VOTING AGREEMENT
This VOTING AGREEMENT (this
“Agreement”), dated as of December 8, 2008 is made by and between Wynnefield
Capital, Inc. (“WCI”), a Delaware corporation with an office at 000 Xxxxxxx
Xxxxxx, Xxxxx 000, Xxx Xxxx, XX 00000 and Caiman Partners L.P., (“Caiman
Partners”), a Delaware limited partnership with an office at 0000 Xxxxxxx Xxxxx,
Xxxxxxxxxx, XX 00000 (each an “Interested Party” and collectively the
“Interested Parties”).
WHEREAS, each of the
Interested Parties together with their respective Affiliated Shareholders (as
defined below) desire to nominate and seek to elect five individuals as members
of the Board of Directors of the White Electronic Designs Corporation, an
Indiana corporation (“WEDC”).
NOW, THEREFORE, in
consideration of the promises set forth herein and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, and
intending to be legally bound, each of the Interested Parties hereby agree as
follows:
1. WEDC
Securities.
(a) As of the date hereof,
each Interested Party represents that the Interested Parties and their
Affiliated Shareholders as set forth on Exhibit A hereto,
beneficially own and have the sole or shared, as indicated, right to vote the
securities of WEDC set forth opposite each such party’s name on Exhibit A hereto (the
“Current Shareholder Securities”). Securities of WEDC acquired by the Interested
Parties and their Affiliated Shareholders after the date hereof shall be
referred to herein as “Additional Shareholder Securities.” Each Interested Party
shall promptly notify the other Interested Parties of any Additional Shareholder
Securities acquired by such Interested Party or its Affiliated Shareholders
after the date hereof. For purposes of this Agreement, “Affiliated Shareholders”
are defined as persons or entities that directly or indirectly control, are
controlled by or are under common control with the Interested Party. Control of
a person or entity means the power to direct, or to cause the direction of, the
management and policies of such person or entity, whether through the ownership
of voting securities, by contract or otherwise.
(b) As of the date hereof,
each Interested Party represents that the Interested Parties and their
Affiliated Shareholders as set forth on Exhibit B hereto, have a direct or
indirect economic or pecuniary interest, including, without limitation,
interests or rights acquired through derivative, hedging or similar transactions
of the securities of WEDC set forth opposite each such party’s name on Exhibit B
hereto (the “Derivative Securities”).
Each
Interested Party agrees, for itself and on behalf of its Affiliated
Shareholders, not to sell, assign, transfer, loan or otherwise dispose of (any
such transaction being herein collectively called a “Transfer”), or to advise
any of its Affiliated Shareholders to Transfer, during the term of this
Agreement, all or any of the Current Shareholder Securities (and Additional
Shareholder Securities, upon their acquisition), Derivative Securities or the
right to vote such Current Shareholder Securities (and any Additional
Shareholder Securities), which are beneficially owned by such Interested Party
or its Affiliated Shareholder, as applicable.
For
purposes of this Agreement, “Meeting Date” shall mean the date of the 2009
Meeting. “2009 Meeting” shall mean the annual meeting of WEDC’s shareholders to
be held in calendar year 2009 or any special meeting of stockholders called for
the purpose of electing directors in calendar year 2009, and any adjournments or
postponements thereof.
