FIRST AMENDED AND RESTATED
CLOSE CORPORATION AGREEMENT
September 13, 2001
By and Among the Following:
BRC Properties Inc.
(fka The Xxxxxx Corporation);
the Xxxxxx Corporation Stock Trust,
Xxxxxx X. Xxxxxx and Xxxxxxx X. Xxxxxx, Trustees;
Xxxxxxx X. Xxxxxx;
Xxxxx X. Xxxxxx;
1987 Irrevocable Qualified Subchapter S Trust,
Xxxxx X. Xxxxxx, Trustee;
Xxxxx X. Xxxxxx;
Xxxxxx X. Xxxxxx;
Xxxxxx X. Xxxxxx; and
Xxxxx Xxxxxx Xxxxx.
Page 16 of 44 pages
TABLE OF CONTENTS
-----------------
PAGE
----
ARTICLE ONE
Definitions ..................................................................... 2
Section 1.01. Affiliate ..................................................... 2
Section 1.02. Agreement ..................................................... 2
Section 1.03. Cause ......................................................... 2
Section 1.04. Code .......................................................... 2
Section 1.05. Control ....................................................... 2
Section 1.06. Corporation ................................................... 2
Section 1.07. Dominion ...................................................... 3
Section 1.08. Family Shareholder(s) ......................................... 3
Section 1.09. Fiduciary ..................................................... 3
Section 1.10. General Corporation Law ....................................... 3
Section 1.11. Incapacity .................................................... 3
Section 1.12. IRS ........................................................... 3
Section 1.13. Issue ......................................................... 3
Section 1.14. Managing Family Shareholder(s) ................................ 3
Section 1.15. Pro Rata Share ................................................ 3
Section 1.16. Purchase Notice ............................................... 4
Section 1.17. Put ........................................................... 4
Section 1.18. Shares ........................................................ 4
Section 1.19. Transfer ...................................................... 4
Section 1.20. 1933 Act ...................................................... 4
Section 1.21. 1934 Act ...................................................... 4
ARTICLE TWO
Close Corporation Agreement ..................................................... 5
Section 2.01. Termination of Old Close Corporation Agreement ................ 5
Section 2.02. Close Corporation Agreement ................................... 5
Section 2.03. Delegation of Power by the Shareholders ....................... 5
Section 2.04. Powers of Directors ........................................... 6
Section 2.05. Proxy ......................................................... 7
ARTICLE THREE
S Corporation Provisions ........................................................ 7
Section 3.01. Two Tax Years ................................................. 7
Section 3.02. Revocation of S Corporation Status ............................ 8
Section 3.03. Maintenance of S Status ....................................... 8
Section 3.04. Mandatory S Distributions ..................................... 8
ARTICLE FOUR
Restrictions on Shares .......................................................... 9
Section 4.01. Restrictions on Transfer by Shareholders ...................... 9
Section 4.02. Transfers to Family Shareholders and Lineal Descendants ....... 9
i
Page 17 of 44 pages
Section 4.03. Restrictions on Issuance by Corporation ................................. 10
Section 4.04. Transferees Bound by This Agreement ..................................... 10
Section 4.05. Restrictions Necessary and Proper ....................................... 10
ARTICLE FIVE
Disposition of Shares Owned by Xxxxxx ..................................................... 10
Section 5.01. Disposition of Shares Owned by Xxxxxx on Death or Incapacity ............ 10
Section 5.02. Right to Purchase Shares of Xxxxxx ...................................... 10
ARTICLE SIX
Sale by Stock Trust and Estates of Deceased Family Shareholders ........................... 11
Section 6.01. Sale by Stock Trust ..................................................... 11
Section 6.02. Purchase of Shares Upon Death of a Family Shareholder ................... 11
Section 6.03. Family Shareholder Estate Put ........................................... 12
ARTICLE SEVEN
Lifetime Stock Trust and Family Shareholder Puts .......................................... 12
Section 7.01. Lifetime Stock Trust and Family Shareholder Puts ........................ 12
ARTICLE EIGHT
Purchase Price ............................................................................ 13
Section 8.01. Determination of Purchase Price ......................................... 13
Section 8.02. General Corporation Law Limitation on Purchases by the Corporation ...... 14
Section 8.03. Tax and Liquidity Limitations on Purchases by the Corporation ........... 14
Section 8.04. Payment Cap ............................................................. 14
ARTICLE NINE
Payment for the Shares .................................................................... 15
Section 9.01. Payment for Shares ...................................................... 15
Section 9.02. Allocations in the Event of a Payment Cap ............................... 16
Section 9.03. Interest Rate on Purchase Price ......................................... 17
Section 9.04. Deduction for Indebtedness .............................................. 17
ARTICLE TEN
Write Up to Fair Value .................................................................... 17
Section 10.01. Write Up to Fair Value .................................................. 17
ARTICLE ELEVEN
Fiduciary Transfer of Shares .............................................................. 17
Section 11.01. Endorsement on Shares for Purchases from Fiduciaries .................... 17
Section 11.02. Lost Share Certificates ................................................. 18
ii
Page 18 of 44 pages
ARTICLE TWELVE
Insurance to Fund the Purchase By the Corporation of Certain Shares ............... 18
Section 12.01. Insurance .................................................... 18
Section 12.02. Purchase of Insurance Policy by Shareholder .................. 19
Section 12.03. Segregation of Insurance Proceeds ............................ 19
ARTICLE THIRTEEN
Miscellaneous ..................................................................... 19
Section 13.01. Enabling Action by Shareholders .............................. 19
Section 13.02. Restrictive Legends .......................................... 19
Section 13.03. Governing Law, Forum and Jurisdiction ........................ 20
Section 13.04. Payments and Notices ......................................... 20
Section 13.05. Amendment, Termination or Invalidity of the Agreement ........ 21
Section 13.06. Provisions Severable ......................................... 22
Section 13.07. Duplicate Originals .......................................... 22
Section 13.08. Successors and Assigns ....................................... 22
Section 13.09. Persons and Pronouns ......................................... 22
Section 13.10. Captions ..................................................... 22
Section 13.11. Integration Clause ........................................... 23
Section 13.12. Equitable Relief ............................................. 23
Section 13.13. Attorney's Fees .............................................. 23
Section 13.14. No Third Party Rights ........................................ 23
Section 13.15. Further Assurances ........................................... 23
Section 13.16. Presumption .................................................. 23
Section 13.17. Acknowledgement .............................................. 23
Section 13.18. Covenants .................................................... 23
iii
Page 19 of 44 pages
FIRST AMENDED AND RESTATED
CLOSE CORPORATION AGREEMENT
THIS FIRST AMENDED AND RESTATED CLOSE CORPORATION AGREEMENT
("Agreement"), is made to be effective as of the _____ day of _______, 2001, by
and among BRC Properties Inc. (fka The Xxxxxx Corporation), an Ohio corporation
("Corporation"), Xxxxxx X. Xxxxxx and Xxxxxxx X. Xxxxxx as trustees (together
"Stock Trustee") under the Xxxxxx Corporation Stock Trust ("Stock Trust"),
Xxxxxxx X. Xxxxxx ("Xxxxxxx"), Xxxxx X. Xxxxxx ("Xxxxx"), Xxxxx X. Xxxxxx, as
trustee ("S Trustee") under the 1987 Irrevocable Qualified Subchapter S
Corporation ("S Trust") and Xxxxx X. Xxxxxx ("Xxxxxx"), said individuals
sometimes hereinafter referred to singularly as "Shareholder" and collectively
as "Shareholders"; Xxxxxx X Xxxxxx ("Xxxxxx"), Xxxxxx X. Xxxxxx ("Xxxxxx") and
Xxxxx Xxxxxx Xxxxx ("Xxxxx"), as beneficiary under the S Trust.
WITNESSETH:
WHEREAS, the Shareholders and the Corporation have heretofore entered
into a Close Corporation Agreement ("Old Close Corporation Agreement"), dated
January 4, 1994, and desire to terminate the Old Close Corporation Agreement;
WHEREAS, the Shareholders and the Corporation desire to replace the Old
Close Corporation Agreement with this Agreement in order to regulate certain
aspects of the internal affairs of the Corporation and certain of the relations
of the Shareholders and any person who may hereinafter become the holder of
shares of the Corporation;
WHEREAS, on November 13, 1998, the Corporation redeemed 42,000 Class B
(non-voting) common shares of the Corporation ("Class B Shares") held by the
Stock Trust, 8,820 Class A (voting) common shares of the Corporation ("Class A
Shares") were gifted from the Stock Trust to the Family Shareholders (as defined
herein) and 33,180 Class B Shares were gifted from the Stock Trust to the Family
Shareholders; on June 19, 2000, the Corporation redeemed 10,205 Class A Shares
held by the Stock Trust; on November 9, 2000, the Stock Trust sold 5,824 Class A
Shares to Xxxxxxx, 3,718 Class A Shares to Xxxxx, 2,639 Class A Shares to the S
Trust and 819 Class A Shares to Xxxxxx; and on August ___, 2001, the Stock Trust
exchanged 13,475 Class A Shares for 13,475 Class B Shares held by the S Trust
pursuant to a tax-free exchange under Section 1036(a) of the Code (as defined
herein);
WHEREAS, the Shareholders consented to and approved the foregoing
transactions and currently own all of the issued and outstanding shares of the
Corporation as set forth in Exhibit A attached hereto and incorporated herein by
this reference and are the only shareholders of the Corporation;
WHEREAS, the Shareholders decided to maintain ownership of the
Corporation in the Xxxxxx family, and such decision has been in the best
interests of the Corporation as evidenced by the profitability of the
Corporation and increases in value per share since January 4, 1994;
Page 20 of 44 pages
WHEREAS, the Shareholders desire to consolidate control of the
Corporation in the Board of Directors in order to more efficiently and
expeditiously govern the operations of the Corporation;
WHEREAS, the Shareholders desire to provide liquidity for their estates
upon their deaths by giving Transfers (as defined herein) by estates a
preference over lifetime Transfers;
WHEREAS, the Shareholders believe that the Transfers permitted
hereunder will provide them with sufficient liquidity in connection with their
investment in the Corporation; and
WHEREAS, the Shareholders and the Corporation believe that restrictions
on the Transfer of Shares are necessary and appropriate because of the
potentially adverse financial impact of unrestricted Transfers on the
Corporation and the Shareholders;
NOW, THEREFORE, in consideration of the foregoing premises and of the
mutual covenants set forth hereunder, the parties hereto make the following
Agreement, intending to be legally bound thereby:
ARTICLE ONE
Definitions
Section 1.01 Affiliate. The term "Affiliate" shall mean, with respect
to any person or entity, any other person or entity that, directly or indirectly
through one or more intermediaries, Controls, is Controlled by or is under
common Control with such person or entity.
