Exhibit 10
STOCKHOLDER'S AGREEMENT
STOCKHOLDER'S AGREEMENT, dated as of October 30, 1998 (this "Agreement"),
by and between Merrimac Industries, Inc., a New Jersey corporation (the
"Company"), and Xxxxxxx X. Xxxxx, XX ("Xxxxx").
WHEREAS, Xxxxx is the record and beneficial owner of the Xxxxx Shares
(as defined herein);
WHEREAS, the parties agree to the transfer and voting provisions relating
to the Covered Securities (as defined herein) as set forth herein; and
WHEREAS, the Company desires to engage Xxxxx to advise and assist in the
Company's business, and Xxxxx has agreed to provide consulting services to the
Company as set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and the
covenants and agreements herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company and Xxxxx agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Certain Definitions. For purposes of this Agreement, the
following terms shall have the meanings indicated:
"Affiliate" means, with respect to any Person, any other Person which
directly or indirectly controls, or is under common control with, or is
controlled by, such first Person. The term "affiliated" (whether or not
capitalized) shall have a correlative meaning. For the purposes of this
definition, "control," as used with respect to any Person, shall mean the
possession, directly or indirectly through or with one or more intermediaries,
of the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by contract or
otherwise. The terms "controlled by" and "under common control with" shall have
correlative meanings.
"Agreement" means this Stockholder's Agreement and any schedules and
exhibits attached hereto, as the same may be amended, supplemented or modified
in accordance with the terms hereof.
"Associate" means, with respect to any Person, (a) any Entity of which such
Person is an officer or partner or is, directly or indirectly, the beneficial
owner of 10
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percent or more of any equity securities of any Class, (b) any trust or
other estate in which such Person has a substantial beneficial interest or as to
which such Person serves as trustee or in a similar fiduciary capacity, (c) any
relative or spouse of such Person, or any relative of such spouse, who has the
same home as such Person and (d) any Associates thereof.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which banking institutions in New York, New York are not open for business.
"Cause" shall have the meaning set forth in Section 2.6 of this Agreement.
"Class" shall have the meaning set forth in the definition of Covered
Securities.
"Common Stock" shall have the meaning set forth in the definition of Xxxxx
Shares.
"Company" shall have the meaning set forth in the preamble to this
Agreement.
"Consulting Agreement" means the Consulting Agreement, dated as of August
1, 1997, by and between the Company and Xxxxx.
"Consulting Term" shall have the meaning set forth in Section 2.5 of this
Agreement.
"Contract" means any agreement, contract, obligation, commitment,
indenture, lease, license, instrument, note, bond, security, agreement in
principle, letter of intent, undertaking, promise, covenant, arrangement or
understanding, whether written or oral.
"Covered Securities" means (i) any and all shares (or other units) of
capital stock of the Company, however denominated, of any class, series, issue
or other type ("Class"), including shares of capital stock into which any such
Class may be changed, and (ii) any and all Rights with respect to any such
shares of capital stock of the Company of any Class. If, at any time, any
Covered Securities of any Class are changed into shares of capital stock of any
other Class or other securities of any Class, whether by reason of a
reclassification, reorganization, recapitalization, consolidation, merger,
exchange or any other event or transaction of any nature whatsoever, then such
shares of capital stock or other securities into which such Covered Securities
are changed shall also be "Covered Securities", and this sentence shall apply
successively on each and every occasion on which any event or transaction of any
kind referred to shall occur. If, in connection with any consolidation, merger,
binding share exchange or reorganization to which the Company is a party and in
which the Company is not the surviving or continuing corporation or any sales,
conveyance, transfer or lease to another Entity of the properties and assets of
the Company as an entirety or substantially as an entirety, capital stock or
other securities of any Class of the successor or acquiring Entity are issued or
issuable in respect of any Covered Securities on any Class, then such shares of
capital stock or other securities of such successor or acquiring Entity shall
also be "Covered Securities". The term "Covered Securities" also includes all
shares or other appropriate units of capital stock or other securities of any
Class issued as a dividend or distribution on any other shares or other units of
Covered Securities.
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"Disability" means, with respect to Xxxxx, the inability to provide the
consulting services contemplated hereunder for a period in excess of 90 days.
"Entity" means any corporation, limited liability company, general or
limited partnership, joint venture, association, joint stock company, trust,
other unincorporated business or organization or other Person which is not
either a natural person or a Governmental Authority.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"Xxxxx" shall have the meaning set forth in the preamble to this Agreement.
"Xxxxx Shares" means (i) the 156,000 shares of issued and outstanding
Common Stock, par value $.50 per share (the "Common Stock"), of the Company
owned by Xxxxx on the date hereof, (ii) all shares of Common Stock and Covered
Securities of the Company hereafter acquired by Xxxxx pursuant to the exercise
of Rights with respect to the shares of Common Stock of the Company currently
held by Xxxxx or pursuant to the exercise of Rights with respect to Covered
Securities of the Company hereafter acquired or held by Xxxxx with the written
consent of the Company, and (iii) all Rights with respect to shares of Common
Stock or Covered Securities of the Company currently owned or held by Xxxxx or
hereafter acquired or held by Xxxxx with the written consent of the Company.
