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EXHIBIT 2
VOTING AGREEMENT
VOTING AGREEMENT, dated as of February 16, 1999, between EMP
ACQUISITION CORP., a Delaware corporation (the "Newco"), on the one hand, and
BOSTON VENTURES LIMITED PARTNERSHIP III ("BVLP III"), BOSTON VENTURES LIMITED
PARTNERSHIP IIIA ("BVLP IIIA"), BOSTON VENTURES COMPANY LIMITED PARTNERSHIP III
("BVCLP III") and PEMIMA L.P. ("PEMIMA"), and XXXXXXX X. XXXXXX ("XXXXXX" and,
together with BVLP III, BVLP IIIA and Pemima, the "STOCKHOLDERS"), on the other
hand.
RECITALS
Concurrently herewith, Newco and American Media, Inc., a
Delaware corporation (the "Company"), are entering into an Agreement and Plan of
Merger dated the date hereof (the "Merger Agreement"; capitalized terms used but
not defined herein shall have the meanings set forth in the Merger Agreement),
providing for the merger of Newco with and into the Company (the "Merger"), upon
the terms and subject to the conditions set forth in the Merger Agreement.
As of the date hereof, each Stockholder owns of record and
beneficially owns the number of shares of Class A Common Stock, par value $.01
per share (the "Class A Shares"), and Class C Common Stock, par value $.01 per
share (the "Class C Shares"), of the Company set forth opposite its or his name
on the signature page of this Agreement (collectively, such Class A Shares and
Class C Shares are the "Existing Shares" and, together with any Class A Shares
or Class C Shares acquired after the date hereof and prior to the termination
hereof, whether upon the exercise
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of options, conversion of convertible securities or otherwise, are the "Subject
Shares").
As of the date hereof, BVCLP III is the sole general partner
of each of BVLP III and BVLP IIIA and Xxxxxx is the sole general partner of
Pemima.
As a condition to their willingness to enter into the Merger
Agreement, Newco has required that each Stockholder, BVCLP III and Xxxxxx enter
into this Agreement.
AGREEMENT
To implement the foregoing and in consideration of the mutual
agreements contained herein, the parties agree as follows:
1. Option to Purchase Shares.
(a) Grant of Option. The Stockholders hereby grant to Newco an
irrevocable option (the "Option") to purchase all but not less than all of the
Subject Shares at a purchase price of $7.00 per share (the "Exercise Price") in
cash (subject to adjustment in the event of a stock dividend or distribution, or
any change in the Company's common shares by reason of any stock dividend,
split-up, recapitalization, combination or the exchange of shares).
(b) Exercise of Option.
(i) Subject to applicable law (including Rule 10b-13 under
the Securities Exchange Act of 1934, as amended (the "Exchange Act")), the
Option may be exercised by Newco as to all of the Subject Shares, at any time,
commencing upon the Exercise Date and prior to the Expiration Date (as
hereinafter defined). As used herein, the term "Exercise Date" means the first
to occur of any of the following dates:
(x) as to any Stockholder, such Stockholder's failure to
perform, in any material
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respect, any agreement or covenant of the Stockholders contained
herein, so long as Newco is not in breach of its obligations under the
Merger Agreement such that the conditions contained in Section 7.3(b)
of the Merger Agreement would not be satisfied; or
(y) the Merger Agreement is terminated and Newco is
entitled to the reimbursement of expenses pursuant to Section
8.3(c) of the Merger Agreement as a result of a willful breach
by the Company of any of its covenants in the Merger
Agreement, or pursuant to Section 8.1(e) of the Merger
Agreement, as a result of a failure to satisfy the closing
condition in Section 7.1(a) of the Merger Agreement. As used
herein, the term "Expiration Date" means the first to occur of
any of the following dates:
(1) the Effective Time (as defined in the Merger Agreement);
(2) 15 days after the termination of the Merger Agreement for
any reason other than as described in clause (y) above, except in the
event of a termination of the Merger Agreement pursuant to Section
8.1(c) at which time the Expiration Date shall be deemed to have
occurred;
(3) 90 days after the termination of the Merger Agreement
described in clause (y) above; or
(4) written notice of termination of this Agreement by Newco
to the Stockholders.
