EXHIBIT 4.10
Execution Copy
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SHAREHOLDER AGREEMENT
THIS SHAREHOLDER AGREEMENT (this "Agreement") is entered into as of May 10,
2000, by and among JOSTENS, INC., a Minnesota corporation (the "Company"),
INVESTCORP INVESTMENT EQUITY LIMITED, a Cayman Islands corporation ("IIEL"), the
other holders of Class D Common Stock ("Class D Stock") of the Company (IIEL and
each such other holder individually a "Class D Shareholder" and collectively the
"Class D Shareholders"), the other shareholders listed on Schedule A attached
hereto (the "Investcorp Shareholders"), FIRST UNION LEVERAGED CAPITAL, LLC, a
North Carolina limited liability company ("First Union" and, together with the
Class D Shareholders and the Investcorp Shareholders, the "Shareholders").
R E C I T A L S
A. The Company is a party to an Agreement and Plan of Merger dated as of
December 27, 1999 and amended on March 31, 2000 (the "Merger Agreement") by and
between the Company and Saturn Acquisition Corporation, a Minnesota corporation
("MergerCo"), pursuant to which MergerCo will, subject to the terms and
conditions of the Merger Agreement, be merged with and into the Company (the
"Merger").
B. Pursuant to a Subscription Agreement dated the date hereof, First Union
has purchased 198,019 shares of Class A Common Stock, par value $0.33? per
share, of MergerCo ("Class A Stock"), which shares will by virtue of the Merger
be automatically converted into a like number of the same class of shares of the
Company (the "First Union Shares").
C. Pursuant to Subscription Agreements dated the date hereof, the Class D
Shareholders have purchased 20,000 shares of Class D Stock and the Investcorp
Shareholders have purchased (i) 5,300,000 shares of Class B Common Stock, par
value $0.01 per share, of MergerCo ("Class B Stock")and (ii) 811,020 shares of
Class C Common Stock, par value $0.01 per share, of MergerCo ("Class C Stock"),
all of which shares will by virtue of the Merger be automatically converted into
a like number of the respective class of shares of the Company
D. In connection with the Merger, the Company and the Shareholders desire
to enter into this Agreement.
A G R E E M E N T
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and for other good and valuable consideration, the parties
hereto agree as follows:
SECTION 1. Definitions. As used in this Agreement, the following terms
shall have the following meanings:
"Affiliate" means, with respect to any Person, (a) any Person which,
directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person or (b) any Person who is a director or
officer (i) of such Person, (ii) of any subsidiary of such Person or (iii)
of any Person described in clause (a) above. For purposes of this
definition, "control" of a Person means the power, directly or indirectly,
(x) to vote 50% or more of the securities having ordinary voting power for
the election of directors of such Person whether by ownership of
securities, contract, proxy or otherwise, or (y) to direct or cause the
direction of the management and policies of such Person whether by
ownership of securities, contract, proxy or otherwise.
"Articles of Incorporation" means the Articles of Incorporation of the
Company in effect immediately following the closing of the Merger, as such
Articles may thereafter from time to time be amended in accordance with
applicable law and such Articles.
"Common Stock" means the common stock, par value $0.01 per share, of
the Company.
"Initial Public Offering" shall have the meaning ascribed to that term
in Article IV, Section 1 of the Articles of Incorporation.
"New Equity Financing" means the issuance by the Company of new common
equity securities of the Company, or securities convertible into, or
exercisable or exchangeable for, such common equity securities other than
issuances of equity securities (a) pursuant to stock incentive or
compensation plans approved by the Board, (b) upon exercise of convertible
instruments outstanding immediately following the closing of the Merger,
(c) as consideration for business acquisitions by the Company or a
subsidiary of the Company approved by the Board, (d) in connection with
debt or lease financings approved by the Board or (e) in the Initial Public
Offering.
"Permitted Transferee" shall mean (i) a Person acquiring Shares
pursuant to Section 2 hereof or (ii) a Person that is an Affiliate of
either First Union or a Permitted Transferee; provided, however, that no
transfer to a Permitted Transferee will be effective unless and until such
Permitted Transferee has agreed in writing to be bound by this Agreement
with respect to the Shares to be so transferred.
