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EXHIBIT 1
SHAREHOLDERS AGREEMENT
AGREEMENT, dated as of October 20, 1997, between Terbem Limited, Tinvest
Limited, Teribe Limited, TCR International Partners, LP, Mitvest Limited, Bobst
Investment Corp. and Three Cities Offshore Partners CV (collectively, the "TCR
Group," each individually, a "TCR Group Member") and Xxxxxxx X. Xxxxxx
("Xxxxxx").
WHEREAS, Xxxxxx Metalcraft Holding Co., a Delaware Corporation ("Xxxxxx
Metalcraft"), and MLX Corp., a Georgia corporation ("MLX"), have entered into
an Agreement and Plan of Merger, dated as of October 20, 1997 (the "Merger
Agreement") pursuant to which Xxxxxx Metalcraft will be merged with and into
MLX (the "Merger"), with MLX being the surviving corporation (hereinafter
referred to as the "Corporation");
WHEREAS, pursuant to the Merger Agreement, Xxxxxx will acquire 1,218,990
shares of the Class A Common Stock, par value $.01 per share, of the
Corporation ("Class A Common Stock") and 100,000 shares of Class B Common
Stock, par value $.01 per share, of the Corporation ("Class B Common Stock" and
together with the Class A Common Stock, the "Common Stock" );
WHEREAS, pursuant to the Recapitalization, the TCR Group will hold an
aggregate of 888,178 shares of the Class A Common Stock and 100,000 shares of
Class B Common Stock;
WHEREAS, the TCR Group and Xxxxxx desire to enter into an agreement with
respect to certain matters regarding the transfer and voting of certain Shares
of Common Stock that will be owned by the TCR Group and Xxxxxx upon
consummation of the Recapitalization and the Merger.
NOW THEREFORE, in consideration of the mutual promises and
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agreements set forth herein, the adequacy of which are hereby acknowledged, the
parties hereto agree as follows:
1. Definitions. As used in this Agreement, the following terms shall have
the meanings set forth below:
"Affiliate" of any Person means (i) in the case of any TCR Group Member,
any other Person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
such TCR Group Member, and (ii) in the case of Xxxxxx, a member of Xxxxxx'x
immediate family, which shall include his parents, spouse, children or
grandchildren, and spouses of children or grandchildren ("Family Members"), or
a trust, corporation or partnership, all of the beneficial interests in which
shall be held by Xxxxxx or one or more Family Members of Xxxxxx; provided,
however, that during the period any such trust, corporation, or partnership
holds any right, title or interest in any Shares, no Person other than Xxxxxx
or one or more Family Members of Xxxxxx may be or become beneficiaries,
stockholders or limited or general partners thereof.
"Class A Common Stock" has the meaning set forth in the recitals to this
Agreement.
"Class B Common Stock" has the meaning set forth in the recitals to this
Agreement.
"Common Stock" has the meaning set forth in the recitals to this
Agreement.
"Common Stock Equivalents" means any security or obligation which is by
its terms convertible into Shares of Common Stock, including, without
limitation, any option, warrant or other subscription or purchase right with
respect to Class A Common Stock or Class B Common Stock.
"Effective Time" means the date and time when the Merger Agreement
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shall become effective (as specified in the Merger Agreement).
"Employment Agreement" means that certain Employment Agreement, to be
executed between Xxxxxx and the Corporation as of the Effective Time.
"Fair Market Value" means with respect to (i) any security traded on a
registered securities exchange, the NASDAQ Stock Market, or the over the
counter market, the average of the last quoted trade of such security on the
twenty (20) consecutive trading days ended one trading day before the date of
determination of Fair Market Value (provided that for any such trading day on
which such security was not traded, the last quoted trade on the next preceding
trading day when such security was traded shall be used in computing such
average), and (ii) any other asset, the value as determined by a mutually
agreed upon appraiser, which shall be either a nationally recognized accounting
firm that is not the certified public accounting firm of any TCR Group Member
or Xxxxxx, or a nationally recognized investment banking firm.