(ii) In the event Newco wishes to exercise the Option, Newco
shall send a written notice to the Stockholders of its intention to so exercise
the Option (a "Notice"), specifying
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the place, time and date of the closing of such purchase (the "Closing"), which
date shall not be less than two business days nor more than five business days
from the date on which a Notice is delivered; provided, that the Closing shall
be held only if such purchase would not otherwise then violate or cause the
violation of, any applicable law or regulations (including, without limitation,
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 0000 (xxx "XXX Xxx")) or any
decree, order or injunction of any governmental agency, authority or court,
whether temporary, preliminary or permanent. If the Closing shall be violative
of any such laws or rules or any such decree, order or injunction, then such
Notice shall be deemed rescinded and of no effect and Newco shall send a new
Notice at such time as the Closing is not violative of such laws, rules,
decrees, orders or injunctions. Notwithstanding the occurrence of such
rescission, this Agreement shall remain in full force and effect.
(iii) At the Closing, each Stockholder in respect of whose
shares the Option is being exercised shall deliver to Newco all of its Subject
Shares by delivery of a certificate or certificates evidencing such Subject
Shares so purchased by Newco duly endorsed or with executed blank stock power
attached, in either event with signature guaranteed such that registered
ownership of the Subject Shares may be registered for transfer on the books of
the Company and Newco will make payment to each Stockholder of the aggregate
Exercise Price for the Subject Shares being purchased upon exercise of the
Option by wire transfer of immediately available funds to an account designated
by such Stockholder in the amount equal to the Exercise Price multiplied by the
number of Subject Shares purchased pursuant to this Section 1.
2. Other Covenants of Each Stockholder. Until the termination of this
Agreement
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in accordance with Section 3, each Stockholder, BVCLP III and Xxxxxx severally
and not jointly, agree as follows:
(a) Voting. If requested by Newco, each of the Stockholders
shall (and BVCLP III shall cause BVLP III and BVLP IIIA to and Xxxxxx
shall cause Pemima to) immediately execute the Consent of Stockholders
attached hereto as Exhibit A; provided that such consent shall not be
executed or if executed, shall not be deemed effective and shall be
revocable until the Consent Date. Consent Date means the record date
for giving consents established in accordance with the applicable rules
of the New York Stock Exchange and Delaware law. The parties agree that
the Consent of Stockholders may only be revoked upon termination of
this Voting Agreement for any reason other than the occurrence of the
Effective Time. Each Stockholder also agrees that in connection with
any other solicitation of written consents or meeting of the
stockholders of the Company relating to the adoption of the Merger
Agreement or in any other circumstances upon which a written consent,
vote or other approval with respect to the Merger or the Merger
Agreement is sought, each Stockholder shall (and BVCLP III shall cause
BVLP III and BVLP IIIA to and Xxxxxx shall cause Pemima to) execute
consents or vote, as the case may be, its Subject Shares in favor of
the Merger, the adoption of the Merger Agreement, the approval of the
terms thereof and each of the other transactions contemplated by the
Merger Agreement.
