Contract
Exhibit
2
This
AGREEMENT, dated as of October 25, 2009 (the "Agreement"), is by
and among Xxxx Xxxxx, Inc., a Maryland corporation (the "Company"), and the
other entities and persons signatory hereto (collectively, the "Investors").
WHEREAS,
the Board of Directors of the Company (the "Board") intends to
(1) increase the size of the Board from thirteen (13) to fourteen (14) members
and (2) appoint Xxxxxx Xxxxx as a director to fill the newly created vacancy,
with a term expiring in 2010;
WHEREAS,
at the Company's 2010 annual meeting of shareholders, the Board intends to
nominate Xx. Xxxxx for election as a member of the Board with a term expiring at
the Company's 2013 annual meeting of shareholders, and recommend that the
shareholders of the Company vote to elect him as a director of the
Company;
WHEREAS,
the Investors economically own (as defined below) the interests in Common Stock,
$0.10 par value, of the Company (the "Common Stock")
specified on Schedule A of this Agreement; and
WHEREAS,
the Investors support the election of the new director to the
Board;
NOW,
THEREFORE, in consideration of the mutual covenants and agreements contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
ARTICLE
I
REPRESENTATIONS
Section
1.1 Authority; Binding
Agreement. (a) The Company hereby represents that
this Agreement and the performance by the Company of its obligations hereunder
(i) has been duly authorized, executed and delivered by it, and is a valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, (ii) does not require the approval of the shareholders of the
Company and (iii) does not and will not violate any law, any order of any court
or other agency of government, the Articles of Incorporation of the Company, as
amended and supplemented, or the By-laws of the Company, as amended and
restated, or any stock exchange rule or regulation, or any provision of any
indenture, agreement or other instrument to which the Company or any of its
properties or assets is bound, or conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any such
indenture, agreement or other instrument, or result in the creation or
imposition of, or give rise to, any lien, charge, restriction, claim,
encumbrance or adverse penalty of any nature whatsoever pursuant to any such
indenture, agreement or other instrument.
(b)Each
of the Investors represents and warrants that this Agreement and the performance
by such Investor of its obligations hereunder (i) has been duly authorized,
executed and delivered by such Investor, and is a valid and binding obligation
of such Investor, enforceable against such Investor in accordance with its
terms, (ii) does not require approval by any owners or holders of any equity
interest in such Investor (except as has already been obtained) and (iii) does
not and will not violate any law, any order of any court or other agency of
government, the charter or other organizational documents of such Investor, as
amended, or any provision of any agreement or other instrument to which such
Investor or any of its properties or assets is bound, or conflict with, result
in a breach of or constitute (with due notice or lapse of time or both) a
default under any such agreement or other instrument, or result in the creation
or imposition of, or give rise to, any lien, charge, restriction, claim,
encumbrance or adverse penalty of any nature whatsoever pursuant to any such
agreement or instrument.
Section
1.2 Interests in Common
Stock. The Investors hereby represent and warrant that, as of
the date hereof, they and their Affiliates (as such term is hereinafter defined)
are, collectively, the "economic owners" (as such term is hereinafter defined)
of such number of shares of Common Stock as are accurately and completely set
forth (including, without limitation, as to the form of ownership) on Schedule
A, and none of the Investors or any of their Affiliates economically own any
other securities of the Company. During the Standstill Period, Trian
Fund Management, L.P. ("TFM"), on behalf of the Investors, shall promptly (and
in any event within three business days) notify the Company in writing upon the
Investors (a) first beneficially owning, in the aggregate, the Minimum
Percentage of shares of Common Stock, which notice shall identify each of the
entities owning any shares of Common Stock and the number of shares beneficially
owned by such entity, (b) ceasing to beneficially own, in the aggregate, the
Minimum Percentage of shares of Common Stock and (c) becoming the economic
owners, in the aggregate, of more than 9.9% of the then outstanding shares of
Common Stock. At any time during the Standstill Period in which (a)
the Investors beneficially own, in the aggregate, at least the Minimum
Percentage of shares of Common Stock and (b) the Investors no longer report on
Schedule 13D with the Securities and Exchange Commission (the "SEC") the
Investors' beneficial ownership of Common Stock, TFM, on behalf of the Investors
shall, upon request of the Company (which request shall not be made more than
once during any quarterly period), promptly (and no later than five business
days after the request is made) provide the Company with a written report
specifying the number of shares of Common Stock beneficially owned, in the
aggregate, by the Investors as of the close of business on the date immediately
preceding such request.
