EXHIBIT 10.20
SELLING SHAREHOLDER AUTHORIZATION
This SELLING SHAREHOLDER AUTHORIZATION (this "Agreement") is made and
entered into by and between the undersigned, an individual resident of the
jurisdiction shown on the signature page below (the "Selling Shareholder"), and
(I) X.X. Xxxxxxxx Worldwide, Inc., a Delaware corporation (the "Company," which
shall be deemed to include all predecessors of the Company, unless expressly
stated otherwise) and (II) X.X. Xxxxxxxx and Xxxx X. Xxxxxxx.
RECITALS
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WHEREAS, the Selling Shareholder is the record and beneficial owner of
shares of common stock of X.X. Xxxxxxxx, Inc., a Minnesota corporation
("Xxxxxxxx Minnesota"), which shall be converted into shares of the Company's
common stock, par value $.10 per share (the "Common Stock"), upon the merger of
Robinson Minnesota with and into the Company (the "Merger");
WHEREAS, the Selling Shareholder wishes to sell the number of shares of
Common Stock shown on the signature page below (the "Shares") pursuant to an
underwriting agreement (the "Underwriting Agreement") among the Company, the
Selling Shareholder, other selling shareholders similarly situated and the
underwriters named therein (the "Underwriters");
WHEREAS, the Company has filed a Registration Statement on Form S-1 (the
"Registration Statement") with the Securities and Exchange Commission (the
"Commission") for the purpose of registering for sale shares of the Common
Stock, including the Shares;
WHEREAS, the Selling Shareholder wishes to enter into this Agreement in
order to facilitate the sale of the Shares by making certain representations to
the Company for use in offering the Shares, by appointing attorneys-in-fact to
enter into an Underwriting Agreement and to take certain actions pursuant
thereto on behalf of the Selling Shareholder, by entering into the other
agreements contained herein, and by agreeing that this Agreement and the actions
authorized hereby are irrevocable;
WHEREAS, the Selling Shareholder has received and reviewed a copy of the
Preliminary Prospectus dated __________________, 1997 (the "Preliminary
Prospectus"), and a draft of the Underwriting Agreement dated September __,
1997;
WHEREAS, the Selling Shareholder acknowledges that (i) if the Selling
Shareholder is a holder of Class B Common Stock of Robinson Minnesota that the
Stock Purchase Agreement (along with any amendments, addendums and exhibits
thereto) between the Selling Shareholder and the Company will automatically
terminate in connection with the offering and (ii) if the Selling Shareholder is
a holder of Class A Common Stock of Robinson Minnesota that restrictions on
transfer of said stock will terminate upon effectiveness of the Merger; and
WHEREAS, the Selling Shareholder agrees to restrict the sale of Common
Stock not being sold by the Selling Shareholder to the Underwriters as provided
herein.
NOW, THEREFORE, in consideration of the premises, the agreements contained
herein, similar selling shareholder authorizations being signed by other selling
shareholders and other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties hereto agree as follows:
1. TAX WITHHOLDINGS (PARTICIPANTS IN STOCK INCENTIVE PROGRAMS ONLY).
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The Selling Shareholder acknowledges that the Shares constitute restricted
stock of Robinson Minnesota, and the restrictions with respect to the restricted
stock will lapse immediately prior to the Closing. The effect of the lapse is
that the Selling Shareholder will recognize ordinary income equal to the fair
market value of the Shares.
The Underwriting Agreement will commit the Underwriters to purchase only a
portion of the Shares (approximately 87% of the Shares), but the Underwriters
will have an option to purchase the balance of the Shares, which option may not
be exercised. Taxable income will be recognized in respect of all of the
Shares, even
though only a portion of the Shares may be purchased. The Selling Shareholder's
Form W-2 to be provided by the Company will include the fair market value of the
Shares.
The Selling Shareholder agrees that a portion of the proceeds from the sale
of the Shares will be paid to the Company, which will be withheld for the
payment of income taxes by Selling Shareholder. Consequently, the Selling
Shareholder authorizes the Company to take such action as is necessary to assure
that all applicable federal or state payroll, income withholding and any other
taxes are withheld from the proceeds of the sale of the Shares, and agrees to
complete, execute and deliver all forms necessary to assure such withholdings,
including the Substitute Form W-9.