Section 1.02. Agreement. The term "Agreement" shall mean this First
Amended and Restated Close Corporation Agreement.
Section 1.03. Cause. The term "Cause" shall mean (i) if by order of a
court of competent jurisdiction a person has been found to be of unsound mind or
has been adjudicated a bankrupt; (ii) gross dereliction of duties after written
notice and the failure, as determined in the discretion of the Directors, to
correct such deficiencies; (iii) willful insubordination of a legitimate order
given by the Board of Directors after written notice and the failure, as
determined in the discretion of the Directors, to correct such deficiencies or
willful violation of a Corporation policy, including the misappropriation of
trade secrets; or (iv) criminal misconduct involving the commission (or the
admission of the commission) of a felony under Ohio law.
Section 1.04. Code. The term "Code" shall mean the Internal Revenue
Code of 1986, as amended from time to time.
Section 1.05. Control. The term "Control" shall mean, with respect to
any person or entity, the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a person or
entity, whether through the ownership of voting securities or otherwise.
Section 1.06. Corporation. The term "Corporation" shall mean BRC
Properties Inc., an Ohio corporation, whose principal business is the active
management of real estate and real estate investment projects.
2
Page 21 of 44 pages
Section 1.07. Dominion. The term "Dominion" shall mean Dominion Homes,
Inc., an Ohio corporation.
Section 1.08. Family Shareholder(s). The term "Family Shareholder"
shall mean Xxxxxxx, Xxxxx or Xxxxx (or trusts for their benefit) and shall
exclude the Stock Trust and Xxxxxx. The term "Family Shareholders" shall mean
Xxxxxxx, Xxxxx and Xxxxx (or trusts for their benefit) collectively.
Section 1.09. Fiduciary. The term "Fiduciary" shall mean an executor,
administrator or other legal representative of a Shareholder's estate or any
other legal representative of a Shareholder.
Section 1.10. General Corporation Law. The term "General Corporation
Law" shall mean Chapter 1701 of the Ohio Revised Code, as amended from time to
time, or any successor statute or provision in the Ohio Revised Code.
Section 1.11. Incapacity. The term "Incapacity" shall mean a person
who (i) has been determined to be incapacitated by a court of competent
jurisdiction or (ii) has a physical or mental impairment that substantially
limits his ability to engage in the business of the Corporation in accordance
with his customary performance for a period of ninety (90) consecutive days and
such impairment has been certified by his regular attending physician, or, if
the person has no regular attending physician, then as certified by a physician
appointed by the Corporation.
Section 1.12. IRS. The term "IRS" shall mean the Internal Revenue
Service.
Section 1.13. Issue. The term "Issue" shall mean sell or otherwise
distribute.
Section 1.14. Managing Family Shareholder(s). The term "Managing
Family Shareholder" shall mean Xxxxxxx or Xxxxx (or trusts for their benefit).
The term "Managing Family Shareholders" shall mean Xxxxxxx and Xxxxx (or trusts
for their benefit) collectively.
Section 1.15. Pro Rata Share. The term "Pro Rata Share" shall mean:
(a) As to a Family Shareholder (other than for purposes of Article
Seven or Section 8.01), the product of (x) the total number of Shares offered as
to which an option to purchase Shares is available to the Family Shareholders
and (y) a fraction, the numerator of which is the number of Shares held by such
Family Shareholder on the date the notice is given and the denominator of which
is the total number of Shares of the Corporation held by all Family
Shareholders.
(b) As to a Family Shareholder or the Stock Trust for purposes of
Article Seven, the product of (x) the total number of Shares as to which a
Lifetime Shareholder Put is available to the Stock Trust and the Family
Shareholders in the aggregate and (y) a fraction, the numerator of which is the
number of Shares held by such Family Shareholder or the Stock Trust, as the case
may be, as of the date of the Lifetime Shareholder Put Notice and the
denominator of which is the total number of Shares held by the Family
Shareholders and the Stock Trust.
3
Page 22 of 44 pages
(c) As to a Managing Family Shareholder (other than for purposes of
Section 8.01), the product of (x) the total number of Shares offered as to which
an option to purchase Shares is available to Managing Shareholders and (y) a
fraction, the numerator of which is the number of Shares held by such Managing
Shareholder on the date the notice is given and the denominator of which is the
total number of Shares of the Corporation held by all Managing Family
Shareholders.
(d) For purposes of Section 8.01, as to any person or entity
exercising a Put during any calendar year, the product of (x) the total of all
costs associated with determining the Fair Market Value of the Shares and (y) a
fraction, the numerator of which is the total number of Shares which are sold by
such person or entity in such calendar year pursuant all of such person's or
entity's Puts and the denominator of which is the total number of Shares which
are sold by all persons and/or entities in such calendar year pursuant to Puts.
Section 1.16. Purchase Notice. The term "Purchase Notice" shall mean
the notices set forth in Sections 5.01 and 5.02, the Stock Trust Notice, Family
Estate Notice and/or Lifetime Shareholder Put Notice.
Section 1.17. Put. The term "Put" shall mean a Lifetime Shareholder
Put, a Stock Trust Put or a Family Shareholder Estate Put.
Section 1.18. Shares. The term "Shares" shall mean shares of the Class
A (voting shares) or Class B (non-voting shares) Common Shares of the
Corporation or of any other class or series of shares of the capital stock of
the Corporation hereinafter authorized.
Section 1.19. Transfer. The term "Transfer" shall mean the sale, gift,
pledge, hypothecation, encumbrance, disposition or other transfer of one or more
Shares, including by operation of law or otherwise.
Section 1.20. 1933 Act. The term "1933 Act" shall mean the Securities
Act of 1933, 15 U.S.C. (S)77a, et seq., as amended from time to time.
Section 1.21. 1934 Act. The term "1934 Act" shall mean the Securities
Exchange Act of 1934, 15 U.S.C. (S)78a, et seq., as amended from time to time.
4
Page 23 of 44 pages
ARTICLE TWO
Close Corporation Agreement
Section 2.01. Termination of Old Close Corporation Agreement. The Old
Close Corporation Agreement is hereby terminated and of no force and effect.
With respect to the foregoing termination of the Old Close Corporation
Agreement, and delivery of this Agreement, and all matters incidental or related
thereto, the undersigned waive any and all rights, if any, and hereby agree to
protect, defend, hold harmless and indemnify the Corporation and its Board of
Directors, officers, employees, agents and each other, including successors and
assigns from, against and in respect of any and all losses, liabilities,
deficiencies, penalties, fines, costs, damages and expenses whatsoever
(including, without limitation, reasonable professional fees and costs of
investigation, litigation, settlement and judgment) relating to the termination
of the Old Close Corporation Agreement, the execution and delivery of this
Agreement and all matters incidental or related thereto, including prior
Transfers related to the Shares (and use and distribution of proceeds related
thereto).
Section 2.02. Close Corporation Agreement.
(a) Scope of Agreement. This Agreement is to be governed by Section
1701.591 of the Ohio Revised Code and is a close corporation agreement as that
term is defined in Section 1701.01(X) of the Ohio Revised Code. This Agreement
shall regulate aspects of the internal affairs of the Corporation and the
relations of the Shareholders of the Corporation among themselves to the extent
set forth herein and, if the Articles of Incorporation or Code of Regulations of
the Corporation shall be inconsistent with this Agreement, such inconsistent
provisions thereof shall be suspended during the term of this Agreement and the
provisions of this Agreement shall be controlling. To the extent not
inconsistent with the provisions of this Agreement, the Articles of
Incorporation and Code of Regulations of the Corporation, as amended from time
to time, shall regulate the aspects of the internal affairs of the Corporation
and the relations of the Shareholders of the Corporation among themselves. This
Agreement shall be entered in the record of the proceedings of the Shareholders
of the Corporation.
(b) Dispensing with Annual Meeting of Shareholders. Absent a written
notice to the President or Secretary of the Corporation by personal delivery or
mail within thirty (30) days after the end of the most recent fiscal year that
requests an annual meeting of Shareholders, the Corporation shall not be
required to have an annual meeting of Shareholders. In the event that there is
no annual meeting, annual financial statements required under the General
Corporation Law to be delivered shall be delivered by the Corporation to each
Shareholder on or before the last day upon which the annual meeting otherwise
could have been held.
