EXHIBIT 10.1
VOTING AGREEMENT
AGREEMENT, dated as of March 31, 2001 among Xxxxx Karan International
Inc., a Delaware corporation (the "COMPANY"), LVMH Moet Xxxxxxxx Xxxxx Vuitton
Inc., a Delaware corporation ("LVMH"), DKI Acquisition, Inc., a Delaware
corporation ("ACQUISITION SUB"), Xxxxx Karan ("DK"), Xxxxxxx Xxxxx ("SW"), Trust
FBO Xxxx Xxxxx Xxxxx, Xxxxx Xxxxx and Xxxxxxxxx Xxxxx U/A/D 2/2/96 (the
"CHILDREN'S TRUST"), 2000 Xxxxxxx Xxxxx Revocable Trust (the "XXXXX TRUST") and
The Xxxxxxx Xxxxx and Xxxxx Karan Alaska Community Property Trust (the "ALASKA
TRUST", and together with the Children's Trust and the Xxxxx Trust, the
"TRUSTS") (DK, SW and the Trusts collectively, the "STOCKHOLDERS").
WHEREAS, concurrently with the execution and delivery of this
Agreement, LVMH, Acquisition Sub and the Company are entering into an Agreement
and Plan of Merger (as the same may be amended from time to time, the "MERGER
AGREEMENT"), providing for, among other things, the merger of Acquisition Sub
with and into the Company;
WHEREAS, the Board of Directors of the Company has approved this
Agreement, the Merger Agreement and the Merger;
WHEREAS, as of the date of this Agreement, each Stockholder is the
owner (either beneficially or of record) of the number of shares of (i) Common
Stock of the Company, par value $0.01 per share ("COMMON STOCK"), and (ii) Class
A Common Stock of the Company, par value $0.01 per share ("CLASS A SHARES" and
collectively with the Common Stock and the Class B Common Stock of the Company,
par value $0.01 per share, of which the Stockholders do not hold any shares,
"COMPANY COMMON STOCK"), as is set forth opposite such Stockholder's name on
Schedule A to this Agreement (all such shares and any shares of Company Common
Stock hereafter acquired or received by such Stockholder by any means whatsoever
prior to the termination of this Agreement, "SHARES"); and
WHEREAS, in order to induce the Company, LVMH and Acquisition Sub to
enter into the Merger Agreement, the Stockholders have agreed to enter into this
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and for other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
GRANT OF PROXY; VOTING AGREEMENT
SECTION 1.1 VOTING AGREEMENT. Provided that the Merger Agreement has
not previously been TERMINATED, each Stockholder hereby agrees to vote all
Shares that such Stockholder is entitled to vote at the time of any meeting of
the stockholders of the Company at which the approval and adoption of the Merger
Agreement (or any amended version thereof) and the approval of the Merger and
all other transactions specifically contemplated by the
Merger Agreement are submitted for the consideration and vote of the
stockholders of the Company, and at any adjournment thereof, in favor of the
approval and adoption of the Merger Agreement (or any amended version thereof)
and the approval of the Merger, and in favor of each of the other actions
specifically contemplated by the Merger Agreement. Each Stockholder hereby
agrees that it will vote all Shares against the approval of any (i) Acquisition
Proposal, (ii) reorganization, recapitalization, liquidation or winding up of
the Company or any other extraordinary transaction involving the Company, (iii)
corporate action the consummation of which would frustrate the purposes, or
prevent or delay the consummation, of the transactions contemplated by the
Merger Agreement or (iv) other matter relating to, or in connection with, any of
the foregoing matters.
SECTION 1.2 IRREVOCABLE PROXY. Each Stockholder hereby revokes any and
all previous proxies granted with respect to the Shares. By entering into this
Agreement, each Stockholder hereby grants a proxy appointing Xxxxx Xxxxxx, the
Senior Vice President, Finance of LVMH, and Xxxxxx Xxxxxxxxx, the Vice
President, Legal Affairs and General Counsel of LVMH, each individually, as the
Stockholder's attorney-in-fact and proxy, with full power of substitution, for
and in the Stockholder's name, to vote, express, consent or dissent, or
otherwise to utilize such voting power in the manner contemplated by Section
1.01 above as LVMH or its proxy or substitute shall, in LVMH's sole discretion,
deem proper with respect to the Shares. The proxy granted by each Stockholder
pursuant to this Article 1 is irrevocable and is granted in consideration of
LVMH entering into this Agreement and the Merger Agreement and incurring certain
related fees and expenses. The proxy granted by each Stockholder shall be
revoked upon termination of this Agreement in accordance with its terms.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS
Each Stockholder, jointly and severally, represents and warrants to the
Company, LVMH and Acquisition Sub that:
SECTION 2.1 AUTHORIZATION. Each Trust is duly created, validly existing
and in good standing under the laws of the jurisdiction of its formation.