"Fully Permitted Number" means, at any time, (i) in the event that the
Maximum Sale Number is less than the number of Shares of Class A Common Stock
owned by the TCR Group and its Affiliates and Xxxxxx and his Affiliates, each
group's pro rata share of the Maximum Sale Number, based upon each group's
ownership of outstanding Shares of Class A Common Stock, and (ii) in the event
that the Maximum Sale Number is greater than the number of Shares of Class A
Common Stock owned by the TCR group and its Affiliates and Xxxxxx and his
Affiliates (a) in the case of the TCR Group and its Affiliates, the number of
Shares of Class A Common Stock owned by the TCR Group and its Affiliates at
such time and (b) in the case of Xxxxxx and his Affiliates, the Maximum Sale
Number minus the number of Shares of Class A Common Stock owned by the TCR
Group and its Affiliates at such time. For purposes of this definition, the
number of Shares of Class A Common Stock owned by Xxxxxx and his Affiliates
shall be deemed to be 418,990 Shares less any Shares sold by Xxxxxx and his
Affiliates after the Effective Time, but not less than zero. Xxxxxx and his
Affiliates' Fully Permitted
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Number may exceed 418,990 pursuant to the terms of this definition.
"Intention Notice" has the meaning set forth in Section 5.1.2 of this
Agreement.
"Xxxxxx Put Right" has the meaning set forth in Section 4.1 of this
Agreement.
"Maximum Sale Number" means, at any time, the maximum number of Shares of
Class A Common Stock that can be sold without causing a "change in ownership,"
as defined in section 382 of the Internal Revenue Code of 1986, as amended.
"Permitted Transferee" has the meaning set forth in Section 5.4 of this
Agreement.
"Person" means any individual, corporation, partnership, limited liability
company, firm, joint venture, association, joint stock company, trust,
unincorporated organization, governmental body or other entity.
"Proxy Termination Date" has the meaning set forth in Section 3.2 of this
Agreement.
"Put Notice" has the meaning set forth in Section 4.2 of this Agreement.
"Put Securities" has the meaning set forth in Section 4.1 of this
Agreement.
"Recapitalization" means the recapitalization of MLX as contemplated by
Sections 4.4 and 5.10 of the Merger Agreement.
"Shares" means, with respect to each party, all shares, whether now owned
or hereafter acquired, of Class A Common Stock or Class B Common Stock owned by
such party or its Affiliates, including shares of Common Stock which are issued
upon conversion, exercise or exchange of all Common Stock Equivalents.
"transfer" has the meaning set forth in Section 5 of this Agreement.
"Transfer Notice" has the meaning set forth in Section 5.1.2 of
this Agreement.
"Transfer Notice Provider" has the meaning set forth in Section 5.1.2 of
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this Agreement.
"Transfer Notice Recipient" has the meaning set forth in Section 5.1.2 of
this Agreement.
"1997 Stock Plan" means the 1997 Stock Option Plan whereby a maximum of
1,166,896 shares of Class A Common Stock, par value $.01 per share, of MLX are
authorized to be delivered to certain officers, other key employees, directors
and consultants by MLX.
2. Effective Date; Term. This Agreement shall become effective only upon
the consummation of the Merger and shall remain in effect until the Proxy
Termination Date.
3. Irrevocable Proxy.
3.1 Grant of Proxy. The TCR Group hereby grants to, and appoints Xxxxxx
as its irrevocable proxy and attorney-in-fact (with full power of substitution)
to vote and/or to act by written consent with respect to all of the Shares of
Class A Common Stock and Class B Common Stock owned by the TCR Group and its
Affiliates with regard to all matters to be voted upon by the stockholders of
the Corporation (including the vote for directors of the corporation), provided
that the TCR Group does not grant to or appoint Xxxxxx as its irrevocable proxy
to vote or act with regard to the following matters: (i) the liquidation of
the Corporation; (ii) any sale of all, or substantially all, of the assets of
the Corporation; and (iii) any merger or consolidation involving the
Corporation, if immediately thereafter stockholders of the Corporation
(including Xxxxxx) before such merger or consolidation do not hold (by
ownership of stock, by proxy or otherwise) the power to vote at least 60% of
votes entitled to elect the directors of the corporation resulting from such
transaction. The proxy hereby granted by the TCR Group is given in
consideration of the other mutual covenants herein contained,
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and as such is coupled with an interest and shall be irrevocable until the
occurrence of an event of termination set forth in Section 3.2.