"Initial Consulting Period" shall have the meaning set forth in Section 2.5
of this Agreement.
"Liens" means any liens, claims, charges, conditions, equitable interests,
commitments (fixed or contingent), encumbrances, options, pledges, security
interests, mortgages, retention of title agreements, defects of title, rights of
interest or restrictions of any kind or nature, including any restriction on
use, voting, transfer, receipt of income or exercise of any other attribute of
ownership.
"Offer" shall have the meaning set forth in Section 3.3 of this Agreement.
"Offer Note" shall have the meaning set forth in Section 3.3 of this
Agreement.
"Offer Price" shall have the meaning set forth in Section 3.3 of this
Agreement.
"Offered Securities" shall have the meaning set forth in Section 3.3 of
this Agreement.
"Offered Terms" shall have the meaning set forth in Section 3.3 of this
Agreement.
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"Person" means any individual, corporation, limited liability company or
entity, general or limited partnership, joint venture, association, joint stock
company, trust, unincorporated business or organization, Governmental Authority
or other entity or legal person, whether acting in an individual, fiduciary or
other capacity.
"Releasees" shall have the meaning set forth in Section 7.1 of this
Agreement.
"Reports" shall have the meaning set forth in Section 5.1(d) of this
Agreement.
"Rights" means options, warrants, convertible or exchangeable securities or
other rights, however denominated, to subscribe for, purchase or otherwise
acquire any equity interest or other security of any Class, with or without
payment of additional consideration in cash or property, either immediately or
upon the occurrence of a specified date or a specified event or the satisfaction
or happening of any other condition or contingency.
"SEC" shall have the meaning set forth in Section 5.1(d) of this Agreement.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Total Voting Power" means the aggregate number of votes which may be cast
by holders of issued and outstanding Covered Securities.
"Transfer" means, when used with reference to any Covered Securities or
other securities, to directly or indirectly, voluntarily or involuntarily, (i)
to offer for sale, sell, assign, make a gift of, exchange, tender, dispose of,
pledge, hypothecate, grant an option or other Right for or otherwise transfer
(whether by merger or otherwise) or permit any sale or transfer to satisfy a
margin call or other obligation relating to Covered Securities held as
collateral, encumber or subject to any claim, Lien or restriction any such
Covered Securities or other securities or any interest therein, (ii) grant any
proxy, voting or other rights with respect to any such Covered Securities or
other securities (other than in accordance with this Agreement) or deposit any
Covered Securities into a voting trust or (iii) enter into any agreement or
arrangement regarding the transfer, acquisition, holding, disposition or voting
of such Covered Securities. The terms "Transferred", "Transferee" and similar
variants shall have correlative meanings.
"Voting Covered Securities" means all Covered Securities entitled to vote
in the election of directors of the Company and which would be entitled to vote
in the election of directors of the Company if it were assumed that Rights with
respect to Covered Securities then held were duly exercised and converted in
full (whether or not then exercisable or convertible).
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Section 1.2 Terms Generally; Certain Rules of Construction. The definitions
in Section 1.1 shall apply equally to both the singular and plural forms of the
terms defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words "include",
"includes" and "including" shall be deemed to be followed by the phrase "without
limitation." The words "herein", "hereof" and "hereunder" and words of similar
import refer to this Agreement in its entirety and not to any part hereof unless
the context shall otherwise require. The word "or" is not exclusive and means
"and/or." All references herein to Sections, Exhibits and Schedules shall be
deemed references to and Sections of, and Exhibits and Schedules to, this
Agreement unless the context shall otherwise require. Unless otherwise expressly
provided herein or unless the context shall otherwise require, any references as
of any time to any agreement (including this Agreement) or other Contract,
instrument or document or to any statute or regulation or any specific section
or other provision thereof are to it as amended and supplemented through such
time (and, in the case of a statute or regulation or specific section or other
provision thereof, to any successor of such statute, regulation, section or
other provision). Any reference in this Agreement to a "day" or number of "days"
(without the explicit qualification of "Business") shall be interpreted as a
reference to a calendar day or number of calendar days. If any action or notice
is to be taken or given on or by a particular calendar day, and such calendar
day is not a Business Day, then such action or notice shall be deferred until,
or may be taken or given on, the next Business Day. Unless otherwise expressly
provided herein or unless the context shall otherwise require, any provision of
this Agreement using a defined term which is based on a specified
characteristic, qualification, feature or status shall, as of any time, refer
only to such Persons who have the specified characteristic, qualification,
feature or status as of that particular time.
ARTICLE II
CONSULTING SERVICES
Section 2.1 Appointment. The Company hereby retains Xxxxx, and Xxxxx agrees
to act, in an advisory and consulting capacity to the Company for a term
commencing on the date hereof and to continue in force thereafter for the
Consulting Term (as defined herein).
