DIRECTOR DESIGNATION AGREEMENT
EXECUTION VERSION
DIRECTOR DESIGNATION AGREEMENT, dated as of March 10, 2008 (this “Agreement”), by and among
Lubar Capital, LLC (“Investor”), and Xxxxxxx Xxxxxxx Inc. (the “Company”).
W I T N E S S E T H:
WHEREAS, the Company, Xxxxxxx Xxxxxxx XX, Goldenboy Acquisition Corp., MEA Holdings, Inc., Xxxxxxxx
Xxxxxx & Associates, Inc. and Xxxxxxxx Xxxxxx Development, LLC have entered into that certain
Agreement and Plan of Merger (the “Merger Agreement”) whereby Goldenboy Acquisition Corp.
will be merged with and into MEA Holdings, Inc. (the “Merger”) in accordance with the
Merger Agreement and the Wisconsin Business Corporation Law;
WHEREAS, in connection with the Merger, the Company, Xxxxxxx Xxxxxxx XX and Investor have entered
into an agreement (the “Contribution Agreement”) pursuant to which the Investor has agreed
to contribute certain of its shares in MEA Holdings, Inc. to Xxxxxxx Xxxxxxx XX (the
“Contribution”) in exchange for units of limited partnership interests issued by Xxxxxxx
Xxxxxxx XX (“OP Units”) (or the alternative units described in the Contribution Agreement);
WHEREAS, the Board has expanded the number of directors of the Company so as to create a vacancy on
the Board; and
WHEREAS, in connection with the Merger and the Contribution, the Company has agreed to support a
representative designated by Investor as a director of the Company, upon the terms and subject to
the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the promises and the mutual covenants and agreement contained
herein, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, each intending to be legally bound, hereby agree as
follows:
ARTICLE I.
DEFINITIONS
Section 1.1. Certain Defined Terms. In addition to the terms defined elsewhere herein, for
purposes of this Agreement, the terms below shall have the following meanings:
“Affiliate” means, with respect to any specified Person, any other Person that
directly, or indirectly through one or more intermediaries, controls or is controlled by or is
under common control with such specified Person. For purposes of this Agreement, with respect to
Investor, “Affiliate” shall not include the Company or any other Person that is directly, or
indirectly through one or more intermediaries, controlled by the Company and, with respect to the
Company, “Affiliate” shall not include Investor or any other Person that is directly, or indirectly
through one or more intermediaries, controlled by Investor.
“Beneficially Own,” “Beneficially Owned” or “Beneficial Ownership”
means, with respect to any securities, having beneficial ownership of such securities (as
determined pursuant to Rule 13d-3 under the Exchange Act, disregarding the phrase “within 60 days”
in paragraph (d)(1)(i) thereof), including pursuant to any agreement, arrangement or understanding,
whether or not in writing.
“Board” means the Board of Directors of the Company.
“Designation Notice” shall mean written notice from Investor to the Company pursuant
to which Investor shall notify the Company of its exercise of its right to designate one Designee
to serve as a director of the Company, which notice shall identify such Designee therein.
“Designation Period” means the period commencing on the date hereof and ending on such
date that Investor or its Affiliates cease to Beneficially Own at least 75% of the OP Units (or any
equity securities in the Company or its Affiliates) issued pursuant to the Contribution Agreement.
“Designee” shall mean any Person designated by Investor in a Designation Notice to
serve as a director of the Company, which designee shall be an officer of Investor who is a
Qualified Designee.
“Person” means any individual, corporation, partnership (general or limited), limited
liability company, joint venture, association, joint-stock company, trust or unincorporated
organization.
“Qualified Designee” means a Designee that qualifies as a director under the Company’s
Corporate Governance Guidelines, as the same may be amended from time to time and is otherwise
reasonably acceptable to the Company
ARTICLE II.