At any meeting of stockholders of the Company or at any
adjournment thereof or in any other circumstances upon which the
stockholders of the Company vote or consent or in connection with which
other such approval is sought, each Stockholder shall (and BVCLP
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III shall cause BVLP III and BVLP IIIA to and Xxxxxx shall cause Pemima
to) vote the Subject Shares against (and the Stockholders shall not,
and BVCLP III shall cause BVLP III and BVLP IIIA not to and Xxxxxx
shall cause Pemima not to, execute consents with respect to) (i) any
action or agreement that would result in a breach in any material
respect of any covenant, representation or warranty or any other
obligation or agreement of the Company under the Merger Agreement and
(ii) any action or agreement (other than the Merger Agreement or the
transactions contemplated thereby) that is intended to or could
reasonably be expected to impede, interfere with, delay, postpone or
attempt to discourage the Merger, including, but not limited to: (A)
any extraordinary corporate transaction (other than the Merger
Agreement and the Merger), such as a merger, consolidation or other
business combination involving the Company and its subsidiaries, any
sale or transfer of a material amount of assets of the Company or its
subsidiaries or of Class A Shares or Class C Shares or other capital
stock of the Company, any reorganization, recapitalization or
liquidation of the Company or its subsidiaries or any other Takeover
Proposal (as defined in the Merger Agreement); (B) any change in the
management or board of directors of the Company, except as otherwise
agreed to in writing by Newco; (C) any material change in the present
capitalization or dividend policy of the Company; (D) any amendment to
the Company's Certificate of Incorporation or Bylaws or other proposal
or transaction involving the Company or any of its subsidiaries, which
amendment or other proposal or transaction changes in any manner the
voting rights of any class of the Company's capital stock or is
intended or could reasonably be expected to impede, frustrate, prevent,
delay or nullify (1)
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the ability of the Company to consummate the Merger or (2) any of the
transactions contemplated by this Agreement or the Merger Agreement and
(E) any other material change in the Company's corporate structure or
business. Each Stockholder further agrees not to (and BVCLPIII shall
cause BVLPIII and BVLPIIIA not to and Xxxxxx shall cause Pemima not to)
commit or agree to take any action inconsistent with the foregoing.
(b) Transfer Restrictions. Each Stockholder, severally and not
jointly, agrees not to (and BVCLP III shall cause BVLP III and BVLP
IIIA not to and Xxxxxx shall cause Pemima not to) (i) sell, transfer,
encumber, pledge, assign or otherwise dispose of (including by gift,
merger, testamentary disposition, interspousal disposition (pursuant to
domestic relations proceeding or otherwise) or otherwise by operation
of law ("Transfer"), or enter into any contract, option or other
arrangement or understanding (including any profit sharing arrangement)
with respect to the Transfer of, any of the Subject Shares or any
interest therein to any person other than pursuant to the terms hereof
or the Merger Agreement, (ii) except as contemplated hereby, grant any
proxy or power of attorney, enter into any voting trust, arrangement or
understanding or otherwise transfer voting power, with respect to the
Subject Shares or any interest therein to any other person other than
Newco, (iii) take any action that would make any of its representations
or warranties contained herein untrue or incorrect, in any material
respect, or have the effect of preventing or disabling such Stockholder
from performing its obligations under this Agreement or (iv) commit or
agree to take any of the foregoing actions.
(c) Proxy. Each Stockholder hereby constitutes and appoints
Newco, and each
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officer of Newco (each with full power of substitution), as the proxies
of the Stockholders and hereby authorizes each of them to vote, or
execute written consents with respect to, the Subject Shares in
accordance with Section 2(a). Each proxy granted pursuant to the
immediately preceding sentence is given in consideration of the
agreements and covenants of Newco pursuant to this Agreement and the
Merger Agreement and as such is coupled with an interest and shall be
irrevocable unless and until this Agreement terminates pursuant to
Section 3 hereof and each Stockholder will take such further action or
execute such other instruments as may be necessary to effectuate the
intent of this proxy and hereby revokes any proxy previously granted by
such Stockholder with respect to the Subject Shares.
(d) Appraisal Rights. Each Stockholder hereby irrevocably
waives and agrees not to assert any rights of appraisal or rights to
dissent from the Merger that such Stockholder may have.
(e) The Partnerships. BVCLP III, with respect to each of BVLP
III and BVLP IIIA, and Xxxxxx, with respect to Pemima, shall not (i)
amend, or permit the amendment of, the terms of such Stockholder's
partnership agreement or other organizational documents in any manner
that, reasonably could be expected to be materially adverse to the
rights of Newco under this Agreement or impede, frustrate, prevent,
delay or nullify the Merger or any of the transactions contemplated by
this Agreement or the Merger Agreement, (ii) Transfer or enter into any
contract, option or other arrangement or understanding with respect to
the Transfer of, their interests in such Stockholder to any person or
(iii) adopt a plan of liquidation or dissolution of such Stockholder or
otherwise terminate the partnership agreement with
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respect to such Stockholder.