2. Voting of Current
Shareholder Securities and Additional Shareholder Securities. Each
Interested Party shall, for itself and on behalf of its Affiliated
Shareholders:
(a) during the term of this Agreement,
retain, and not in any way compromise or encumber, the right to vote any Current
Shareholder Securities (and Additional Shareholder Securities, upon their
acquisition) beneficially owned by such Interested Party or Affiliated
Shareholder, as applicable;
(b) take such commercially reasonable
actions as may be required so that it may vote its Current Shareholder
Securities and Additional Shareholder Securities, and cause any person with whom
it has shared voting power to vote such securities at the 2009 Meeting;
and
(c) on the Meeting Date, (i) attend the
2009 Meeting in person or by proxy such that all Current Shareholder Securities
and Additional Shareholder Securities held by such Interested Party and its
Affiliated Shareholders are represented at such meeting, (ii) at the 2009
Meeting, vote such Current Shareholder Securities and Additional Shareholder
Securities in person or by proxy in the manner set forth in Exhibit B hereto with
respect to each of the actions described therein (the “Actions”), and in favor
of any ancillary or procedural actions or matters related to giving effect to
the Actions or required to effect the approval of the Actions (but in no event
in contravention of any of the Actions), and (iii) at the 2009 Meeting, not vote
any such Current Shareholder Securities and Additional Shareholder Securities
other than as set forth in Exhibit B hereto and
any ancillary or procedural actions or matters related to the Actions or
required to effect the approval of the Actions (but in no event in contravention
of any of the Actions).
3. Expenses. Each
Interested Party shall be responsible for its Share (as defined below) of all
reasonable out-of-pocket and third-party expenses (including, without
limitation, fees and disbursements of counsel, proxy solicitators or other
professionals and advisors engaged by or to act on behalf of the Interested
Parties with respect to matters set forth herein) incurred or to be incurred in
connection with, the matters described by this Agreement, the Group Schedule 13D
(as hereinafter defined), preliminary and definitive proxy statements filed with
the Securities and Exchange Commission, letters, advertisements, solicitation of
proxies and the Actions or transactions contemplated hereby or thereby (in each
case, to the extent not reimbursed by WEDC). Notwithstanding anything
to the contrary, each Interested Party shall be fully responsible for all such
expenses arising out of such Interested Party’s (or its Affiliated Shareholders’
or any of their respective affiliates’) gross negligence, fraud, bad faith or
willful misconduct. For the purposes of this Agreement, an Interested Party’s
Share shall be mutually agreed upon between the parties hereto at a later
date.
4.
Cooperation. Each
Interested Party shall (a) use reasonable efforts to assist each other and
timely provide all necessary or desirable information to each other and (b) to
execute and deliver such additional documents, in each case, as may be
reasonably required in order to effect the Actions and transactions contemplated
by this Agreement and the Schedule 13D in respect of the parties’ collective
beneficial ownership of securities of WEDC (as a “Group”), as may be amended
from time to time (the “Group Schedule 13D”). Each party to this Agreement
agrees, to the extent required by, and in accordance with, applicable federal
securities laws, to update any information pertaining to such party in the Group
Schedule 13D or any amendments thereto. Each Interested Party shall promptly,
and in no event later than one business day following the acquisition of a
beneficial interest in Additional Shareholder Securities by the Interested Party
or its Affiliated Shareholders, provide such information to the other Interested
Parties as is reasonably necessary with respect to any amendment of the Group
Schedule 13D. Until the third anniversary of this Agreement, each of the
Interested Parties agrees to cooperate, to the extent reasonable, including
without limitation in a joint defense, with respect to any claim or action of
any kind, at law or equity, or any appeal of any decision thereof, threatened in
writing, initiated or pending which in any manner attempts to prevent, forestall
or invalidate the consummation of any of the Actions or any matter contemplated
by this Agreement or the Group Schedule 13D, or in a joint prosecution or other
declaratory action which attempts to effectuate any matter contemplated by this
Agreement or the Group Schedule 13D; provided, however, if any
claim is pending by or against the Interested Parties on the third anniversary
of this Agreement, this Agreement shall continue in full force and effect until
such claim is finally resolved.
5. Liability. Except
as set forth in Sections 3 and 11 hereof or resulting from any breach of any
Interested Party’s representations, warranties or covenants hereunder, no
Interested Party nor any of its Affiliated Shareholders nor any of their
respective affiliates, partners, employees, counsel, agents or representatives
shall be liable to any other Interested Party or their Affiliated Shareholders
or any of their respective affiliates, partners, employees, counsel, agents or
representatives, in each case for any loss, liability, damage or expense arising
out of or in connection with this Agreement or the Group Schedule 13D or the
Actions or transactions contemplated hereby or thereby, except to the extent
such loss, liability, damage or expense is caused by such Interested Party’s
gross negligence, fraud, bad faith or willful misconduct, or violation of law.
