ, injunction, decree, judgment, order,
statute, rule or regulation applicable to AGT or any of AGT'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 AGT to perform
its obligations hereunder.
(iii) Execution, Delivery and Performance by AGT. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by the Board of
Directors of AGT, and AGT has taken all other actions required by law, its
Certificate of Incorporation and its Bylaws in order to consummate the
transactions contemplated by this Agreement. This Agreement constitutes the
valid and binding obligations of AGT 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.
4. Stop Transfer. Each Stockholder agrees with, and covenants to, AGT
that such Stockholder shall not request that the Company register the transfer
(book-entry or otherwise) of any certificate or uncertificated interest
representing any of such Stockholder's Shares, unless such transfer is made in
compliance with this Agreement (including the provisions of Section 3(a)(vii)
hereof). In the event of a stock dividend or distribution, or any change in the
Company Common Stock by reason of any stock dividend, split-up,
recapitalization, combination, exchange of shares or the like, the term "Shares"
shall be deemed to refer to and include the Shares as well as all such stock
dividends and distributions and any shares into which or for which any or all of
the Shares may be changed or exchanged.
5. Termination. Except as otherwise provided herein, the covenants and
agreements contained herein with respect to the Shares shall terminate upon the
termination of the Merger Agreement in accordance with its terms by AGT or the
Company.
6. 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 or her capacity as such director or
officer and nothing herein shall limit or affect any action taken by such person
in his or her capacity as a director or officer. Each Stockholder signs solely
in his or her capacity as the record and beneficial owner of, or the trustee of
a trust whose beneficiaries are the beneficial owners of, such Stockholder's
Shares.
7. Miscellaneous.
(a) Entire Agreement. This Agreement and the Merger Agreement constitute
the entire agreement between the parties with respect to the subject matter
hereof and supersede all other prior agreements and understandings, both written
and oral, between the parties with respect to the subject matter hereof.
(b) Certain Events. Each Stockholder agrees that this Agreement and the
obligations hereunder shall attach to such 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, such Stockholder's heirs, guardians, administrators or successors.
Notwithstanding any transfer of Shares, the transferor shall remain liable for
the performance of all obligations under this Agreement of the transferor.
(c) Assignment. This Agreement shall not be assigned by operation of law
or otherwise without the prior written consent of the other party provided that
AGT may assign, in its sole discretion, its rights and obligations hereunder to
any affiliate of AGT, but no such assignment shall relieve AGT of its
obligations hereunder if such assignee does not perform such obligations.
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(d) Amendments, 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;
provided that either Schedule I or II hereto may be supplemented by AGT by
adding the name and other relevant information concerning any stockholder of the
Company who agrees to be bound by the terms of this Agreement without the
agreement of any other party hereto, and thereafter such added stockholder shall
be treated as a "Stockholder" for all purposes of this Agreement.
(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, telegram, telex
or telecopy, 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. All communications hereunder shall be delivered to the
respective parties at the following addresses or the addresses set forth on the
signature pages hereto:
If to Stockholder: At the addresses set forth on signature pages hereto
If to AGT or Acquisition:
Applied Graphics Technologies, Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxx
Xxxxx Xxxxxxxx, Xx.
copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx, Esq.
Telecopy: (000) 000-0000
If to the Company:
Devon Group, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxxxxxx, Xx.
Telecopy: (000) 000-0000
copy to:
X'Xxxxxxxx Graev & Karabell, LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxx, Esq.
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.
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(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 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; provided that, in the event of a Stockholder's
death, the benefit to be received by the Stockholder hereunder shall inure to
his successors and heirs.
(k) Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of New York, without giving effect to the
principles of conflicts of law thereof.
(l) Jurisdiction. Each party hereby irrevocably submits to the exclusive
jurisdiction of the Court of Chancery in the State of Delaware in any action,
suit or proceeding arising in connection with the Agreement, and agrees that any
such action, suit or proceeding shall be brought only in such court (and waives
any objection based forum non conveniens or any other objection to venue
therein); provided, however, that such consent to jurisdiction is solely for the
purpose referred to in this paragraph (1) and shall not be deemed to be a
general submission to the jurisdiction of said Court or in the State of Delaware
other than for such purposes. Each party hereto hereby waives any right to a
trial by jury in connection with any such action, suit or proceeding.