"Person" means an individual, limited or general partnership, joint
venture, limited liability company, corporation, trust, unincorporated
organization or a government or any department or agency thereof.
Certain other terms are defined elsewhere in this Agreement.
SECTION 2. Right of First Offer on Shares.
(a) In the event that First Union or any Permitted Transferee holding
First Union Shares (the "Initiating Holder") proposes to sell any First
Union Shares to any Person other than a Permitted Transferee, such
Initiating Holder shall furnish to the Company and to IIEL a written notice
specifying the number of First Union Shares proposed to be sold, the
proposed sale price and all other material terms and conditions of the
proposed sale (a "Proposed Sale Notice").
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(b) The Company and IIEL shall each then have the irrevocable option,
exercisable by written notice to the Initiating Holder within 60 days after
receipt of a Proposed Sale Notice (the "Option Period"), to purchase all
(but not less than all) of the First Union Shares covered by such Notice at
the same price and on the same terms and conditions as contained in such
Notice (the "Option"). As between the Company and IIEL, IIEL will have
first priority with respect to the Option, and the First Union Shares
covered by such Option may be allocated between IIEL and the Company in any
amounts mutually agreed upon by IIEL and the Company.
(c) In the event that either IIEL or the Company elects to exercise
the Option (either or both, as applicable, an "Electing Offeree"), the
closing of the purchase or purchases pursuant to the exercise of such
Option shall occur at the offices of the Company on the date specified in
the notice of exercise, which date shall not be later than 90 days after
receipt by the Company and IIEL of the Proposed Sale Notice Holder (or such
earlier date, if any, mutually agreed upon by the Initiating Holder and the
Electing Offeree). At such closing, (i) the Initiating Holder shall deliver
to the Electing Offeree the stock certificate or certificates or warrant
certificate or certificates evidencing such First Union Shares in valid
form for transfer with appropriate and duly executed assignments, stock
powers or endorsements, as the case may be, bearing any necessary
documentary stamps and accompanied by such certificates of authority,
consents to transfer or other instruments or evidences of good title of the
Initiating Holder to such First Union Shares, free and clear of any and all
claims, liens, pledges and encumbrances, as may reasonably be requested by
such Electing Offerees, and (ii) each Electing Offeree shall pay to the
Initiating Holder the applicable purchase price by wire transfer of
immediately available funds to such account as the Initiating Holder shall
designate in writing to the Electing Offeree.
(d) If the Option is not exercised within the Option Period or if,
prior to the expiration of the Option Period, each of IIEL and the Company
shall have given the Initiating Holder written notice that it will not
exercise the Option, then the Initiating Holder shall be free, for a period
of 180 days beginning on the earlier of the day after the expiration of the
Option Period or the date on which the Initiating Holder shall have
received such notices of non-election, as applicable, to sell such First
Union Shares to any other purchaser or purchasers at prices, terms and
conditions no less favorable to the Initiating Holder than those contained
in the Proposed Sale Notice; provided that (i) any such other purchaser or
purchasers agree in writing to be bound by all provisions of this Agreement
applicable to the Initiating Holder to the extent such provisions by their
terms continue in effect; and (ii) in no event shall the total number of
Persons holding First Union Shares as a result of sales pursuant to this
Section 2(d) exceed five (5) Persons.
(e) Except as hereinafter provided, no transfer, assignment or other
disposition of any First Union Shares (including without limitation any
transfer, assignment or other disposition by operation of law) may be made
by First Union or a Permitted Transferee, other than a transfer by First
Union to a Permitted Transferee or by a Permitted Transferee to another
Permitted Transferee; provided that, subject to the prior written consent
of IIEL (which consent shall not be unreasonably withheld), First Union or
a Permitted Transferee may pledge First Union Shares in a bona fide credit
transaction with an unaffiliated financial institution.
(f) All First Union Shares sold pursuant to Section 2(d) shall
continue to be subject to the provisions of this Section 2.
