FINLAY ENTERPRISES, INC.
AMENDED AND RESTATED
STOCKHOLDERS' AGREEMENT
FINLAY ENTERPRISES, INC.
AMENDED AND RESTATED
STOCKHOLDERS' AGREEMENT
TABLE OF CONTENTS
Preamble Page
ARTICLE I Definitions 1
ARTICLE II Covenants and Conditions 6
Section 2.1 Come Along. . . . . . . . . . . . . . . . 6
Section 2.2 Take Along. . . . . . . . . . . . . . . . 7
Section 2.3 Corporate Governance. . . . . . . . . . . 7
Section 2.4 Reports Under 1993 Act. . . . . . . . . . 11
Section 2.5 Stock Split . . . . . . . . . . . . . . . 12
Section 2.6 Maintenance of Public Market. . . . . . . 12
Section 2.7 Listing of Shares . . . . . . . . . . . . 13
Section 2.8 Employment Agreement Amendment. . . . . . 13
ARTICLE III Miscellaneous 13
Section 3.1 Remedies. . . . . . . . . . . . . . . . . 13
Section 3.2 Entire Agreement. . . . . . . . . . . . . 13
Section 3.3 Amendment . . . . . . . . . . . . . . . . 13
Section 3.4 Severability. . . . . . . . . . . . . . . 14
Section 3.5 Notices . . . . . . . . . . . . . . . . . 14
Section 3.6 Binding Effect; Assignment. . . . . . . . 15
Section 3.7 Termination . . . . . . . . . . . . . . . 15
Section 3.8 Recapitalizations, Exchanges, Etc.. . . . 15
Section 3.9 Xxx Representative. . . . . . . . . . . . 16
Section 3.10 Action Necessary to Effectuate
the Agreement . . . . . . . . . . . . . . 16
Section 3.11 Purchase for Investment; Legend
on Certificate. . . . . . . . . . . . . . 16
Section 3.12 Effectiveness of Transfers. . . . . . . . 17
Section 3.13 Additional Stockholders . . . . . . . . . 17
Section 3.14 No Waiver . . . . . . . . . . . . . . . . 18
Section 3.15 Counterparts. . . . . . . . . . . . . . . 18
Section 3.16 Headings. . . . . . . . . . . . . . . . . 18
Section 3.17 Governing Law . . . . . . . . . . . . . . 18
SCHEDULE A Schedule of Stockholders 23
AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT
This Amended and Restated Stockholders' Agreement (the "Agreement") is
entered into as of the 6th day of March, 1995, by and among Finlay Enterprises,
Inc., a Delaware corporation (the "Company"), Xxxxx X. Xxxxxxxxx, Xxxxxx X.
Xxxxxx, Xxxxxx X. Xxxxxxxxxx and Xxxxxx X. Xxxxxxxx, those persons listed as
Investor Stockholders on the signature pages hereof (the "Investor Holders"),
those persons listed as Xxx Holders on the signature pages hereof (the "Xxx
Holders") and those persons listed as XXX Holders on the signature pages hereof
(the "XXX Holders"). The Management Holders, the Investor Holders, the Xxx
Holders, and the XXX Holders are sometimes collectively referred to herein as
the "Stockholders." Certain terms used in this Agreement as defined terms are
defined in Article I hereof.
WHEREAS, certain parties hereto entered into a Stockholders Agreement
dated as of May 26, 1993 (as amended, the "Original Agreement") for the purpose
of regulating certain aspects of their relationships with each other and with
the Company;
WHEREAS, the Company has sold or is in the process of selling shares of
its Common Stock pursuant to a registration under the 1933 Act pursuant to a
Registration Statement filed on Form S-1 (No. 33-88938) (the "Offering"); and
WHEREAS, certain remaining parties to the Original Agreement desire
to amend and restate the Original Agreement;
In consideration of the mutual promises, representations, warranties,
covenants and conditions set forth in this Agreement, the parties to this
Agreement mutually agree that if the Offering has been consummated on or before
June 1, 1995, then upon (and only upon) the consummation of the Offering, the
Original Agreement shall be amended and restated in its entirety as follows:
ARTICLE I
Definitions
For the purposes of this Agreement, the following terms shall be defined
as follows:
The "1933 Act" shall mean the Securities Act of 1933, as amended, and
the rules, regulations and interpretations thereunder.
The "1934 Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules, regulations and interpretations thereunder.
An "Affiliate" of a specified person, corporation or other entity shall
mean a person, corporation or other entity which, directly or indirectly,
through one or more intermediaries, controls, or is controlled by, or is under
common control with, the corporation or other entity specified.
"Applicable Xxx Xxxxxx" and "Applicable XXX Xxxxxx" shall mean the
Original Xxx Holders and the Equity-Linked Investors, respectively, and (a) the
following transferees of Shares pursuant to a Transfer by a Xxx Xxxxxx: Xxx or
the officers, employees or consultants of Xxx (who spend at least fifty percent
(50%) of their business hours consulting for Xxx and maintain an office at Xxx)
or a corporation or corporations or a partnership or partnerships (or other
entity for collective investment, such as a fund) which is (and continues to be)
controlled by, controlling or under common control with Xxx, or any other Person
listed as a Xxx Xxxxxx on a Signature Page attached hereto as of the date of
this Agreement; (b), the following transferees of Shares pursuant to a Transfer
by an XXX Xxxxxx or Xxx Equity Partners: any present or future general or
limited partner of either of the Equity-Linked Investors or Xxx Equity Partners,
respectively (other than any person which becomes a partner solely to enable it
to be an Applicable Xxx Xxxxxx or Applicable XXX Xxxxxx of the Shares); (c) the
following transferees of Shares pursuant to a Transfer by an XXX Xxxxxx or a Xxx
Xxxxxx: an Institutional Investor; or (d) the following transferees of Shares
pursuant to a Transfer by an XXX Xxxxxx: any entity which is (and continues to
be) directly or indirectly controlled by such XXX Xxxxxx, which does (and will
continue to) directly or indirectly control such XXX Xxxxxx or which is (and
continues to be) directly or indirectly controlled by a Person or entity which
also does (and will continue to) directly or indirectly control such XXX Xxxxxx.
