STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT (this "Agreement") dated as of
October 1, 1997, by and among Xxxxxxx plc, a corporation
organized under the laws of the United Kingdom ("Purchaser"),
Pearson Merger Company, Inc., a Delaware corporation and
wholly-owned indirect subsidiary of Purchaser (the "Merger Sub")
and the Stockholders named on Exhibit A hereto (each a
"Stockholder").
WHEREAS, each Stockholder is, as of the date hereof, the
record and beneficial owner of the number of shares of common
stock, par value $0.0001 per share (the "Class A Common Stock")
and/or the number of shares of Class B Common Stock, par value
$.0001 per share ("Class B Common Stock" and, together with the
Class A Common Stock, the "Common Stock") of All American
Communications, Inc., a Delaware corporation (the "Company") set
forth next to such Stockholder's name on Exhibit A hereto; and
WHEREAS, Purchaser, Merger Sub and the Company concurrently
herewith are entering into an Agreement and Plan of Merger, dated
as of the date hereof (the "Merger Agreement"), which provides,
among other things, for the acquisition of the Company by
Purchaser by means of a cash tender offer (the "Offer") for any
and all of the outstanding shares of Common Stock and for the
subsequent merger (the "Merger") of Merger Sub with and into the
Company upon the terms and subject to the conditions set forth in
the Merger Agreement; and
WHEREAS, as a condition to the willingness of Purchaser and
Merger Sub to enter into the Merger Agreement, and in order to
induce Purchaser and Merger Sub to enter into the Merger
Agreement, each Stockholder has agreed to enter into this
Agreement.
NOW, THEREFORE, in consideration of the execution and
delivery by Purchaser and the Merger Sub of the Merger Agreement
and the foregoing and the mutual representations, warranties,
covenants and agreements set forth herein and therein, and other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. Representations and Warranties of the
Stockholders. Each Stockholder hereby severally represents and
warrants to Purchaser and Merger Sub as follows as to such
Stockholder:
a. Such Stockholder is the record and beneficial owner of
the shares of Common Stock ("Shares") set forth next to such
Stockholder's name on Exhibit A hereto.
b. Such Stockholder, if a corporation, is duly organized,
validly existing and in good standing under the laws of its
respective jurisdiction, has all requisite corporate power
and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby, and has taken
all necessary corporate action to authorize the execution,
delivery and performance of this Agreement.
c. This Agreement has been duly authorized, executed and
delivered by such Stockholder and constitutes the legal, valid
and binding obligation of such Stockholder, enforceable against
such Stockholder in accordance with its terms, except (i) as
limited by applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting
enforcement of creditors' rights generally and (ii) the
availability of the remedy of specific performance or injunctive
or other forms of equitable relief may be subject to equitable
defenses and would be subject to the discretion of the court
before which any proceeding therefor may be brought.
d. Neither the execution and delivery of this Agreement nor
the consummation by such Stockholder of the transactions
contemplated hereby will result in a violation of, or a default
under, or conflict with, any contract, trust, commitment,
agreement, understanding or arrangement of any kind to which the
Stockholder is a party or bound or to which such Stockholder's
Shares are subject. Consummation by such Stockholder of the
transactions contemplated hereby will not violate, or require any
consent, approval, or notice under any provision of any judgment,
order, decree, statute, law, rule or regulation applicable to
such Stockholder or such Stockholder's Shares, except for any
necessary filing under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") or the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), any pre-
merger notification with the German Federal Cartel Office or
state takeover laws.
e. Such Stockholder's Shares and the certificates
representing such Stockholder's Shares are now and at all times
during the term hereof will be held by such Stockholder, or by a
nominee or custodian for the benefit of such Stockholder, free
and clear of all liens, claims, security interests, proxies,
voting trusts or agreements, understandings or arrangements or
any other encumbrances whatsoever, except for any such
encumbrances or proxies arising hereunder or otherwise disclosed
to the Purchaser; provided, however, that such Stockholder may
transfer all or a portion of the shares to a person or entity
who, by written instrument reasonably acceptable in form and
substance to Purchaser, agrees to be bound by each of the terms
of this Agreement.
SECTION 2. Representations and Warranties of Purchaser
and Merger Sub. Each of Purchaser and Merger Sub hereby, jointly
and severally, represents and warrants to each Stockholder as
follows:
a. Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the United
Kingdom, has all requisite corporate power and authority to
execute and deliver this Agreement and to consummate the
transactions contemplated hereby, and has taken all necessary
corporate action to authorize the execution, delivery and
performance of this Agreement. Merger Sub is a corporation duly
organized, validly existing and in good standing under the laws
of the State of Delaware, has all requisite corporate power and
authority to execute and deliver this Agreement and to consummate
the transactions contemplated hereby, and has taken all necessary
corporate action to authorize the execution, delivery and
performance of this Agreement.
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b. This Agreement has been duly authorized, executed and
delivered by each of Purchaser and Merger Sub and constitutes the
legal, valid and binding obligation of each of Purchaser and
Merger Sub, enforceable against each of them in accordance with
its terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors' rights generally
and (ii) the availability of the remedy of specific performance
or injunctive or other form of equitable relief may be subject to
equitable defenses and would be subject to the discretion of the
court before which any proceeding therefor may be brought.
c. Neither the execution and delivery of this Agreement nor
the consummation by each of Purchaser and Merger Sub of the
transactions contemplated hereby will result in a violation of,
or a default under, or conflict with, any contract, trust,
commitment, agreement, understanding or arrangement of any kind
to which each of Purchaser and Merger Sub is not a party or
bound. The consummation by each of Purchaser and Merger Sub of
the transactions contemplated hereby will not violate, or require
any consent, approval, or notice under any provision of any
judgment, order, decree, statute, law, rule or regulation
applicable to either Purchaser or Merger Sub, except for any
necessary filing under the HSR Act, any pre-merger notification
with the German Federal Cartel Office or state takeover laws.