SECTION 2.2 AUTHORITY OF STOCKHOLDERS. Each of the Stockholders has
full legal capacity, and, in the case of the Trusts, full trust power, to enter
into, execute and perform the Stockholder's obligations under this Agreement.
The execution and delivery by the Trusts of this Agreement and the performance
by the Trusts of their obligations hereunder have been duly authorized and
approved by all requisite trust action. This Agreement has been duly executed
and delivered by a duly authorized trustee of each of the Trusts. This Agreement
constitutes a valid and legally binding obligation of each of the Stockholders,
enforceable against each of the Stockholders in accordance with its terms
(except to the extent that enforcement may be affected by laws relating to
bankruptcy, reorganization, insolvency and creditors' rights and by the
availability of injunctive relief, specific performance and other equitable
remedies).
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SECTION 2.3 CONSENTS. No consent, waiver, authorization, order or
approval of, or filing or registration with any Governmental Authority or other
Person, or under or with respect to any permit, license, contract, agreement or
other instrument to which any of the Stockholders is a party or by which any of
the Stockholders is, or their respective assets are, bound or affected, is
required for or in connection with the execution and delivery by any of the
Stockholders of this Agreement and the consummation by any of the Stockholders
of the transactions contemplated hereby.
SECTION 2.4 NON-CONTRAVENTION. Neither the execution and delivery of
this Agreement by any of the Stockholders, nor the consummation by any of the
Stockholders of the transactions contemplated hereby, will (i) violate, conflict
with or result in a breach of any federal, state, local or foreign statute, law,
ordinance, rule, code, order or regulation of any Governmental Authority or any
order, ruling, writ, injunction, judgment, award, determination or decree of any
court, arbitral body or Governmental Authority to which any of the Stockholders
is a party or by which any of the Stockholders is bound, (ii) with respect to
the Trusts, violate, conflict with or result in a breach of any of the terms,
conditions or provisions of any such Stockholder's trust agreement or other
constituent documents or (iii) violate, conflict with or result in a breach of
or constitute a default (or event which with the giving of notice or the passage
of time, or both, would become a default) under, require a consent under, or
give to others any rights of termination, amendment, acceleration, suspension,
revocation or cancellation of, or result in the creation of any Claims or
Permitted Encumbrances on any of the assets or properties of any of the
Stockholders pursuant to or result in any payment or charge under, any permit,
license, contract or agreement to which any Stockholder is a party or by which
any Stockholder, or any of such Stockholder's assets or properties, is bound or
affected, and no such permit, license, contract or agreement shall prohibit or
delay the timely performance by the Stockholders of any of their obligations
under this Agreement.
SECTION 2.5 OWNERSHIP OF SHARES. As of the date of this Agreement, each
Stockholder owns its Shares beneficially and of record, and except for such
Shares, such Stockholder does not beneficially or of record own any (i) shares
of capital stock or voting securities of the Company, (ii) securities of the
Company convertible into or exchangeable for shares of capital stock or voting
securities of the Company or (iii) options or other rights to acquire from the
Company any capital stock, voting securities or securities convertible into or
exchangeable for capital stock or voting securities of the Company. Other than
as set forth in the Shareholders Agreement dated as of June 10, 1996 among the
Company, certain of the Stockholders, and certain other parties thereto (which
agreement has not been amended or modified as of the date hereof) (the
"Shareholders Agreement"), each Stockholder has sole voting power, sole power of
disposition, sole power to demand appraisal rights and all other stockholder
rights with respect to all of its Shares, with no restrictions on such
Stockholder's rights of voting or disposition pertaining thereto, other than
restrictions on disposition pursuant to applicable securities laws. Other than
the Shareholders Agreement, there are no outstanding subscriptions, options,
warrants, rights (including preemptive rights), calls, or other agreements or
commitments of any character relating to the Shares or to any corporate
governance matters. Each Stockholder has good, valid and marketable title to its
Shares, free
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and clear of all Claims and Permitted Encumbrances. Each Trust has full trust
power and authority to own the Shares owned by it.