"Business Day" shall mean any day, other than a Saturday, Sunday or
legal holiday, on which banks in New York, New York are open for business.
"Common Stock" shall mean the Company's common stock, par value $.01 per
share, that the Company may be authorized to issue from time to time and any
stock into which such Common Stock may hereafter be changed or for which such
Common Stock may be exchanged after giving effect to the terms of such change or
exchange (by way of reorganization, recapitalization, merger, consolidation or
otherwise) and shall also include any common stock of the Company hereafter
authorized and any capital stock of the Company of any other class hereafter
authorized which is not preferred as to dividends or distribution of assets in
liquidation over any other class of capital stock of the Company or which has
ordinary voting power for the election of directors of the Company.
The "Company" shall mean Finlay Enterprises, Inc., a Delaware
corporation, and its successors and assigns.
"Cornstein Beneficiaries" shall mean, collectively, after the death of
Xxxxx X. Xxxxxxxxx, the estate of Xxxxx X. Xxxxxxxxx and the spouse and children
of Xxxxx X. Xxxxxxxxx holding Shares.
"XXX Holders" shall have the meaning set forth in the first paragraph of
this Agreement and shall also include transferees of the XXX Holders unless
prior to such Transfer such transferee was a Management Holder, Investor Holder
or a Xxx Xxxxxx.
"XXX Nominees" shall have the meaning set forth in Section 2.3(a).
"Equity-Linked Investors" shall mean Equity-Linked Investors, L.P. and
Equity-Linked Investors - II.
"Institutional Investor" shall mean an insurance company, financial
institution, investment fund or other institutional investor.
"Investor Holders" shall have the meaning set forth in the first
paragraph of this Agreement and shall also include transferees of the Investor
Holders unless prior to such Transfer such transferee was a Management Holder, a
Xxx Xxxxxx or an XXX Xxxxxx.
"Xxx" shall mean Xxxxxx X. Xxx Company.
"Xxx Equity Partners" means Xxxxxx X. Xxx Equity Partners, L.P., a
Delaware limited partnership.
"Xxx Holders" shall have the meaning set forth in the first paragraph of
this Agreement and shall also include transferees of the Xxx Holders unless
prior to such Transfer such transferee was an Investor Holder, a Management
Holder or an XXX Xxxxxx.
"Xxx Representative" shall have the meaning set forth in Section 3.9.
"Management Holders" shall mean Xxxxxx X. Xxxxxxxx, Xxxxx X. Xxxxxxxxx,
Xxxxxx X. Xxxxxx and the Estate of Xxxxxx X. Xxxxxxxxxx and other employees of
the Company or the Operating Company who from time to time sign a counterpart
signature page hereto as Management Holders and their transferees unless prior
to such Transfer such transferee was an Investor Holder, a Xxx Xxxxxx or an XXX
Xxxxxx.
"Original Agreement" shall mean the Stockholders' Agreement dated as of
May 26, 1993, as amended, by and among the Company and certain of the other
parties hereto.
"Operating Company" shall mean Finlay Fine Jewelry Corporation, a
Delaware corporation, and its successors and assigns.
"Original Xxx Holders" shall mean the Xxx Holders as of the date of this
Agreement.
A "Permitted Transferee" shall mean a transferee of Shares from any
Management Holder who is a natural person and (i) such Management Holder's
spouse, children, parents or siblings or a trust for the benefit of any of them,
provided that the Management Holder retains, as trustee or by some other means,
the sole authority to vote such Shares, and (ii) such Management Holder's
personal representative upon his death for purposes of administration of his
estate or upon his disability for purposes of protection and management of his
assets.
"Person" means an individual, corporation, partnership, trust, or
unincorporated association, or a government or any agency or political
subdivision thereof.
A "Public Offering" shall mean the completion of a sale of Common Stock
pursuant to a registration statement which has become effective under the 1933
Act, excluding registration statements on Form X-0, X-0 or similar limited
purpose forms.
"Registration Rights Agreement" means the Registration Rights Agreement
dated as of May 26, 1993 among the Company and the Xxx Holders, XXX Holders,
Investor Holders and Management Holders, as amended from time to time.
"Rule 144 Transaction" means a transfer of Shares (A) complying with
Rule 144 under the 1933 Act as such Rule or a successor thereto is in effect on
the date of such transfer (but not including a sale other than pursuant to a
"brokers transaction" as defined in clauses (i) and (ii) of paragraph (g) of
Rule 144 as in effect on the date hereof) and (B) occurring at a time when
Shares are registered pursuant to Section 12 of the 1934 Act.
"Schedule" shall refer to the Schedule of Stockholders attached hereto
as Schedule A.