Section
1.3 Defined
Terms. For purposes of this Agreement:
(a)
Except as provided in Section 2.7 hereof, the term "Affiliate" has
the meaning set forth in Rule 12b-2 promulgated by the SEC under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), but
shall not include any entity whose equity securities are registered under the
Exchange Act (or are publicly traded in a foreign jurisdiction), solely by
reason of the fact that a principal of any of the Investors serves as a member
of its board of directors or similar governing body, unless the Investors or
their Affiliates otherwise control such entity (as the term "control" is defined
in Rule 12b-2 promulgated by the SEC under the Exchange Act). For
purposes of this Agreement, the Investors, on the one hand, and the Company, on
the other, shall not be deemed to be affiliates of each other.
(b) The
terms "beneficial
owner" and "beneficially own"
shall have the same meanings as set forth in Rule 13d-3 ("Rule 13d-3")
promulgated by the SEC under the Exchange Act. The terms "economic owner" and
"economically
own" shall have the same meanings as "beneficial owner" and "beneficially
own," except that a person will also be deemed to economically own and to be the
economic owner of (i) all shares of Common Stock which such person has the right
to acquire pursuant to the exercise of any rights in connection with any
securities or any agreement, regardless of when such rights may be exercised and
whether they are conditional, and (ii) all shares of Common Stock in which
such person has any economic interest, including, without limitation, pursuant
to a cash settled call option or other derivative security, contract or
instrument in any way related to the price of shares of Common
Stock.
(c) The
"Standstill
Period" means the period from the date of this Agreement through the
earlier of (w) the date that is 60 days prior to the first day of the notice
period specified in the advance notice provision applicable to the Company's
2013 annual meeting of shareholders (whether pursuant to applicable law or
regulation or the Company's Articles of Incorporation or By-laws, each as may
hereafter be amended), (x) March 31, 2012, if the Director Designee has
delivered to the Company a notice of resignation from the Board not less than 30
days prior to such date (in which case, if there are then less than 30 days
remaining in the advance notice period for the Company's 2012 annual meeting of
shareholders, the Board shall waive the advance notice provision in the
Company's By-laws until April 30, 2012 so as to permit the Investors to nominate
one or more or a slate of directors at the Company's 2012 annual meeting of
shareholders), (y) that date that is 30 days after the date that the Director
Designee has delivered to the Company a notice of resignation from the Board if
such date of delivery is subsequent to March 1, 2012 and (z) if the Company
shall have materially breached this Agreement and shall not have cured such
breach within 15 days following written notice from the Investors describing
such breach in reasonable detail, the date on or after such 15 day period on
which the Investors have provided the Company written notice of the termination
of the Standstill Period; provided, however, that the
Investors may terminate the Standstill Period at any time by written notice to
the Company in the event that (a) a Non-Election Date occurs, (b) the Director
Designee is removed from the Board (for the avoidance of doubt, not including
any resignation required hereunder), or (c)(i) the Director Designee is unable
to serve as a director of the Company as a result of his death or incapacity and
(ii) the Company and the Investors fail to agree on a replacement, or the Board
fails to appoint such agreed replacement to the Board, within 90 days following
the date that he ceased to be a director of the Company (in the event that a
replacement is agreed and appointed pursuant to the foregoing subclauses (a) or
(c), references to the applicable former director in Section 2.1(a), Section
2.1(b) and Section 2.1(c) shall be deemed to be references to such
replacement). The Company and the Investors agree that each of Xxxxx
X. May and Xxxxxx X. Garden shall be an acceptable replacement for the Director
Designee.
(d)
"Non-Election
Date" means (i) the 45th day following the Company's 2010 annual meeting
of shareholders if (x) the Director Designee (or any agreed upon replacement) is
not elected at the Company's 2010 annual meeting of shareholders, and (y) the
Director Designee or any replacement agreed upon by the Company and the
Investors has not been appointed to the Board with a term expiring at the
Company's 2013 annual meeting of shareholders, (ii) the 45th day following the
Company's 2011 annual meeting of shareholders if (x) applicable law requires the
Director Designee (or any agreed upon replacement) to be elected by shareholders
at the Company's 2011 annual meeting of shareholders in order for the Director
Designee (or any agreed upon replacement) to complete his term expiring at the
Company's 2013 annual meeting of shareholders, (y) the Director Designee (or any
agreed upon replacement) is not elected at the Company's 2011 annual meeting of
shareholders, and (z) the Director Designee or any replacement agreed upon by
the Company and the Investors has not been appointed to the Board with a term
expiring at the Company's 2013 annual meeting of shareholders, or (iii) the 45th
day following the Company's 2012 annual meeting of shareholders if (x)
applicable law requires the Director Designee (or any agreed upon replacement)
to be elected by shareholders at the Company's 2012 annual meeting of
shareholders in order for the Director Designee (or any agreed upon replacement)
to complete his term expiring at the Company's 2013 annual meeting of
shareholders, (y) the Director Designee (or any agreed upon replacement) is not
elected at the Company's 2012 annual meeting of shareholders, and (z) the
Director Designee or any replacement agreed upon by the Company and the
Investors has not been appointed to the Board with a term expiring at the
Company's 2013 annual meeting of shareholders. A failure to elect or
appoint the Director Designee (or any agreed upon replacement) in accordance
with the terms of this Agreement shall not result in a "Non-Election Date" to
the extent resulting solely from the refusal of the Director Designee (or any
agreed upon replacement) to serve.
