EXHIBIT 10.2
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT, dated as of March __, 1997, among
SunSource Inc., a Delaware corporation (the "Corporation"), Xxxxxx Brothers (as
hereinafter defined), Xxxxxx X. Xxxxxxxx ("Xxxxxxxx"), Xxxx X. XxXxxxxxx
("XxXxxxxxx"), Xxxxxx X. Xxxxxxxx ("Xxxxxxxx"), Xxxxxx X. Xxxxxxxxx
("Xxxxxxxxx"), Xxx X. Xxxxxxx ("Xxxxxxx"), Xxxxxx X. Xxxxxxx ("Xxxxxxx") and the
respective S-corporations of Marshall, McDonnell, Edmonson, Cornelius, Xxxxxxx
and Xxxxxxx listed on the signature page hereto (Marshall, McDonnell, Edmonson,
Cornelius, Xxxxxxx and Xxxxxxx and their respective S-corporations being
collectively referred to herein as the "Senior Executives").
BACKGROUND
The Corporation has been formed to accomplish the conversion
(the "Conversion") of SunSource L.P. (the "Partnership") to corporate form. In
the Conversion, Xxxxxx/SDI, Inc., which is the general partner of SDI Partners
I, L.P., the general partner of the Partnership (the "General Partner"), and the
Senior Executives, who are the limited partners of the General Partner, will
receive Common Stock of the Corporation (the "Common Stock") in exchange for
their interests in the General Partner. In addition, affiliates of Xxxxxx
Brothers and the Senior Executives presently own Class B limited partnership
interests in the Partnership which will be converted in the Conversion into
Common Stock. For purposes of this Agreement, "Xxxxxx Brothers" shall mean
Xxxxxx Brothers Holdings Inc., Xxxxxx/SDI, Inc., Xxxxxx LTD I, Inc., Xxxxxx
Brothers Capital Partners I (or upon dissolution of Xxxxxx Brothers Capital
Partners I, LB I Group, Inc., its general partner) and any other person
affiliated with the foregoing entities to which they distribute shares of Common
Stock received by them in the Conversion.
The purpose of this Agreement is to provide for certain
restrictions on the sale of Common Stock by the parties after the Conversion,
certain corporate governance matters with respect to the voting of shares of
Common Stock and certain bylaw provisions.
NOW, THEREFORE, in consideration of the consideration to be
received by Xxxxxx Brothers and the Senior Executives in the Conversion and the
mutual promises contained herein, the parties agree as follows:
Section 1. Sale of Shares of Common Stock. Xxxxxx Brothers and
the Senior Executives each agree that they and their respective affiliates will
not sell any shares of Common Stock which they beneficially own, in a single
transaction or series of related transactions, to any third person or persons
which to the knowledge of Xxxxxx Brothers and the Senior Executives after
reasonable inquiry, would beneficially own after such transactions more than 10%
of the then outstanding Common Stock (or more than 15% of the then outstanding
Common Stock if such person or persons are eligible to report the acquisition of
such shares on Schedule 13G
pursuant to Rule 13d-1(b)(1) under the Securities Exchange Act of 1934, as such
rule is currently in effect).
Section 2. Voting of Shares. On matters submitted to a vote of
stockholders, Xxxxxx Brothers and the Senior Executives each agree to vote (or
cause to be voted), in the same proportion as the shares of outstanding Common
Stock not owned by them ("Unaffiliated Shares") that are voted on any such
matter, that percentage of Excess Voting Shares held by them at such time that
equals the percentage of outstanding Unaffiliated Shares that are voted on such
matter. "Excess Voting Shares" means the shares of Common Stock beneficially
owned by Xxxxxx Brothers or the Senior Executives, as the case may be (and their
respective affiliates), at any time, that represents voting power in excess of
their respective voting powers immediately prior to the Conversion that they
would have had in a vote of the holders of the Class A Interests and the Class B
Interests voting together as a single class. On matters that are the subject of
action by written consent of stockholders in lieu of meeting, Xxxxxx Brothers
and the Senior Executives each agree to deliver (or cause to be delivered)
written consents with respect to a number of shares of Common Stock equal to the
percentage of outstanding Unaffiliated Shares that have delivered written
consents in such matter times the number of Excess Voting Shares held by each of
them.
Section 3. Board of Directors. The Board of Directors of the
Corporation shall consist of nine directors, of whom three directors may be
nominated by management, four will be Independent Directors (as defined in the
provision of the Bylaws of the Corporation attached as Exhibit 1) and two
directors may be nominated by Xxxxxx Brothers if Xxxxxx Brothers holds more than
20% of the outstanding shares of Common Stock or one director may be nominated
by Xxxxxx Brothers if Xxxxxx Brothers holds between 10% and 20% of the
outstanding shares of Common Stock. Xxxxxx Brothers and the Senior Executives
each agree to vote the shares of Common Stock owned by them to carry out the
provisions of this section, subject to the provisions of Section 2.