Section 2.2 Consulting Services. Xxxxx agrees during the Consulting Term to
render services of an advisory and consultative nature in order that the Company
may have the benefit of his expertise and knowledge of the affairs of the
Company. Xxxxx will perform services hereunder for approximately 10 hours per
month (non- cumulative) exclusively and only as directed by the Chief Executive
Officer of the Company. In the absence of specific instructions from the Chief
Executive Officer of the Company, Xxxxx shall not be authorized to perform any
services on behalf of the Company or represent to any Person that he is a
consultant or an agent of the Company. It is contemplated that Xxxxx will
provide the services hereunder in the Connecticut, New Jersey and New York area
(except for normal business travel) or at the Company's request at such other
location as may be mutually agreed upon by the Company and Xxxxx. In addition to
performing the services described herein, Xxxxx further agrees during the
Consulting Term to provide the Chief Executive Officer of the Company, upon his
request, with written reports summarizing all such services performed by Xxxxx
on behalf of the Company and setting forth the number of hours per month devoted
to the performance thereof.
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Section 2.3 Consulting Fee. The Company shall pay Xxxxx as a fee for the
services rendered pursuant to this Article II a sum equal to Five Thousand
($5,000) Dollars per month. Such sum is to be payable on the first day of each
month commencing November 1, 1998.
Section 2.4 Expenses. The Company shall reimburse Xxxxx for pre- approved,
reasonable out-of-pocket business expenses upon presentation of appropriate
evidence thereof.
Section 2.5 Consulting Term. The consulting services provided to the
Company by Xxxxx as set forth herein shall be for a term commencing on the date
hereof and shall continue for a period of not less than thirty six (36) months
(the "Initial Consulting Period") unless sooner terminated pursuant to Section
2.6. At the expiration of the Initial Consulting Period, the term of the
consulting services as set forth herein may be extended for additional one year
terms, subject to Section 2.6, upon the mutual agreement of the Company and
Xxxxx. The Initial Consulting Period (or any shorter period hereunder) and each
period thereafter during which consulting services are provided by Xxxxx to the
Company in accordance with the terms and conditions of this Agreement without
termination hereunder is referred to herein as the "Consulting Term".
Section 2.6 Termination of Consulting Term. The Consulting Term may be
terminated by Xxxxx at any time upon ninety (90) days written notice to the
Company. The Consulting Term shall also terminate on Xxxxx'x death or
Disability. Notwithstanding any of the foregoing provisions of this Agreement,
the Company may, at any time during the Consulting Term without prior notice,
terminate the consulting arrangement under this Article II for "Cause" (as
hereinafter defined). In such event, the Company shall pay to Xxxxx all
consulting fees accrued but unpaid through the date of termination of the
Consulting Term; and the Company shall not have any further obligations under
this Article II, except as may otherwise be required by law. For the purpose of
this Agreement, the Company shall be deemed to have "Cause" to terminate Xxxxx'x
employment hereunder for: (a) willful failure to perform normal and customary
duties required under Section 2.2 for an extended period for any reason other
than death or total Disability; (b) gross negligence or willful misconduct,
including fraud, embezzlement or intentional misrepresentation; (c) commission
of, or indictment or conviction for, a felony; (d) willfully engaging in
competitive activities against the Company or purposely aiding a competitor of
the Company; (e) misappropriation of a material opportunity of the Company; (f)
oral or written publication of information relating to the Company not in the
public domain; (g) any breach by Xxxxx of the agreements set forth in Articles
III, IV and VI; or (h) violation of any other material term of this Agreement
and failure to cure within two (2) days after receipt of notice of such
violation.
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Section 2.7 Confidential Information and Indemnification.
(a) Confidential Information. Xxxxx shall not disclose any confidential
information of the Company or its Affiliates which is now known to him or which
hereafter may become known to him as a result of his consulting services
hereunder or by reason of other positions previously held with the Company, and
shall not at any time directly or indirectly disclose any such information to
any Person, or use the same in any way other than in connection with the
business of the Company or its Affiliates, during and at all times after the
expiration of the Consulting Term; provided, however, that, subject to Section
6.1, nothing in this Section 2.7 shall prohibit Xxxxx from communicating,
disclosing or using information that has become known generally by the public or
otherwise has come into the public domain (other than by disclosure by Xxxxx).
Xxxxx'x contractual obligation under this paragraph, however, shall not extend
beyond one year after the end of the Consulting Term.
(b) Indemnification. To the extent permitted by law and so long as Xxxxx is
not in breach of this Agreement, Xxxxx shall be entitled to be indemnified under
the Articles of Incorporation and Bylaws, as applicable, of the Company or any
subsidiary thereof for which Xxxxx is performing services as provided herein
and, to the extent permitted under currently applicable insurance policies and
solely in connection with the services to be rendered to the Company pursuant
hereto, to be covered by directors and officers liability insurance policies
covering directors and officers of the Company that are the same as or provide
coverage at least equivalent to those carried by the Company on the date hereof.