Section 2.03. Delegation of Power by the Shareholders. Except as
otherwise expressly provided in this Agreement, during the term of this
Agreement, the Shareholders hereby delegate to the Board of Directors appointed
in accordance with Section 2.04 hereof any and all power and authority granted
to these Shareholders under the General Corporation Law. If any amendment to the
Articles of Incorporation and/or Code of Regulations of the Corporation, or any
other action requiring the vote, consent, proxy or approval of the Shareholders
of the Corporation, is required now or in the future in order to make
permissible or lawful the
5
Page 24 of 44 pages
delegation of the power of the Shareholders to the Directors as provided in this
Section 2.03, each Shareholder agrees to vote all Shares of the Corporation at
the time held by him or her in favor of, or will consent in writing to, such
amendment or action, whether such amendment or action is voted upon or consented
to, at, prior to or after the time of such action. Except as otherwise provided
by Section 1701.591 of the Ohio Revised Code and this Agreement, the
Shareholders hereby waive their right to be consulted concerning the operation
of the Corporation as provided herein.
Any action required or permitted to be taken at any meeting of the
Shareholders of the Corporation may be taken without a meeting, without prior
notice and without a vote, by a majority of the Directors appointed pursuant to
Section 2.04, in one or more consents in writing, setting forth the action so
taken. Prompt notice in writing of the taking of a corporate action without a
meeting (in the event that all Directors did not participate in the action) or
with a meeting (in the event that all Directors did not attend the meeting)
shall be given by the Secretary of the Corporation to each Director who did not
so participate or not so attend, as the case may be.
Any Shareholder may, upon submission of a demand stating the reasonable
and proper purpose thereof, examine and copy, during usual business hours of the
Corporation, its Articles of Incorporation, Code of Regulations, books and
records of account, minutes, records of its Shareholders, this Agreement and
other records of the Corporation on file with the Corporation.
The Shareholders and the Corporation acknowledge and agree that Shares
which are non-voting do not provide any voting power or authority to their legal
or beneficial owners except as expressly required by the General Corporation
Law. To the extent the General Corporation Law requires such shares to vote,
such authority is expressly delegated to the Directors as provided herein.
Section 2.04. Powers of Directors. The Directors of the Corporation
shall have all the authority of and the exclusive right to exercise all the
powers granted to the Shareholders under the General Corporation Law. The
Directors also shall have all of the authority of and the exclusive right to
exercise all of the powers granted to Directors under the General Corporation
Law and this Agreement.
(a) Number of Directors. The authorized number of Directors of the
Corporation shall be five (5); provided, however, that the number of Directors
may be less than five (5) in the event fewer that such number is appointed in
accordance with subparagraph (b) below or a successor is not appointed to fill a
vacancy pursuant to subparagraph (b) below.
(b) Appointment of Directors of the Corporation. Until the death or
Incapacity of either Xxxxxx or Xxxxxxx, Xxxxxx and Xxxxxxx shall have the joint
right to appoint all the Directors of the Corporation; provided that Xxxxx shall
be appointed as a Director as long as he is a Shareholder owning at least ten
percent (10%) of the issued and outstanding Shares of the Corporation and absent
his removal for Cause. Xxxxxx and Xxxxxxx shall have the joint right to remove
any person appointed by them as a Director of the Corporation, except that Xxxxx
xxx be removed only as provided herein. In the event of the death, Incapacity,
resignation or removal of any Director of the Corporation appointed by Xxxxxx
and Xxxxxxx, Xxxxxx and Xxxxxxx shall have the joint right, but not the
obligation, to appoint a successor to such person as
6
Page 25 of 44 pages
a Director of the Corporation. Upon the death or Incapacity of either Xxxxxx or
Xxxxxxx, the other shall exercise solely all rights under this Section 2.04(b)
that before such death or Incapacity were exercised by them jointly. Upon the
death or Incapacity of both Xxxxxx and Xxxxxxx, Xxxxx shall exercise all rights
under this Section 2.04(b) that before such death or Incapacity were exercised
by Xxxxxx and/or Xxxxxxx. Upon the death or Incapacity of Xxxxxx, Xxxxxxx and
Xxxxx, the Shareholders shall elect the Directors of the Corporation in
accordance with the General Corporation Law.
(c) Appointment of Xxxxx as a Director of Dominion. As long as Xxxxx
owns at least ten percent (10%) of the issued and outstanding Shares of the
Corporation and as long as the Corporation owns issued and outstanding shares of
Dominion which entitle it to elect at least two directors of Dominion and absent
David's removal as Director of the Corporation or Dominion for Cause, the
Directors of the Corporation shall use their best efforts to cause the election
or appointment of Xxxxx as director of Dominion.
(d) Third Party Beneficiary Rights of Xxxxxx. Notwithstanding
anything in this Agreement or any subsequent amended or restated agreement to
the contrary, Xxxxxx shall continue to have the rights set forth in Section
2.04(b) hereof until his death or Incapacity, regardless of whether Xxxxxx owns
any Shares of the Corporation and the Shareholders agree that this provision
shall survive the termination of this Agreement.
Section 2.05. Proxy. Without limiting the generality of the delegation
of the Shareholders' power and authority to the Board of Directors as provided
for in Section 2.03, to the extent necessary to effect the purposes of this
Agreement, the Shareholders of the Corporation hereby appoint the Board of
Directors as the attorneys of the Shareholders, with full power of substitution
in each of them, for and in the name of such Shareholders, to vote, according to
the number of votes which such Shareholders would be entitled to exercise if
personally present at any meeting of Shareholders held for such purpose and do
hereby ratify and confirm any and all acts of said attorneys, or substitutes
hereunder appointed, lawfully done by virtue of or in furtherance of such
purpose. In light of the mutual consideration exchanged by the parties hereto,
this irrevocable proxy shall be deemed to be, and is, coupled with an interest.
This irrevocable proxy shall expire and be of no further force and effect after
the expiration of ten (10) years from the date of this Agreement.
ARTICLE THREE
S Corporation Provisions
Section 3.01. Two Tax Years. So long as the Corporation's election to
be an S corporation has not been revoked or terminated and in the event that a
Shareholder terminates his, her or its entire interest in the Corporation during
the taxable year of the Corporation, the Corporation shall elect under Section
1377(a)(2) of the Code or any successor Code and its provisions, to have the
rules provided in Section 1377(a)(1) applied as if the taxable year consisted of
two (2) taxable years with the first such tax year ending on the date of the
termination of the Shareholder's ownership. Upon such election, the Corporation
shall execute any and all necessary forms for exercising such election, and each
person who is a Shareholder at any time during the taxable year will execute the
necessary Shareholder's consent notwithstanding that such person may have
disposed of his, her or its entire interest in the
7
Page 26 of 44 pages
Corporation prior to such termination. Each Shareholder will authorize and
cooperate with the filing of such election and such consents with the
appropriate IRS Center or office. Such other action shall be taken as may be
deemed necessary or advisable by counsel to the Corporation to exercise such
election.
Section 3.02. Revocation of S Corporation Status. Notwithstanding
Section 1362(d)(1)(B) of the Code, the Corporation and each of the Shareholders
agree that the Corporation's election to be an S corporation may be revoked by
the Directors on behalf of the Shareholders pursuant to the authority of the
Directors in Section 2.03 hereof. Each Shareholder will cooperate with and
execute any filing with the IRS necessary to effectuate such revocation. Upon
such revocation, Article Three of this Agreement shall become void and of no
further force or effect.
Section 3.03. Maintenance of S Status.
(a) Except as provided herein and in Section 3.02, the Corporation
agrees that, as long as the Corporation meets the requirements of Section
1361(b)(1)(A), (B) and (C) of the Code, it (i) will not, for purposes of Section
1361(b)(1)(D) of the Code, Issue more than one class of stock (taking into
account the rule set forth in Section 1361(c)(4) of the Code) and (ii) will not
become an "ineligible corporation," as such term is defined in Section
1361(b)(2) of the Code, except to the extent that the Corporation owns an
inactive subsidiary or the Corporation's ownership of a subsidiary is
transitory.
(b) Neither the Corporation nor any Shareholder shall Transfer Shares
or permit any action which would result in a Transfer of Shares to (i) any
person who would cause the Corporation to have more than seventy-five (75)
shareholders; (ii) any nonresident alien; (iii) any partnership; (iv) any
retirement plan; or (v) any person other than a qualified shareholder of an S
Corporation as described in Section 1361 of the Code.
(c) The purpose of this Section 3.03 is to maintain the Corporation's
status as an S corporation. In the event the Code is amended to provide
additional flexibility to S corporations, such amendments shall automatically be
incorporated by reference into this Section 3.03.
Section 3.04. Mandatory S Distributions. So long as the Corporation's
election to be an S corporation has not been revoked or terminated, the
Corporation shall pay to each person who was a Shareholder of the Corporation
during a taxable year a cash dividend or distribution, from available surplus,
in an amount not less than the product of (i) the maximum marginal individual
income tax rate under the Code in effect for such taxable year and (ii) such
Shareholder's pro rata share of the Corporation's taxable income for such
taxable year as determined under Section 1363(b) of the Code. The cash dividend
or distribution shall be paid by the Corporation to each person no later than
thirty (30) days prior to the date on which such person is legally required to
file his federal income tax return that includes his pro rata share of the
Corporation's taxable income. Additional distributions may be made from time to
time in such amounts as are determined by the Directors to assist each
Shareholder with state and local taxes and with estimated tax payments
attributed to the S Corporation status of the Corporation. Any such
distributions will be made pro rata to the Shareholders based upon Share
ownership.