(e)"Extraordinary Matter"
means (x) any merger, consolidation, share exchange, recapitalization, or other
business combination, in each case as a result of which the holders of the
Common Stock of the Company immediately prior to the consummation of such
transaction would cease to own at least a majority of the outstanding shares of
common stock of the resulting company (or, if such resulting company is a
subsidiary, then the ultimate parent company) or (y) any liquidation,
dissolution or sale of all or substantially all of the assets of the Company, in
each case referred to in (x) or (y) that is subject to Company shareholder
approval.
(f)
"Physical
Shares" means shares beneficially owned by the Investors as to which the
Investors directly or indirectly have voting and investment power and which are
held either of record by the Investors or through a broker, dealer, agent,
custodian or other nominee who is the holder of record of such
shares. For the avoidance of doubt, it is understood that (i)
"Physical Shares" shall not include shares beneficially owned by the Investors
solely as a result of the operation of (x) clauses (i) and (ii) of Section
1.3(b) hereof or (y) Rule 13d-3(d)(1)(i)(A)-(B), and (ii) the fact that
shares are held in a margin account or are pledged as collateral pursuant to
customary loan documentation shall not result in such shares not being
considered Physical Shares unless and until such shares are liquidated pursuant
to a margin call or otherwise foreclosed upon by the applicable broker, lender
or other third party.
ARTICLE
II
COVENANTS
Section
2.1 Director. (a) As
promptly as practicable following the date of this Agreement, the Board shall
(i) increase the size of the Board from thirteen (13) to fourteen (14)
directors, (ii) appoint Xxxxxx Xxxxx as a director of the Company with a term
expiring at the Company's 2010 annual meeting (the "Director Designee")
and (iii) appoint the Director Designee to serve on the Nominating and Corporate
Governance Committee of the Board. The Director Designee shall be
entitled to serve as a member of the Nominating and Corporate Governance
Committee of the Board (or any committee performing such functions) at
all times that the Director Designee shall serve as a member of the Board,
subject to the Director Designee satisfying and continuing to satisfy applicable
New York Stock Exchange requirements and other applicable law. By
entering into this Agreement, the Director Designee (including any agreed upon
replacement) hereby agrees to resign as a member of the Board on the first date
on which both (x) either (I) the Standstill Period has terminated, or (II) the
Investors do not beneficially own, for a period of 30 consecutive days, Physical
Shares of Common Stock equal to at least 5.0% of the outstanding shares of
Common Stock calculated as provided in the last sentence of Section 2.5 hereof
(the "Minimum
Percentage") (each of the foregoing (I) and (II), a "Triggering Event")
and (y) five days have elapsed since the Triggering Event and the Board (acting
directly rather than by committee) has requested in writing the Director
Designee's resignation, in which case the resignation shall take effect at the
time the Board has delivered such request to the Director Designee and the
Investors. The Director Designee also agrees to resign in accordance
with Section 3.1(b) under the circumstances specified therein. For
the avoidance of doubt, the Company may at any time or from time to time
increase or decrease the size of the Board and/or change its composition,
provided that such increase or decrease may not affect the tenure of the
Director Designee.
(b) The
Company agrees that, provided that the Standstill Period has not terminated, the
Board will:
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(1)
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at
the 2010 annual meeting of shareholders, nominate the Director Designee
(other than in the case of his refusal or inability to serve), together
with the other persons included in the Company's slate of nominees for
election as director at such 2010 annual meeting, as a director of the
Company, with a term expiring at the Company's 2013 annual meeting;
and
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(2)
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recommend
that the shareholders of the Company vote to elect the Director Designee
as a director of the Company at the 2010 annual meeting of
shareholders.
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(c) The
Company shall use all reasonable best efforts (which shall include the
solicitation of proxies) to ensure that the Director Designee is elected at the
2010 annual meeting of shareholders.
Section
2.2 Voting
Provisions. During the Standstill Period, the Investors,
together with their respective Affiliates, will cause all shares of Common Stock
for which they have the right to vote to be present for quorum purposes and to
be voted at any meeting of shareholders or at any adjournments or postponements
thereof, (x) in favor of each director nominated and recommended by the Board
for election at any such meeting and (y) against any shareholder nominations for
director which are not approved and recommended by the Board for election at any
such meeting.