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(g) The transfer restrictions imposed on the First Union Shares by
this Section 2 are in addition to any restrictions applicable to such
shares which are contained in the Articles of Incorporation.
(h) The provisions of this Section 2 shall expire and be of no further
force and effect upon occurrence of an Initial Public Offering.
SECTION 3. Right to Participate in Certain Sales.
(a) In the event that, during the period beginning immediately after
the closing of the Merger and ending upon the Initial Public Offering, one
or more Investcorp Shareholders propose to engage in a sale or series of
related sales of equity interests in the Company which is not a "Tag-Along
Transfer" within the meaning of Article IV of the Articles of Incorporation
(a "Section 3 Sale") to a purchaser who is not an Investcorp Shareholder (a
"Section 3 Purchaser"), then First Union and any Permitted Transferee
holding First Union Shares shall be given the right to participate in such
Section 3 Sale at the same price and on the same terms and conditions as
the Investcorp Shareholders participating in such transaction, up to the
Pro Rata Share Amount (as defined below) applicable to First Union and each
such Permitted Transferee. As used in this Section 3. "Pro Rata Share
Amount" applicable to a holder of First Union Shares shall mean the number
of whole First Union Shares (disregarding any resulting fractional share)
derived by multiplying (x) the total number of First Union Shares held by
such holder by (y) a fraction, the numerator of which is the total number
of outstanding shares of all classes of common stock of the Company (other
than First Union Shares) to be included in the Section 3 Sale and the
denominator of which is the total number of outstanding shares of all
classes of common stock of the Company held by the Investcorp Shareholders
participating in such transaction.
(b) The Investcorp Shareholders proposing to engage in a Section 3
Sale shall notify, or cause to be notified, First Union and each Permitted
Transferee holding First Union Shares in writing of each Section 3 Sale at
least 20 days prior to the scheduled closing of the Section 3 Sale. Such
notice (the "Section 3 Sale Notice") shall set forth the following: (i) the
total number of shares of Company capital stock, by class, to be included
in the Section 3 Sale, (ii) the applicable Pro Rata Share Amount for each
holder of First Union Shares then having rights under this Section 3 and
the basis on which each of such Amounts has been calculated, (iii) the
consideration per share to be paid by the Section 3 Purchaser, (iv) a
summary of other material terms and conditions of the Section 3 Sale and an
estimate of anticipated expenses, (v) that the Section 3 Purchaser has been
informed of the participation rights under this Section 3 and has agreed to
purchase First Union Shares up to the applicable Pro Rata Share Amounts to
the extent holders of such First Union Shares elect to participate and (vi)
the name and address of the person to whom such holders of First Union
Shares should direct their election notices as provided in Section 3(c)
below.
(c) The participation rights granted pursuant to this Section 3 may be
exercised by holders of such rights by delivery of a written notice (the
"Section 3 Election Notice") within 15 days following receipt of such
Notice (each holder of such participation rights who so elects is referred
to herein as an "Electing Holder"). The Section 3 Election Notice shall
state either (A) that the Electing Holder elects to include in such sale
its full Pro Rata Share Amount or
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(B) if such Electing Holder elects to include in such Sale a lesser number
of shares, such lesser number of shares (the amount so included, the
"Included Shares").
The Section 3 Election Notice shall constitute a binding agreement by
the applicable Electing Holder to sell the Included Shares in the Section 3
Sale on the terms and conditions specified in the Section 3 Sale Notice. In
addition, by delivering the Section 3 Election Notice such Electing Holder
agrees to the following: (i) prior to the closing of any such Sale, to
execute and deliver (or cause to be executed and delivered) any purchase
agreement or other documentation required by the Section 3 Purchaser to
consummate the Section 3 Sale, which purchase agreement and other
documentation shall be on terms no less favorable in respect of any
material term to such Electing Holder than those executed by the other
Company shareholders participating in such Sale; provided that no Electing
Holder shall be required to make any representation or warranty or
undertake any liability in any such purchase agreement or otherwise in
connection with a Section 3 Sale other than representations and warranties
as to its ownership and authority to transfer the Included Shares, free and
clear of all liens and encumbrances and in compliance with all applicable
laws; and (B) at the closing of any such Sale deliver to the Section 3
Purchaser the certificate or certificates representing the Included Shares,
duly endorsed for transfer with signatures guaranteed, against receipt of
the purchase price therefor.