2. INFORMATION REGARDING BENEFICIAL OWNERSHIP OF SHARES.
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As used in this Agreement, the "beneficial owner" of a security includes
any person who, directly or indirectly, through any contract, arrangement,
understanding, relationship or otherwise has or shares (a) voting power, which
includes the power to vote, or direct the voting of, such security, or (b)
investment power, which includes the power to dispose or direct the disposition
of such security. A person may be regarded as having voting power of a security
which is owned (1) by that person's spouse or minor children or by any of that
person's relatives or spouse's relatives who share the same home with that
person; (2) a partnership of which that person is a partner; or (3) a
corporation of which that person is a substantial shareholder.
The Selling Shareholder is the beneficial owner of the equity securities of
the Company, its parents or its subsidiaries listed below. Under the column
"Nature of Ownership," the undersigned has indicated the amounts of securities
for which the undersigned has (a) sole voting power, (b) shared voting power,
(c) sole investment power, or (d) shared investment power. In addition, the
Selling Shareholder has separately indicated the amount of equity securities of
the Company that the undersigned has the right to acquire within 60 days,
including but not limited to any right to acquire (a) through the exercise of an
option, warrant or right, (b) through conversion of a security, (c) pursuant to
the power to revoke a trust, discretionary account or similar arrangement, or
(d) pursuant to the automatic termination of a trust, discretionary account or
similar arrangement.
Number of Title of Securities
Shares Nature of Ownership (Common or Preferred)
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The rules of the Commission permit a person to disclaim beneficial
ownership of securities. Such a disclaimer means that listing of securities
"beneficially owned" would not be construed as an admission of beneficial
ownership for all purposes, such as the Commission's short-swing profit rules
and rules governing reports by holders of five percent or more of the equity
securities of a public company. To disclaim beneficial ownership of any of the
shares listed above check "yes" below and provide the requested information.
Answer: / / YES / / NO
If so, please identify the shares to which the disclaimer applies and briefly
describe the basis for the disclaimer.
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3. IRREVOCABLE POWER OF ATTORNEY.
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3.1. In connection with the sale of the Shares, the Selling Shareholder
irrevocably constitutes and appoints X.X. Xxxxxxxx and Xxxx X. Xxxxxxx or either
of them the true and lawful attorneys-in-fact (the "Attorneys," which shall mean
either or both of the attorneys-in-fact) with full power and authority, whether
acting singly or jointly, to act in the name and for and on behalf of the
Selling Shareholder (this "Power of Attorney"):
(a) To negotiate and agree upon the purchase price per share (the
"Purchase Price Per Share") to be paid by the Underwriters for the Shares.
(b) To negotiate, execute and deliver the Underwriting Agreement (and
amendments thereto), which shall provide for the sale to the Underwriters of
the Shares, or such part thereof as the Attorneys shall determine, which
agreement contains, among other things, provisions for representations,
warranties and indemnity agreements by the Selling Shareholder.
(c) To sell to the Underwriters the Shares, or such part thereof as the
Attorneys shall determine, at the Purchase Price Per Share.
(d) To sell to the Underwriters additional shares of Company Common
Stock pursuant to the over-allotment provision of the Underwriting Agreement
at the Purchase Price Per Share.
(e) To give such orders and instructions and sign such documents as the
Attorneys may in their sole discretion determine to be necessary or proper,
with respect to (i) the transfer on the books of the Company of the Shares
in order to effectuate their sale; (ii) the transfer to Alex. Xxxxx & Sons
Incorporated, as representative (the "Representative") of the Underwriters,
for the account of the Underwriters of the Shares against receipt of the
purchase price to be paid therefor; (iii) the payment out of the proceeds of
any sale to the Underwriters of the portion of all fees and expenses
chargeable to the Selling Shareholders, all transfer taxes incident to the
sale of the Shares and any other expenses incurred by the Seller not
previously agreed (in writing) to be borne by the Company in connection with
the registration, sale and delivery to the Underwriters of the shares of
Common Stock being sold to the Underwriters and the public offering thereof;
(iv) to the extent applicable the payment to the Company of a portion of the
proceeds from the sale of the Shares to satisfy the Selling Shareholder's
withholding obligations; and (v) the remittance to the Selling Shareholder
of the balance of the proceeds from any sale of the Shares.