Each Interested Party on behalf of itself and its respective Affiliated
Shareholders, disclaims any beneficial ownership (except as provided herein) or
pecuniary or economic interest in, of any of the Current Shareholder Securities,
Additional Shareholder Securities or Derivative Securities controlled or
beneficially owned by the other Interested Party and its Affiliated
Shareholders.
6.
Representations;
Power; Binding Agreement; Non-Contravention; Misstatements; Omissions.
Each Interested Party represents, as to itself only, that: (a) it has the full
right, power and authority to enter into this Agreement and perform all of its
obligations hereunder; (b) neither the execution, delivery nor performance of
this Agreement by such party will violate the charter, by-laws or other
organizational or constitutive documents of such party, or any other agreement,
contract or arrangement to which such party is a party or is bound, including
any voting agreement, stockholders agreement or voting trust; (c) this Agreement
has been duly authorized, executed and delivered by such party and constitutes a
legal, valid and binding agreement of such party, enforceable in accordance with
its terms; (d) neither the execution or delivery of this Agreement by such party
will (i) require any material consent or approval of or filing with any
governmental or other regulatory body, other than filings required under the
federal or state securities laws, or (ii) constitute a violation of, conflict
with or constitute a default under (A) any material law, rule or regulation
applicable to such party, or (B) any material order, judgment or decree to which
such party is bound; and (e) the Interested Party and its Affiliated
Shareholders have the right to vote the Current Shareholder Securities as set
forth on Exhibit
A.
7.
Notices. All
notices, correspondence and information related to this Agreement should be sent
to the Interested Parties at the addresses set forth below:
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Wynnefield
Partners, Inc.
000
Xxxxxxx Xxxxxx, Xxxxx 000
Xxx
Xxxx, Xxx Xxxx 00000
Facsimile:
(000) 000-0000
Attention:
Xx. Xxx Xxxxxx
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Caiman
Partners L.P.
0000
Xxxxxxx Xxxxx
Xxxxxxxxxx,
XX 00000
Facsimile:
(000) 000-0000
Attention:
Mr. Xxxxx Xxxx
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With a
copy to:
In all
cases with a copy to:
Xxxx
Xxxxxxx, P.C.
0000
Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx,
XX 00000
Attention:
Xxxxxxx X. Xxxxxxx, Esq.
8.
Amendments;
Successors. No waiver, amendment or other modification of this Agreement
shall be effective unless in writing and signed by each Interested Party. This
Agreement shall inure to the benefit of and be binding on each Interested Party
and their respective successors. This Agreement is non-assignable.
9.
Termination. Except
as otherwise set forth in Section 4 hereof, this Agreement will terminate upon
the earlier to occur of (x) December 31, 2009, unless such date is extended by
agreement of the Interested Parties, and (y) the date of the 2009 Meeting at
which the Actions set forth on Exhibit B have been voted on; provided that no matter shall
be considered consummated hereunder, or the obligations of the Interested
Parties terminated hereunder, while any claim or action of any kind, at law or
equity, or any appeal of any decision thereof, is threatened in writing,
initiated or pending which in any manner attempts to prevent, forestall or
invalidate any of the Actions or matters contemplated thereby. Any termination
of this Agreement pursuant to this Section 9 shall occur without any liability
or continuing obligation of any party to any other party; provided, that the
reimbursement obligations set forth in Section 3, and the obligations to
cooperate and provide information set forth in Section 4 shall survive any such
termination. Notwithstanding anything to the contrary, including any continuing
obligations to cooperate hereunder, upon termination of this Agreement, no
Interested Party intends to be, and shall no longer be, part of a “group” for
any purpose, including for purposes of the federal securities laws.