8
Page 27 of 44 pages
ARTICLE FOUR
Restrictions on Shares
Section 4.01. Restrictions on Transfer by Shareholders. Except as
otherwise expressly provided in Section 4.02, and except for the pledge or
hypothecation of Shares which may now or in the future be required by persons or
entities lending money to the Corporation for the operation of the Corporation,
which loans shall have been approved by the Board of Directors, no Shareholder
shall Transfer any Shares of the Corporation now held or hereinafter acquired by
him, unless such Transfer shall have been previously approved by the other
Shareholders. Any such Transfer or attempted or purported Transfer in violation
of this Section 4.01 shall be null and void ab initio and a fraud upon the
Corporation and the other Shareholders and may be enjoined in any court of
competent jurisdiction by any Shareholder or by the Corporation. Any Shareholder
making or attempting any purported Transfer in violation of this Section 4.01,
notwithstanding any agreement or understanding with any such attempted or
purported transferee, shall retain the right to vote the Shares and to receive
dividends and liquidation proceeds from the Corporation, shall continue to be a
Shareholder of the Corporation for state and federal income tax purposes and, if
the Corporation shall have an election in effect to be an S Corporation, shall
report such Shareholder's pro rata share of income or loss as determined by the
Corporation in accordance with the Code.
Without limiting the foregoing, as to Shares held in the Stock Trust,
the following additional restrictions also shall apply: (i) upon Donald's death
the Shares, if any, then held in the Stock Trust shall be held for the benefit
of Xxxxxx (assuming Xxxxxx predeceases Xxxxxx) during her lifetime and
thereafter the Shares, if any, then held in the Stock Trust shall be distributed
only to Xxxxxxx (or his issue), Xxxxx (or his issue) and Xxxxx (or her issue),
or any of them (or any of their issue) upon Joanne's death or the date which is
ten years from Donald's death, whichever is later; (ii) Xxxxxx and Xxxxxxx are
the trustees and Xxxxxxx shall be the successor trustee upon the death or
Incapacity of Xxxxxx; and (iii) the Stock Trust cannot be amended without the
written consent of Xxxxxxx, Xxxxx and Xxxxx if such amendment amends or modifies
subparts (i) and (ii) in any material manner.
Section 4.02. Transfers to Family Shareholders and Lineal Descendants.
Except as prohibited in Section 3.03, notwithstanding anything to the contrary
in this Agreement, the following Transfers shall be permitted:
(a) Any Shareholder may Transfer any Shares now or hereafter held by
him, her or it to any person who is a Family Shareholder if expressly permitted
herein or permitted by the Directors;
(b) Upon the death of any Family Shareholder, any Shares now or
hereafter held by him, her or it may be Transferred to any of the following: (i)
any lineal descendant of Xxxxxx and Xxxxxx (or a trust established for the
exclusive benefit of any lineal descendant(s) of Xxxxxx and Xxxxxx); and (ii) a
trust established for the exclusive benefit of the surviving spouse of such
Family Shareholder during the surviving spouse's lifetime and thereafter the
Shares, if any, then held in such trust shall be distributed only to lineal
descendant(s) of Xxxxxx and Xxxxxx (or a trust established for the exclusive
benefit of any lineal descendant(s) of Xxxxxx and Xxxxxx) upon the death of the
surviving spouse; provided that until their death or Incapacity, either Xxxxx or
9
Page 28 of 44 pages
Xxxxxxx shall be the trustee of any trust to which Shares are Transferred
pursuant to this Section 4(b); and
(c) Any Shareholder may Transfer any Class B Shares now or hereafter
held by him, her or it to any lineal descendant of Xxxxxx and Xxxxxx (or any
trust established for the exclusive benefit of any lineal descendant(s) of
Xxxxxx and Xxxxxx).
Section 4.03. Restrictions on Issuance by Corporation. With the
unanimous authorization of the Board of Directors, the Corporation may Issue
Shares of any class (whether authorized but unissued shares or treasury shares)
to any person only if such Issuance does not violate the other provisions of
this Agreement.
Section 4.04. Transferees Bound by This Agreement. Any person to whom
Shares have been Transferred or Issued pursuant to this Article Four shall
simultaneously become bound by the terms and conditions of this Agreement by
executing an amendment, addendum or a joinder to this Agreement satisfactory to
the Board of Directors.
Section 4.05. Restrictions Necessary and Proper. Each Shareholder and
the Corporation agree and acknowledge that the restrictions on Transfer and
Issuance of Shares of the Corporation imposed by this Agreement are imposed to
accomplish legitimate purposes of the Corporation, and that such restrictions
are not more restrictive than necessary to accomplish those purposes.
ARTICLE FIVE
Disposition of Shares Owned by Xxxxxx
Section 5.01. Disposition of Shares Owned by Xxxxxx on Death or
Incapacity. In the event of the death or Incapacity of Xxxxxx, the Corporation
shall purchase all of his Shares; provided, however, that the Corporation may
first give the Managing Family Shareholders the option to purchase all or any
portion of George's Shares. If the Corporation gives such an option to the
Managing Family Shareholders, each such Managing Family Shareholder, in his
discretion, shall have the right to purchase his Pro Rata Share of such Shares.
Managing Family Shareholders who purchase their Pro Rata Shares may purchase any
or all remaining Shares in the event a Managing Family Shareholder does not
elect to purchase his Pro Rata Share of such Shares. Any Shares not purchased by
the Managing Family Shareholders shall be purchased by the Corporation. The
estate or personal representative of Xxxxxx shall give written notice of
George's death or Incapacity to the Corporation. All Shares purchased pursuant
to this Section 5.01 shall be deemed to have been purchased and, for all
corporate purposes, cease to be outstanding as of the date of the death or
Incapacity of Xxxxxx. The purchase price for all purchases under this Section
5.01 shall be determined pursuant to Article Eight hereof and paid in accordance
with Article Nine hereof.
Section 5.02. Right to Purchase Shares of Xxxxxx. The Corporation
shall have the right, at any time and from time to time, to acquire all, but not
less than all, of the Shares of Xxxxxx by giving Xxxxxx written notice of its
intent to purchase or to assign its option to purchase to the Managing Family
Shareholders pursuant to this Section 5.02. The Corporation shall have the right
to assign its option to the Managing Family Shareholders at any time, in
10
Page 29 of 44 pages
which event each such Managing Family Shareholder, in his discretion, shall have
the right to purchase his Pro Rata Share of such Shares. Managing Family
Shareholders who purchase their Pro Rata portion of the Shares may purchase any
or all remaining Shares in the event a Managing Family Shareholder does not
elect to purchase his Pro Rata Share of such Shares; provided further, that any
remaining Shares shall be purchased by the Corporation, subject to the terms of
this Agreement. The purchase price for all purchases under this Section 5.02
shall be determined in accordance with Article Eight hereof and paid in
accordance with Article Nine. All Shares purchased pursuant to this Section 5.02
shall be deemed to have been purchased upon the Corporation giving written
notice to Xxxxxx of its intention to exercise its option hereunder or to assign
such option to the Managing Family Shareholders.
ARTICLE SIX
Sale by Stock Trust and Estates of Deceased Family Shareholders
Section 6.01. Sale by Stock Trust. The Stock Trust shall have the
option to sell to the Corporation, commencing on the date of death of the later
to die of Xxxxxx and Xxxxxx, all or any part of the Shares then held by the
Stock Trust ("Stock Trust Put"). The Stock Trustee may exercise the Stock Trust
Put by giving written notice ("Stock Trust Notice") of the exercise of the Stock
Trust Put to the Corporation. The Stock Trust Notice shall specify the number of
Shares that the Stock Trust desires to sell and shall be irrevocable.
The Corporation may give the Family Shareholders the option to purchase
the Shares covered by the Stock Trust Put, in which case each such Family
Shareholder, in his, her or its discretion, shall have the right to purchase
his, her or its Pro Rata Share of such Shares. Family Shareholders who purchase
their Pro Rata portion of the Shares may purchase any or all remaining Shares in
the event a Family Shareholder does not elect to purchase his, her or its Pro
Rata Share of such Shares; provided further, that any remaining Shares shall be
purchased by the Corporation, subject to the terms of this Agreement. All Shares
purchased pursuant to this Section 6.01 shall be deemed to have been purchased
and, for all corporate purposes, cease to be outstanding as of the date of the
Stock Trust Notice. The purchase price for all purchases under this Section 6.01
shall be determined as provided in Article Eight of this Agreement and shall be
paid as provided by Article Nine of this Agreement.
Section 6.02. Purchase of Shares Upon Death of a Family Shareholder.
Upon the death of a Family Shareholder, the Corporation shall purchase, and the
estate of such Family Shareholder shall sell, the maximum number of the deceased
Family Shareholder's Shares which may be purchased using the proceeds received
by the Corporation from any and all Insurance Policies (as defined in Section
12.01) on the life of the deceased Family Shareholder; provided that all Class A
Shares, if any, of the deceased Family Shareholder shall be purchased before any
Class B Shares may be purchased by the Corporation pursuant to this Section
6.02. All Shares purchased pursuant to this Section 6.02 shall be deemed to have
been purchased and, for all corporate purposes, cease to be outstanding as of
the date of the Family Shareholder's death. The purchase price for all purchases
under this Section 6.02 shall be determined pursuant to Article Eight hereof and
paid in accordance with Article Nine hereof.