Section 4. Bylaw Provision. The bylaws of the Corporation
shall include the provision set forth in Exhibit 1 hereto. Xxxxxx Brothers and
the Senior Executives agree to vote the shares of Common Stock owned by them to
carry out the provisions of the Bylaws, subject to the provisions of Section 2.
Section 5. Governing Law. This Agreement shall be governed in
all respects, including validity, interpretation and effect, by the laws of the
State of Delaware applicable to contracts made and to be performed in that
State.
Section 6. Further Assurances. From and after the date of this
Agreement, the parties hereto shall execute and deliver such instruments,
documents and other writings and take such actions as may be reasonably
necessary to effectuate fully the intent and purpose of this Agreement.
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Section 7. Notices. All notices, requests, demands and other
communications provided for by this Agreement shall be sufficient if given in
writing and delivered personally, by Federal Express or similar overnight
delivery, by telecopy or facsimile transmission, or by registered or certified
mail, return receipt requested, postage prepaid as follows (or to such other
addressee or address as shall be set forth in a notice given in the same
manner):
If to the Corporation:
SunSource Inc.
0000 Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxx
If to Xxxxxx Brothers:
c/x Xxxxxx Brothers Inc.
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx Xxxxxxxx
If to any Senior Executive:
c/o SunSource Inc.
0000 Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attn: [Name of Senior Executive]
IN WITNESS WHEREOF, the parties hereto have executed this
Stockholders Agreement as of the date first above written.
SUNSOURCE INC.
By
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Title
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XXXXXX/SDI, INC.
By
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Title
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XXXXXX LTD I, INC.
By
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Title
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XXXXXX BROTHERS CAPITAL PARTNERS I
By
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Title
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LB I GROUP, INC.
By
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Title
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DOTMAR CORP.
By
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Xxxxxx X. Xxxxxxxx
JPM CORP.
By
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Xxxx X. XxXxxxxxx
NORVED CORP.
By
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Xxxxxx X. Xxxxxxxx
HJC CORP.
By
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Xxxxxx X. Xxxxxxxxx
MWH CORP.
By
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Xxx X. Xxxxxxx
DIACOR CORP.
By
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Xxxxxx X. Xxxxxxx
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EXHIBIT 1
SECTION __. Approval of Independent Directors for Certain Actions.--(a)
Prior to the third anniversary of the date of the consummation of the conversion
of SunSource L.P. to corporate form, the approval of at least a majority of the
corporation's Independent Directors (as defined below) shall be required to
approve (i) any amendment to the certificate of incorporation or bylaws of the
corporation or any stockholder rights plan of the corporation (including the
redemption of the rights thereunder or waiver of any provision thereof) or any
waiver of, or "opt-out" from, the benefit or effect of any provision thereof) or
other provision applicable to the corporation including section 203 of the
GCL); or (ii) any agreement binding the corporation in respect of the sale, in a
single transaction or a series of related transactions, of all or a Substantial
Part of the corporation (as defined below), whether by liquidation,
consolidation, dissolution, sale of capital stock or assets, tender or exchange
offer, merger or other business combination.
(b) The approval of at least a majority of the corporation's
Independent Directors shall be required to approve and authorize (i) any
transaction or series of related transactions between the corporation or any of
its subsidiaries, on the one hand, and any Stockholder (as defined below) or any
affiliate of a Stockholder, on the other hand, (ii) any amendment to, or waiver
of, any provisions of the Stockholders Agreement, dated as of March __ , 1997,
among the Corporation and certain of its stockholders, or (iii) notwithstanding
the terms of the preceding paragraph (a), any amendment to the certificate of
incorporation or bylaws of the corporation which would amend, repeal, waive,
contravene or otherwise alter this paragraph (b), including amendments of the
defined terms used herein.
For purposes of the foregoing:
"Independent Director" means a director of the corporation who is not
(apart from such directorship) (i) an officer, director, affiliate, employee,
principal stockholder, consultant or partner of a Stockholder or any affiliate
of a Stockholder or of any entity that was dependent upon a Stockholder or any
affiliate of a Stockholder for more than 5% of its revenues or earnings in its
most recent fiscal year, or (ii) an officer, employee, consultant or partner of
the corporation or any affiliate of the corporation or an officer, employee,
principal stockholder, consultant or partner of an entity that was dependent
upon the corporation or any affiliate of the corporation for more than 5% of its
revenues or earnings in its most recent fiscal year;
"Stockholder" means SDI Partners I, L.P., Xxxxxx Brothers Capital
Partners I, L.P., Xxxxxx/SDI, Inc., Xxxxxx Brothers Inc. and their respective
affiliates or successors, and any officer, director, employee, principal
stockholder or partner of such entities, affiliates or successors; and
"Substantial Part of the corporation" means, as of any date, thirty
percent (30%) or more of (i) the outstanding capital stock of the corporation
(measured by economic interest or voting power), or (ii) the book value of the
consolidated tangible assets of the corporation and its subsidiaries, taken as a
whole (without regard to any liabilities of the corporation or any of its
subsidiaries), as of the end of its most recent fiscal quarter ending prior to
the time the determination is made.
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