Section
2.3 Actions
by the Investors. Each of the Investors agrees that, during
the Standstill Period, neither it nor any of its Affiliates will, unless
specifically requested or authorized in writing by a resolution of the Board,
directly or indirectly:
(a) purchase
or cause to be purchased or otherwise acquire or agree to acquire economic
ownership of (i) any Common Stock, if in any such case, immediately after the
taking of such action the Investors, together with their respective Affiliates,
would, in the aggregate, economically own more than 9.9% of the then outstanding
shares of Common Stock (the parties agree that (A) it shall not be a breach of
this Agreement if the Investors inadvertently economically own more than such
9.9% if as soon as practicable the Investors divest themselves of economic
ownership of sufficient shares so that they cease to economically own more than
9.9% of the then outstanding shares of Common Stock, (B) it shall not
be a breach of this Section 2.3(a) if the Investors' economic ownership of
shares exceeds such 9.9% limitation solely as a result of share purchases,
reverse share splits or other actions taken by the Company that by reducing the
number of shares outstanding cause the Investors' economic ownership to exceed
such 9.9% limitation, so long as the Investors' economic ownership shall not
increase thereafter (except solely as a result of further corporate actions
taken by the Company), unless and until the Investors' economic ownership before
and after such subsequent increase does not exceed such 9.9% limitation, and (C)
for purposes of any calculation under this Section 2.3(a), the number of
outstanding shares of Common Stock then outstanding shall be the number as of
the latest date set forth in the Company's most recently filed Quarterly Report
on Form 10-Q or Form 10-K or, if more recently filed, Form 8-K, or (ii) any
other securities issued by the Company;
(b) form,
join in or in any other way participate in a "partnership, limited partnership,
syndicate or other group" within the meaning of Section 13(d)(3) of the Exchange
Act with respect to the Common Stock or deposit any shares of Common Stock in a
voting trust or similar arrangement or subject any shares of Common Stock to any
voting agreement or pooling arrangement, or grant any proxy with respect to any
shares of Common Stock (other than to a designated representative of the Company
pursuant to a proxy solicitation on behalf of the Board), other than solely with
other Investors or one or more Affiliates of an Investor with respect to the
shares of Common Stock acquired in compliance with paragraph (a) above or to the
extent such a group may be deemed to result with the Company or any of its
Affiliates as a result of this Agreement;
(c)
solicit proxies or written consents of shareholders, or conduct any binding or
nonbinding referendum with respect to Common Stock, or make, or in any way
participate in, any "solicitation" of any "proxy" within the meaning of Rule
14a-1 promulgated by the SEC under the Exchange Act (but without regard to the
exclusion set forth in Rule 14a-1(l)(2)(iv) from the definition of
"solicitation") to vote any shares of Common Stock with respect to any matter,
or become a participant in any contested solicitation for the election of
directors with respect to the Company (as such terms are defined or used in the
Exchange Act and the Rules promulgated thereunder), other than solicitations or
acting as a participant in support of the voting obligations of the Investors
and their Affiliates pursuant to Section 2.2;
(d) seek
to call, or to request the call of, or call a special meeting of the
shareholders of the Company, or seek to make, or make, a shareholder proposal
(whether pursuant to Rule 14a-8 under the Exchange Act or otherwise) at any
meeting of the shareholders of the Company, or make a request for a list of the
Company's shareholders, or seek election to the Board, seek to place a
representative on the Board or seek the removal of any director from the Board,
or otherwise acting alone, or in concert with others, seek to control or
influence the governance or policies of the Company;
(e)
effect or seek to effect (including, without limitation, by entering into any
discussions, negotiations, agreements or understandings whether or not legally
enforceable with any third person), offer or propose (whether publicly or
otherwise) to effect, or cause or participate in, or in any way assist or
facilitate any other person to effect or seek, offer or propose (whether
publicly or otherwise) to effect or participate in, (i) any acquisition of any
securities (or economic ownership thereof as defined herein), or any material
assets or businesses, of the Company or any of its subsidiaries, except
purchases of Common Stock pursuant to the limits specified in paragraph
(a) above, (ii) any tender offer or exchange offer, merger, acquisition,
share exchange or other business combination involving the Company or any of its
subsidiaries, or (iii) any recapitalization, restructuring, liquidation,
disposition, dissolution or other extraordinary transaction with respect to the
Company or any of its subsidiaries or any material portion of its or their
businesses;
(f)
publicly disclose, or cause or facilitate the public disclosure (including
without limitation the filing of any document or report with the SEC or any
other governmental agency or any disclosure to any journalist, member of the
media or securities analyst) of any intent, purpose, plan or proposal to obtain
any waiver, or consent under, or any amendment of, any of the provisions of
Sections 2.2 or 2.3, or otherwise (i) seek in any manner to obtain any waiver,
or consent under, or any amendment of, any provision of this Agreement or (ii)
bring any action or otherwise act to contest the validity of Section 2.2 or 2.3
or seek a release from the restrictions or obligations contained in Section 2.2
or 2.3;
(g) make
or issue or cause to be made or issued any public disclosure, announcement or
statement (including without limitation the filing of any document or report
with the SEC or any other governmental agency or any disclosure to any
journalist, member of the media or securities analyst) (i) in support of any
solicitation described in paragraph (c) above (other than solicitations on
behalf of the Board), (ii) in support of any matter described in paragraph (d)
above, (iii) concerning any potential matter described in paragraph (e) above or
(iv) negatively commenting upon the Company, including the Company's corporate
strategy, business, corporate activities or management; or
(h) enter
into any discussions, negotiations, agreements or understandings with any person
or entity with respect to the foregoing, advise, assist, encourage, support or
seek to persuade others to take any action with respect to any of the foregoing,
or act in concert with others or as part of a group (within the meaning of
Section 13(d)(3) of the Exchange Act) with respect to any of the
foregoing.