11
Page 30 of 44 pages
Section 6.03. Family Shareholder Estate Put. Upon the death of a
Family Shareholder or a Family Shareholder's spouse, the estate of such deceased
Family Shareholder or Family Shareholder's spouse shall have the option to sell
to the Corporation ("Family Shareholder Estate Put") all or any part of the
Shares which are necessary (after taking into consideration the proceeds from
any sale of Shares pursuant to Section 6.02 hereof) to satisfy estate,
inheritance, legacy and any succession taxes (including interest as part of such
taxes) imposed because of the death of such Family Shareholder or Family
Shareholder's spouse and the amount of funeral and administrative expenses
allowable as a deduction to the estate of such Family Shareholder or Family
Shareholder's spouse under Section 2053 (provided that fractional shares shall
not be part of the Family Estate Put); provided that all Class A Shares, if any,
shall be sold before any Class B Shares may be sold pursuant to this Section
6.03. The Estate of such deceased Family Shareholder or Family Shareholder's
spouse may exercise the Family Shareholder Estate Put by giving written notice
("Family Estate Notice") of the number of Class A Shares and Class B Shares of
the Family Shareholder Estate Put to the Corporation. The Family Shareholder
Estate Put shall provide for the number of Class A Shares and Class B Shares
desired to be sold and shall be irrevocable.
The Corporation may give Family Shareholders the option to purchase the
Shares covered by the Family Shareholder Estate Put, in which case each such
Family Shareholder, in his, her or its discretion, shall have the right to
purchase his, her or its Pro Rata Share of such Shares. Family Shareholders who
purchase their Pro Rata portion of the Shares may purchase remaining Shares in
the event a Family Shareholder does not elect to purchase his, her or its Pro
Rata Share of such Shares; provided further, that any remaining Shares shall be
purchased by the Corporation, subject to the terms of this Agreement. All Shares
purchased pursuant to this Section 6.02 shall be deemed to have been purchased
and, for all corporate purposes, cease to be outstanding as of the date of the
Family Estate Notice. The purchase price for all purchases under this Section
6.02 shall be determined as provided in Article Eight of this Agreement and
shall be paid as provided by Article Nine of this Agreement.
ARTICLE SEVEN
Lifetime Stock Trust and Family Shareholder Puts
Section 7.01. Lifetime Stock Trust and Family Shareholder Puts. Each
of the Stock Trust and each Family Shareholder or his, her or its successor
shall have the option to sell to the Corporation all or any part (as provided
herein) of the Shares then held by the Stock Trust or the Family Shareholder, as
the case may be ("Lifetime Shareholder Put"); provided that all Class A Shares,
if any, shall be sold by the Stock Trust or the Family Shareholder before any
Class B Shares may be sold pursuant to this Section 7.01. Notwithstanding
anything to the contrary in this Section 7.01, without the consent of a majority
of the Directors, no Family Shareholder may exercise a Lifetime Shareholder Put
if at the time of the Lifetime Shareholder
12
Page 31 of 44 pages
Put Notice (as defined below), such Family Shareholder (or the trust beneficiary
of such Family Shareholder) is a full-time employee of the Corporation or an
Affiliate of the Corporation.
The number of Shares that may be sold in the aggregate during any
calendar year by the Stock Trust and the Family Shareholders pursuant to the
Lifetime Shareholder Put shall not exceed the number of Shares representing two
percent (2%) of the total number of issued and outstanding Shares of the
Corporation held in the aggregate by the Family Shareholders and the Stock Trust
at such time. Of the number of Shares that may be sold in the aggregate during
any calendar year by the Stock Trust and the Family Shareholders, each such
person or entity shall be entitled to sell to the Corporation such person's or
entity's Pro Rata Share of such Shares, plus such person's or entity's Pro Rata
Share of any such Shares of any other person or entity who has a Lifetime
Shareholder Put but has not exercised (or is not permitted to exercise) such put
during such annual period.
The Stock Trust or Family Shareholder, as the case may be, may exercise
a Lifetime Family Shareholder Put only by giving written notice of exercise of
the Lifetime Family Shareholder Put to the Corporation (the "Lifetime
Shareholder Put Notice") during the period commencing on January 1 and ending on
January 31 of any calendar year in which the Lifetime Shareholder Put is
available under this Section 7.01. The Lifetime Shareholder Put Notice shall
specify the number of Shares the Stock Trust or the Family Shareholder desires
to sell to the Corporation and shall be irrevocable.
The Corporation may give the Managing Family Shareholders who are not
exercising the Lifetime Shareholder Put the option to purchase the Shares
covered by the Lifetime Shareholder Put, in which case each such Managing Family
Shareholder, in his discretion, shall have the right to purchase his Pro Rata
Share of such Shares. Managing Family Shareholders who purchase their Pro Rata
Share of such Shares may purchase any or all of such remaining Shares in the
event a Managing Family Shareholder does not elect to purchase his Pro Rata
Share of such Shares; provided further, that any and all remaining Shares shall
be purchased by the Corporation, subject to the terms of this Agreement.
All Shares purchased pursuant to this Section 7.01 shall be deemed to
have been purchased and, for all corporate purposes, cease to be outstanding as
of the date of the Lifetime Shareholder Put Notice. The purchase price to be
paid for Shares purchased pursuant to a Lifetime Shareholder Put Notice shall be
determined as provided in Article Eight of this Agreement and shall be paid for
as provided in Article Nine of this Agreement.
Notwithstanding anything in this Agreement or any subsequent amendment
or restatement to the contrary, the S Trustee, and Xxxxx upon the termination of
the S Trust and distribution of the Shares to her, shall be required to consent
to and approve any amendment or restatement which would eliminate or
substantially change in any material respect the Lifetime Shareholder Put
provisions set forth in this Section 7.01.
ARTICLE EIGHT
Purchase Price
Section 8.01. Determination of Purchase Price. The purchase price to be
paid by the Corporation, the Family Shareholders, or the Managing Family
Shareholders for Shares purchased pursuant to Articles Five, Six or Seven of
this Agreement shall be the fair market value ("Fair Market Value") of such
Shares on a non-marketable, minority interest basis, without regard to voting
rights, as determined by PricewaterhouseCoopers LLP's valuation division and its
successor and assigns ("PwC"), the Corporation's then accountants or a valuation
firm of comparable repute as reasonably determined by the Directors and
substantially in accordance with the methodology set forth in
13
Page 32 of 44 pages
the valuation conducted by PwC, dated as of February 29, 2000 ("Valuation"),
which Valuation is attached hereto and incorporated herein by reference. Death
proceeds from any Insurance Policy described in Article Twelve shall not be
included or reflected in the Fair Market Value determination.
With respect to any Put, the person or entity exercising such Put shall
pay all costs associated with determining the Fair Market Value of the Shares as
provided in this Section 8.01 and in facilitating or otherwise related to the
Transfer of Shares; provided, that if more than one person or entity exercises a
Put in the same calendar year, each person or entity exercising a Put in that
calendar year shall pay such person's or entity's Pro Rata Share of the costs
associated with determining the Fair Market Value of the Shares.
Section 8.02. General Corporation Law Limitation on Purchases by the
Corporation. Notwithstanding anything contained in this Agreement to the
contrary and in addition to other restrictions set forth herein, the Corporation
shall not be required to make purchases or payments hereunder (except to the
extent provided for by Section 8.04) (i) if immediately after such purchase or
payment (a) the Corporation's assets would be less than its liabilities plus
stated capital, if any, (b) the Corporation is insolvent (as defined in the
General Corporation Law) or (c) there is reasonable ground to believe that by
such purchase the Corporation would be rendered insolvent (as defined in the
General Corporation Law); (ii) if such purchase or payment is contrary to law or
(iii) if such purchase or payment would violate provisions of the Corporation's
lending agreements and no waiver of such provisions or refinancing to remove
such provisions is practicable. Provided, further, that if the Corporation has
issued Notes (as defined in Section 9.01(a)) hereunder or is required to make
new purchases of Shares, allocations with respect to Share purchases and Payment
Cap adjustments shall be made in accordance with Section 9.02.
Section 8.03. Tax and Liquidity Limitations on Purchases by the
Corporation. The Corporation shall purchase Shares only as permitted in Section
9.02 and in the event of Shares already purchased and for which Notes have been
issued by the Corporation hereunder shall be required to make an adjustment for
the payment for Shares as provided in Section 8.04 hereof to the extent that:
(a) The Corporation would have gross receipts of which more than
25% constitutes passive investment income within the meaning
of Section 1362(d)(3) of the Code, and the Corporation has
subchapter C earnings and profits in such year as determined
in the reasonable discretion of the Directors of the
Corporation.
(b) The Corporation would not have, after such purchase or
payment, sufficient capital or income, in the reasonable
discretion of the Directors, to operate its business in the
ordinary course.
Section 8.04. Payment Cap. If at any time a limitation is triggered
under Section 8.02 or Section 8.03 hereunder, payments for Shares previously
purchased but not paid for under Article Nine or Shares that would be required
to be purchased by the Corporation hereunder but for such limitation shall be
subject to a payment cap ("Payment Cap"). The Payment Cap is the amount of
money, if any, that the Corporation can pay on an annual basis hereunder without
triggering the limitation set forth in Section 8.02 or Section 8.03 hereunder.