(m) Descriptive Headings. The descriptive headings used herein are
inserted for convenience or reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
(n) 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.
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IN WITNESS WHEREOF, AGT, Acquisition and each Stockholder have caused this
Agreement to be duly executed as of the day and year first above written.
APPLIED GRAPHICS TECHNOLOGIES, INC.
By: /s/ XXXX XXXXXXX
------------------------------------
Name: Xxxx Xxxxxxx
Title: Chief Executive Officer
AGT ACQUISITION CORP.
By: /s/ XXXX XXXXXXX
------------------------------------
Name: Xxxx Xxxxxxx
Title: Chief Executive Officer
Stockholders:
/s/ XXXXXX X. XXXXX
--------------------------------------
Xxxxxx X. Xxxxx
0000 Xxxxx Xxxx
Xxxxxxxxxxx, XX 00000
/s/ XXXXXXX X. XXXXX
--------------------------------------
Xxxxxxx X. Xxxxx
00 Xxxxxx Xxxx
Xxxxxxx, XX 00000
/s/ XXXXXX X. XXXXXXXXXX
--------------------------------------
Xxxxxx X. Xxxxxxxxxx
00 Xxxxxxxxx Xxx
Xxxxxx, XX 00000
/s/ XXXX X. XXXXXXX
--------------------------------------
Xxxx X. Xxxxxxx
0000 Xxxxxxxxx Xxxx
Xxxxxxx Xxxx, Xxxxxxxx 00000
/s/ XXXXXX X. XXXXXXX
--------------------------------------
Xxxxxx X. Xxxxxxx
000 Xxxxxxx Xxxx Xxxx
Xxxxxxx Xxxx, Xxxxxxxx 00000
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/s/ XXXXXXX X. XXXXX
--------------------------------------
Xxxxxxx X. Xxxxx
00 Xxxxxx Xxxxx Xxxxx
Xxxxxxxx, XX 00000
/s/ XXXXX XXXXXXXXX
--------------------------------------
Xxxxx Xxxxxxxxx
000 Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
/s/ XXXXX XXXXXXXXX, XX.
--------------------------------------
Xxxxx Xxxxxxxxx, Xx.
0000 Xxxx Xxxxxx
Xxx. 0X
Xxx Xxxx, Xxx Xxxx 00000
/s/ XXXXXX X. XXXXXX
--------------------------------------
Xxxxxx X. Xxxxxx
000 Xxxxxxxxx Xxxx
Xxxx Xxxx, XX 00000
AGREED TO AND ACKNOWLEDGED
(with respect to Section 4 hereof and for
purposes of acknowledging its consent hereto):
DEVON GROUP, INC.
By: /s/ XXXXX XXXXXXXXX, XX.
----------------------------------
Name: Xxxxx Xxxxxxxxx, Xx.
Title: Chief Executive Officer
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SCHEDULE I TO
STOCKHOLDERS AGREEMENT
NAME OF STOCKHOLDER NUMBER OF SHARES OWNED
------------------- ----------------------
Xxxxx Xxxxxxxxx, Xx......................................... 857,999
Maine Obernauer............................................. 300,000
Xxxx X. Xxxxxxx............................................. 160,500
Xxxxxx X. Xxxxxxx........................................... 106,393
Xxxxxxx X. Xxxxx............................................ 200,068
Xxxxxx X. Xxxxxxxxxx........................................ 14,000
Xxxxxx X. Xxxxxx............................................ 87,874
Xxxxxxx X. Xxxxx............................................ 3,000
Xxxxxx X. Xxxxx............................................. 30,000
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SCHEDULE II TO
STOCKHOLDERS AGREEMENT
NAME OF STOCKHOLDER OPTIONS
------------------- ---------------
Xxxxxx X. Xxxxxxx........................................... 50,000 @ $34.25
35,000 @ $16.75
15,000 @ $26.00
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