"Shares" shall mean all (i) shares of Common Stock held by Stockholders
from time to time (other than shares of Common Stock acquired from the public),
and (ii) securities of the Company or any of its Subsidiaries issued in exchange
for, upon reclassification of, or as a distribution in respect of, any of the
foregoing. For purposes of this Agreement (other than Section 2.3 hereof),
"Shares" shall include (i) outstanding options, warrants and other rights to
purchase Common Stock held by any Stockholder and (ii) Common Stock purchasable
upon exercise of outstanding exercisable options, warrants and other rights to
purchase Common Stock held by each Stockholder. For purposes of this Agreement,
when calculating the percentage of Shares held by any holder, such calculation
shall give effect to any stock splits, distributions, combinations or other
recapitalization events involving the Shares.
"Stockholder" shall mean any party hereto other than the Company.
"Stockholder Group" shall mean any of (A) the XXX Holders taken as a
group, (B) the Xxx Holders taken as a group, (C) the Management Holders taken as
a group, and (D) the Investor Holders taken as a group. The Company shall not in
any case be deemed to be a member of any Stockholder Group (whether or not the
Company holds or repurchases any Shares).
"Subsidiary" with respect to any entity (the "parent") shall mean any
corporation, firm, association or trust of which such parent, at the time in
respect of which such term is used, (i) owns directly or indirectly more than
fifty percent (50%) of the equity or beneficial interest, on a consolidated
basis, or (ii) owns directly or controls with power to vote, indirectly through
one or more Subsidiaries, shares of capital stock or beneficial interest having
the power to cast at least a majority of the votes entitled to be cast for the
election of directors, trustees, managers or other officials having powers
analogous to those of directors of a corporation. Unless otherwise specifically
indicated, when used herein the term Subsidiary shall refer to a direct or
indirect Subsidiary of the Company.
"Third Party" means any Person (including such Person's Affiliates)
other than the Company.
"Transfer" shall mean to transfer, sell, assign, pledge, hypothecate,
give, create a security interest in or lien on, place in trust (voting or
otherwise), assign or in any other way encumber or dispose of, directly or
indirectly and whether or not by operation of law or for value, any Shares.
ARTICLE II
Covenants and Conditions
2.1 Come Along. No Stockholder or group of Stockholders shall Transfer
Shares constituting a majority of the outstanding shares of Common Stock in one
or a series of related transactions to a Third Party without complying with the
terms and conditions set forth in this Section 2.1.
(a) The Stockholder or group of Stockholders (collectively, the
"Initiating Stockholder") desiring to Transfer such Shares shall give
not less than twenty (20) days prior written notice of such intended
Transfer to each other Stockholder ("Participating Offeree") and to the
Company. Such notice (the "Participation Notice") shall set forth terms
and conditions of such proposed Transfer, including the name of the
prospective transferee, the number of Shares proposed to be
transferred (the "Participation Securities") by the Initiating
Stockholder, the purchase price per Share proposed to be paid therefor
and the payment terms and type of Transfer to be effectuated. Each
Participating Offeree may, by notice in writing to the Initiating
Stockholder and to the Company given within ten (10) days following
the delivery of the Participation Notice to such Participating
Offeree, have the opportunity and right to sell to the purchasers in
such proposed Transfer (upon the same terms and conditions as the
Initiating Stockholder) up to that number of Shares owned by such
Participating Offeree as shall equal the product of (x) a fraction,
the numerator of which is the number of Shares owned by such
Participating Offeree as of the date of such proposed Transfer and the
denominator of which is the aggregate number of Shares owned as of the
date of such Participation Notice by each Initiating Stockholder and
by all Participating Offerees, multiplied by (y) the number of
Participation Securities. The amount of Participation Securities to be
sold by any Initiating Stockholder shall be reduced to the extent
necessary to provide for such sales of Shares by Participating
Offerees.
(b) At the closing of any proposed Transfer in respect of which
a Participation Notice has been delivered, the Initiating Stockholder,
together with all Participating Offerees electing to sell Shares who
have delivered the notice referred to in paragraph (a) above, shall
deliver to the proposed transferee certificates evidencing the Shares to
be sold thereto duly endorsed with stock powers and shall receive in
exchange therefor the consideration to be paid or delivered by the
proposed transferee in respect of such Shares as described in the
Participation Notice.
(c) The provisions of this Section 2.1 shall not apply to any
Rule 144 Transaction or to any Transfer by a Xxx Xxxxxx or an Applicable
Xxx Xxxxxx to an Applicable Xxx Xxxxxx or a Transfer by an XXX Xxxxxx or
an Applicable XXX Xxxxxx to an Applicable XXX Xxxxxx, other than, in
each case, a Person described in Section (c) (and not Section (a), (b)
or (d)) of the definition of "Applicable Xxx Xxxxxx" and "Applicable XXX
Xxxxxx."
2.2 Take Along. If Stockholders holding at least a majority of the then
outstanding Common Stock (the "Take Along Group") determine to sell or exchange
(in a business combination or otherwise) in one or a series of related bona fide
arms-length transactions to an unrelated and unaffiliated Third Party all of the
Shares held by them, then, upon thirty (30) days written notice from the Take
Along Group to the other Stockholders, which notice shall include reasonable
details of the proposed sale or exchange including the proposed time and place
of closing and the consideration to be received by the Stockholders (such notice
being referred to as the "Sale Request"), each other Stockholder shall be
obligated to, and shall (i) sell, transfer and deliver, or cause to be sold,
transferred and delivered, to such Third Party, all of his Shares in the same
transaction at the closing thereof (and will deliver certificates for all of his
Shares at the closing, free and clear of all claims, liens and encumbrances),
and each Stockholder shall receive the same consideration per share of Common
Stock upon such sale and (ii) if stockholder approval of the transaction is
required, vote his Shares in favor thereof. The provisions of this Section 2.2
shall not apply to any Transfer pursuant to a Public Offering.