The Directors, in
14
Page 33 of 44 pages
their reasonable discretion, shall make the determination of whether the Payment
Cap applies. The Payment Cap shall exist until such time as the condition
triggering the limitation no longer exists as reasonably determined by the Board
of Directors. Under the Payment Cap, principal and interest under the Notes
shall be adjusted or shall xxxxx ("Payment Cap Adjustment") as is necessary to
comply with the allocations in Section 9.02. The Corporation shall give the
Shareholders and any other person or entity receiving payments hereunder or who
would otherwise be permitted to have the Corporation purchase Shares written
notice when the Payment Cap is exceeded and when the Payment Cap is no longer
necessary. When the Payment Cap is no longer necessary, the Corporation shall
deliver to the Shareholders and any other person or entity receiving payments
hereunder a revised amortization schedule which adjusts the principal and
interest payments over the term of the Notes to reflect accrued but unpaid
principal and interest during the period of time in which the Payment Cap
existed. Accrued but unpaid principal and interest shall be paid in equal
installments during the remaining term of the Notes.
ARTICLE NINE
Payment for the Shares
Section 9.01. Payment for Shares. Subject to adjustments required by
Section 8.04, in the event that the Corporation and/or the Family Shareholders
or Managing Family Shareholders shall purchase Shares under this Agreement, the
following conditions shall apply unless the seller and the purchaser(s) of such
Shares shall agree in writing to another arrangement:
(a) The Corporation and/or the Family Shareholders or Managing Family
Shareholders shall pay the total purchase price by cash or by
certified check at the Closing (defined herein) in the event that
the total purchase price for the Shares is less than or equal to
$500,000. In the event that the total Purchase Price for the
Shares with respect to any of the Shareholders exceeds $500,000,
the first $500,000 shall be paid in accordance with the preceding
sentence hereof and the remaining unpaid balance of the Purchase
Price may in the discretion of the Board of Directors, be paid by
delivery at the Closing of a non-negotiable promissory note (the
"Note"). Each Note (i) shall be paid in forty (40) equal
quarterly installments of principal and interest on the last day
of March, June, September and December, beginning on such
quarterly date first following the Closing, (ii) shall bear
interest on the unpaid purchase price from the date and at the
rate set forth in Section 9.03 hereof, which interest shall be
paid quarterly in arrears at the time of each payment of the
purchase price, (iii) shall be subject to prepayment without
penalty, in whole or in part, at any time with the amount of any
such prepayments applied first to interest accrued on the unpaid
balance as of the date of the prepayment and second to the unpaid
balance, and each installment of the unpaid balance thereafter
shall xxxxx proportionately, and (iv) shall provide for
acceleration of payment after notice of default has been given to
the Corporation and/or the Family Shareholders or Managing Family
Shareholders by the Shareholder, unless such default is cured
within thirty (30) days after written notice of default. The
parties agree that in the event the Payment Cap applies and the
Corporation is prevented from making payments under the terms of
the Note,
15
Page 34 of 44 pages
no default shall exist under the Note notwithstanding the
application of the Payment Cap Adjustment set forth in Section
8.04 hereof. Interest shall accrue on amounts due and not paid
under the Note during such period of time that the Payment Cap
exists at a rate equal to 2% in excess of the rate provided
for in Section 9.03. Notwithstanding anything to the contrary
in this Section 9.01(a), the amount of any proceeds received
by the Corporation from any Insurance Policy described in
Article Twelve which is used to purchase the Shares of a
deceased Shareholder shall be paid by cash or by certified
check at the Closing.
(b) In the event the Corporation or the Family Shareholders
purchase Shares under this Agreement and deliver Notes, the
Notes shall be secured by a pledge of the Shares to the
selling Shareholder until such time as the payment is made in
full. Certificates evidencing the Shares pledged under the
Pledge Agreement shall be held by the selling Shareholder. The
Pledge Agreement shall be in a form satisfactory to the Board
of Directors.
(c) The "Closing" of any purchase pursuant to subparagraphs (a)
and (b) shall take place at the principal place of business of
the Corporation on the ninetieth (90th) day following the
Purchase Notice (provided that if such date is not a business
day, the next business day thereafter).
Section 9.02. Allocations in the Event of a Payment Cap. To the extent
that the Corporation's obligations hereunder would exceed the Payment Cap at any
time during its fiscal year, the Directors of the Corporation shall make the
following allocations pro rata by each classification set forth in (a) - (e)
below or in such other manner as the Directors in their sole discretion deem
equitable and make Payment Cap Adjustments under outstanding Notes to permit the
following:
(a) First, interest payable under outstanding Notes in order to
avoid imputed interest or original issue discount;
(b) Second, subject to the terms and conditions of Section 303 of
the Code, the Corporation will purchase from the executors or
administrators of the estate of a deceased Shareholder as many
of the Shares in the estate which when multiplied by the
purchase price set forth in Section 8.01 equal the sum of (i)
the estate, inheritance, legacy and succession taxes
(including any interest collected as part of such taxes)
imposed because of the death of the Shareholder and (ii) the
amount of funeral and administrative expenses allowable as
deductions to the estate of the Shareholder under Section 2053
of the Code; provided that the Corporation shall not be
required to purchase any fractional Shares;
(c) Third, the Corporation will purchase Shares from the estates
of Shareholders remaining after the purchases in (b) above;
(d) Fourth, the Corporation will purchase Shares from Xxxxxx
pursuant to Sections 5.01 and 5.02 hereof; and
16
Page 35 of 44 pages
(e) Fifth, the Corporation will purchase Shares from the Stock
Trust and Family Shareholders who have exercised the Lifetime
Family Shareholder Put set forth in Section 7.01 hereof.
provided, however, that if the Corporation has Notes outstanding under Section
9.01, subparagraphs (b) through (e) above also shall be construed to cover, pro
rata with new Share purchases, the payments under the Notes (e.g., a Note
outstanding from the purchase of Shares from the Stock Trust shall be treated
pro rata with new Share purchases under subparagraph (e)).
Section 9.03. Interest Rate on Purchase Price. The unpaid balance of
the purchase price of any Share purchased pursuant to Articles Five, Six or
Seven of this Agreement shall bear interest at the rate made available to the
Corporation under its revolving credit facility or working capital credit
facility by its principal lender or the lead lender designated in any lending
group and any such interest shall accrue from the Closing. Interest shall be
computed, and changes in the interest rate shall be made, on a monthly basis and
the interest rate at the beginning of the month or the date interest first
accrues shall be used for the entire month.
Section 9.04. Deduction for Indebtedness. If a Shareholder is indebted
to the Corporation or a purchasing Shareholder(s) at the date of the
Shareholder's death or the date of Transfer, the Corporation or purchasing
Shareholder(s) may (but shall not be required to) deduct from and set off
against each installment of the purchase price for such Shares all or such part
of such indebtedness that is due and unpaid at the time when each such
installment is due for payment in accordance with this Agreement, and such
indebtedness to the Corporation or the purchasing Shareholder(s) shall be
reduced and satisfied to the extent of each such deduction and set-off.
ARTICLE TEN
Write Up to Fair Value
Section 10.01. Write Up to Fair Value. If the Corporation is relieved
by Section 8.02 from purchasing any of its own Shares which it may be obligated
or permitted to purchase pursuant to the terms of this Agreement because, at the
time of such purchase, (i) the book value of the Corporation's assets is less
than its liabilities plus stated capital and (ii) the tangible or intangible
assets of the Corporation have a fair value in excess of the amount at which
they are carried on the Corporation's books, the Corporation, through its
Directors, shall, to the extent permitted by applicable law and generally
accepted accounting principles, write up to fair value any or all of the
tangible or intangible assets of the Corporation (and thereby create or add to
the Corporation's capital surplus) in order to make permissible or lawful any of
the purchases of its own Shares pursuant to the terms of this Agreement.
ARTICLE ELEVEN
Fiduciary Transfer of Shares
Section 11.01. Endorsement on Shares for Purchases from Fiduciaries.
The Shareholder (or, in the case of a deceased or incapacitated Shareholder, his
Fiduciary or personal
17
Page 36 of 44 pages
representative) whose Shares are being purchased pursuant to the exercise of any
of the purchase rights contained in this Agreement shall promptly cause each
share certificate evidencing such Shares to be appropriately endorsed and
delivered to the purchasing Shareholder(s) or the Corporation, subject to the
provisions of Section 9.01. If such Shares are purchased by the Corporation they
shall be treated as treasury shares for all corporate purposes when payment for
the Shares is made in full.
Section 11.02. Lost Share Certificates. If the Fiduciary, or a
Shareholder whose Shares are purchased pursuant to the exercise of one or more
of the purchase rights, shall assert that one or more of the Share certificates
evidencing such Shares have been lost, wrongfully taken or destroyed, such
Fiduciary or such Shareholder shall, in lieu of delivering such Share
certificate(s) to the Corporation or Shareholder as contemplated by Section
11.01 of this Agreement, deliver to and file with the Corporation:
(a) A lost securities affidavit executed by such Fiduciary or such
Shareholder, stating that, after reasonable effort to locate
the same, such Share certificates cannot be found and have, to
the best of his knowledge, been lost, wrongfully taken or
destroyed;
(b) Unless waived by the Directors of the Corporation, an
indemnity bond, in the form and with surety satisfactory to
the Directors of the Corporation, to indemnify the Corporation
against any loss or liability that it may incur by reason of
any acts taken by it in reliance on the assertion of such
Fiduciary or Shareholder that such Share certificate(s) have
been lost, wrongfully taken or destroyed; and
(c) An assignment separate from the certificate, appropriately
endorsed by such Fiduciary or Shareholder to sell, assign and
transfer each Share evidenced by each such lost, wrongfully
taken or destroyed Share certificate to the party purchasing
the same.