In the
event the Company has announced or entered into a binding agreement providing
for, or has recommended that its shareholders support, an Extraordinary Matter,
the provisions of this Section 2.3 shall not operate to prevent the Investors
from proposing or taking any actions in furtherance of or consummating a
competing Extraordinary Matter, but all of the other provisions of this
Agreement shall continue in full force and effect.
Notwithstanding
anything herein to the contrary, nothing in this Section 2.3 shall be deemed to
in any way restrict or limit (a) the Director Designee from, in his capacity as
a member of the Board, confidentially expressing or advocating for his views to
other members of the Board or during Board meetings or (b) the Investors'
ability to (i) discuss any matter confidentially with the Company, the Board or
any of its members, or (ii) vote their shares of Common Stock on any matter
brought before the shareholders of the Company in any manner that they choose,
other than as expressly provided in Section 2.2 above, (iii) sell any shares of
Common Stock, including, without limitation, pursuant to a Company or
third-party tender offer or exchange offer, or (iv) communicate, on a
confidential basis, with attorneys, accountants or financial advisers (excluding
any such advisor who has taken, takes or is expected by the Investors to take
any action that if taken by the Investors would violate this Section
2.3).
Section
2.4 Additional
Preparations by the Investors. As of the date of this
Agreement, the Investors are not engaged in any discussions or negotiations and
do not have any agreements or understandings, whether or not legally
enforceable, concerning the acquisition of economic ownership of any Common
Stock, other than with investors or potential investors in funds and accounts
managed or to be managed by TFM or an Affiliate thereof.
Section
2.5 Ownership
Commitment. The Investors will use their commercially
reasonable efforts (taking into account fiduciary duties, legal obligations and
requirements, the Company's Xxxxxxx Xxxxxxx Policy, economic and
financial conditions, market and trading prices and conditions and other
relevant matters) to cause the Investors and their Affiliates (a) by or before
December 31, 2009, to beneficially own an aggregate amount of shares of Common
Stock equal to at least 6.0% of the Company's outstanding shares of Common Stock
and (b) by or before April 30, 2010, to beneficially own an aggregate amount of
shares of Common Stock equal to at least 8.0% of the Company's outstanding
shares of Common Stock. For purposes of any calculation of the
Minimum Percentage and under this Section 2.5, the number of the Company's
outstanding shares of Common Stock shall be the lesser of (A) 161,261,167 and
(B) that number of shares set forth as outstanding in any filing of the Company
made with the SEC after the date of this Agreement under the Exchange Act or the
Securities Act of 1933, as amended.
Section
2.6 Publicity. Promptly
after the execution of this Agreement, the Company and the Investors will issue
a joint press release in the form attached hereto as Schedule B (the "Joint Press
Release").
Section
2.7 Maryland
Law (a) The Company covenants and agrees that if the Company
shall repurchase shares of Common Stock, effect a reverse stock split or
otherwise take any action that, by reducing the number of shares outstanding,
would, solely as a result of such stock repurchase, stock split or Company
action, increase the beneficial ownership of the Investors and its Affiliates to
greater than 9.9% (each of the foregoing Company actions, a "Share Reducing
Action"), the Company and/or the Board shall take all action necessary
such that, solely as a result of such Share Reducing Action (or any successive
Share Reduction Action), none of the Investors and/or their Affiliates and/or
Associates (as such terms are defined in the Maryland Business Combination Act
(Title 3, Subtitle 6 of the Maryland General Corporation Law)) will become an
"interested stockholder" (as that term is defined in the Maryland Business
Combination Act), such Board action to remain in effect until such time, if any,
as the Investors and/or their Affiliates acquire beneficial ownership of any
additional shares of Common Stock (other than solely as a result of further
Share Reducing Actions) at a time when the Investors and their Affiliates
otherwise have or would have as a result of such acquisition beneficial
ownership of more than 9.9% of the then outstanding shares of Common
Stock. Any action taken by the Company or the Board pursuant to this
Section 2.7(a), and the obligations of the Company or the Board pursuant to this
Section 2.7(a), shall survive the termination of this Agreement.