2.3 Corporate Governance. Until the tenth anniversary of the date
hereof, the Company and Stockholders shall take all action, including but not
limited to (i) the Stockholders instructing their director designees provided
herein to take such actions and (ii) the Stockholders voting, or executing
written consents with respect to, their Shares, so that:
(a) Election of Directors. Subject to Sections 2.3(c) and 2.3(d)
below, the Company's and the Operating Company's Boards of Directors
shall be fixed at ten (10) members, of which one member shall be
designated by Xxxxxx X. Xxxxxx (which member shall be Xx. Xxxxxx
himself) (the "Xxxxxx Nominee"), two members (one of which members shall
be either Xx. Xxxxxxxxx himself, or if Xx. Xxxxxxxxx is no longer an
employee of the Company, a management employee of the Company) shall be
designated by Xxxxx X. Xxxxxxxxx (the "Cornstein Nominees"), two members
shall be designated by the Applicable XXX Holders (the "XXX Nominees"),
and two members shall be designated by the Applicable Xxx Holders (the
"Xxx Nominees"). The directors shall be divided into classes. The
initial term of one Xxxxx Nominee and one Xxx Nominee shall expire in
1996; the initial term of the Xxxxxx Nominee and the Cornstein Nominees
shall expire in 1997; and the initial term of the other Xxx Nominee and
other Xxxxx Nominee shall expire in 1998. At the option of the
Applicable Xxx Holders and the Applicable XXX Holders, respectively, the
Xxx Nominee(s) or the XXX Nominee(s), respectively, shall be reduced by
one or by two, and such Xxx Nominee(s) or XXX Nominee(s), as the case
may be, shall be removed from the Board of Directors and, during such
time as the Applicable Xxx Holders and the Applicable XXX Holders,
respectively, would otherwise have had the right to designate a Director
hereunder, a representative of the Applicable Xxx Holders or the
Applicable XXX Holders, as the case may be, shall continue to have the
right to attend meetings of the Board of Directors of the Company and
the Operating Company as an observer without a vote or other rights as a
director (except the right to receive sufficient notice to enable such
attendance and the right to receive all other communications,
information and materials furnished, from time to time, to Directors of
the Company and the Operating Company and the right to receive
reimbursement for travel expenses to the same extent as Directors of the
Company and the Operating Company). In addition to any other rights
under this Agreement, (x) any transferee of any of the Xxx Holders, the
XXX Holders and Xxxxx X. Xxxxxxxxx, who is an Institutional Investor and
who holds pursuant to one or more Transfers Shares constituting at least
ten percent (10%) of the Shares then outstanding and (y) a
representative of the Cornstein Beneficiaries, so long as they hold,
collectively, at least five percent (5%) of the issued and outstanding
shares of Common Stock of the Company (and have not designated a
director pursuant to this Section 2.3(a)), shall have the right to
attend meetings of the Boards of Directors of the Company and its
Subsidiaries, and, in the case of the Cornstein Beneficiaries, the
Executive Committee, as an observer without a vote or other rights as a
director (except the right to receive sufficient notice to enable such
attendance and the right to receive all other communications,
information and materials furnished, from time to time, to Directors of
the Company and its Subsidiaries, and the Executive Committee, as the
case may be, and the right to receive reimbursement for travel expenses
to the same extent as Directors of the Company and its Subsidiaries).
(b) Designation of Director Nominees. One of the Xxx Nominees
shall be designated by the vote or consent of a majority of the then
outstanding Shares owned by Xxx Equity Partners and its transferees who
are Applicable Xxx Holders and one of the Xxx Nominees shall be
designated by the vote or consent of a majority of the then outstanding
Shares owned by the Applicable Xxx Holders other than Xxx Equity
Partners. The Cornstein Nominees shall be designated by the vote or
consent of a majority of the then outstanding Shares owned by Xxxxx X.
Xxxxxxxxx and his Permitted Transferees. The XXX Nominees shall be
designated by the vote or consent of a majority of the then outstanding
Shares owned by the Applicable XXX Holders. Any group of Stockholders
entitled to designate directors hereunder shall also be entitled to
require that the director designated by that group pursuant to this
Section 2.3 be removed or replaced by another designee of such group.
(c) Termination of Right to Elect Directors. The number of
directors which Xxxxxx X. Xxxxxx, Xxxxx X. Xxxxxxxxx, the Applicable XXX
Holders, and the Applicable Xxx Holders shall have the right to
designate to the Board of Directors of the Company and its Subsidiaries
shall be reduced as follows: Xx. Xxxxxx'x right to designate a director
shall terminate on the date that Xx. Xxxxxx is no longer an employee of
the Company. Xx. Xxxxxxxxx'x right to designate one director shall
terminate when Xx. Xxxxxxxxx and his Permitted Transferees own less than
fifty percent (50%) of the Shares held by him on the date hereof, and
his right to designate the other director shall terminate when he owns
less than five percent (5%) of the Common Stock of the Company then
outstanding. The Applicable Xxx Holders' right to designate one director
shall terminate when the Applicable Xxx Holders collectively own less
than fifty percent (50%) of the Shares held by them on the date hereof,
and their right to designate the other director (which shall be the
director designated by Xxx Equity Partners in accordance with Section
2.3(b)) shall terminate when the Applicable Xxx Holders collectively own
less than five percent (5%) of the Common Stock of the Company then
outstanding. The Applicable XXX Holders right to designate one director
shall terminate when the Applicable XXX Holders collectively own less
than fifty percent (50%) of the Shares held by them on the date hereof,
and their right to designate the other director shall terminate when the
Applicable XXX Holders collectively own less than five percent (5%) of
the Common Stock of the Company then outstanding.