SECTION 2.6 FINDER'S FEES. NO investment banker, broker, finder or
other intermediary is entitled to a fee or commission from the Company, LVMH or
Acquisition Sub in respect of this Agreement based upon any arrangement or
agreement made by or on behalf of such Stockholder.
ARTICLE 3
COVENANTS OF STOCKHOLDERS
Each Stockholder hereby covenants and agrees that:
SECTION 3.1 NO PROXIES FOR OR ENCUMBRANCES ON SHARES. Except pursuant
to the terms of this Agreement and the Exchange and Option Agreement dated as of
the date hereof among the Stockholders, LVMH and Acquisition Sub, such
Stockholder shall not, without the prior written consent of LVMH, directly or
indirectly, (i) grant any proxies or enter into any voting trust or other
agreement or arrangement with respect to the voting of any Shares or (ii) sell,
assign, transfer, encumber or otherwise dispose of, or enter into any contract,
option or other arrangement or understanding with respect to the direct or
indirect sale, assignment, transfer, encumbrance or other disposition of, any
Shares or any interest therein during the term of this Agreement, provided that
nothing herein shall prohibit the Stockholders from transferring shares to the
Xxxxx-Xxxxx Foundation, to other Stockholders or to trusts for the benefit of
the Stockholders or any present or former spouse, ancestor or descendent or
sibling of any Stockholder or any trust or other similar entity established for
the benefit of such individuals or their descendants ("RELATED PARTIES"),
provided that each of the Xxxxx-Xxxxx Foundation and/or the Related Parties, as
applicable, enters into an agreement substantively similar to this Agreement.
Each Stockholder shall not seek or solicit any such sale, assignment, transfer,
encumbrance or other disposition or any such contract, option or other
arrangement or understanding and agrees to notify LVMH promptly, and to provide
all details requested by LVMH, if such Stockholder shall be approached or
solicited, directly or indirectly, by any Person with respect to any of the
foregoing; PROVIDED that the foregoing shall not obligate DK or SW to take any
such action nor prevent DK or SW from taking any such actions if DK or SW, as
the case may be, determines in good faith after consultation with independent
legal counsel that taking such action or failing to so act would reasonably be
expected to constitute a breach of his or her fiduciary duty as a director or
officer of the Company.
SECTION 3.2 OTHER OFFERS.
(a) Each Stockholder shall not, and will use his, her or its
reasonable best efforts to cause their Representatives not to, directly or
indirectly, (i) take any action to initiate, solicit, encourage, negotiate or
take any action to facilitate, any inquiries or the making of any proposal or
offer with respect to, or a transaction to effect, any Acquisition Proposal,
(ii) engage in discussions with, or disclose any nonpublic information relating
to the
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Company or any of its Subsidiaries, afford access to the properties, books or
records of the Company or any of its Subsidiaries to, or cooperate in any way
with, any Person that may be considering making, or has made, an Acquisition
Proposal or has agreed to endorse an Acquisition Proposal or (iii) approve or
recommend, or propose publicly to approve or recommend, or execute or enter
into, or propose publicly to approve or enter into, any letter of intent or
other agreement related to any Acquisition Proposal; PROVIDED that the foregoing
shall not limit or prohibit DK or SW from participating in discussions with the
members of the Board of Directors of the Company if DK or SW, as the case may
be, determines in good faith after consultation with independent legal counsel
that the failure to so act would reasonably be expected to constitute a breach
of his or her fiduciary duty as a director of the Company.
(b) Each Stockholder will promptly notify LVMH after receipt
of an Acquisition Proposal or any indication that any Person is considering
making an Acquisition Proposal or any request for nonpublic information relating
to the Company or any of its Subsidiaries or for access to the properties, books
or records of the Company or any of its Subsidiaries by any Person that may be
considering making, or has made, an Acquisition Proposal indicating, in
connection with such notice, the name of such Person and the material terms and
conditions of any such Acquisition Proposal, indication or request and will keep
LVMH fully informed of the status and details of any such Acquisition Proposal,
indication or request; provided, however, that no such disclosure or delivery of
such notice shall be required if it would reasonably be expected to constitute a
breach of their fiduciary duty as directors or officers of the Company (as
reasonably determined by such Stockholders after taking into account the advice
of their independent legal counsel).