(f) To complete and effectuate and, if necessary, to prepare and endorse
on behalf of the Selling Shareholder an instruction directing the Company to
transfer the Shares to be sold by the Selling Shareholder.
(g) To retain legal counsel in connection with any and all matters
referred to herein (which counsel may, but need not, be counsel for the
Company).
(h) To do all things and to take all action, which the Attorneys, in
their sole discretion, consider necessary or proper in connection with or to
carry out the sale of the Shares on behalf of the Selling Shareholder as
fully as the Selling Shareholder could do if personally present and acting.
3.2. The Attorneys shall have full power to make and substitute any
attorney to act in their place and stead, and the Selling Shareholder hereby
ratifies and confirms all that the Attorneys or their substitute or substitutes
shall do by virtue of this Agreement.
3.3. For the purpose of completing the transactions contemplated by the
Underwriting Agreement and this Power of Attorney, this Power of Attorney and
all authority conferred hereby shall be irrevocable and shall not be terminated,
except as specifically provided in the Underwriting Agreement or this Power of
Attorney, by the Selling Shareholder, by operation of law, by the death or
incapacity of the Selling Shareholder, or by the occurrence of any other event.
If the Selling Shareholder should die or become incapacitated, or liquidate,
dissolve or be a party to a merger, or in the case of a trust, the trustee of
the trust shall be removed, die or become incapacitated or the trust shall be
terminated, or if any other such event should occur before the completion of the
transactions contemplated by the Underwriting Agreement and this Power of
Attorney, the Attorneys are nevertheless authorized and directed to complete all
of such transactions as if such event had not occurred, and actions taken by the
Attorneys, pursuant to this Power of Attorney, shall be as valid as if such
death, incapacity, removal or other event had not occurred, regardless of
whether the Attorneys shall have received notice of such death, incapacity,
removal or other event.
3.4. The Attorneys are hereby empowered to determine in their sole
discretion the time or times when, the purpose for which and the manner in which
any power herein conferred shall be exercised, and the conditions, provisions
and covenants of any instrument or document which may be executed by the
Attorneys pursuant hereto.
3.5. It is understood that the Attorneys shall not be liable for any error
of judgment or for any act done or omitted or for any mistake of fact or law
except for the Attorneys' own gross negligence or bad faith. The Selling
Shareholder agrees to hold the Attorneys free and harmless from any and all
loss, damage or liability which the Attorneys may sustain as a result of any
action taken in good faith by the Attorneys, as Attorneys hereunder.
4. LOCK-UP.
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The Selling Shareholder agrees that he or she will not, directly or
indirectly, offer, sell, sell short or otherwise dispose of any shares of Common
Stock or other capital stock of the Company, or any other securities
convertible, exchangeable or exercisable for Common Stock or derivative of
Common Stock owned by the Selling Shareholder or request the registration for
the offer or sale of any of the foregoing (or as to which the Selling
Shareholder has the right to direct the disposition of) for a period of one year
after the date of the Underwriting Agreement, except with the prior written
consent of the Representative and except upon death of the Selling Shareholder
or to members of his or her family or to trusts for him, her or their benefit
that take subject to the same restrictions. Such restrictions do not prohibit
the Selling Shareholder from exercising options to purchase shares of Company
Common Stock, subject to the restrictions set forth herein regarding the
offering, sale or other disposition of the shares received upon such exercise.
The Selling Shareholder further agrees that stop transfer instructions with
respect to Common Stock owned by the Selling Shareholder will be entered on the
transfer books and records of the Company.
5. IRREVOCABLE TRANSFER INSTRUCTION.
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The Selling Shareholder hereby irrevocably authorizes and instructs the
Company to register the transfer of the Shares or any portion thereof to the
Representative on the dates and in the amounts as the Attorneys shall direct in
a writing filed with the Company. The Selling Shareholder agrees that, until
the termination of this Agreement, such authorization and instruction shall be
irrevocable. The Selling Shareholder agrees that he or she may not sell,
pledge, transfer or otherwise dispose of the Shares prior to the termination of
this Agreement.