Section 2.8 Independent Contractor. Xxxxx is an independent contractor and
has and shall have no power, nor will he represent that he has any power, to
bind the Company or to assume or create any obligation or responsibility on
behalf of the Company. Xxxxx shall not be entitled to participate in any
retirement, disability, life insurance, saving or other plans maintained for
employees of the Company or to receive any benefits or compensation not
explicitly provided in this Agreement.
Section 2.9 Consulting Agreement. The Company and Xxxxx hereby acknowledge
and agree that the Consulting Agreement has been canceled and has no further
force or effect.
ARTICLE III
STANDSTILL AND TRANSFER MATTERS
Section 3.1 Acquisitions. Without the prior written consent of the Company,
Xxxxx will not purchase or otherwise acquire, or agree or offer to purchase or
otherwise acquire, record or beneficial ownership of any Covered Securities
other than Xxxxx Shares (it being understood that for purposes of this Section
3.1, a dividend or a distribution of Covered Securities pursuant to a
reorganization, recapitalization, consolidation, merger or exchange shall not be
deemed a purchase or an acquisition).
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If Xxxxx purchases or otherwise acquires Covered Securities in violation of
the immediately preceding sentence, such Covered Securities shall immediately be
Transferred as permitted by Section 3.2; provided, however, that such Transferee
is not a Person, or "group" that has any Person as a member, who is an Associate
of Xxxxx. Notwithstanding the foregoing, the Company may also pursue any other
available remedy to which it may be entitled to as a result of such violation.
Section 3.2 Transfer Restrictions. Xxxxx will not Transfer or permit any
Person to Transfer on his behalf any Covered Securities, except:
(a) subject to Section 3.3, to any Person or "group" (within the meaning of
Section 13(d)(3) of the Exchange Act) who, after giving effect to such Transfer,
would beneficially own Voting Covered Securities representing in the aggregate
less than 3% of Total Voting Power; or
(b) pursuant to a tender or exchange offer made by the Company or
recommended by the Board of Directors of the Company to the Company's
stockholders.
Section 3.3 Rights of First Refusal.
(a) Xxxxx will not Transfer or permit any Person to Transfer on his behalf
any Covered Securities in accordance with Section 3.2(a) without first giving
the Company prior written notice thereof (an "Offer Notice"), which shall (i)
state the Offered Terms (as defined below), (ii) include a true and correct copy
of the Contract embodying the terms and conditions of such proposed Transfer (if
any) and (iii) offer the Company the opportunity (as hereinafter provided) to
purchase (or to designate a third party to purchase) such Covered Securities
(the "Offered Securities") at a cash price equal to the sum of the amount of any
cash plus the fair market value of any other consideration offered by the
prospective Transferee (the "Offer Price"). The Offer Notice shall constitute an
offer (the "Offer") by Xxxxx to sell all, but not less than all, of the Offered
Securities at the Offer Price to the Company or its designee. For purposes of
this Section 3.3, "Offered Terms" means the terms and conditions upon which the
Offered Securities are proposed to be Transferred to the prospective Transferee,
including (i) the identity of the Transferee and (ii) the aggregate Offer Price
and the kind and amount of consideration proposed to be paid or delivered by the
prospective Transferee for the Offered Securities, the timing and manner of the
payment or other delivery thereof and any other material terms of such offer.
(b) The Offer may be accepted within 20 days of receipt by the Company of
the Offer Notice and, if accepted, the Offered Securities shall be purchased
within 60 days after such acceptance. If the Offer is not accepted or the
Offered Securities are not purchased as contemplated above, Xxxxx may sell the
Offered Securities to such prospective Transferee at a price not less than the
Offer Price.
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If the sale to such prospective Transferee is not consummated as
contemplated above within 60 days after the expiration of the 20-day offer
period or earlier irrevocable rejection of such Offer or failure to purchase the
Offered Securities after acceptance of the Offer, no sale may be made by Xxxxx
without again complying with this Section 3.3.
(c) If the consideration offered by the prospective Transferee includes
non-cash consideration, the Company and Xxxxx shall in good faith seek to agree
upon the value of such non-cash consideration. Xxxxx shall provide the Company
with a description of the method by which Xxxxx and the prospective Transferee
evaluated such non-cash consideration and copies of any appraisals or similar
reports on which such evaluation was based. If Xxxxx and the Company fail to
agree on such value within 10 days following receipt by the Company of the Offer
Notice, then the items in dispute shall be referred to a nationally recognized
investment banking firm or appraiser selected jointly by Xxxxx and the Company.