10.
Public
Announcements. No Interested Party shall issue any written
press release or make any other public statement regarding the Actions or other
transactions contemplated by this Agreement or the Group Schedule 13D without
the prior consent of the other Interested Parties.
11.
Representation.
Each Interested Party represents and agrees that, to the best of its knowledge,
the information about such Interested Party or any of its Affiliated
Shareholders contained or which is required to be contained in the Group
Schedule 13D or any amendment thereto is accurate, correct and complete in all
material respects as of date of the applicable filing. Damages for any breach of
the foregoing representation shall include not only judgments and amounts paid
in settlement (with the approval of the misrepresenting Interested Party), but
also other losses (excluding loss of value of the securities held or to be held)
incurred by any other party to this Agreement.
12.
Counterparts. This
Agreement may be executed and delivered by each party hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original and both of which taken together shall constitute one and the same
agreement.
13.
Choice of Law.
This Agreement shall be governed by and construed in accordance with the
domestic laws of the State of New York, without giving effect to any choice of
law or conflict of laws provision or rule (whether of the State of New York or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of New York. Each of the parties hereto hereby
agrees that any dispute under this Agreement shall be determined in the federal
courts of the United States sitting in the Southern District of New York, or the
courts of the State of New York sitting in the County of New York, and each
party hereto hereby submits and consents to any such court’s exercise of
jurisdiction.
14.
Severability. If any
term, provision, covenant or restriction contained in this Agreement is held by
a court of competent jurisdiction or other authority by judgment or order no
longer subject to review, to be invalid, void, unenforceable or against its
regulatory policy, the remainder of the terms, provisions, covenants and
restrictions contained in this Agreement shall remain in full force and effect
and shall in no way be affected, impaired or invalidated.
[signature page
follows]
IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed and delivered on
the date and year first above written
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Wynnefield
Capital, Inc.
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Caiman
Partners L.P.
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By: Caiman
Capital GP, L.P., its
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By:
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/s/ Xxxxxx Xxxx
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general
partner
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Name: Xxxxxx
Xxxx
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Title: President
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By:
Caiman Capital Management LLC, its managing general
partner
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By:
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/s/ Xxxxx Xxxx
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Name: Xxxxx
Xxxx
Title: Managing
Member
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EXHIBIT
A
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INTERESTED
PARTY
|
Interested
Party Securities
|
|
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Wynnefield
Capital, Inc. (“WCI”)
|
|
Number
of shares of WEDC common stock with
(i)
Sole right to vote: 420,184 (1)
(ii)
Shared right to vote: 0
|
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AFFILIATED
SHAREHOLDERS
|
Affiliated
Shareholder Securities
|
|
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Wynnefield
Partners Small Cap Value,
L.P.
(“Wynnefield Partners”)
|
Number
of shares of WEDC common stock with
(i)
Sole right to vote: 364,261
(ii)
Shared right to vote: 0
|
|
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Wynnefield
Partners Small Cap Value,
L.P.
I (“Wynnefield Partners I”)
|
Number
of shares of WEDC common stock with
(i)
Sole right to vote: 642,556
(ii)
Shared right to vote: 0
|
|
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Wynnefield
Small Cap Value Offshore
Fund,
Ltd.(“Wynnefield Offshore”)
|
Number
of shares of WEDC common stock with
(i)
Sole right to vote: 420,184
(ii)
Shared right to vote: 0
|
|
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Wynnefield
Capital Management, LLC
(“WCM”)
|
Number
of shares of WEDC common stock with
(i)
Sole right to vote: 1,006,817 (2)
(ii)
Shared right to vote: 0
|
|
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Xxxxxx
Xxxx
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Number
of shares of WEDC common stock with
(i)
Sole right to vote: 0
(ii)
Shared right to vote: 1,427,001 (3)
|
|
Xxxxxx
Xxxxxx
|
|
Number
of shares of WEDC common stock with
(i)
Sole right to vote: 0
(ii)
Shared right to vote: 1,427,001
(3)
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(1) WCI
is the sole investment manager of Wynnefield Offshore and, accordingly, may be
deemed to be the indirect beneficial owner (as that term is defined under Rule
13d-3 under the Exchange Act) of the WEDC common stock that Wynnefield Offshore
beneficially owns.