If no Section 3 Election Notice is received by the person designated
in the Section 3 Sale Notice to receive such Election within the time
period specified in Section 3(c)(i) above, the other selling shareholders
participating in the Section 3 Sale shall have the right to sell to the
Section 3 Purchaser up to the number of shares designated as proposed for
sale in the Section 3 Sale Notice on terms and conditions no more favorable
in any material respect to such shareholders than those stated in such
Notice.
(d) Each holder of Included Shares shall be required to bear its pro
rata share, based on the number of total shares included in such Sale by
all Company shareholders, of the expenses of the transaction, including
without limitation legal, accounting and investment banking fees and
expenses.
(e) The provisions of this Section 3 shall not apply to any First
Union Shares that have previously been the subject of a completed Section 3
Sale nor shall the holder of any such First Union Shares have the right,
pursuant to this Agreement, to participate in any subsequent Section 3
Sale.
(f) The provisions of this Section 3 shall not apply to sales by any
Investcorp Shareholder to any Affiliate of any such Investcorp Shareholder
or to any other Investcorp Shareholder.
(g) Nothing herein shall constitute an obligation on the part of the
Investcorp Shareholders proposing to engage in a Section 3 Sale to
consummate such sale.
SECTION 4. Right to Participate in Future Financings.
In the event that, prior to the Initial Public Offering, the Company
intends to engage in a New Equity Financing, (i) it shall provide First Union,
the Class D Shareholders and the
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Investcorp Shareholders with written notice of such intention at least 20
business days prior to the scheduled closing of the New Equity Financing,
describing the type of equity securities to be issued, the price and the number
or amount thereof, and the general terms upon which the Company proposes to
effect such issuance and (ii) if within 10 days after receipt of such notice
First Union, any Class D Shareholder or any Investcorp Shareholder (each, an
"Electing Shareholder") notifies the Company of its desire to participate in
such New Equity Financing as hereinafter contemplated, it shall take steps as
are necessary to enable each such Electing Shareholder to participate, at such
Electing Shareholder's option, as a purchaser in such New Equity Financing such
that the Electing Shareholder, through the exercise of such option, would
maintain a percentage interest in the outstanding common equity securities of
the Company equal to the percentage that the total outstanding common equity
securities of the Company held by such Electing Shareholder at such time bears
to the total outstanding common equity securities of the Company on a fully
diluted basis.
SECTION 5. Public Reports and Financial Statements.
As soon as available to the public, the Company will provide to First Union
copies of all annual reports, periodic reports and other filings made by the
Company with the Securities and Exchange Commission. In the event that, after
the date hereof, the Company shall not be required to make filings with the
Securities and Exchange Commission, the Company will deliver to First Union as
soon as available annual and quarterly consolidated balance sheets and
consolidated statements of income and shareholders' equity and consolidated
statements of cash flows of the Company.
SECTION 6. Legends. All certificates representing First Union Shares shall,
in addition to other legends that may be required by the Articles of
Incorporation of the Company or by state or federal securities laws, bear the
following legends:
"THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
TERMS, CONDITIONS AND RESTRICTIONS OF A SHAREHOLDER AGREEMENT AMONG JOSTENS,
INC. AND CERTAIN OF ITS SHAREHOLDERS AND MAY BE TRANSFERRED ONLY IN COMPLIANCE
WITH THE CONDITIONS SPECIFIED IN SUCH AGREEMENT. THESE SHARES ARE SUBJECT TO
REPURCHASE RIGHTS PURSUANT TO SUCH SHAREHOLDER AGREEMENT. A COMPLETE AND CORRECT
COPY OF SUCH AGREEMENT IS AVAILABLE FOR INSPECTION AT THE OFFICES OF JOSTENS,
INC. AND WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER HEREOF UPON WRITTEN
REQUEST."