(b) The
Company agrees that if during the Standstill Period it shall adopt any
anti-takeover measure, including, without limitation, a shareholder rights plan,
board resolution or a by-law amendment that would have an anti-takeover effect
(including opting into the provisions in 3-803 to 3-805 of the Maryland General
Corporation Law), it shall provide that such action will not prevent the
Investors and/or their Affiliates from taking any actions that would not
otherwise be prohibited during the Standstill Period by this
Agreement.
Section
2.8 Other
Directorships. The Company acknowledges that the Director
Designee currently sits on the Boards of Directors of three other public
companies. The Company represents and warrants to the Investors that
the Nominating and Corporate Governance Committee and the Board have taken all
action necessary to approve the Director Designee serving on the Boards of
Directors of the Company and such other three public companies upon his
appointment to the Board and have adopted such resolutions and taken such other
actions as are necessary for the Board to permit, without the prior consent of
the Nominating and Corporate Governance Committee or the Board notwithstanding
the Company's policy relating to service on multiple public company boards of
directors, the Director Designee (or any agreed upon replacement) to serve on up
to six public company Boards of Directors at any one time (including the Board)
at any time that the Director Designee shall serve on the Board and to provide
that such resolution shall remain in full force and effect at all times during
the Standstill Period.
Section
2.9. Economic Ownership of
Shares. The Company acknowledges that the acquisition by the
Investors of economic ownership of shares of Common Stock through privately
negotiated back-to-back call and put transactions pursuant to which,
simultaneously with the purchase of each call option, the Investors also sell a
put option for the same number of shares of Common Stock and which may, at the
option of the Investors, be settled in shares of Common Stock, or any similar
transaction that results in the Investors economically owning the equivalent of
shares of Common Stock, cash settled call options or other derivative
securities, contracts or instruments related to the price of shares of Common
Stock, will not violate, or result in the breach of, any of the
Company's policies applicable to directors of the Company, including without
limitation, in the Policies and Procedures Regarding Acquisitions and
Dispositions of Xxxx Xxxxx Securities. For the avoidance of doubt,
the foregoing does not apply with respect to and is not a waiver of the
Company's policies relating to trading windows, reporting, xxxxxxx xxxxxxx,
short sales or pre-clearance.
ARTICLE
III
OTHER
PROVISIONS
Section
3.1 Specific Performance;
Remedies. (a) Each party hereto hereby acknowledges
and agrees, on behalf of itself and its Affiliates, that irreparable harm would
occur in the event any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties will be entitled to specific relief
hereunder, including, without limitation, an injunction or injunctions to
prevent and enjoin breaches of the provisions of this Agreement and to enforce
specifically the terms and provisions hereof (other than the terms of Section
2.5 hereof) in the Chancery Court of the State of Delaware or if such court does
not accept jurisdiction then any state or federal court in the State of
Delaware, or, if such courts do not accept jurisdiction then any state or
federal court in the State of New York, in addition to any other remedy to which
they may be entitled at law or in equity. Any requirements for the
securing or posting of any bond with such remedy are hereby waived.
(b) Notwithstanding
any other section in this Agreement and without limiting any other remedies the
Company may have in law or equity, in the event that the Investors shall have
materially breached this Agreement and shall not have cured such breach within
15 days following written notice describing such breach in reasonable detail
from the Company, the Director Designee shall, upon the written request of the
Board, resign as a member of the Board, such resignation to be effective as of
the time the Board has delivered such request to the Director Designee and the
Investors.
(c) Each
party hereto agrees, on behalf of itself and its Affiliates, that any actions,
suits or proceedings arising out of or relating to this Agreement or the
transactions contemplated hereby will be brought solely and exclusively in the
Chancery Court of the State of Delaware, or if such court does not accept
jurisdiction then any federal court in the State of Delaware, or, if such courts
do not accept jurisdiction then any state or federal court in the State of New
York (and the parties agree not to commence any action, suit or proceeding
relating thereto except in such courts), and further agrees that service of any
process, summons, notice or document by U.S. registered mail to the respective
addresses set forth in Section 3.3 will be effective service of process for any
such action, suit or proceeding brought against any party in any such
court. Each party, on behalf of itself and its Affiliates,
irrevocably and unconditionally waives any objection to the laying of venue of
any action, suit or proceeding arising out of this Agreement or the transactions
contemplated hereby, in the Chancery Court of the State of Delaware or if such
court does not accept jurisdiction then the federal courts in the State of
Delaware, or, if such courts do not accept jurisdiction then any state or
federal court in the State of New York, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such action, suit or proceeding brought in any such court has been brought
in an improper or inconvenient forum.