(d) Executive Committee. The Board of Directors of the Company
and the Operating Company shall have an Executive Committee empowered,
to the fullest extent possible by law, to take all actions which can be
taken by the full Board of Directors of the Company and the Operating
Company. Each such Executive Committee shall consist of five (5)
directors, one of which will be designated by Xxxxxx X. Xxx (so long as
the Applicable Xxx Holders have a right to designate one director
pursuant to Section 2.3(a) above), one of which will be designated by
the Applicable XXX Holders, (so long as the Applicable XXX Holders have
a right to designate one director pursuant to Section 2.3(a) above), two
of which (including one management employee of the Company) will be
designated by Xxxxx X. Xxxxxxxxx, so long as Xxxxx X. Xxxxxxxxx has the
right to designate two directors pursuant to Section 2.3(a) above, and
thereafter only one of which will be designated by Xxxxx X. Xxxxxxxxx
(so long as Xxxxx X. Xxxxxxxxx has the right to designate one director
pursuant to Section 2.3(a) above), and one of which will be an
independent director designated by the Board of Directors of the
Company. If any Stockholder or group of Stockholders loses its right to
designate a member of the Executive Committee in accordance with the
foregoing provisions of this Section 2.3(d), such member shall be
designated by the Board of Directors of the Company. Notwithstanding any
other provision of this Agreement, if all of the members of the
Executive Committee vote to remove a director, each Stockholder agrees
to vote his or its Shares (whether at a meeting or by written consent)
to effectuate such removal.
(e) Restrictions on Other Agreements. No Stockholder shall grant
any proxy or enter into or agree to be bound by any voting trust with
respect to the Shares, nor shall any Stockholder enter into any
stockholders agreements or arrangements of any kind with any person with
respect to the Shares on terms which conflict with the provisions of
this Agreement (whether or not such agreements and arrangements are with
other Stockholders or holders of Shares that are not parties to this
Agreement), including but not limited to, agreements or arrangements
with respect to the acquisition, disposition or voting of Shares
inconsistent herewith.
(f) Stockholder Action. Each Stockholder agrees that, in such
Stockholder's capacity as a stockholder of the Company, such Stockholder
will vote, or grant proxies relating to such shares to vote, all of such
Stockholder's shares of Common Stock in favor of any transaction
pursuant to Section 2.2 hereof (other than a transaction with an
Affiliate) if, and to the extent that, approval of the Company's
stockholders is required in order to effect such transaction.
2.4 Reports Under 1934 Act. With a view to making available to the
Stockholders and their transferees the benefits of Rule 144 and Rule 144A
promulgated under the 1933 Act and any other rule or regulation of the
Commission that may at any time permit a Stockholder to sell securities of the
Company or the Operating Company to the public without registration, the Company
agrees to use and to cause the Operating Company to use its best efforts to take
all action that may be required as a condition to the availability of Rule 144,
Rule 144A or such other rules or regulations, including without limitation to:
(a) make and keep public information available, as those terms
are understood and defined in Rule 144, at all times subsequent to
ninety (90) days after the effective date of the first registration
statement covering an underwritten Public Offering filed by the Company
or the Operating Company;
(b) file with the Commission in a timely manner all reports and
other documents required of the Company or the Operating Company under
the 1933 Act and the 1934 Act (including, without limitation, under
Section 13 or Section 15 of the 0000 Xxx); and
(c) furnish to any Stockholder forthwith upon request a written
statement by the Company or the Operating Company that it has complied
with the reporting requirements of Rule 144 (at any time after ninety
(90) days after the effective date of said first registration statement
filed by the Company or the Operating Company), and of the 1933 Act and
the 1934 Act (at any time after it has become subject to such reporting
requirements), a copy of the most recent annual or quarterly report of
the Company or the Operating Company, and such other reports and
documents so filed by the Company or the Operating Company as may be
reasonably requested in availing any Stockholder of any rule or
regulation of the Commission permitting the selling of any securities
without registration.
2.5 Stock Split. If, on or after the receipt by the Company of a request
for registration of a Public Offering pursuant to the Registration Rights
Agreement, the proposed managing underwriter or underwriters of such offering
reasonably believes that the number of shares to be registered is less than the
minimum number necessary for the success of such offering, the Company will
promptly prepare and submit to its Board of Directors, use its best efforts to
cause to be adopted by its Board of Directors and stockholders, and, if so
adopted, file and cause to become effective, an amendment to its Restated
Certificate of Incorporation so as to cause each share of its outstanding Common
Stock to be converted into such number of shares of such Common Stock so that
the number of shares of Registrable Securities (as defined in the Registration
Rights Agreement) to be registered is equal to at least the minimum number which
such managing underwriter or underwriters reasonably believes is necessary for
the success of such offering. Each Stockholder, together with such Stockholder's
Transferees, hereby agrees to vote the Shares held by such Stockholder in favor
of adopting such amendment and to cause its director designees pursuant to
Section 2.3(a), if any, to vote for such amendment.
2.6 Maintenance of Public Market. The Company will not proceed with a
program of acquisition of its own Common Stock, initiate a corporate
reorganization or recapitalization or authorize or consent to any action which
would have the effect of:
(a) removing the Company from registration with the
Commission under the 1934 Act, or
(b) reducing substantially or eliminating the public market
for shares of Common Stock of the Company.