(2) WCM
is the sole general partner of the Wynnefield Partners and Wynnefield Partners I
and, accordingly, may be deemed to be the indirect beneficial owner (as that
term is defined under Rule 13d-3 under the Exchange Act) of the WEDC common
stock that Wynnefield Partners and Wynnefield Partners I beneficially
own.
(3)
Messrs. Obus and Xxxxxx are executive officers of WCI and, accordingly, each of
Messrs. Obus and Xxxxxx may be deemed to be the indirect beneficial owner (as
that term is defined under Rule 13d-3 under the Exchange Act) of the WEDC common
stock that WCI may be deemed to beneficially own. In addition, each of Messrs.
Obus and Xxxxxx are the co-managing members of WCM, and accordingly, each of
Messrs. Obus and Xxxxxx may be deemed to be the indirect beneficial owner (as
that term is defined under Rule 13d-3 under the Exchange Act) of the WEDC common
stock that WCM may be deemed to beneficially own.
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INTERESTED
PARTY
|
Interested
Party Securities
|
|
|
Caiman
Partners, L.P.
(“Caiman
Partners”)
|
|
Number
of shares of WEDC common stock with
(i)
Sole right to vote: 803,700
(ii)
Shared right to vote: 0
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AFFILIATED
SHAREHOLDERS
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Interested
Party Securities
|
|
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Caiman
Capital GP, L.P.
(“Caiman
Capital”)
|
Number
of shares of WEDC common stock with
(i)
Sole right to vote: 803,700 (1)
(ii)
Shared right to vote: 0
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|
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Caiman
Capital Management, LLC
(“Caiman
Management”)
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Number
of shares of WEDC common stock with
(i)
Sole right to vote: 803,700 (2)
(ii)
Shared right to vote: 0
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|
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Xxxxx
Xxxx
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Number
of shares of WEDC common stock with
(i)
Sole right to vote: 803,700 (3)
(ii)
Shared right to vote: 0
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(1) Caiman
Capital is the sole general partner of Caiman Partners and, accordingly, may be
deemed to be the indirect beneficial owner (as that term is defined under Rule
13d-3 under the Exchange Act) of the WEDC common stock that Caiman Partners
beneficially owns.
(2) Caiman
Management is the managing general partner of Caiman Capital and, accordingly,
Caiman Management may be deemed to be the indirect beneficial owner (as that
term is defined under Rule 13d-3 under the Exchange Act) of the WEDC common
stock that Caiman Capital may be deemed to beneficially own.
(3) Xx.
Xxxx is the managing member of Caiman Management and, accordingly, Xx. Xxxx may
be deemed to be the indirect beneficial owner (as that term is defined under
Rule 13d-3 under the Exchange Act) of the WEDC common stock that Caiman
Management may be deemed to beneficially own.
EXHIBIT
B
Actions to be Voted
on
1.
Against any adjournment or postponement of the 2009 Meeting until a vote has
occurred on the item below.
2. For
the election at the 2009 Meeting of five director nominees which currently are
not members of the Board of Directors, the identity of whom is to be agreed to
by all of the Interested Parties. In the event WEDC purports to increase the
number of directorships pursuant to its Bylaws or otherwise increases the number
of directors to be elected at the 2009 Meeting, the Interested Parties may
nominate additional persons as directors to fill any vacancies created by the
increase or to fill any additional positions on the board which the stockholders
shall vote on at the 2009 Meeting.