SECTION 7. Miscellaneous.
(a) Notices. All notices, instructions and other communications in
connection with this Agreement shall be in writing and may be given by (i)
personal delivery, (ii) certified mail, return receipt requested, postage
prepaid, or (iii) delivery by a nationally recognized overnight courier, to
the parties at the addresses of each as set forth on the signature pages to
this Agreement or to such other address as any party may specify in a
notice to the other parties. Notices will be deemed to have been given (w)
when actually delivered personally, (x) the next business day if sent by
overnight courier (with proof of delivery) or (y) on the fifth day after
mailing by certified mail.
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(b) No Waiver. No course of dealing and no delay on the part of any
party hereto in exercising any right, power or remedy conferred by this
Agreement shall operate as a waiver thereof or otherwise prejudice such
party's rights, powers and remedies conferred by this Agreement or shall
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy.
(c) Binding Effect; Assignability. This Agreement shall be binding
upon and, except as otherwise provided herein, shall inure to the benefit
of the respective parties and their permitted successors and assigns,
including, without limitation, Permitted Transferees to the extent
specifically provided for herein. This Agreement shall not be assignable
except as otherwise specifically provided herein.
(d) Amendment and Waiver. This Agreement may not be amended, modified
or supplemented, and no waiver or consent to departures from the provisions
hereof shall bind any party who has not given such waiver or consent,
unless consented to in writing by the holders of at least 80% of the
outstanding common equity securities of the Company. The Agreement may not
be amended, modified or supplemented in a manner which adversely affects
the rights of any holder of common equity securities of the Company but
does not equally affect the rights of all other holders of common equity
securities of the Company without the affected party's consent.
(e) Governing Law; Service of Process. This Agreement shall be
construed both as to validity and performance in accordance with, and
governed by, the laws of the State of New York applicable to agreements to
be performed in New York, without regard to principles of conflict of laws.
Each of the parties hereto irrevocably consents to the jurisdiction and
venue of any state or federal court situated in the City of New York in the
State of New York, and further consents to the service of any and all
process in any action or proceeding arising out of or relating to this
Agreement by the mailing of copies of such process to such party at its
address pursuant to Section 6(a) hereof.
(f) Counterparts. This Agreement may be executed in two or more
counterparts each of which shall be deemed an original but all of which
together shall constitute one and the same instrument, and all signatures
need not appear on any one counterpart.
(g) Headings. All headings and captions in this Agreement are for
purposes of reference only and shall not be construed to limit or affect
the substance of this Agreement. All references to Section in this
Agreement refer to Sections of this Agreement, unless the context otherwise
expressly provides.
(h) Entire Agreement. This Agreement contains, and is intended as, a
complete statement of all the terms of the arrangements between the parties
with respect to the matters provided for herein and supersedes any previous
agreements and understandings between the parties with respect to those
matters.
(i) Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law, or
public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in
any
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manner adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner to the end that transactions contemplated hereby are
fulfilled to the maximum extent possible.
(j) No Dilution. The Company hereby represents and warrants to First
Union that in no event will the issuance of Common Stock upon exercise of
the Class B Warrant issued by the Company on the date hereof be dilutive to
First Union's ownership percentage of the Company common equity securities.
(k) New Class D Shareholders. The Company will not issue, and the
Class D Shareholders and the Investcorp Shareholders will not transfer, any
shares of Class B Stock, Class C Stock or Class D Stock unless the holder
or transferee of such shares shall have first agreed to become a party to,
and to be bound by, the terms of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
JOSTENS, INC.
a Minnesota corporation
By: /s/ Xxx X. XxXxxxx
-------------------------------------
Name: Xxx X. XxXxxxx
Title: Vice President & Treasurer
Address:
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FIRST UNION LEVERAGED CAPITAL, LLC
a North Carolina limited liability
company
By: /s/ Xxxxx Xxxxxx
-------------------------------------
Name: Xxxxx Xxxxxx
Title: Senior Vice President
Address:
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INVESTCORP INVESTMENT EQUITY LIMITED, a
Cayman Islands corporation
By: /s/ Sydney X. Xxxxxxx
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Name: Sydney X. Xxxxxxx
Title: Director
Address: P.O. Box 1111
Grand Cayman
Cayman Islands, B.W.I.