SECTION 3.3 APPRAISAL RIGHTS. Each Stockholder shall not exercise any
rights (including, without limitation, under Section 262 of the General
Corporation Law of the State of Delaware) to demand appraisal of any of his, her
or its Shares which may arise with respect to the Merger.
ARTICLE 4
MISCELLANEOUS
SECTION 4.1 FURTHER ASSURANCES. Each of the Company, LVMH, Acquisition
Sub and the Stockholders will execute and deliver, or cause to be executed and
delivered, all further documents and instruments reasonably necessary, proper or
advisable under applicable laws and regulations, to carry out the purpose and
intent of this Agreement.
SECTION 4.2 AMENDMENTS; WAIVER; TERMINATION. Any provision of this
Agreement may be amended or waived if, but only if, such amendment or waiver is
in writing and is signed, in the case of an amendment, by each party to this
Agreement or in the case of a waiver, by the party against whom the waiver is to
be effective. 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
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with the terms hereof, will 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. This Agreement shall terminate on the earlier of (i) the date of
consummation of the Merger and (ii) the date of termination of the Merger
Agreement in accordance with its terms. Upon any termination of this Agreement,
this Agreement shall thereupon become void and of no further force and effect,
and there shall be no liability in respect of this Agreement or of any
transactions contemplated hereby or by the Merger Agreement on the part of any
party hereto or any of such party's Representatives; PROVIDED, HOWEVER, that
nothing herein shall relieve any party from any liability for such party's
willful breach of this Agreement; and PROVIDED FURTHER that nothing herein shall
limit, restrict, impair, amend or otherwise modify the rights, remedies,
obligations or liabilities of any person under any other contract or agreement,
including, without limitation, the Agreement dated as of December 15, 2000, by
and among LVMH, DK, SW and the Children's Trust, which provided for the sale of
all of the capital stock of Gabrielle Studio, Inc. to Karma Acquisition, Inc.(as
assignee of LVMH).
SECTION 4.3 EXPENSES; ATTORNEY'S FEES. All costs and expenses incurred
in connection with this Agreement shall be paid by the party incurring such cost
or expense. Notwithstanding the foregoing, if any legal action or other legal
proceeding relating to this Agreement or the enforcement of any provision of
this Agreement is brought against any of the Stockholders, and the party
bringing such action or proceeding does not fully prevail, the Stockholders
against whom such action or proceeding was brought shall be entitled to recover
reasonable attorneys' fees, costs and disbursements (in addition to any other
relief to which such Stockholders may be entitled).
SECTION 4.4 SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; PROVIDED that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of the other parties hereto, except that LVMH and
Acquisition Sub may transfer or assign their rights and obligations to any of
their respective direct wholly-owned subsidiaries, to the extent and for so long
as such entities remain direct wholly-owned subsidiaries.
SECTION 4.5 GOVERNING LAW; JURISDICTION AND VENUE. This Agreement shall
be construed in accordance with and governed by the laws of the State of
Delaware regardless of the laws that might otherwise govern under applicable
principles of conflicts of law. The parties hereto hereby irrevocably and
unconditionally consent to and submit to the exclusive jurisdiction of the
courts of the State of Delaware for any actions, suits or proceedings arising
out of or relating to this Agreement and the transactions contemplated hereby
(and the parties agree not to commence any action, suit or proceeding related
thereto, except in such courts), and further agree that service of any process,
summons, notice or document by U.S. registered mail to the respective addresses
set forth on the signature pages hereto shall be effective service of process
for any such action, suit or proceeding brought against any party in any such
court. The parties irrevocably and unconditionally waive any objection to the
laying of venue of any action, suit or proceeding arising out of this Agreement
or the transactions contemplated hereby, in the courts of the State of Delaware
or the United States of America
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located in the State of Delaware, and hereby further irrevocably and
unconditionally waive and agree not to plead or claim in any such court that any
such action, suit or proceeding brought in any such court has been brought in
any inconvenient forum.
SECTION 4.6 COUNTERPARTS; EFFECTIVENESS. This Agreement may be signed
in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have received
counterparts hereof signed by all of the other parties hereto.
SECTION 4.7 SEVERABILITY. If any term, provision or covenant of this
Agreement is held by a court of competent jurisdiction or other authority to be
invalid, void or unenforceable, the remainder of the terms, provisions and
covenants of this Agreement shall remain in full force and effect and shall in
no way be affected, impaired or invalidated.
SECTION 4.8 SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement is
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof in addition to any other
remedy to which they are entitled at law or in equity.