Section
3.2 Entire
Agreement. This Agreement contains the entire understanding of
the parties with respect to the subject matter hereof and may be amended only by
an agreement in writing executed by the parties hereto.
Section
3.3 Notices. All
notices, consents, requests, instructions, approvals and other communications
provided for herein and all legal process in regard hereto shall be in writing
and shall be deemed validly given, made or served, if (a) given by telecopy,
when such telecopy is transmitted to the telecopy number set forth below and the
appropriate confirmation is received or (b) if given by any other means, when
actually received during normal business hours at the address specified in this
subsection:
if
to the Company:
Xxxx Xxxxx,
Inc.
000
Xxxxxxxxxxxxx Xxxxx
Xxxxxxxxx,
Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Corporate
Secretary
with
a copy to:
Wachtell,
Lipton, Xxxxx & Xxxx
00 Xxxx 00xx
Xxxxxx
Xxx Xxxx,
XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxx
Xxxxxxxx X. Xxxxx
if
to the Investors:
000 Xxxx
Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx
Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Chief
Legal Officer
Section
3.4 Governing
Law. This Agreement and any claim, controversy or dispute
arising under or related to this Agreement, the relationship of the parties,
and/or the interpretation and enforcement of the rights and duties of the
parties shall be governed by and construed and enforced in accordance with the
laws of the State of Delaware, without regard to any conflict of laws provisions
thereof.
Section
3.5 Further
Assurances. Each party agrees to take or cause to be taken
such further actions, and to execute, deliver and file or cause to be executed,
delivered and filed such further documents and instruments, and to obtain such
consents, as may be reasonably required or requested by the other parties in
order to effectuate fully the purposes, terms and conditions of this
Agreement.
Section
3.6 Third-Party
Beneficiaries. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective successors and
assigns, and nothing in this Agreement (other than Section 2.7 hereof) is
intended to confer on any person other than the parties hereto or their
respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
Section
3.7 Counterparts;
Miscellaneous. This Agreement may be executed and delivered
(including by facsimile transmission or .pdf format) 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. The headings
used herein are for convenience only and the parties agree that such headings
are not to be construed to be part of this Agreement or to be used in
determining the meaning or interpretation of this Agreement. Unless
the context otherwise requires, whenever used in this Agreement the singular
shall include the plural, the plural shall include the singular, and the
masculine gender shall include the neuter or feminine gender and vice
versa.
Section
3.8 Interpretation. Each
of the parties hereto acknowledges that it has been represented by counsel of
its choice throughout all negotiations that have preceded the execution of this
Agreement, and that it has executed the same with the advice of said
counsel. Each party and its counsel cooperated and participated in
the drafting and preparation of this Agreement and the documents referred to
herein, and any and all drafts relating thereto exchanged among the parties
shall be deemed the work product of all of the parties and may not be construed
against any party by reason of its drafting or
preparation. Accordingly, any rule of law or any legal decision that
would require interpretation of any ambiguities in this Agreement against any
party that drafted or prepared it is of no application and is hereby expressly
waived by each of the parties hereto.
[Remainder of Page Intentionally Left
Blank]
IN
WITNESS WHEREOF, each of the parties hereto has executed this Agreement, or
caused the same to be executed by its duly authorized representative as of the
date first above written.
|
|
|
XXXX
XXXXX, INC.
By: /s/ Xxxx X.
Xxxxxxx
Name: Xxxx
X. Xxxxxxx
Title: Chief
Executive Officer
/s/ Xxxxxx
Peltz__________________
Xxxxxx
Xxxxx
/s/ Xxxxx X.
May__________________
Xxxxx X.
May
/s/ Xxxxxx X.
Garden_______________
Xxxxxx X.
Garden
TRIAN
PARTNERS GP, L.P.
By: Trian
Partners General Partner, LLC,
its
General Partner
By: /s/ Xxxxxx X.
Garden
Name:
Xxxxxx X. Garden
Title:
Member
TRIAN
PARTNERS, L.P.
By: Trian
Partners GP, L.P., its General Partner
By: Trian
Partners General Partner, LLC,
its
General Partner
By: /s/ Xxxxxx X.
Garden
Name:
Xxxxxx X. Garden
Title:
Member
TRIAN SPV
(SUB) V, L.P.