However, this Section 2.6 shall apply only as long as there are at least five
percent (5%) of the Shares still outstanding and such Shares have not been
transferred in a Public Offering of Common Stock of the Company pursuant to a
registration statement under the 1933 Act or transferred pursuant to a Rule 144
Transaction.
2.7 Listing of Shares. If any shares of the Company's Common Stock are
listed on any national securities exchange (or on the National Association of
Securities Dealers Inc., Automated Quotation System or comparable system), then
the Company will take such action as may be necessary, from time to time, to
list Common Stock included in the Shares on such exchange (or system as the case
may be), subject to official notice of issuance, with respect to shares of
Common Stock not then issued.
2.8 Employment Agreement Amendments. No amendment may be made to Section
7 or 8 of the Employment Agreement, dated as of January 3, 1995, among the
Company, the Operating Company and Xxxxxx X. Xxxxxx without the consent of the
holders of a majority of the then outstanding shares held by each of the
Applicable XXX Holders and the Applicable Xxx Holders.
ARTICLE III
Miscellaneous
3.1 Remedies. The parties to this Agreement acknowledge and agree that
the covenants of the Company and the Stockholders set forth in this Agreement
may be enforced in equity by a decree requiring specific performance. Without
limiting the foregoing, if any dispute arises concerning the sale or other
disposition of any of the Shares subject to this Agreement or concerning any
other provisions hereof or the obligations of the parties hereunder, the parties
to this agreement agree that an injunction may be issued in connection therewith
(including, without limitation, restraining the sale or other disposition of
such Shares or rescinding any such sale or other disposition). Such remedies
shall be cumulative and non-exclusive and shall be in addition to any other
rights and remedies the parties may have under this Agreement or otherwise.
3.2 Entire Agreement. This Agreement, the Stock Purchase Agreement and
the Registration Rights Agreement, together with the Exhibits hereto, sets forth
the entire understanding of the parties, and supersedes all prior agreements and
all other arrangements and communications, whether oral or written, with respect
to the subject matter hereof.
3.3 Amendment. The Schedule may be amended to reflect changes in the
composition of the Stockholders and changes in stock ownership that may occur
from time to time as a result of Transfers of Shares not restricted under
Section 2.1 or 2.2 hereof. Amendments to the Schedule reflecting Transfers of
Shares not restricted under Section 2.1 or 2.2 hereof shall become effective
when the amended Schedule, and a copy of the Agreement as executed by any new
transferee in accordance with Section 3.13, are filed with the Company.
Amendments to the Schedule reflecting Transfers pursuant to waivers under
Article II hereof shall become effective when a copy of each of (i) the amended
Schedule, (ii) the waivers, as executed by the holders of a majority of the
Shares held by each of the XXX Holders, the Management Holders, the Investor
Holders and the Xxx Holders (or by the Xxx Representative), voting separately,
and (iii) the counterpart signature page to this Agreement as executed by any
new transferee, are delivered to the Company and to the XXX Holders and the Xxx
Holders (or the Xxx Representative), provided that, for purposes of this
sentence, "Management Holders" shall exclude each Management Holder who holds
less than 5,000 Shares. Any other amendment, revision or termination of this
Agreement shall require the prior written consent of the holders of a majority
of the Shares held by each of the XXX Holders, Management Holders, Investor
Holders and the Xxx Holders (or the Xxx Representative), voting separately.
3.4 Severability. The invalidity or unenforceability of any particular
provision of this Agreement shall not affect the other provisions hereof, and
this Agreement shall be construed in all respects as if the invalid or
unenforceable provision were omitted.
3.5 Notices. All notices and other communications necessary or
contemplated under this Agreement shall be in writing and shall be delivered in
the manner specified herein or, in the absence of such specification, shall be
deemed to have been duly given three business days after mailing by certified
mail, when delivered by hand, upon confirmation of receipt by telecopy, or one
day after sending by overnight delivery service, to the respective addresses of
the parties set forth below:
(a) for notices and communications to the Company:
Finlay Enterprises, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
FAX: (000) 000-0000
ATTN: President
(b) For notices and communications to the Stockholders, to the
respective addresses set forth in the Schedule,
(c) with a copy in the case of the Xxx Holders to:
Xxxxxxxx, Xxxxxxx & Xxxxxxx
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
FAX: (000) 000-0000
ATTN: Xxxxxxx X. Xxxxxx
and in the case of the Company to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
FAX: (000) 000-0000
ATTN: Xxxxx X. Xxxxxxx
and in the case of the XXX Holders to:
Xxxxxx, Xxxxx & Bockius
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
FAX: (000) 000-0000
ATTN: Xxxxxxxxxxx Xxxxxxx
and in the case of Cornstein to:
Zimet, Haines, Xxxxxxxx & Xxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
FAX: (000) 000-0000
Attn: Xxxxx Xxxxxx Xxxxxx
By notice complying with the foregoing provisions of this Section 3.5, each
party shall have the right to change the mailing address for future notices and
communications to such party.
3.6 Binding Effect; Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties thereto and to their respective transferees,
successors, assigns, heirs and administrators; provided, however, that the
rights under this Agreement may not be assigned except as expressly provided
herein. No such assignment shall relieve an assignor of its obligations
hereunder.
3.7 Termination. Without affecting any other provision of this Agreement
requiring termination of any rights in favor of any Stockholder, or any
transferee of Shares, the provisions of Article II of this Agreement shall
terminate as to such Stockholder, or transferee, when, pursuant to and in
accordance with this Agreement, such Stockholder, or transferee, as the case may
be, no longer owns any Shares.