Xxxxx and the Company shall share all expenses of such investment banking firm
or appraiser, as the case may be. The value of any securities offered as
consideration shall be the fair market value of such securities determined on a
fully distributed basis, and the value of any property other than securities
shall be the fair market value of such property. If a determination under this
Section 3.3(c) is required, any date for acceptance of an Offer provided for in
Section 3.3(b) hereof shall be postponed until the second Business Day after the
date of such determination. All determinations made pursuant to this Section
3.3(c) shall be final and binding on Xxxxx and the Company.
ARTICLE IV
VOTING REQUIREMENTS
Section 4.1. Agreement to Vote. During the term of this Agreement, Xxxxx
hereby agrees to vote or act by written consent with respect to (i) Covered
Securities held of record or beneficially owned by Xxxxx at the time of such
vote or action by written consent and (ii) all Covered Securities as to which
Xxxxx at the time of such vote or action by written consent has voting control,
in each case, as directed by the Board of Directors of the Company (or the Chief
Executive Officer or Secretary of the Company) in its (or his or her) sole and
absolute discretion, including, without limitation, all matters requiring or
permitting the voting of any Covered Securities or the granting of a consent,
proxy or approval in respect of any Covered Securities, including ordinary or
extraordinary corporate actions and all matters submitted to a stockholder vote
at general or special stockholder meetings of the Company. Xxxxx further agrees
not to enter into any other agreement or transaction that is intended, or could
reasonably be expected, to impede, interfere with, delay, postpone, discourage
or adversely affect Xxxxx'x obligations to vote the Covered Securities as
provided in this Agreement, and agrees not to enter into any other voting
agreement or voting trust or grant any proxy, consent or approval or otherwise
transfer, directly or indirectly, voting power with respect to any Covered
Securities, in each case except as provided herein.
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Section 4.2 Grant of Irrevocable Proxy. In the event that Xxxxx fails to
comply with the provisions of Article IV of this Agreement, Xxxxx hereby
irrevocably grants to and appoints the Chief Executive Officer of the Company
(or any other officer of the Company designated by the Company), Xxxxx'x proxy
and attorney-in-fact (with full power of substitution), for and in the name,
place and stead of Xxxxx, to vote or act by written consent with respect to all
Covered Securities held of record or beneficially owned by Xxxxx or as to which
Xxxxx has voting control and to grant a consent, proxy or approval in respect of
any Covered Securities held of record or beneficially owned by Xxxxx or as to
which Xxxxx has voting control, in each case in such manner as the Company (or
any officer of the Company) shall determine in its (or his or her) sole and
absolute discretion, including all matters requiring or permitting the voting of
any Covered Securities or the granting of a consent, proxy or approval in
respect of any Covered Securities, including ordinary or extraordinary corporate
actions and matters submitted to a stockholder vote at general or special
stockholder meetings of the Company. Xxxxx hereby affirms that the irrevocable
proxy set forth in this Section 4.2 will be valid for the term of this Agreement
and is given to secure the performance of the obligations of Xxxxx under this
Agreement. Xxxxx hereby further affirms that each proxy hereby granted shall,
for the term of this Agreement, be irrevocable and shall be deemed coupled with
an interest, in accordance with Section 14A:5-19 of the New Jersey Business
Corporation Act.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.1 Representations and Warranties.
(a) Xxxxx hereby represents and warrants to the Company that, except as set
forth on Schedule 5.1(a) to this Agreement, he has good and valid title to, and
is the record and beneficial owner of, the Xxxxx Shares free and clear of any
Liens, and he has voting control of such Xxxxx Shares. The Xxxxx Shares
constitute all Covered Securities of the Company owned of record or beneficially
by Xxxxx and all such Covered Securities of the Company as to which Xxxxx has
voting control.
(b) Each party to this Agreement hereby represents and warrants to each
other party that (i) such party has the right, power and authority to enter into
this Agreement and perform its or his obligations hereunder, (ii) this Agreement
has been duly authorized by all necessary action prerequisite to the execution
and delivery thereof by such party and is a legally valid and binding obligation
of such party enforceable in accordance with its terms and (iii) the execution,
delivery and performance of this Agreement by such party and the transactions
contemplated hereby do not, with or without the giving of notice or the passage
of time or both, (x) violate any law, ordinance,
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rule or regulation or any judgment, writ, injunction or order of any court,
arbitrator or governmental, administrative or self-regulatory body or agency,
applicable to such party, (y) require the consent or authorization of or waiver
by or filing with any governmental, administrative, self-regulatory body or
agency or any other Person or (z) conflict with, result in the breach of any
provision of, result in the modification or termination of, require the consent
or authorization of or waiver by or filing with any other Person (other than
such as has been obtained prior to the date hereof) to, or result in the
creation or imposition of any Lien or constitute a default under any material
Contract to which such party is a party.