3. Expiration. This Agreement, except with respect to the
Option which termination shall be governed by Section 1, shall terminate on the
first to occur of (a) the Effective Time, (b) 15 days after the date on which
the Merger Agreement is terminated pursuant to and in accordance with Section
8.1 thereof, except for terminations pursuant to Section 8.1(d), (c) 180 days
after the date on which the Merger Agreement is terminated pursuant to and in
accordance with Section 8.1(d) and (d) written notice of termination of this
Agreement by Newco to the Stockholders (the "Expiration Date").
4. Representations and Warranties of the Stockholders, BVCLP
III and Xxxxxx.
(a) Each Stockholder, BVCLP III and Xxxxxx (each hereinafter a
"person") hereby, severally and not jointly, represents and warrants to
Newco as of the date hereof in respect of himself or itself as follows:
(i) Authority. Such person has all requisite legal
capacity, power and authority to enter into this Agreement, to
perform its obligations hereunder and to consummate the
transactions contemplated hereby. This Agreement has been duly
authorized, executed and delivered by such person and
constitutes a valid and binding obligation of such person
enforceable in accordance with its terms. The execution and
delivery of this Agreement do not, and the consummation of the
transactions contemplated hereby and compliance by such person
with the terms hereof will not, conflict with, or result in
any violation of, or default (with or without notice or lapse
of time or both) under, permit the termination of any
provision of or result in the
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termination of or the acceleration of the maturity or
performance of, or result in the creation or imposition of any
lien upon any of the assets or properties of such Stockholder
under, (i) any provision of any agreement, instrument, permit,
concession, franchise, license, judgment, order, notice,
decree, statute, law, ordinance, rule or regulation applicable
to such person or to such person's property or assets or (ii)
in the case of BVLP III, BVLP IIIA, BVCLP III and Pemima, the
constitutive documents of such person. If such person is
married and such person's Subject Shares constitute community
property or otherwise need spousal or other approval to be
legal, valid and binding, this Agreement has been duly
authorized, executed and delivered by, and constitutes a valid
and binding agreement of, the person's spouse, enforceable
against such spouse in accordance with its terms. No trust of
which such person is a trustee requires the consent of any
beneficiary to the execution and delivery of this Agreement or
to the consummation of the transactions contemplated hereby.
No filing with, and no permit, authorization, consent or
approval of, any Governmental Entity or any other person is
necessary for the execution of this Agreement by such person,
or the performance by such person of its obligations
hereunder. The Stockholders hereby agree that the performance
of their obligations under this Agreement, including
consenting to, or voting in favor of, the adoption of the
Merger Agreement or complying with their obligations in
Section 1 shall not be deemed to be a breach of, or otherwise
conflict with, the Stockholders, Registration Rights and
Voting Agreement (the "Stockholders'
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Agreement), dated as of April 8, 1993, by and among the
Stockholders, and the obligation to take the actions set forth
in Section 2 of this Agreement shall be deemed to satisfy the
requirements set forth in Section 2 of the Stockholders'
Agreement.
(ii) No broker, investment banker, financial adviser or
other person is entitled to any broker's, finder's, financial
adviser's or other similar fee or commission in connection
with the transactions contemplated hereby based upon
arrangements made by or on behalf of such person in his or her
capacity as such.
(iii) Such person understands and acknowledges that
Newco is entering into the Merger Agreement in reliance upon
such person's execution and delivery of this Agreement with
Newco.
(b) Each Stockholder hereby, severally and not jointly,
further represents and warrants to Newco as of the date hereof in
respect of himself or itself as follows:
(i) The Subject Shares. Such Stockholder is the record
holder of the number of the Existing Shares as is set forth
opposite such Stockholder's name on the signature page hereto.
On the date hereof, the Existing Shares set forth opposite
such Stockholder's name on the signature page hereto
constitute all of the outstanding Class A Shares and Class C
Shares owned beneficially or by record by such Stockholder.