By: Trian
Partners GP, L.P., its General Partner
By: Trian
Partners General Partner, LLC,
ots
General Partner
By: /s/ Xxxxxx X.
Garden
Name:
Xxxxxx X. Garden
Title:
Member
TRIAN
PARTNERS MASTER FUND, L.P.
By: Trian
Partners GP, L.P., its General Partner
By: Trian
Partners General Partner, LLC,
its
General Partner
By: /s/ Xxxxxx X.
Garden
Name:
Xxxxxx X. Garden
Title:
Member
TRIAN
PARTNERS PARALLEL FUND I, L.P.
By: Trian
Partners Parallel Fund I General Partner,
LLC, its
General Partner
By: /s/ Xxxxxx X.
Garden
Name:
Xxxxxx X. Garden
Title:
Member
By: Trian
Fund Management GP, LLC,
its
General Partner
By: /s/ Xxxxxx X.
Garden
Name:
Xxxxxx X. Garden
Title:
Member
SCHEDULE
A
The
Investors beneficially own, in the aggregate, 6,946,756 shares of Common
Stock. The Investors that own such shares and the number of shares
that they beneficially own are set forth below.
|
Investor
|
Shares of Common Stock
|
|
Trian
Partners Master Fund, L.P.
|
3,842,239
|
|
Trian
Partners, L.P.
|
1,393,987
|
|
Trian
Partners Parallel Fund I, L.P.
|
134,846
|
|
Trian
SPV (SUB) V, L.P.
|
1,575,684
|
|
|
SCHEDULE
B
|
For
Immediate Release
Investor
Relations:
Xxxx
Xxxxxxx
000-000-0000
Media:
Xxxx
Xxxxxxxx
000-000-0000
Xxxx
Xxxxx To Elect Xxxxxx Xxxxx to Board of Directors
Baltimore,
Maryland -- October 26, 2009 -- Xxxx Xxxxx, Inc. (NYSE: LM) announced today that
Xxxxxx Xxxxx, Chief Executive Officer and a founding partner of Trian Fund
Management, L.P., ("Trian Partners") will be elected to the Company's Board of
Directors, expanding the Board to 14 members, including 13 independent
directors. He will be elected on Tuesday, October 27,
2009.
Xxxx X.
Xxxxxxx, Xxxx Xxxxx'x Chairman and Chief Executive Officer, said, "We welcome
Xxxxxx, whose firm is a significant investor in Xxxx Xxxxx, as the newest member
of our Board of Directors. We look forward to benefiting from his
insights and experience as we work together to build greater value for our
clients and our shareholders."
Xx. Xxxxx
commented, "Over the past several months, my colleagues and I have been engaged
in constructive dialogue with Xxxx Xxxxxxx and other members of the Xxxx Xxxxx
management team. We share their view that Xxxx Xxxxx'x recent
strategic initiatives are improving the Company's operating performance and I
look forward to contributing as a Board member and working with the management
team and the Board to help this great company achieve its full
potential."
Xx. Xxxxx
also serves as a director of X. X. Xxxxx Company, is non-executive Chairman of
the Board of Wendy's/Arby's Group, Inc. (formerly Triarc Companies, Inc.) and is
Chairman of the Board of Trian Acquisition I Corp. From April 1993
through June 2007, he served as Chairman and Chief Executive Officer of Triarc,
which during that period of time owned Arby's Restaurant Group, Inc. and the
Snapple Beverage Group, as well as other consumer and industrial
businesses.
The
addition of Xx. Xxxxx to the Board reflects an agreement between Xxxx Xxxxx and
Trian Fund Management, L.P., certain funds managed by it and certain of its
affiliates. In addition, pursuant to the agreement, Trian
Partners has agreed to vote its shares in favor of Xxxx Xxxxx'x director
nominees as provided in the agreement and made certain other commitments. The
full text of the agreement with Trian Partners is available to the public as an
Exhibit to the Form 8-K that the company is filing with the Securities and
Exchange Commission.
Trian
Partners owns 6,946,756 shares, or approximately 4.3% of Xxxx Xxxxx'x
outstanding common stock.
About
Xxxx Xxxxx
Xxxx
Xxxxx is a global asset management firm, with $703 billion in assets under
management as of September 30, 2009. The Company provides active
asset management in many major investment centers throughout the
world. Xxxx Xxxxx is headquartered in Baltimore, Maryland, and its
common stock is listed on the New York Stock Exchange (symbol: LM).
This
release contains forward-looking statements subject to risks, uncertainties and
other factors that may cause actual results to differ materially. For a
discussion of these risks and uncertainties, see "Risk Factors" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in Xxxx Xxxxx'x Annual Report on Form 10-K for the fiscal year ended
March 31, 2009.