3.8 Recapitalizations, Exchanges, Etc. The provisions of this Agreement
shall apply, to the full extent set forth herein with respect to Shares, to any
and all shares of capital stock of the Company or any successor or assign of the
Company (whether by merger, consolidation, sale of assets or otherwise) which
may be issued in respect of, in exchange for, or in substitution of the Shares,
by reason of a stock dividend, stock split, stock issuance, reverse stock split,
combination, recapitalization, reclassification, merger, consolidation or
otherwise. Upon the occurrence of any such events, amounts hereunder shall be
appropriately adjusted.
3.9 Xxx Representative.
Each Xxx Xxxxxx hereby designates and appoints (and each Permitted
Transferee (other than pursuant to an Institutional Transfer) of each such Xxx
Xxxxxx is hereby deemed to have so designated and appointed) Xxxxxx X. Xxxxx,
Xx., with full power of substitution (the "Xxx Representative"), as the
representative of each such Person to perform all such acts as are required,
authorized or contemplated by this Agreement to be performed by any such Person
and hereby acknowledges that the Xxx Representative shall be the only Person
authorized to take any action so required, authorized or contemplated by this
Agreement by each such Person. Each such Person further acknowledges that the
foregoing appointment and designation shall be deemed to be coupled with an
interest and shall survive the death or incapacity of such Person. Each such
Person hereby authorizes (and each such Permitted Transferee will be deemed to
have authorized) the other parties hereto to disregard any notice or other
action taken by such Person pursuant to this Agreement except for the Xxx
Representative. The other parties hereto are and will be entitled to rely on any
action so taken or any notice given by the Xxx Representative and are and will
be entitled and authorized to give notices only to the Xxx Representative for
any notice contemplated by this Agreement to be given to any such Person. A
successor to the Xxx Representative may be chosen by a majority of the Shares
held by the Xxx Holders, provided that notice thereof is given by the new Xxx
Representative to the Company and to the XXX Holders, the Investor Holders and
the Management Holders.
3.10. Action Necessary to Effectuate the Agreement.
The parties hereto agree to take or cause to be taken all such corporate
and other action as may be necessary to effect the intent and purposes of this
Agreement.
3.11. Purchase for Investment; Legend on Certificate.
Each of the parties acknowledges that all of the Shares held by such
party as shown on Exhibit A hereto are being (or have been) acquired for
investment and not with a view to the distribution thereof and that no transfer,
hypothecation or assignment of Shares may be made except in compliance with
applicable federal and state securities laws. All the certificates of Shares of
the Company which are now or hereafter owned by the Stockholders and which are
subject to the terms of this Agreement shall have endorsed in writing, stamped
or printed, thereon the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
TERMS AND CONDITIONS, INCLUDING RESTRICTION ON TRANSFER, OF A
STOCKHOLDERS' AGREEMENT DATED AS OF MAY 26, 1993, AS AMENDED FROM TIME
TO TIME, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.
3.12. Effectiveness of Transfers.
All Shares transferred by a Stockholder (other than pursuant to an
effective registration statement under the 1933 Act or a Rule 144 Transaction)
shall be held by the transferee thereof pursuant to this Agreement. Such
transferee shall, except as otherwise expressly stated herein, have all the
rights and be subject to all of the obligations of a Stockholder under this
Agreement automatically and without requiring any further act by such transferee
or by any parties to this Agreement. Without affecting the preceding sentence,
if such transferee is not a Stockholder on the date of such transfer, then such
transferee, as a condition to such transfer, shall confirm such transferee's
obligations hereunder in accordance with Section 3.13 hereof. No Shares shall be
transferred on the Company's books and records, and no transfer of Shares shall
be otherwise effective, unless any such transfer is made in accordance with the
terms and conditions of this Section 3.12 and Sections 2.1, 2.2 and 3.13 hereof,
and the Company is hereby authorized by all of the Stockholders to enter
appropriate stop transfer notations on its transfer records to give effect to
this Agreement. Stockholders are, subject to applicable law, free to Transfer
Shares except as explicitly restricted by Sections 2.1, 2.2, 3.12 and 3.13
hereof.
3.13. Additional Stockholders.
Subject to the restrictions on transfers of Shares contained in Sections
2.1, 2.2 and 3.12 hereof, any Person acquiring Shares (except for transferees
acquiring Shares (a) in an offering registered under the 1933 Act or (b) in a
Rule 144 Transaction) shall, on or before the transfer or issuance to it of
Shares, sign a counterpart signature page hereto in form reasonably satisfactory
to the Company and shall thereby become a party to this Agreement. The Company
shall require each Person acquiring an option, warrant or other right to
purchase shares of Common Stock under any option or other equity participation
plan to execute a counterpart signature page hereto and to the Registration
Rights Agreement.
3.14. 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 waiver thereof or otherwise prejudice such party's rights, powers and
remedies. No single or partial exercise of any rights, powers or remedies
conferred by this Agreement shall preclude any other or further exercise thereof
or the exercise of any other right, power or remedy.
3.15. 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 signature need not appear on any one counterpart.
3.16. Headings.
All headings and captions in this Agreement are for purposes of
references only and shall not be construed to limit or affect the substance of
this Agreement.
3.17. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED UNDER
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (REGARDLESS OF
THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE NEW YORK
PRINCIPLES OF CONFLICTS OF LAWS).
[Remainder of Page Intentionally Left Blank]
AMENDED AND RESTATED
STOCKHOLDERS' AGREEMENT
Signature Page
IN WITNESS WHEREOF, the parties have executed this Agreement as an
instrument under SEAL as of the date first above written.