ARTICLE TWELVE
Insurance to Fund the Purchase
By the Corporation of Certain Shares
Section 12.01. Insurance. In order to fund in part the purchase of
Shares required or permitted herein, the Corporation, by its Directors, may
procure, as policyowner and beneficiary, life insurance on the lives of any or
all of the Shareholders and/or such Shareholders' respective spouses ("Insurance
Policy"). Any insurance company that has issued an Insurance Policy hereunder
shall be authorized at all times during the terms of this Agreement to disclose
and release to any Shareholder, upon written request therefor, any information
with respect to the status of any Insurance Policy. Except as set forth in
Section 12.02, during the term of this Agreement, the Corporation shall not be
required to maintain any Insurance Policy in full force and effect. The
Corporation may, without the prior written consent of any insured Shareholder,
cancel any Insurance Policy or take any action which may give rise to the
termination or cancellation thereof.
18
Page 37 of 44 pages
Section 12.02. Purchase of Insurance Policy by Shareholder. If (i) an
insured Shareholder sells, transfers, gives or otherwise distributes all of the
Shares owned by such Shareholder to any person or entity in accordance with the
terms of this Agreement prior to such Shareholder's death or (ii) this Agreement
shall have been terminated prior to such Shareholder's death, then the insured
Shareholder shall have the right to purchase from the Corporation any or all of
the Insurance Policies insuring the life of the insured Shareholder for a price
equal to the cash surrender value of such policies on the date of the sale,
transfer, gift or other distribution, plus the unearned portion of any premium
which shall have been paid thereon, less any indebtedness under such Insurance
Policies. This right may be exercised by the insured Shareholder by the payment
of the purchase price in cash to the Corporation within thirty (30) days after
(i) the Transfer of all of the Shares owned by such Shareholder or (ii) the
termination of this Agreement. In the event an insured Shareholder exercises
this option, the Corporation shall execute all such documents and take such
other actions as may be reasonably requested by the insured Shareholder or the
insurance company in order to assign and transfer to the insured Shareholder
such Insurance Policy or Policies. If an insured Shareholder does not exercise
such option, the Corporation shall have the right to maintain, sell, assign,
transfer, terminate, cancel or take any other action in respect of any or all of
the Insurance Policies covered by such option in its sole discretion.
Section 12.03. Segregation of Insurance Proceeds. The Corporation
agrees to segregate (and during such period invest such proceeds as determined
by the Directors) from its other corporate assets the proceeds of each Insurance
Policy received by the Corporation and to use such proceeds and any interest
thereon to purchase the Shares of a deceased Shareholder pursuant to this
Agreement. In the event the Corporation receives proceeds from an Insurance
Policy in excess of the amount necessary to purchase all of the Shares of a
deceased Shareholder, such excess proceeds shall be used as the Directors of the
Corporation determine.
ARTICLE THIRTEEN
Miscellaneous
Section 13.01. Enabling Action by Shareholders. If any amendment to the
Articles of Incorporation and/or the Regulations of the Corporation, or any
other action requiring the vote, consent or approval of Shareholders of the
Corporation, is required in order to make permissible or lawful any of the
purchases of its own Shares which the Corporation may be obligated or entitled
to make in accordance with the terms of this Agreement, each Shareholder will
vote all Shares of the Corporation at the time held by him, her or its in favor
of, or will consent in writing to, such amendment or action, whether such
amendment or action is voted upon or consented to at, prior to or after the time
of such purchase or purchases by the Corporation or the Shareholder(s).
Section 13.02. Restrictive Legends. The Corporation and each
Shareholder shall cause each certificate evidencing Shares of the Corporation
held by each Shareholder to bear an appropriate legend reflecting the terms of
this Agreement, which legend may be in the following or any other appropriate
form chosen by the Corporation:
19
Page 38 of 44 Pages
BRC Properties Inc., an Ohio corporation (the "Corporation"),
and each person who is a Shareholder of the Corporation, are
parties to a written Close Corporation Agreement, as that term
is defined in Section 1701.01(X) of the Ohio Revised Code (the
"Close Corporation Agreement"). The Close Corporation
Agreement governs certain aspects of the internal affairs of
the Corporation and the relations of the Shareholders among
themselves, including restrictions on the transfer of shares.
Any transferee or purchaser of the Shares shall be bound by
the Close Corporation Agreement and shall be considered a
party to the Close Corporation Agreement. The Corporation will
mail to the record holder of the Shares a copy of the Close
Corporation Agreement, without charge, within five (5) days
after receipt of a written request therefor. Additionally, the
shares evidenced by this certificate have not been registered
under the Securities Act of 1933, as amended, or the
securities laws of any state, and may not be sold,
transferred, pledged, hypothecated except pursuant to an
opinion of counsel satisfactory to the Corporation that such
transfer is lawful.
Section 13.03. Governing Law, Forum and Jurisdiction. This Agreement
shall be governed by and construed in accordance with the laws of the State of
Ohio. Any action, suit or proceeding in respect of or arising from or out of
this Agreement or the transactions contemplated hereby shall be prosecuted as to
any one or more of the parties hereto at Columbus, Ohio. Each party hereto
jointly and severally consents to the exercise of jurisdiction over his or its
person by any court situated at Columbus, Ohio and having jurisdiction over the
subject matter of any action, suit or proceeding arising from or out of or in
respect of this Agreement or the transactions contemplated hereby. Adequate
notice of any such action, suit or proceeding in any such court shall
conclusively be deemed to have been given to any one or more of the parties
hereto against whom the same is instituted if given to such person in accordance
with the provisions of this Agreement or by any other manner consistent with due
process of law. EACH PARTY HERETO WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, SUIT OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES
UNDER THIS AGREEMENT.
Section 13.04. Payments and Notices.
(a) All payments, documents, notices and other communications required
or permitted to be made, given or delivered to the Corporation under the terms
of this Agreement, which notices and other communications shall be in writing,
shall be mailed by registered mail, or delivered in person, to an officer of the
Corporation (other than the person delivering or giving such document, notice or
other communication) at the principal office of the Corporation with a copy to
the Shareholders who are not giving or delivering any such document, notice or
other communication, and shall be deemed to have been made, given or delivered
when actually received.
(b) All payments, documents, notices and other communications required
or permitted to be made, given or delivered to any other party under the terms
of this Agreement, which notices and other communications shall be in writing,
shall be delivered in person or
20
Page 39 of 44 Pages
mailed by registered mail, return receipt requested, to such party at the
following address: (1) If to Xxxxxx, to: Xxxxxx X. Xxxxxx, 0000 Xxxxxx Xxxx,
Xxxxxx, Xxxx 00000; (2) If to Xxxxxx, to: Xxxxxx X. Xxxxxx, 0000 Xxxxxxxxxx
Xxxx, Xxxxx Xxxxxxxxx, Xxxx 00000; (3) If to Xxxxxxx, to: Xxxxxxx X. Xxxxxx,
0000 Xxxxxx Xxxx, Xxxxxx, Xxxx 00000; (4) If to Xxxxx, to: Xxxxx X. Xxxxxx, 0000
Xxxxxx Xxxx, Xxxxxx, Xxxx 00000; (5) If to Xxxxx, to: Xxxxx Xxxxxx Xxxxx, 0000
Xxxxxxxx Xx., Xxxxx Xxxxxxxxx, Xxxx 00000; (6) If to the S Trust, to: Xxxxx X.
Xxxxxx, Trustee, 0000 Xxxxxx Xxxx, Xxxxxx, Xxxx 00000; (7) If to Xxxxxx, to:
Xxxxx X. Xxxxxx, 0000 Xxxxxx Xxxx, Xxxxxx, Xxxx 00000; and (8) If to the Stock
Trust: The Xxxxxx Corporation Stock Trust, Attn: Xxxxxx X. Xxxxxx and Xxxxxxx X.
Xxxxxx, Trustees, 0000 Xxxxxx Xxxx, Xxxxxx, XX 00000, or at such other address
as such party may from time to time and at any time designate by giving written
notice to all of the other parties to this Agreement in accordance with this
Section 13.04, and shall be deemed to have been made, given or delivered when
actually received.
Section 13.05. Amendment, Termination or Invalidity of the Agreement.
(a) Subject to Section 2.04 and subject to Section 7.01, this
Agreement may be amended or terminated, from time to time and at any time, by
the written consent or affirmative vote of the holders of a proportion of not
less than four-fifths of the outstanding Shares of each class of the issued and
outstanding Shares of the Corporation. If the Agreement is amended or terminated
by the written consent of the holders of fewer than all of the Shares of each
class as provided herein, the Secretary of the Corporation shall mail a copy of
the amendment or a notice of termination to each Shareholder who did not so
consent.
(b) Notwithstanding anything herein to the contrary, this Agreement
shall also terminate automatically if the Corporation is required to file
periodic reports and information pursuant to Section 15(d) of the 1934 Act or
the Shares of the Corporation are (i) listed on a national securities exchange,
(ii) registered under Section 12(g) of the 1934 Act or (iii) included in a
registration statement that has become effective pursuant to the 1933 Act;
provided that such actions must be taken by the affirmative vote or written
consent of the Shareholders as set forth in subparagraph (a) above.
(c) This Agreement shall be invalid if Shares of the Corporation are
transferred or issued to a person who takes delivery of the certificate for the
Shares other than by gift, bequest or inheritance and without knowledge or
notice of the Agreement and such person delivers to the Corporation a written
rejection of the Agreement the earlier of within ninety (90) days after the date
on which that person first received notice of the existence of the Agreement or
within three years of the date of transfer or issuance and the Corporation does
not offer in writing, within thirty (30) days after the date on which the
Corporation received the written rejection, to purchase the Shares from such
person for the full amount paid for the Shares, or, having made an offer to
purchase the Shares for that amount, the Corporation, upon that person's
acceptance of the offer, does not purchase the Shares in accordance with this
Section 13.05.