6. IRREVOCABLE COMMITMENT TO SELL SHARES.
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The Selling Shareholder acknowledges that, upon the execution of and
subject to the terms of the Underwriting Agreement, he or she will have
unqualifiedly committed to sell the Shares to the Underwriters. Prior to
December 31, 1997, this Agreement (including the commitment to sell the Shares)
shall be irrevocable and shall not be subject to termination by any act of the
Selling Shareholder, by operation of law or by the occurrence of any other
event, including the death or incapacity of the Selling Shareholder if the
Selling Shareholder is an individual, or the death, incapacity, removal or
replacement of a trustee of the Selling Shareholder if the Selling Shareholder
is a trust. If any such event should occur before the completion of the
transactions contemplated by this Agreement and the Underwriting Agreement, all
of such transactions shall be completed, and the Attorneys shall cause to be
delivered the Shares to be sold in accordance with the terms and conditions of
the Underwriting Agreement and this Agreement. In such event, the actions taken
by the Attorneys pursuant to this Agreement shall be as valid as if such event
had not occurred, regardless of whether the Attorneys shall have received notice
of such event. The Company shall be entitled to act and rely upon any
statement, request, notice or instructions from the Attorneys respecting this
Agreement. Until the Underwriters have made payment of the Purchase Price Per
Share pursuant to the Underwriting Agreement, the Selling Shareholder shall
remain the owner of the Shares and shall have the right, among other things, to
vote the same and to receive all dividends and distributions thereon.
7. MODIFICATION OF STOCK INCENTIVE PROGRAMS (PARTICIPANTS ONLY).
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(a) If the Selling Shareholder has received an award under the Company's
Central Office Management Incentive Program ("C.O.M.I.P."), the Company and the
Selling Shareholder agree that the award under the C.O.M.I.P. applicable to the
year 1997 shall be modified immediately prior to the Closing to add the
following paragraph:
Notwithstanding the express provisions of this award, all amounts earned
with respect to the year ending December 31, 1997, shall be payable in cash,
and not in Common Stock, the C.O.M.I.P. shall terminate with the year ending
December 31, 1997, and the paragraphs 7 and 8 of the award (and any
comparable provisions in any prior award under the C.O.M.I.P.) shall be
deleted and of no force or effect.
(b) If the Selling Shareholder has received an award under the Company's
Employee Incentive Program ("E.I.P."), the Company and the Selling Shareholder
agree that paragraph 2 of the award applicable to the year 1997 (and any
comparable provision in any prior award under the E.I.P.) shall be deleted and
of no force or effect.
(c) If the Selling Shareholder has received an award under the Company's
Profit Center Incentive Program ("P.C.I.P."), the Company and the Selling
Shareholder agree that the award under the P.C.I.P. applicable to the year 1997
shall be modified immediately prior to the Closing to add the following
paragraph:
Notwithstanding the express provisions of this award, all amounts earned
shall be payable in cash, and not in Common Stock, and paragraphs 7 and 8 of
the award (and any comparable provisions in any prior award under the
P.C.I.P.) shall be deleted and of no force or effect.
8. TERMINATION.
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This Agreement shall terminate (i) if the sale of the Shares has not been
completed by the close of business on December 31, 1997, or (ii) if the
Representative advises the Company that it will not proceed with the proposed
public offering during calendar year 1997.
9. GENERAL PROVISIONS.
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9.1. Entire Agreement. This Agreement (including the exhibits, schedules
and other documents referred to herein) contains the entire understanding
between the parties hereto with respect to the subject matter hereof and
supersedes any prior understandings, agreements or representations, written or
oral, relating to the subject matter hereof.
9.2. Counterparts. This Agreement may be executed in separate
counterparts, each of which will be an original and all of which taken together
shall constitute one and the same agreement, and any party hereto may execute
this Agreement by signing any such counterpart.
9.3. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law but if any provision of this Agreement is held to be invalid,
illegal or unenforceable under any applicable law or rule, the validity,
legality and enforceability of the other provision of this Agreement will not be
affected or impaired thereby.
9.4. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs, personal
representatives and, to the extent permitted by subsection 9.5, successors and
assigns.
9.5. Assignability. Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof shall be
assignable (including by operation of law) by any party without the prior
written consent of the other parties to this Agreement. Upon any assignment of
this Agreement without prior written consent, any of the other parties may, in
its discretion, terminate this Agreement, declare this Agreement in default or
allow this Agreement to remain in full force and effect.
9.6. Modification, Amendment, Waiver or Termination. No provision of this
Agreement may be modified, amended, waived or terminated except by an instrument
in writing signed by the parties to this Agreement. No course of dealing
between the parties will modify, amend, waive or terminate any provision of this
Agreement or any rights or obligations of any party under or by reason of this
Agreement.