BOARD DESIGNATION
Section 2.1. Designation of Director. Subject to applicable law, and applicable stock exchange
and securities market rules and regulations, the Company agrees to take, or cause to be taken, all
actions necessary to elect (or cause to be elected) Xxxxx Xxxxx as initial Designee. Subject to
applicable law, and applicable stock exchange and securities market rules and regulations, during
the Designation Period, following such initial election, the Company agrees to take all actions set
forth under Section 2.3 below promptly after the receipt by the Company of a Designation Notice.
Section 2.2. Replacement Director. Subject to applicable law, and applicable stock exchange
and securities market rules and regulations, during the Designation Period, in the event that any
Designee is unable or unwilling to serve as a director of the Company (due to death, disability or
otherwise), or once having commenced to serve, is removed, withdraws or
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resigns from the Board or
dies, such Designee’s replacement shall be nominated and designated by Investor, and the Company
agrees to take, or cause to be taken, all actions necessary to cause such replacement to be elected to serve as a director of the Company for the remaining term of
Designee.
Section 2.3. Recommendation and Solicitation of Proxies. At each vote for the general election
of directors of the Company held (whether by a meeting or written consent of the stockholders of
the Company) during the Designation Period, following receipt of a Designation Notice, the Company
shall nominate any Qualified Designee hereof for election as a director of the Company, provided
(1) in the event that the Investor fails to send a timely Designation Notice in order for the
Company to nominate a new Designee, the Designee currently serving as a director shall be deemed to
be the Investor’s new Designee and (2) to the extent that the Board determines that the proposed
Designee does not qualify as a Qualified Designee, Investor shall be permitted to propose
additional Designees until such time that the Board determines that a proposed Designee qualifies
as a Qualified Designee to serve as a director of the Company.
Section 2.4. Charter and Bylaws. The Company shall take or cause to be taken all lawful action
necessary to ensure that, at all times during the Designation Period, the Company’s charter and
bylaws (in each case, as amended and in effect from time to time during the Designation Period) are
not inconsistent with the provisions of this Agreement.
Section 2.5. Indemnification and Insurance.
(a) If elected as a director, the Company shall make available to the Designee,
indemnification consistent with its current practices with respect to other directors of the
Company, including entering into an indemnification agreement consistent with those entered into
with the Company’s other directors.
(b) The Company shall continue to maintain in full force and effect director and officer
liability insurance for the benefit of each Designee elected as a director consistent with its
current practices with respect to other directors of the Company.
Section 2.6. Injunctive Relief. The parties hereto hereby agree that it is impossible to
measure in money the damages which will be suffered or incurred by Investor by reason of any breach
or violation by the Company of its obligations set forth in this Article II. Accordingly,
in the event of any such breach or violation, in addition to any other remedy at law or in equity
that Investor may have available to it, Investor shall have the right to specific performance of
such obligations.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Investor as follows:
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Section 3.1. Corporate Organization. The Company is duly organized, validly existing and in
good standing under the laws of the State of Maryland and has all requisite corporate power to own
its properties and assets and to conduct its business as now conducted.
Section 3.2. Authorization and Validity of Agreement. The Company has the requisite corporate
power and authority to execute, deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of this Agreement by
the Company and the performance by the Company of its obligations hereunder and the consummation of
the transactions contemplated hereby have been duly authorized by the Board and all other necessary
corporate action on the part of the Company, and no other corporate proceedings on the part of the
Company are necessary to authorize this Agreement and the transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by the Company and, assuming due
execution and delivery by Investor, constitutes a legal, valid and binding obligation of the
Company, enforceable against it in accordance with its terms.
Section 3.3. No Conflict or Violation. The execution, delivery and performance by the Company
of this Agreement does not and will not (i) violate or conflict with any provision of the articles
of incorporation or bylaws of the Company (in each case, as amended and in effect on the date
hereof), (ii) violate any provision of law, or any order, judgment or decree of any governmental
entity, or (iii) violate or result in a breach of or constitute (with due notice or lapse of time
or both) a default under any contract, agreement or instrument to which the Company or any of its
subsidiaries is a party or by which any of them is bound or to which any of their respective
properties or assets is subject.