SECTION 4.9 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 right, power or remedy by such party.
SECTION 4.10 OFFICERS AND DIRECTORS. Notwithstanding anything to the
contrary in this Agreement, in the event a Stockholder is a director or officer
of the Company, nothing in this Agreement is intended or shall be construed to
require such Stockholder, in his or her capacity as a director or officer of the
Company, to act or fail to act in accordance with his or her fiduciary duties in
such capacity. Furthermore, no Stockholder 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 a director or officer, and
nothing herein will limit or affect, or give rise to any liability to any
Stockholder in such Stockholder's capacity as a director or officer of the
Company. For the avoidance of doubt, nothing in this SECTION 4.10 shall in any
way limit, modify or abrogate any of the obligations of the Stockholders
hereunder to vote the Shares in accordance with the terms of this Agreement and
to not transfer any Shares except as permitted under Section 3.1 above.
SECTION 4.11 CONSTRUCTION. Whenever used in this Agreement, the
singular shall include the plural and vice versa (where applicable), the use of
the masculine, feminine or neuter gender shall include the other genders (unless
the context otherwise requires), the words "hereof," "herein," "hereto,"
"hereby," "hereunder" and other words of similar import refer to this Agreement
as a whole (including all schedules and exhibits), the words "include,"
"includes" and "including" shall mean "include, without limitation," "includes,
without limitation" and "including, without limitation," respectively. Each
party has been represented by its own counsel in connection with the negotiation
and preparation of this
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Agreement and, consequently, each party hereby waives the application of any
rule of law to the effect that any provision of this Agreement shall be
interpreted or construed against the party whose counsel drafted that provision.
SECTION 4.12 CAPITALIZED TERMS. Capitalized terms used but not defined
herein shall have the respective meanings set forth in the Merger Agreement.
SECTION 4.13. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties relating to the subject matter hereof; PROVIDED,
that nothing herein shall limit, restrict, impair, amend or otherwise modify the
rights, remedies, obligations or liabilities of any person under any other
contract or agreement, including, without limitation, the Agreement dated as of
December 15, 2000, by and among LVMH, DK, SW and the Children's Trust, which
provided for the sale of all of the capital stock of Gabrielle Studio, Inc. to
Karma Acquisition, Inc. (as assignee of LVMH).
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
XXXXX KARAN INTERNATIONAL INC.
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Financial and
Operations Officer
LVMH MOET XXXXXXXX XXXXX VUITTON INC.
By: /s/ Xxxxx X. Xxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
DKI ACQUISITION, INC.
By: /s/ Xxxxx X. Xxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
/s/ Xxxxx Karan
-------------------------------------
Xxxxx Karan
/s/ Xxxxxxx Xxxxx
-------------------------------------
Xxxxxxx Xxxxx
TRUST FBO XXXX XXXXX XXXXX, XXXXX
XXXXX AND XXXXXXXXX XXXXX
U/A/D 2/2/96
By: /s/ Xxxxxxx Xxxxx
--------------------------------
Name: Xxxxxxx Xxxxx
Title:
2000 XXXXXXX XXXXX REVOCABLE TRUST
By: /s/ Xxxxxxx Xxxxx
---------------------------------
Name: Xxxxxxx Xxxxx
Title:
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THE XXXXXXX XXXXX AND XXXXX KARAN
ALASKA COMMUNITY PROPERTY TRUST
By: /s/ Xxxxxxx Xxxxx
---------------------------------
Name: Xxxxxxx Xxxxx
Title:
By: /s/ Xxxxx Karan
---------------------------------
Name: Xxxxx Karan
Title:
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SCHEDULE A
OWNERSHIP OF COMPANY COMMON STOCK
---------------------------------
SHARES OF DKI SHARES OF CLASS A
STOCKHOLDER COMMON STOCK % COMMON STOCK %
----------- ------------- -- ---------------- --
Xxxxx Xxxxx 0 - 0 00%
Xxxxxx Xxxxx 0 - 9 50%
Trust FBO Xxxx Xxxxx 291,688 1.31% - -
Xxxxx, Xxxxx Xxxxx and
Xxxxxxxxx Xxxxx
The Xxxxxx Xxxxx and 3,968,540 17.83% - -
Xxxxx Karan Alaska
Community Property Trust
The Xxxxxx Xxxxx 2000 982,800 4.42% - -
Revocable Trust
TOTAL 5,243,028 23.56% 18 100%
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