(c) Xxxxx hereby represents and warrants to the Company that, except for
this Agreement or as set forth on Schedule 5.1(c) to this Agreement, Xxxxx has
the sole right to vote and dispose of the Xxxxx Shares in his sole discretion
and none of the Xxxxx Shares is subject to any voting trust or other agreement,
arrangement, or restriction with respect to the voting thereof and there are no
Rights or Contracts to which Xxxxx is a party, or by which Xxxxx is bound or
affected, that provides for the Transfer of any Covered Securities or any
interest therein or any Rights with respect thereto, relates to the voting,
Transfer or control of any thereof, or obligates Xxxxx to grant, offer or enter
into any of the foregoing.
(d) Xxxxx hereby represents and warrants to the Company that he has filed
all required reports, schedules, forms, statements and other documents
(collectively, "Reports") concerning the Xxxxx Shares with the Securities and
Exchange Commission ("SEC") as required by the Securities Act and the Exchange
Act, and that none of such Reports contained any untrue statement of a material
fact or omitted to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(e) Xxxxx hereby makes the representations and warranties set forth in the
Letter Agreement attached hereto as Exhibit A.
ARTICLE VI
CERTAIN COVENANTS
Section 6.1 Certain Actions. Xxxxx, except as otherwise permitted by this
Agreement, will not:
(a) make, or take any action to solicit, initiate or encourage, any offer
or proposal for, or any indication of interest in, a merger or other business
combination involving the Company or any subsidiary of the Company or the
acquisition of any equity interest in, or a substantial portion of the assets
of, the Company or any subsidiary of the Company;
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(b) solicit", or become a "participant" in any "solicitation" of, any
"proxy" (as such terms are defined in Regulation 14A under the Exchange Act) or
written consent from any holder of Covered Securities in connection with any
vote on any matter, or agree or announce his or its intention to vote with any
Person undertaking a "solicitation" or communicate with or seek to advise or
influence any Person with respect to the voting of any Covered Securities;
(c) form, join or in any way participate in a "group" (within the meaning
of Section 13(d)(3)of the Exchange Act) with respect to any Covered Securities;
(d) call or seek to have called any meeting of the stockholders of the
Company or seek election of any representative to the Board of Directors of the
Company, including Xxxxx, or the removal of any member of the Board of Directors
of the Company;
(e) otherwise act to seek to control, disrupt or influence the management,
policies or affairs, of the Company or its Affiliates;
(f) without the prior written consent of the Company, issue or make any
announcement or public statement concerning, or otherwise communicate with any
Person regarding, the Company or its Affiliates, any policies of the Company or
its Affiliates or any director, officer, employee or stockholder of the Company
or its Affiliates, unless such announcement, public statement or communication
is required to be made by Xxxxx to perform the consulting services set forth in
Article II; or
(g) instigate or encourage any third party to do any of the foregoing.
Section 6.2 SEC Reports and Margin Call Notices.
(a) During the term of this Agreement, Xxxxx will deliver to the Company
(i) on the date required to be filed with the SEC, true and complete copies of
all Reports required to be filed by Xxxxx with the SEC concerning the Covered
Securities of the Company owned or held by Xxxxx and (ii) true and complete
copies of all Reports that would have been required to be filed by Xxxxx with
the SEC concerning the Covered Securities of the Company owned or held by Xxxxx
if Xxxxx owned or held a sufficient number of such Covered Securities to require
filing of Reports with the SEC, such copies of Reports to be delivered to the
Company on the dates such Reports would have been required to be filed with the
SEC.
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(b) During the term of this Agreement, Xxxxx will promptly provide the
Company with copies of all reports, documents, certificates, notices and other
information which are delivered to Xxxxx in connection with his ownership of
Xxxxx Shares that are held in any margin account or are pledged or otherwise
used as collateral.
ARTICLE VII
RELEASE
Section 7.1 General Release. Xxxxx hereby irrevocably and unconditionally
releases, acquits and forever discharges each of the Company and its Affiliates,
and each of their present and former officers, directors, employees,
representatives, agents and stockholders and each of their respective
predecessors, successors and assigns (collectively, the "Releasees"), of and
from any and all manner of action or actions, cause or causes of action,
demands, charges, complaints, rights, damages, debts, dues, sums of money,
accounts, reckonings, losses, costs, expenses, responsibilities, liabilities,
obligations, promises, covenants, contracts, controversies, agreements and
claims whatsoever, whether known or unknown, which Xxxxx (or any of his heirs,
executors or administrators) ever had, now has, or which he (or they) may have
or shall have against the Company or any other Person referred to above arising
out of any matter, cause, acts, conduct, claims or event on or prior to the date
hereof, including Xxxxx'x resignation from the Company's Board of Directors and
the position of Chairman of the Company and any rights or claims arising out of
or relating to the Consulting Agreement (including rights or claims which did
exist or which might have been asserted by Xxxxx under any federal or state
statute or any federal, state or local law, now or hereafter recognized) as well
as Xxxxx'x status as a stockholder of the Company. Xxxxx represents that he has
no complaints, charges, lawsuits or other proceedings of any nature pending
against the Releasees in any forum. Further, Xxxxx hereby irrevocably and
unconditionally waives and gives up any right he has, had or might have had to
commence any proceeding, or to seek to be entitled to any recovery in any
proceeding of any nature whatsoever, against the Releasees with respect to
matters released herein, and he covenants and agrees not to commence any such
proceeding or permit any other Person to do so on his behalf.