(d) Notwithstanding subparagraph (c), the Agreement shall not become
invalid and such person to whom the Shares are transferred or issued is not
entitled to any payment from the Corporation pursuant to this Section 11.03 of
this section if both of the following apply: (i) Shares of the Corporation are
transferred or issued to a person who takes delivery of the certificate for the
shares other than by gift, bequest, or inheritance and without knowledge or
notice of the Agreement and (ii) such person does either of the following: (A)
fails to deliver a
21
Page 40 of 44 Pages
written rejection of the Agreement to the Corporation within ninety (90) days
after the date on which that person first received notice of the existence of
the Agreement or within three (3) years of the date of transfer or issuance,
whichever is earlier or (B) fails, within thirty (30) days after the date on
which that person receives a written offer by the Corporation to purchase the
Shares from that person for the full amount paid for the Shares, to accept the
offer.
(e) If Shares of the Corporation are transferred or issued to a
person who takes delivery of the certificate for the Shares other than by gift,
bequest, or inheritance and without knowledge or notice of the Agreement and
that person accepts an offer by the Corporation to purchase the Shares, the
Corporation shall pay to that person the full amount paid for the Shares within
seven (7) days after that person delivers to the Corporation the certificate for
the shares and proof of payment of the amount paid for the Shares. If the amount
paid for the Shares included property other than cash, the Corporation, at its
option, may return the property to that person or may pay to that person cash in
an amount equal to the fair market value of the property on the date of transfer
or issuance of the Shares, as determined in good faith by the Corporation. A
Shareholder who transfers Shares to a person who takes delivery of the
certificate for the Shares other than by gift, bequest, or inheritance and
without knowledge or notice of the Agreement is liable to the Corporation, upon
the Corporation's written demand made upon the Shareholder within ninety (90)
days after the date on which the Corporation made payment for the Shares, for
the full amount that the Corporation paid for the Shares. Upon receiving payment
in that amount from the Shareholder, the Corporation shall transfer the Shares
to the Shareholder.
Section 13.06. Provisions Severable. If any provisions of this
Agreement or the application of any such provision to any person or any
circumstances shall be determined to be invalid or unenforceable, then such
determination shall not affect any other provisions of this Agreement or the
application of such provision to any other person or circumstance, all of which
other provisions shall remain in full force and effect; and if any provision of
this Agreement is capable of two constructions, one of which would render the
provision void and the other of which would render the provision valid, then
such provision shall have the meaning which renders it valid.
Section 13.07. Duplicate Originals. This Agreement may be executed in
counterparts, each of which shall be deemed to be a duplicate original, but all
counterparts, taken together, shall constitute duplicate originals of one and
the same agreement.
Section 13.08. Successors and Assigns. This Agreement shall inure to
the benefit of and be binding upon the respective successors and assigns
(including successive, as well as immediate, successors and assigns) of each
party hereto.
Section 13.09. Persons and Pronouns. When used in this Agreement, each
pronoun and the terms "person" or "persons" shall be deemed to mean one or more
individuals, firms, corporations, trusts, partnerships or other entities, as the
context or circumstances may indicate.
Section 13.10. Captions. The captions contained in this Agreement are
included only for convenience of reference and do not define, limit, explain or
modify this Agreement or its interpretation, construction or meaning and are in
no way to be construed as a part of this Agreement.
22
Page 41 of 44 Pages
Section 13.11. Integration Clause. This Agreement constitutes the
entire agreement between the parties hereto in respect of the subject matter of
this Agreement, and this Agreement supersedes all prior and contemporaneous
agreements between the parties hereto in connection with the subject matter of
this Agreement.
Section 13.12. Equitable Relief. Because of the unique character of the
Shares and in the event of breach of this Agreement, the Shareholders and the
Corporation will suffer irreparable injury if this Agreement is not specifically
enforced. The Shareholders and the Corporation shall therefore be entitled to
specific enforcement of this Agreement or injunctive relief in any court of
competent jurisdiction. Such remedies shall be cumulative and not exclusive, and
shall be in addition to any other available remedies to the Shareholders and the
Corporation.
Section 13.13. Attorney's Fees. In the event of litigation of any
dispute or controversy arising from, in, under or concerning this Agreement or
any amendment or termination hereof, including, without limiting the generality
of the foregoing any claimed breach hereof, the prevailing party in such action
shall be entitled to recover from the other party in such action, such sum as
the court shall fix as reasonable attorney's fees incurred by such prevailing
party.
Section 13.14. No Third Party Rights. Except as provided in Sections
2.01 and 2.04 hereof, nothing herein shall be deemed to create any rights in
third parties (other than permitted successors and assigns) who are not parties
to this Agreement.
Section 13.15. Further Assurances. The parties shall execute and
deliver such other instruments and take such other action as may be necessary or
convenient in the discretion of the Board of Directors of the Corporation to
effectuate all the provisions and intentions of this Agreement.
Section 13.16. Presumption. Notwithstanding that the Shareholders may
also serve as Directors of the Corporation, as Directors and Officers of
Dominion and as trustees, and certain conflicts of interest may arise from time
to time, the parties hereto agree that there shall be a presumption of good
faith and fair dealing in connection with actions taken hereunder by such
persons, which presumption can only be overcome by clear and convincing evidence
to the contrary.
Section 13.17. Acknowledgement. The Corporation, Shareholders and other
parties acknowledge and covenant to the Corporation and each other that they
have (i) the requisite capacity to enter into this Agreement; (ii) carefully
read and understood the terms contained herein, including exhibits and schedules
attached hereto, (iii) had the right to, and have been encouraged to, obtain
legal counsel separate from Vorys, Xxxxx, Xxxxxxx and Xxxxx LLP ("VSSP"), the
Corporation's legal counsel, (iv) executed and delivered this Agreement as their
free act and deed and (v) in connection with any dispute arising hereunder, VSSP
may continue to represent the interests of the Corporation notwithstanding any
prior services that VSSP may have provided, or are currently providing, to a
Shareholder at the time of such dispute.
Section 13.18. Covenants. The covenants made herein shall continue
after and shall survive the execution and delivery of this Agreement.
23
Page 42 of 44 pages
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of the date first above written.
BRC PROPERTIES INC.
/s/ Xxxxx X. Xxxxxxx /s/ Xxxxxx X. Xxxxxx
------------------------------- ----------------------------------------
Xxxxxx X. Xxxxxx, Chairman
/s/ Xxxxxx X. Xxxxx
-------------------------------
/s/ Xxxxxx X. Xxxxxx
/s/ Xxxxx X. Xxxxxxx /s/ Xxxxxxx X. Xxxxxx
------------------------------- ----------------------------------------
Xxxxxx X. Xxxxxx and
/s/ Xxxxxx X. Xxxxx Xxxxxxx X. Xxxxxx, Stock Trustees of
------------------------------- Xxxxxx Corporation Stock Trust
/s/ Xxxxx X. Xxxxxxx /s/ Xxxxxxx X. Xxxxxx
------------------------------- ----------------------------------------
Xxxxxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxx
-------------------------------
/s/ Xxxxx X. Xxxxxxx /s/ Xxxxx X. Xxxxxx
------------------------------- ----------------------------------------
Xxxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxx
-------------------------------
/s/ Xxxxx X. Xxxxxxx /s/ Xxxxx X. Xxxxxx
------------------------------- ----------------------------------------
Xxxxx X. Xxxxxx, S Trustee
/s/ Xxxxxx X. Xxxxx
-------------------------------
/s/ Xxxxx X. Xxxxxxx /s/ Xxxxx X. Xxxxxx
------------------------------- ----------------------------------------
Xxxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxx
-------------------------------
/s/ Xxxxx X. Xxxxxxx /s/ Xxxxxx X. Xxxxxx
------------------------------- ----------------------------------------
Xxxxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxx
-------------------------------
/s/ Xxxxx X. Xxxxxxx /s/ Xxxxxx X. Xxxxxx
------------------------------- ----------------------------------------
Xxxxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxx
-------------------------------
/s/ Xxxxx X. Xxxxxxx /s/ Xxxxx Xxxxxx Xxxxx
------------------------------- ----------------------------------------
Xxxxx Xxxxxx Xxxxx, Beneficiary
/s/ Xxxxxx X. Xxxxx
-------------------------------
24
Page 43 of 44 pages
EXHIBIT A
CLASS B
CLASS A SHARES
SHARES CLASS A (NON- CLASS B COMBINED COMBINED
SHAREHOLDERS (VOTING) % VOTING) % TOTAL %
------------ -------- - ------- - ----- -
Xxxxxx X. Xxxxxx and 6,500 6.85 13,475 4.93 19,975 5.43
Xxxxxxx X. Xxxxxx, Trustees
The Xxxxxx Stock Trust
Xxxxxxx X. Xxxxxx 43,099 45.43 112,875 41.32 155,974 42.38
Xxxxx X. Xxxxxx 23,328 24.59 76,180 27.88 99,508 27.04
Xxxxx X. Xxxxxx, Trustee 1987 16,114 16.99 54,605 19.99 70,719 19.21
Irrevocable Qualified
Subchapter S Trust, Xxxxx
Xxxxxx Xxxxx, Beneficiary
Xxxxx X. Xxxxxx 5,819 6.13 16,060 5.88 21,879 5.94
TOTALS: 94,860 273,195 368,055
Treasury Shares: 10,205 Class A
--------------- 42,000 Class B
25
Page 44 of 44 pages