3.2 Termination of Proxy. The proxy granted to Xxxxxx pursuant to
Section 3.1 shall terminate and be of no further force or effect upon the
earliest to occur of (i) ten years after the Effective Time; (ii) Xxxxxx'x death
or Disability (as defined in the Employment Agreement); (iii) in the event
Xxxxxx terminates his employment with the Corporation (other than a Constructive
Termination as defined in the Employment Agreement); (iv) in the event of
Xxxxxx'x termination by the Corporation for Cause (as defined in the Employment
Agreement) or (v) in the event that Xxxxxx'x ownership of Class A Common Stock
falls below 1,096,425 Shares, including for this purpose Shares issuable upon
conversion, exercise or exchange of all Common Stock Equivalents, as adjusted to
reflect stock splits and similar actions in respect of the Class A Common Stock
after the Effective Time (the date of the occurrence of any such event described
in clauses (i) through (v) being referred to as the "Proxy Termination Date").
4. Xxxxxx Put Right.
4.1 Exercise. If at any time prior to the Proxy Termination Date (i)
the TCR Group is entitled to vote for a transaction described in (ii) and (iii)
of the proviso to Section 3.1; (ii) any TCR Group Member or Affiliate fails to
vote in favor of any such transaction and (iii) such transaction is not approved
by the stockholders of the Corporation, then Xxxxxx shall have the right and
option (the "Xxxxxx Put Right") to require the TCR Group to purchase all, but
not less than all, of the Class A Common Stock and Class B Common Stock then
owned by Xxxxxx and his Affiliates (the "Put Securities"). If Xxxxxx shall
exercise the Xxxxxx Put Right, the TCR Group shall be obligated, jointly and
severally, to purchase the Put Securities for a purchase price equal to the Fair
Market Value Xxxxxx would have received in such proposed transaction for his
Class A Common Stock and Class B Common Stock, provided that in the event that
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Xxxxxx would have retained any or all of the Put Securities in such proposed
transaction, the purchase price for such Put Securities shall be equal to the
Fair Market Value of such Put Securities.
4.2 Notice and Duration. Exercise of the Xxxxxx Put Right may only be
effected by delivering written notice to the TCR Group (the "Put Notice"). The
Put Notice shall state the number of Put Securities held by Xxxxxx and his
Affiliates. Exercise of the Xxxxxx Put Right shall be made, if at all, within
20 days after the occurrence of the event giving rise to the Xxxxxx Put Right.
4.3 Closing of Purchase of Put Securities. In any case where Xxxxxx
exercises the Xxxxxx Put Right, the TCR Group shall purchase for cash the Put
Securities within 45 days of the delivery of the Put Notice.
4.4 Termination of Xxxxxx Put Right. Xxxxxx shall have no right to
exercise the Xxxxxx Put Right following, and the Xxxxxx Put Right shall
terminate and be of no further force and effect, on the earliest to occur of
(i) the expiration of the 20 day period described in Section 4.2 or (ii) the
Proxy Termination Date.
5. Restrictions on Transfer and Purchase of Shares. The TCR Group and
their Affiliates and Xxxxxx and his Affiliates shall not sell, give, assign,
hypothecate, pledge, encumber, grant a security interest in or otherwise
dispose of (whether by operation of law or otherwise) (each a "transfer") or
purchase any Shares or any right, title or interest therein or thereto, except
for transfers and purchases made in compliance with the provisions of this
Agreement. Notwithstanding the existence of the proxy contained in Section
3.1, the TCR Group and its Affiliates may transfer Shares pursuant to the terms
of this Agreement and any Shares transferred in compliance with the terms of
this Agreement shall be free and clear of such proxy.
5.1 Limitation on Transfer of Class A Common Stock.
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5.1.1 For three (3) years after the Effective Time, neither the TCR
Group, Xxxxxx, nor any of their respective Affiliates may transfer any Shares of
Class A Common Stock owned as of the Effective Time.