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OTHER CLASS D SHAREHOLDERS
--------------------------
BALLET LIMITED, a Cayman Islands
corporation
By: /s/ [Signature Illegible]
------------------------------------
Name: Investcorp Management
Services Limited
Title: Authorized Representative
Address: Xxxx Xxxx Xxxxxxxx
X.X. Xxx 0000
Xxxxxxxxxx, Xxxxx Cayman
Cayman Islands, B.W.I.
DENARY LIMITED, a Cayman Islands
corporation
By: /s/ [Signature Illegible]
------------------------------------
Name: Investcorp Management
Services Limited
Title: Authorized Representative
Address: Xxxx Xxxx Xxxxxxxx
X.X. Xxx 0000
Xxxxxxxxxx, Xxxxx Cayman
Cayman Islands, B.W.I.
GLEAM LIMITED, a Cayman Islands
corporation
By: /s/ [Signature Illegible]
------------------------------------
Name: Investcorp Management
Services Limited
Title: Authorized Representative
Address: Xxxx Xxxx Xxxxxxxx
X.X. Xxx 0000
Xxxxxxxxxx, Xxxxx Cayman
Cayman Islands, B.W.I.
HIGHLANDS LIMITED, a Cayman Islands
corporation
By: /s/ [Signature Illegible]
------------------------------------
Name: Investcorp Management
Services Limited
Title: Authorized Representative
Address: Xxxx Xxxx Xxxxxxxx
X.X. Xxx 0000
Xxxxxxxxxx, Xxxxx Cayman
Cayman Islands, B.W.I.
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NOBLE LIMITED, a Cayman Islands
corporation
By: /s/ [Signature Illegible]
------------------------------------
Name: Investcorp Management
Services Limited
Title: Authorized Representative
Address: Xxxx Xxxx Xxxxxxxx
X.X. Xxx 0000
Xxxxxxxxxx, Xxxxx Cayman
Cayman Islands, B.W.I.
OUTRIGGER LIMITED, a Cayman Islands
corporation
By: /s/ [Signature Illegible]
------------------------------------
Name: Investcorp Management
Services Limited
Title: Authorized Representative
Address: Xxxx Xxxx Xxxxxxxx
X.X. Xxx 0000
Xxxxxxxxxx, Xxxxx Cayman
Cayman Islands, B.W.I.
QUILL LIMITED, a Cayman Islands
corporation
By: /s/ [Signature Illegible]
------------------------------------
Name: Investcorp Management
Services Limited
Title: Authorized Representative
Address: Xxxx Xxxx Xxxxxxxx
X.X. Xxx 0000
Xxxxxxxxxx, Xxxxx Cayman
Cayman Islands, B.W.I.
RADIAL LIMITED, a Cayman Islands
corporation
By: /s/ [Signature Illegible]
------------------------------------
Name: Investcorp Management
Services Limited
Title: Authorized Representative
Address: Xxxx Xxxx Xxxxxxxx
X.X. Xxx 0000
Xxxxxxxxxx, Xxxxx Cayman
Cayman Islands, B.W.I.
SHORELINE LIMITED, a Cayman Islands
corporation
By: /s/ [Signature Illegible]
------------------------------------
Name: Investcorp Management
Services Limited
Title: Authorized Representative
Address: Xxxx Xxxx Xxxxxxxx
X.X. Xxx 0000
Xxxxxxxxxx, Xxxxx Cayman
Cayman Islands, B.W.I.
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ZINNIA LIMITED, a Cayman Islands
corporation
By: /s/ [Signature Illegible]
------------------------------------
Name: Investcorp Management
Services Limited
Title: Authorized Representative
Address: Xxxx Xxxx Xxxxxxxx
X.X. Xxx 0000
Xxxxxxxxxx, Xxxxx Cayman
Cayman Islands, B.W.I.
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