ARTICLE VIII
TERMINATION
Section 8.1 Termination. Except for Article II, which shall terminate in
accordance with the terms thereof, the provisions of this Article VIII and the
provisions of Article IX, this Agreement shall terminate upon the occurrence of
any of the following:
(a) Xxxxx shall beneficially own Voting Covered Securities representing in
the aggregate less than 3% of Total Voting Power; provided, that if Xxxxx shall
again acquire beneficial ownership of Voting Covered Securities representing in
the aggregate 3% or more of Total Voting Power within three years of such
termination, this Agreement shall be reinstated from the date of such
acquisition; or
(b) the dissolution, liquidation or winding up of the Company.
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ARTICLE IX
MISCELLANEOUS
Section 9.1 Binding Effect; Assignability. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns. No party to this
Agreement will assign or delegate this Agreement or any rights, interests or
obligations hereunder, except that the Company may assign this Agreement and its
rights, interest or obligations to any Affiliate of the Company.
Section 9.2 Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers of or consents to departures from the provisions
hereof may not be given unless approved in writing by the parties hereto.
Section 9.3 Governing Law. This Agreement and the validity, interpretation
and performance of the terms and provisions hereof shall be governed by, and
construed in accordance with, the laws of the State of New Jersey, without
regard to the provisions thereof relating to choice or conflict of laws.
Section 9.4 Interpretation. The headings of the articles and sections
contained in this Agreement are solely for the purpose of reference, are not
part of the agreement of the parties and shall not affect the meaning or
interpretation of this Agreement.
Section 9.5 Notices. All notices, requests, consents, demands, elections
and other communications required or permitted hereunder shall be in writing and
shall be given to the intended recipient at:
If to the Company:
Merrimac Industries, Inc.
00 Xxxxxxxxx Xxxxx
Xxxx Xxxxxxxx, Xxx Xxxxxx 00000
Facsimile: (000) 000-0000
Attention: President and Chief Executive Officer
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with a copy to:
Xxxxxxxxxx & Xxxxx LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
If to Xxxxx:
Xx. Xxxxxxx X. Xxxxx, XX
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
with a copy to:
Xxxxxx X. Xxxxxxxxx, Esq.
Suite 1210
0000 Xxxxxxxxxxx Xxxxxx, XX
Xxxxxxxxxx, X.X. 00000
Facsimile: (000) 000-0000
Any such notice, request, consent, demand, election or other communication
shall be deemed to have been duly given if personally delivered or sent by
registered or certified mail, return receipt requested, Express Mail, Federal
Express or similar overnight delivery service for next Business Day delivery or
by telegram, telex or facsimile transmission and will be deemed given, unless
earlier received: (1) if sent by certified or registered mail, return receipt
requested, five calendar days after being deposited in the United States mail,
postage prepaid; (2) if sent by Express Mail, Federal Express or similar
overnight delivery service for next Business Day delivery, the next Business Day
after being entrusted to such service, with delivery charges prepaid or charged
to the sender's account; (3) if sent by telegram or telex or facsimile
transmission, on the date sent; and (4) if delivered by hand, on the date of
delivery.
Section 9.6 No Implied Waivers. No action taken pursuant to this Agreement,
including any investigation by or on behalf of any party, shall be deemed to
constitute a waiver by the party taking such action of compliance with any
representations, warranties, covenants or agreements contained herein or made
pursuant hereto. The waiver by any party hereto of a breach of any provision of
this Agreement shall not operate or be construed as a waiver of any preceding or
succeeding breach and no failure by any party to exercise any right or privilege
hereunder shall be deemed a waiver of such party's rights or privileges
hereunder or shall be deemed a waiver of such party's rights to exercise the
same at any subsequent time or times hereunder.
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Section 9.7 Entire Agreement. This Agreement and the Letter Agreement
attached hereto as Exhibit A constitute the entire agreement of the parties with
respect to the specific subject matter hereof, and supersedes all prior
agreements and undertakings, both written and oral, among the parties with
respect to such specific subject matter.
Section 9.8 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to constitute one and the same agreement.
Section 9.9 Further Assurances. Each party shall cooperate and take such
actions as may be reasonably requested by the other party in order to carry out
the provisions and purposes of this Agreement and the transactions contemplated
hereby.
Section 9.10 Specific Performance; Injunctive Relief. In addition to any
other rights or remedies which may be available at law, in equity or by
Contract, the Company shall be entitled to obtain in any court of competent
jurisdiction specific performance of, or an injunction or other order
restraining any act or proposed act which would result in a violation of, any of
the terms or provisions of any of Xxxxx'x covenants, agreements or obligations
hereunder, it being agreed by the parties that the remedy at law, including
monetary damages, for breach of such provision will be inadequate compensation
for any loss and that any defense in any action for specific performance that a
remedy at law would be adequate is waived. The rights and remedies herein
expressly provided are cumulative and not exclusive of any other rights or
remedies which any party would otherwise have pursuant to this Agreement, at
law, in equity, by statute or otherwise.