Such Stockholder does not have record or beneficial ownership
of any Class A Shares or Class C Shares not set forth on the
signature page hereto. Such Stockholder has sole power of
disposition with respect to all of the Existing Shares set
forth opposite such Stockholder's name in Part I of Schedule I
hereto and
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sole voting power with respect to the matters set forth in
Section 2 hereof and sole power to demand dissenter's or
appraisal rights, in each case with respect to all of the
Existing Shares set forth opposite such Stockholder's name in
Part II of Schedule I hereto, with no restrictions on such
rights, subject to applicable federal securities laws and the
terms of this Agreement. Such Stockholder will have sole power
of disposition with respect to the Subject Shares and, except
as set forth in the Stockholders' Agreement, will have sole
voting power with respect to the matters set forth in Section
2 hereof and sole power to demand dissenter's or appraisal
rights, in each case with respect to all Subject Shares other
than Existing Shares, if any, which become beneficially and
not owned of record by such Stockholder with no restrictions
on such rights, subject to applicable federal securities laws
and the terms of this Agreement. Any shared beneficial
ownership of any of the Subject Shares or shared voting or
dispositive power is shared only with other Stockholders who
are parties to this Voting Agreement.
(ii) Except as set forth in Schedule II hereto, such
Stockholder's Subject Shares and the certificates representing
such Subject Shares are now and at all times during the term
hereof will be held as of record by such Stockholder, or by a
nominee or custodian for the benefit of such Stockholder, free
and clear of all liens, claims, security interests, proxies,
voting trusts or agreements, understandings or arrangements or
any other encumbrances whatsoever, except for any such
encumbrances or proxies arising hereunder.
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5. Additional Subject Shares; Adjustments. Each Stockholder hereby
agrees, while this Agreement is in effect, to promptly notify Newco of the
number of any new Subject Shares acquired by such Stockholder, if any, after the
date hereof. In the event of a stock dividend or distribution, or any change in
the Company's common shares by reason of any stock dividend, split-up,
recapitalization, combination or the exchange of shares, the term "Subject
Shares" shall be deemed to refer to and include the Subject Shares as well as
all such stock dividends and distributions and any shares into which or for
which any or all of the Subject Shares may be changed or exchanged.
6. Fiduciary Duties. Notwithstanding anything in this Agreement to the
contrary, the covenants and agreements set forth in this Agreement shall not be
deemed to prevent Xxxxxx from taking any action, subject to the applicable
provisions of the Merger Agreement, while acting in his capacity as director of
the Company.
7. Further Assurances. From time to time, at the other party's request
and without further consideration, each party hereto shall execute and deliver
such additional documents and take all such further action as may be necessary
or desirable to consummate and make effective, in the most expeditious manner
practicable, the transactions contemplated by this Agreement. The Stockholders
agree to amend or modify the provisions of the Stockholders' Agreement to the
extent necessary in the event it is determined that the Stockholders' Agreement
conflicts with the obligations of the Stockholders under this Agreement in any
material respect.
8. Stop Transfer Order; Legends. In furtherance of this Agreement,
concurrently herewith, each Stockholder shall and hereby does authorize the
Company's counsel to notify the
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Company's transfer agent that there is a stop transfer order with respect to all
of the Existing Shares and that this Agreement places limits on the voting and
transfer of such shares. Each Stockholder agrees that within ten business days
after the date hereof, such Stockholder will no longer hold any Subject Shares
in "street name" or in the name of any nominee. If requested by Newco, each
Stockholder agrees to submit to Newco contemporaneously with or promptly
following execution of this Agreement all certificates representing the Subject
Shares so that Newco may note thereon a legend referring to the option, proxy
and other rights granted to it by this Agreement. If any of the Subject Shares
beneficially owned by such Stockholder are held of record by a brokerage firm in
"street name" or in the name of any other nominee (a "Nominee," and, as to such
Shares, "Nominee Shares"), each Stockholder agrees that, upon written notice by
Newco requesting it, such Stockholder will within five days of the giving of
such notice execute and deliver to Newco a limited power of attorney in such
form as shall be reasonably satisfactory to Newco enabling Newco to require the
Nominee to (i) satisfy Newco's option and grant the irrevocable proxy to the
same effect as Sections 1 and 2 hereof with respect to the Nominee Shares held
by such Nominee and (ii) submit to Newco the certificates representing such
Nominee Shares for notation of the above-referenced legend thereon.