5.1.2 Commencing three (3) years after the Effective Time, neither
Xxxxxx, any TCR Group Member nor any of their respective Affiliates may transfer
any Shares of Class A Common Stock without complying with the procedures and
requirements set forth in this Section 5.1.2. Prior to making any such
transfer, Xxxxxx or any of his Affiliates, on the one hand, or the TCR Group or
any of its Affiliates, on the other hand, shall provide written notice (the
"Transfer Notice" and such party providing the Transfer Notice together with its
Affiliates being referred to herein as the "Transfer Notice Provider") to the
other party (together with its Affiliates the "Transfer Notice Recipient") of
the Transfer Notice Provider's intention to make such transfer, which notice
shall state the number of Shares proposed to be transferred, which number may be
up to the Transfer Notice Provider's Fully Permitted Number. Within fifteen
(15) days of the delivery of such Transfer Notice, the Transfer Notice Recipient
shall deliver written notice (the "Intention Notice") to the Transfer Notice
Provider, which notice shall state one of the following: (i) that the Transfer
Notice Recipient does not intend to sell any Shares of Class A Common Stock or
(ii) that the Transfer Notice Recipient intends to sell Shares of Class A Common
Stock and the number of Shares such party intends to sell, which number may be
up to the Transfer Notice Recipient's Fully Permitted Number. In the event that
the Intention Notice contains the information contained in clause (i) above or
in the event that no Intention Notice is provided, the Transfer Notice Provider
may sell Shares of Class A Common Stock in any amount up to the Transfer Notice
Provider's Fully Permitted Number, provided that such transfer shall be made
within sixty (60) days from the earlier of (a) the date on which the Intention
Notice is provided or (b) fifteen (15) days from the date the Transfer Notice is
provided. In the event that the Intention Notice contains the information
contained in clause (ii) above, the Transfer Notice
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Provider and the Transfer Notice Recipient may transfer Shares of Class A
Common Stock in an amount up to their respective Fully Permitted Numbers,
provided that such transfer shall be made within sixty (60) days from the
earlier of (a) the date on which the Intention Notice is provided or (b)
fifteen (15) days from the date the Transfer Notice is provided. Any attempt
to transfer any Shares in violation of this Section 5.1.2 shall be null and
void ab initio and the Corporation shall not register any such transfer.
Nothing contained within this Section 5.1.2 shall be deemed to affect the
obligations of Xxxxxx, any TCR Group Member or any of their respective
Affiliates to comply with any conditions or requirements set forth in the
Articles of Incorporation of the Corporation, including any requirement to
obtain any approval of the Board of Directors of the Corporation, any other
documents of corporate governance, any other contract or agreement, or any
applicable federal or state securities laws.
5.2 Limitation on Transfer of Class B Common Stock. Neither the TCR
Group, Xxxxxx, nor any of their respective Affiliates may transfer any Shares of
Class B Common Stock owned as of the Effective Time or convert any Shares of
Class B Common Stock owned as of the Effective Time into Shares of Class A
Common Stock pursuant to Section 2.3 of the Articles of Amendment of the
Articles of Incorporation of MLX until the earlier of (i) ten (10) years after
the Effective Time or (ii) the Proxy Termination Date.
5.3 Limitation on Purchase of Shares. Neither the TCR Group or any of
its Affiliates, on the one hand, nor Xxxxxx or any of his Affiliates, on the
other hand, shall purchase additional Shares of Class A Common Stock or Class B
Common Stock after the Effective Time without the approval of Xxxxxx or the TCR
Group, respectively, and of the Board of Directors of the Corporation, provided
that this limitation shall not apply to the purchase of Shares of Class A Common
Stock by Xxxxxx and his Affiliates pursuant to Common Stock Equivalents owned by
Xxxxxx immediately after the Merger or issued to Xxxxxx pursuant to the 1997
Stock Plan.
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5.4 Permitted Transfers. Notwithstanding anything to the contrary
contained in this Agreement, but subject to this Section 5.4 and Section 5.5,
at any time, any TCR Group Member or Xxxxxx or their respective Affiliates may
transfer all or a portion of its Shares to any other TCR Group Member or to
Xxxxxx or their respective Affiliates (each, a "Permitted Transferee") and
Xxxxxx and his Affiliates may transfer their Shares pursuant to Section 4.1.
5.5 Permitted Transfer Procedures. If any member of the TCR Group or
Xxxxxx or any of their respective Affiliates wishes to transfer Shares to a
Permitted Transferee under Section 5.4, such party shall give written notice to
the other party of its intention to make any such transfer not less than ten
(10) days prior to effecting such transfer, which notice shall state the name
and address of each Permitted Transferee to whom such transfer is proposed and
the number of Shares proposed to be transferred to such Permitted Transferee;
provided that the Permitted Transferee shall have assumed in writing all of the
obligations of his transferor imposed by this Agreement and shall have agreed to
be bound by each of the terms and provisions of this Agreement to which such
transferor was bound.
