SHAREHOLDERS AGREEMENT
This Agreement by and among XXXX X. XXXXXXX ("Xxxxxxx"), XXXX X.
XXXXXXX, AS TRUSTEE UNDER THE XXXX X. XXXXXXX REVOCABLE TRUST AGREEMENT,
DATED FEBRUARY 9, 1987 (the "Xxxxxxx Trust"), PRAB, INC., a Michigan
corporation (the "Company") and the STATE TREASURER OF THE STATE OF
MICHIGAN, CUSTODIAN OF PUBLIC SCHOOL EMPLOYEES' RETIREMENT SYSTEM; STATE
EMPLOYEES' RETIREMENT SYSTEM; MICHIGAN STATE POLICE RETIREMENT SYSTEM; AND
MICHIGAN JUDGES' RETIREMENT SYSTEM (the "SMRS") is made this 31st day of
October, 1996 (the "Agreement").
X. Xxxxxxx is the Chairman of the Board of the Company and
Xxxxxxx and the Xxxxxxx Trust constitute a 5% shareholder within the meaning
of Section 382 of the Internal Revenue Code of 1986, as amended (the
"Code").
B. SMRS is willing to sell to the Company certain Prab, Inc.
stock that SMRS owns, pursuant to that certain Stock Purchase and Sale
Agreement between the Company and SMRS dated as of the date hereof between
the Company and SMRS (the "Stock Purchase and Sale Agreement").
C. As an inducement to SMRS and the Company to enter into the
Stock Purchase and Sale Agreement, Xxxxxxx and the Xxxxxxx Trust are willing
to agree to certain restrictions on the acquisition or disposition of shares
of stock of the Company in order to prevent a "change of ownership" within
the meaning of Section 382 of the Code.
Now, therefore, the parties agree as follows:
1. Restrictions on Acquisitions and Dispositions.
(a) For a period of three years from the date of this Agreement
(the "Restrictive Period"), Xxxxxxx and the Xxxxxxx Trust shall not purchase
or otherwise acquire, nor pledge, sell, or otherwise dispose of, any shares
of any class of stock of the Company, provided, however, that Xxxxxxx and
the Xxxxxxx Trust may purchase or otherwise acquire, pledge, sell or
otherwise dispose of, shares of any class of stock of the Company upon the
prior written consent of the Company. The Company shall grant such consent
if, in its sole reasonable discretion after consultation with its legal
counsel and its accountants, such purchase, sale or other disposition will
not create a reasonable risk that an "ownership change" may occur within the
meaning of Section 382 of the Code.
(b) During the Restrictive Period, Xxxxxxx and the Xxxxxxx Trust
shall not enter into an agreement for the purchase or other acquisition or
for the sale, pledge or other disposition, of any shares of any class of
stock of the Company, including any option, put, right of first refusal or
similar agreement (and the provisions of this paragraph (b) shall apply
notwithstanding that under the terms of such agreement, any transfer of
shares would not be consummated until following the end of such Restrictive
Period).
2. Certificates.
Xxxxxxx and the Xxxxxxx Trust shall return all certificates
representing stock of the Company owned by them to the Company and the
Company shall stamp or imprint on such certificates a legend in the
following form:
THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO THE
PROVISIONS OF A SHAREHOLDERS AGREEMENT DATED OCTOBER 31,
1996 AMONG THE COMPANY, XXXX X. XXXXXXX, AND THE XXXX X.
XXXXXXX TRUST, AS AMENDED FROM TIME TO TIME, WITH RESPECT TO
TRANSFERS, AND TRANSFERS HEREOF MAY BE MADE ONLY IN
ACCORDANCE WITH THE PROVISIONS OF SAID AGREEMENT. A COPY OF
SAID AGREEMENT IS AVAILABLE FOR INSPECTION AT THE PRINCIPAL
OFFICE OF THE COMPANY.
During the term of this Agreement, any other certificates representing stock
of the Company owned by Xxxxxxx or the Xxxxxxx Trust issued by the Company
shall bear the foregoing legend.
3. Construction.
The provisions of this Agreement shall be construed in such manner
as to satisfy the objective of avoiding a "change of ownership" under
Section 382 of the Code. This Agreement shall be construed under and
governed by Michigan law and shall be binding upon the heirs, personal
representatives, successors and assigns of the parties.
IN WITNESS WHEREOF, the parties have executed this Shareholders
Agreement as of the date first set forth above.
XXXX X. XXXXXXX
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Xxxx X. Xxxxxxx, individually
XXXX X. XXXXXXX REVOCABLE TRUST
AGREEMENT
By:
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Xxxx X. Xxxxxxx, Trustee
PRAB, INC.
By:
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Xxxx X. Xxxxxx
Its: President
STATE TREASURER OF THE STATE OF MICHIGAN CUSTODIAN OF PUBLIC SCHOOL
EMPLOYEES' RETIREMENT SYSTEM; STATE EMPLOYEES' RETIREMENT SYSTEM;
MICHIGAN STATE POLICE RETIREMENT SYSTEM; AND MICHIGAN JUDGES'
RETIREMENT SYSTEM
By:
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Xxxx X. Xxxx, Administrator
Alternative Investments
Division