9. Entire Agreement; Assignment.
(a) This Agreement (including the documents and instruments
referred to herein) constitutes the entire agreement and supersedes all
prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof.
(b) Neither this Agreement nor any of the rights, interests or
obligations under this
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Agreement will be assigned by any of the parties hereto (whether by
operation of law or otherwise) without the prior written consent of the
other party; provided, that Newco may assign its rights hereunder to
any of its affiliates, but no such assignment shall relieve Newco of
its obligations hereunder. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be
enforceable by, the parties and their respective successors and
assigns.
8. Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, each of which shall remain in full force
and effect.
9. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
10. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which shall constitute one and the same agreement.
11. Parties in Interest; Notices. This Agreement shall be
binding upon and inure solely to the benefit of each party hereto and nothing in
this Agreement, express or implied, is intended to confer upon any person other
than the parties any rights or remedies of any nature whatsoever under or by
reason of this Agreement. Any notices required to be delivered to the parties
hereunder shall be sent to the addresses set forth on the signature page hereto.
12. Specific Performance. The parties hereto agree that
irreparable damage would
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occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to seek an injunction
or injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any federal court located in the State of
Delaware or any Delaware state court, this being in addition to any other remedy
to which they are entitled at law or in equity.
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IN WITNESS WHEREOF, Newco, the Stockholders, BVCLP III and
Xxxxxx have caused this Agreement to be duly executed as of the day and year
first above written.
EMP ACQUISITION CORP.
By: _________________________________
Name: Xxxxxx Xxxxxxx
Title: President
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Number of Class A Shares BOSTON VENTURES LIMITED PARTNERSHIP III
Record:
Beneficial: 531,376
By: Boston Ventures Company Limited Partnership
Number of Class C Shares III, its sole general partner
Record:
Beneficial: 9,786,805.7
By: _______________________________
Number of Class A Shares BOSTON VENTURES LIMITED PARTNERSHIP IIIA
Record:
Beneficial: 140,078
By: Boston Ventures Company Limited Partnership
III, its sole general partner
Number of Class C Shares
Record:
Beneficial: 2,579,602.1 By: _______________________________
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Number of Class A Shares PEMIMA, L.P.
Record:
Beneficial: 339,859
By: _______________________________
Number of Class C Shares Name: Xxxxxxx X. Xxxxxx, its sole general partner
Record:
Beneficial: 8,335,603.2
000 Xxxxxxxx Xxxxx Xxxx
Xxx Xxxx, XX 00000
____________________________________
Number of Class A Shares Xxxxxxx X. Xxxxxx
Record:
Beneficial: 339,859
Number of Class C Shares
Record:
Beneficial: 8,335,603.2
000 Xxxxxxxx Xxxxx Xxxx
Xxx Xxxx, XX 00000
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SCHEDULE I
Part I -- Number of Existing Shares with Sole Dispositive Power or Shared
Dispositive Power with the Stockholders who are Party to this Voting
Agreement:
Name of Stockholder Number of Existing Shares
------------------- -------------------------
Boston Ventures Limited Partnership III
Class A 531,376
Class C 9,786,805.7
Boston Ventures Limited Partnership IIIA
Class A 140,078
Class C 2,579,602.1
Pemima, L.P.
Class A 339,859
Class C 8,335,603.2
Part II -- Number of Existing Shares with Sole Voting Power and Sole Power
to Demand Dissenter's or Appraisal Rights or Shared Voting Power and
Shared Power to Demand Dissenter's or Appraisal Rights with the
Stockholders who are Party to this Voting Agreement:
Name of Stockholder Number of Existing Shares
------------------- -------------------------
Boston Ventures Limited Partnership III
Class A 531,376
Class C 9,786,805.7
Boston Ventures Limited Partnership IIIA
Class A 140,078
Class C 2,579,602.1
Pemima, L.P.
Class A 339,859
Class C 8,335,603.2
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SCHEDULE II
[Intentionally left blank.]