Section 9.11 Severability. If any provision of this Agreement or the
application thereof to any Person or circumstance is held by a court of
competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions hereof, or the application of such provision to Persons or
circumstances other than those as to which it has been held invalid or
unenforceable, shall remain in full force and effect and shall in no way be
affected, impaired or invalidated thereby; provided, that if any provision
hereof or the application thereof shall be so held to be invalid, void or
unenforceable by a court of competent jurisdiction, then the parties shall
negotiate in good faith in an effort to agree upon a suitable and equitable
substitute provision therefor and, if the parties shall fail to negotiate and
agree upon such a provision, such court of competent jurisdiction may substitute
for such invalid, void or unenforceable provision a suitable and equitable
provision in order to carry out, so far as may be valid and enforceable, the
intent and purpose of the invalid, void or unenforceable provision.
Section 9.12 Consent to Jurisdiction; Service of Process. To the fullest
extent permitted by applicable law, each party hereto hereby irrevocably and
unconditionally (i) submits, for himself and his property or itself and its
property, to the nonexclusive jurisdiction of the courts of the States of New
York and New Jersey and any court of the United States sitting in New York City
(and of any appellate court to which an appeal of any judgment, order, decree or
decision of any such court may be taken) in any suit, action
-16-
or proceeding arising out of or relating to this Agreement or for
recognition or enforcement of any judgment rendered in any such suit, action or
proceeding, (ii) waives any objection which he or it may now or hereafter have
to the laying of venue of any such suit, action or proceeding in any such court,
including any claim that any such suit, action or proceeding has been brought in
an inconvenient forum, (iii) waives all rights to a trial by jury in any such
suit, action or proceeding, (iv) waives personal service of any summons,
complaint or other process by any means, manner or method other than in the
manner provided for the giving of notices to such party in Section 9.5, and
agrees that any process served upon such party in such manner provided for in
Section 9.5 shall have the same validity and legal force and effect as if served
upon such party personally within the State of New York or New Jersey, as the
case may be and (v) if any such party at any time is not a resident of the State
of New York or New Jersey, agrees to appoint and maintain the appointment of an
agent in the State of New York and New Jersey as such party's agent for service
and acceptance of legal process in connection with any such action, suit or
proceeding with the same validity and legal force and effect as if served upon
such party personally, within the State of New York or New Jersey, as the case
may be, and to notify promptly each other such party of the name and address of
such agent.
Section 9.13 Facsimile Signatures. This Agreement may be executed by
facsimile signatures.
IN WITNESS WHEREOF, the parties have executed this Stockholder's Agreement
as of the date first above written.
MERRIMAC INDUSTRIES, INC.
-------------------------
By: /s/ Xxxxx X. Xxxxxx
-------------------
Name: Xxxxx X. Xxxxxx
Title: Chairman, President and Chief
Executive Officer
/s/ Xxxxxxx X. Xxxxx XX
-----------------------
Xxxxxxx X. Xxxxx XX
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Schedule 5.1(a)
The Xxxxx Shares are held in a margin account.
Schedule 5.1(c)
The Xxxxx Shares are held in amargin account.
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Exhibit A
October 30, 1998
Xx. Xxxxxxx X. Xxxxx, XX
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Dear Xx. Xxxxx:
We refer to (i) the Stockholder's Agreement, dated as of the date hereof
(the "Agreement"), by and between Merrimac Industries, Inc., a New Jersey
corporation (the "Company"), and Xxxxxxx X. Xxxxx, XX and (ii) the Company's
directors and officers liability insurance coverage provided by Royal Indemnity
Insurance Company (policy number RHP605982) and Connecticut Indemnity Insurance
Company (policy number DOE200093) (collectively, the "Indemnity Policies").
This letter will confirm our understanding as follows:
1. To the extent permitted under the Indemnity Policies and as provided in
the Agreement, Xx. Xxxxx will be indemnified in accordance with the Indemnity
Policies from and against all claims and damages arising out of his performance
of the services rendered to the Company pursuant to the Agreement; and
2. Xx. Xxxxx represents and warrants that he is not aware of any act, error
or omission that might give rise to a claim under the Indemnity Policies.
Please indicate your agreement by signing and returning the executed copy
of this letter.
Very truly yours,
Merrimac Industries, Inc.
By: /s/ Xxxxx X. Xxxxxx
-------------------
Name:Xxxxx X. Xxxxxx
Title: Chairman, President and Chief
Executive Officer
Agreed and Accepted:
/s/ Xxxxxxx X. Xxxxx XX
-----------------------
Xxxxxxx X. Xxxxx XX
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