9.7. Notices. All notices, consents, requests, instructions, approvals or
other communications provided for herein shall be in writing and delivered by
personal delivery, overnight courier, mail, electronic facsimile or e-mail
addressed to the receiving party at the address set forth herein. All such
communications shall be effective when received.
(a) Selling Shareholder
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As shown on the signature page below.
(b) Attorneys-in fact
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X.X. Xxxxxxxx
Xxxx X. Xxxxxxx
X.X. Xxxxxxxx Worldwide, Inc.
0000 Xxxxx Xxxxxxxx Xxxx, Xxxxx 000
Xxxx Xxxxxxx, XX 00000-0000
(c) The Company
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X.X. Xxxxxxxx Worldwide, Inc.
0000 Xxxxx Xxxxxxxx Xxxx, Xxxxx 000
Xxxx Xxxxxxx, XX 00000-0000
Attention: Vice President
Any party may change the address set forth above by notice to each other party
given as provided herein.
9.8. Headings. The headings contained in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
9.9. Governing Law. ALL MATTERS RELATING TO THE INTERPRETATION,
CONSTRUCTION, VALIDITY AND ENFORCEMENT OF THIS AGREEMENT SHALL BE GOVERNED BY
THE INTERNAL LAWS OF THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT TO ANY CHOICE
OF LAW PROVISIONS THEREOF.
9.10. Third-Party Benefit. Nothing in this Agreement, express or implied,
is intended to confer upon any other person any rights, remedies, obligations or
liabilities of any nature whatsoever.
9.11. Survival of Representations and Warranties. Notwithstanding any
investigation made by any of the parties hereto and notwithstanding the sale of
the Shares or any actions taken after the execution hereof, the representations
made in this Agreement shall survive.
9.12. Jurisdiction and Venue. THIS AGREEMENT MAY BE ENFORCED IN ANY
FEDERAL COURT OR STATE COURT SITTING IN MINNESOTA, AND EACH PARTY CONSENTS TO
THE JURISDICTION AND VENUE OF ANY SUCH COURT AND WAIVES ANY ARGUMENT THAT VENUE
IN SUCH FORUM IS NOT CONVENIENT. IF ANY PARTY COMMENCES ANY ACTION UNDER ANY
TORT OR CONTRACT THEORY ARISING DIRECTLY OR INDIRECTLY FROM THE RELATIONSHIP
CREATED BY THIS AGREEMENT IN ANOTHER JURISDICTION OR VENUE, ANY OTHER PARTY TO
THIS AGREEMENT SHALL HAVE THE OPTION OF TRANSFERRING THE CASE TO THE ABOVE-
DESCRIBED VENUE OR JURISDICTION OR, IF SUCH TRANSFER CANNOT BE ACCOMPLISHED, TO
HAVE SUCH CASE DISMISSED WITHOUT PREJUDICE.
IN WITNESS WHEREOF, the Selling Shareholder agrees to be bound by this
Agreement.
Dated: _____________________________, 1997
______________________________
Signature
[NAME]
[ADDRESS]
[CITY, STATE ZIP CODE]
[NUMBER OF SHARES]
Resident of the State of __________________________________
[must be completed]
Accepted:
____________________________________
X.X. Xxxxxxxx
____________________________________
Xxxx X. Xxxxxxx
X.X. Xxxxxxxx Worldwide, Inc.
By _________________________________
Its Vice President
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SUBSTITUTE FORM W-9
NAME OF SHAREHOLDER: [NAME]
ADDRESS: [ADDRESS]
[CITY, STATE ZIP CODE]
TAXPAYER IDENTIFICATION NUMBER: [SSAN]
CERTIFICATION: Under penalties of perjury, I certify that:
1. The number shown on this form is my correct taxpayer
identification number, and
2. I am not subject to backup withholding because: (a) I
have not been notified by the Internal Revenue Service that I am
subject to backup withholding as a result of a failure to report all
interest or dividends, or (b) the Internal Revenue Service has
notified me that I am no longer subject to backup withholding.
Note: Please cross out item 2 above if you have been notified by the Internal
Revenue Service that you are currently subject to backup withholding because you
have failed to report all interest and dividends on your tax return.
Dated: ____________, 1997 Signature: ___________________
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