ARTICLE IV.
ADDITIONAL AGREEMENTS
Section 4.1. Term. This Agreement shall be effective as of the date hereof and shall continue
in force and effect until the expiration of the Designation Period, at which time this Agreement
shall be of no further force or effect except as otherwise provided herein.
Section 4.2. Notices. All notices, requests, claims, demands and other communications required
or permitted hereunder shall be in writing and shall be given (and shall be deemed to have been
duly received if so given) by facsimile, hand delivery, mail (registered or certified mail, postage
prepaid, return receipt requested) or any courier service, in each case providing reasonable proof
of delivery. All communications hereunder shall be delivered to the respective parties at the
following addresses and facsimile numbers:
if to Investor:
Lubar Capital, LLC
000 X. Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx XX 00000
Attention: Xxxxx Xxxxx
Facsimile: (000) 000 0000
000 X. Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx XX 00000
Attention: Xxxxx Xxxxx
Facsimile: (000) 000 0000
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with a copy to:
Xxxxxxx & Xxxx, S.C.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
if to the Company:
Xxxxxxx Xxxxxxx Inc.
0000 Xxxxxxx Xxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxx
Facsimile: (000) 000 0000
0000 Xxxxxxx Xxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxx
Facsimile: (000) 000 0000
with a copy to:
Xxxxxxxx Chance LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxx X. Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxx X. Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000
Section 4.3. CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF MARYLAND WITHOUT REGARD TO ITS PRINCIPLES OF CONFLICTS OF LAWS.
Section 4.4. Limitations on Rights of Third Parties. Except as otherwise set forth herein,
nothing in this Agreement is intended or shall be construed to confer upon or give any Person,
other than the parties hereto and their respective successors, any rights or remedies under or by
reason of this Agreement or any transaction contemplated hereby.
Section 4.5. Assignment. This Agreement and the rights and obligations hereunder may not be
assigned without the prior written consent of the parties hereto and any purported or attempted
assignment or other transfer of rights or obligations under this Agreement without such consent
shall be void and of no force or effect. This Agreement shall inure to the benefit of and shall be
binding upon the parties hereto and their respective successors and permitted assigns.
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Section 4.6. No Joint Venture or Business Entity. Nothing expressed or implied in this
Agreement is intended or shall be construed to create or establish a joint venture, partnership or
other business entity by, among or between the parties hereto.
Section 4.7. Amendments. This Agreement may not be amended, modified or altered, and no
provision hereof may be waived, in any such case in whole or in part, except by a subsequent
writing signed by the parties hereto.
Section 4.8. Severability. In the event that any part of this Agreement is declared by any
court or other judicial or administrative body of competent jurisdiction to be null, void or
unenforceable, said provision shall survive to the extent it is not so declared, and all of the
other provisions of this Agreement shall remain in full force and effect.
Section 4.9. Headings. The headings contained in this Agreement are included for convenience
of reference only and shall not affect in any way the meaning or interpretation of this Agreement.
Section 4.10. Counterparts. This Agreement may be executed and delivered (including by
facsimile transmission) in one or more counterparts, and by the different parties hereto in
separate counterparts, each of which when executed and delivered shall be deemed to be an original
but all of which taken together shall constitute one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Board Designation Agreement to be duly
executed as of the day and year first above written.
LUBAR CAPITAL, LLC | ||||||
By: | Lubar Capital Management, LLC, its Manager | |||||
By: | Lubar & Co., Incorporated, its Manager | |||||
By: | ||||||
XXXXXXX XXXXXXX INC. | ||||||
By: | ||||||
Name: Xxxxx X. Xxxxxxx | ||||||
Title: President and CEO |