6. Miscellaneous.
6.1 Waiver of Compliance; Consents. Any failure of the TCR Group or its
Affiliates, on the one hand, or Xxxxxx or his Affiliates, on the other hand, to
comply with any obligation, covenant, agreement or condition herein may be
waived by Xxxxxx or the TCR Group, respectively, only by a written instrument
signed by the party granting such waiver, but such waiver or failure to insist
upon strict compliance with such obligation, covenant, agreement or condition
shall not operate as a waiver of, or estoppel with respect to, any subsequent or
other failure. Whenever this Agreement requires or permits consent by or on
behalf of any party hereto, such consent shall be given in writing in a manner
consistent with the requirements for a waiver of compliance as set forth in
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this Section 6.1.
6.2 Notices. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given when delivered in person,
by facsimile or telegram or on the next business day when sent by overnight
courier or on the second succeeding business day when sent by registered or
certified mail (postage prepaid, return receipt requested) to the respective
parties at the following addresses (or at such other address for a party as
shall be specified by like notice);
(i) if to the TCR Group and its Affiliates, to
Three Cities Research, Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: W. Xxxxxx Xxxxxx
Telecopy: (000) 000-0000
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
Telecopy: (000) 000-0000
and
(ii) if to Xxxxxxx Xxxxxx and his Affiliates, to
Xxxxxx Metalcraft Holding Co.
0000 Xxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Telecopy: (000) 000-0000
with a copy to
Husch & Eppenberger
000 X.X. Xxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxx Xxxxxxxx
Telecopy: (000) 000-0000
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6.3 Assignment. This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns. Neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned by either of
the parties hereto without the prior written consent of the other party. This
Agreement is not intended to confer upon any other person except the parties
hereto any rights or remedies hereunder.
6.4 Governing Law. This Agreement shall be governed by the laws of the
State of Delaware, without giving effect to the principles of conflicts of law
thereof or of any other jurisdiction.
6.5 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
6.6 Headings. The article and section headings contained in this
Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not in any way affect the meaning or
interpretation of this Agreement.
6.7 Entire Agreement. This Agreement and the documents or instruments
referred to herein, embodies the entire agreement and understanding of the
parties hereto in respect of the subject matter contained herein. There are no
restrictions, promises, representations, warranties, covenants, or
undertakings, other than those expressly set forth or referred to herein. This
Agreement supersedes all prior agreements and the understandings between the
parties with respect to such subject matter.
6.8 Specific Performance. The parties hereto intend that each of the
parties have the right to seek damages or specific performance in the event
that any other party hereto fails to perform such party's obligations
hereunder. Therefore, if any party shall institute any action or proceeding to
enforce the provisions hereof, any party against whom such action or proceeding
is brought hereby waives any claim or defense
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therein that the plaintiff party has an adequate remedy at law.
6.9 Further Assurances. Each of the parties shall, and shall cause their
respective Affiliates to, execute such instruments and take such action as may
be reasonably required or desirable to carry out the provisions hereof and the
transactions contemplated hereby.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
/s/ Xxxxxxx X. Xxxxxx
----------------------------
Xxxxxxx X. Xxxxxx
TERBEM LIMITED
By: /s/ W. Xxxxxx Xxxxxx
-------------------------
Name: W. Xxxxxx Xxxxxx
Title: Attorney-in-Fact
TINVEST LIMITED
By: /s/ W. Xxxxxx Xxxxxx
-------------------------
Name: W. Xxxxxx Xxxxxx
Title: Attorney-in-Fact
TERIBE LIMITED
By: /s/ W. Xxxxxx Xxxxxx
-------------------------
Name: W. Xxxxxx Xxxxxx
Title: Attorney-in-Fact
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TCR INTERNATIONAL PARTNERS, L.P.
By: Three Cities Research, Inc.
its general partner
By: /s/ Xxxxxx xx Xxxxx
------------------------
Name: Xxxxxx xx Xxxxx
Title: President
MITVEST LIMITED
By: /s/ W. Xxxxxx Xxxxxx
----------------------------
Name: W. Xxxxxx Xxxxxx
Title: Attorney-in-Fact
BOBST INVESTMENT CORP.
By: /s/ W. Xxxxxx Xxxxxx
----------------------------
Name: W. Xxxxxx Xxxxxx
Title: Attorney-in-Fact
00
XXXXX XXXXXX XXXXXXXX XXXXXXXX XX
By: /s/ W. Xxxxxx Xxxxxx
------------------------------
Name: W. Xxxxxx Xxxxxx
Title: Attorney-in-Fact