FINLAY ENTERPRISES, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
Name: Xxxxx X. Xxxxxxxxx
Title: President
MANAGEMENT HOLDERS: INVESTOR HOLDERS:
/s/ Xxxxx X. Xxxxxxxxx /s/Xxxxxx X. Xxxxxx
Xxxxx X. Xxxxxxxxx Xxxxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxxx /s/Xxxxx Xxxxxx Xxxxxx
Xxxxxx E. Xxxxxx Xxxxx Xxxxxx Xxxxxx
Executor of the will of
Xxxxxx X. Xxxxxxxxxx
/s/Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
/s/Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
XXX HOLDERS:
EQUITY-LINKED INVESTORS, L.P.
By: Xxxxx X. Xxxxx
Associates, General
Partner
By: /s/Xxxxx X. Xxxxx
EQUITY-LINKED INVESTORS - II
By: Xxxxx X. Xxxxx
Associates - II,
General Partner
By: /s/Xxxxx X. Xxxxx
XXX HOLDERS:
/s/Xxxxxx X. Xxxxx, Xx.
Xxxxxx X. Xxxxx, Xx., individually
and as Xxx Representative for Xxxxxx X.
Xxx Equity Partners, L.P., 1989
Xxxxxx X. Xxx Nominee Trust, Xxxx X.
Childs, Xxxxx X. Xxxxxxx, Xxxxxx X.
Xxxxxxxx, X. Xxxxxx Xxxx, Xxxxx X.
Xxxxxxxx, Xxxxx X. Xxxxxx, Xxxxxx X.
Xxxxxxxxx, Xxxxxx X. Xxxxx,
Xxxxx X. Xxxxxx, Xxxxxxx Xxxxxx,
SGS Family Limited Partnership,
Xxxxxxx X. XxXxxx, Xxxxxx X. Xxxxxxx,
Xxxxx X. Xxxxxxx, Xxxxxxx X. Xxxxxx,
Xxxxx Xxxxxx, Xxxx X. Xxxxxxxx,
Xxxx X. Xxxxxx, Xxxx X. Xxxxxx,
Xxxxxx X. Xxxxxxx, Xxxxx X. Xxxxxx,
Xxxxxxxx X. Xxxxxxxx and Xxxxxxxx X.
Xxxxxx
Stockholders' Agreement
Management Holder Counterpart
Signature Page
IN WITNESS WHEREOF, the undersigned holder of equity securities of the
Company has executed this counterpart signature page to this Agreement as an
instrument under SEAL as of the date first above written and agrees to be bound
by the provisions hereof as a Management Holder.
Name:
Date:
SCHEDULE A
Schedule of Stockholders
Options, Warrants
and Other Rights
Number of Shares to Purchase
Stockholder of Common Stock * Common Stock
Xxxxxx X. Xxx Equity
Partners, L.P. 1,796,509 0
Xxxxx Xxxxxx Bank and
Trust Company as trustee
for 1989 Xxxxxx X. Xxx
Nominee Trust 99,823 0
Xxxx X. Childs 14,618 0
Xxxxx X. Xxxxxxx 4,872 0
Xxxxxx X. Xxxxxxxx 2,924 0
X. Xxxxxx Xxxx 3,654 0
Xxxxx X. Xxxxxx 2,292 0
Xxxxxx X. Xxxxx, Xx. 4,872 0
Xxxxxx X. Xxxxxxxxx 1,603 0
Xxxxxx X. Xxxxx 1,067 0
SGS Family Limited Partnership 1,125 0
Xxxxxxx X. XxXxxx 2,192 0
Xxxxxx X. Xxxxxxx 2,192 0
Xxxxx X. Xxxxxxx 730 0
Xxxxxxx X. Xxxxxx 687 0
Xxxxx Xxxxxx 687 0
Xxxx X. Xxxxxxxx 274 0
Xxxx X. Xxxxxx 550 0
Xxxx X. Xxxxxx 91 0
Xxxxxx X. Xxxxxxx 343 0
Xxxxx X. Xxxxxx 320 0
Xxxxxxxx X. Xxxxxxxx 320 0
Xxxxxxxx X. Xxxxxx 687 0
Equity-Linked Investors, L.P. 318,379 0
c/o Desai Capital Management
Incorporated
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Equity-Linked Investors-II 235,324 0
c/o Desai Capital Management
Incorporated
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Xxxxx X. Xxxxxxxxx 451,372 0
000 Xxxx 00xx Xx.
Xxx Xxxx, XX 00000
Xxxxxx Xxxxxxxx 101,876 6,656
000 Xxxx 00xx Xx. #0000
Xxx Xxxx, XX 00000
Estate of Xxxxxx X. Xxxxxxxxxx 76,538 30,008
c/o Zimet, Haines, Xxxxxxxx &
Xxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Xxxxxx X. Xxxxxx 82,588 0
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Xxxxx Xxxxxx Xxxxxx 4,000 0
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Xxxxxxx Xxxxxxx 984 0
Financo, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx
Xxxxxx X. Xxxxxx 138,525 69,263
00 X. 00xx Xxxxxx
Xxx. 0X
Xxx Xxxx, XX 00000
Xxxxxx X. Xxxxxxx 0 50,000
c/o Tanner & Co.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
* This Schedule shall be deemed amended without any further action or
delivery by adding the shares issued in exchange for the outstanding
shares of the Company's 10% Series C Cumulative Redeemable Preferred
Stock.