SECTION 3. Purchase and Sale of the Shares.
a. Purchaser hereby agrees to make the Offer. Each
Stockholder hereby severally agrees that it shall tender its
Shares and any shares subsequently acquired pursuant to exercises
after the date hereof of options or warrants to purchase Common
Stock (the "Subject Shares") into the Offer in accordance with
the terms and conditions of the Offer and that it shall not
withdraw any Subject Shares so tendered unless the Merger
Agreement is terminated in accordance with its terms. In
addition, each Stockholder hereby severally agrees to sell to
Merger Sub, and Merger Sub hereby agrees to purchase, all such
Stockholder's Subject Shares at a price per Share equal to $25.50
or such higher price per Share as may be offered by Merger Sub in
the Offer (the "Purchase Price"), provided that such obligation
to purchase is subject to Merger Sub having accepted Shares for
payment under the Offer and the Minimum Condition (as defined in
Exhibit A to the Merger Agreement) and other conditions set forth
in Exhibit A of the Merger Agreement having been satisfied, which
conditions (other than the Minimum Condition) may be waived by
Merger Sub in its sole discretion. Notwithstanding anything to
the contrary herein, the Subject Shares which are shares of Class
A Common Stock, shall not, in the aggregate for all purposes of
this Agreement, exceed 49.9% of the then outstanding shares of
Class A Common Stock, and the number of Subject Shares shall be
reduced on a share-for-share basis for any Shares owned by
Purchaser or any affiliate thereof as of the date hereof. The
Subject Shares as of the date hereof are set forth on Exhibit B
hereto.
b. Each Stockholder hereby grants to Purchaser an
irrevocable option (collectively, the "Option") to purchase such
Stockholder's Subject Shares at a price per Share equal to the
Purchase Price, exercisable in whole but not in part during the
one year period after (i) termination of the Merger Agreement
pursuant to Section 8.3(b) or 8.4(b) thereof or (ii) a
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Competing Transaction Termination (as defined in the Merger
Agreement). In the event Purchaser wishes to exercise the Option,
Purchaser shall send a written notice to each Stockholder
specifying the place, date and time for the closing of such
purchase at least 5 business days in advance of the date of such
closing. Any such purchase shall be subject to the expiration of
any applicable waiting period under the HSR Act and pre-merger
approval required by the German Federal Cartel Office.
SECTION 4. Transfer of the Shares; Option Exercises. Prior
to the termination of this Agreement, except as otherwise
provided herein, no Stockholder shall: (i) transfer (which term
shall include without limitation, for the purposes of this
Agreement, any sale, gift, pledge or other disposition) or
consent to any transfer of any or all of such Stockholder's
Shares; (ii) enter into any contract, option or other agreement
or understanding with respect to any transfer of any or all of
such Stockholder's Shares or any interest therein; (iii) except
as provided in Section 5(b) hereto, grant any proxy, power-of-
attorney or other authorization or consent or with respect to
such Stockholder's Shares; or (iv) deposit such Stockholder's
Shares into a voting trust or enter into a voting agreement or
arrangement with respect to such Stockholder's Shares; provided,
however, that (x) a Stockholder may transfer all or a portion of
such Stockholder's Shares to a person or entity who, by written
instrument reasonably acceptable in form and substance to
Purchaser, agrees to be bound by each of the terms of this
Agreement, and (y) any Stockholder may sell any of such
Stockholders' Shares in a sale which complies with Rule 144 under
the Securities Act of 1933, as amended, provided that prior to
any such sale, such Stockholder shall give notice (the "Sale
Notice") to Purchaser of the number of Shares such Stockholder
desires to sell and, for a period of 5 business days after
receipt of the Sale Notice, Purchaser shall have the right to
purchase such Stockholders' Shares desired to be sold from the
Stockholder at the Purchase Price. In the event that Purchaser
does not purchase such Stockholders' Shares within such 5
business days period, Stockholder will be free to sell such
Stockholders' Shares desired to be sold to any third party. Prior
to the Transition Time (as defined in the Merger Agreement),
except as otherwise provided herein, no Stockholder shall
exercise any outstanding options or warrants to purchase Common
Stock except (i) as necessary to avoid the expiration of such
option or warrant or (ii) in connection with the tender or sale
of the underlying Common Stock to Purchaser or its affiliates.
SECTION 5. Voting of Shares; Grant of Irrevocable Proxy;
Appointment of Proxy.
a. Each Stockholder hereby agrees that at any meeting
(whether annual or special and whether or not an adjourned or
postponed meeting) of the holders of Common Stock, however
called, or in connection with any written consent of the holders
of Common Stock solicited by the Board of Directors, such
Stockholder will appear at the meeting or otherwise cause the
Section 5 Shares (as such term is hereinafter defined) to be
counted as present thereat for purposes of establishing a quorum
and vote or consent (or cause to be voted or consented) such
Stockholder's Section 5 Shares (i) in favor of the Merger during
the term of the Merger Agreement and (ii) against any Competing
Transaction during the term of this Agreement. "Section 5 Shares"
shall mean (i) the Subject Shares unless and until the Class B
Common Stock shall have become voting stock, and (ii) all shares
of voting stock of the Company from and after
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the time that the Class B Common Stock shall have become voting
stock; provided, however, that notwithstanding anything to the
contrary herein, unless and until the Transition Time shall have
occurred, the Section 5 Shares shall not in the aggregate exceed
such amount of the then outstanding shares of voting stock of the
Company as would result in the occurrence of a Change in Control
under the Indenture referred to in Section 3.5(a) of the Merger
Agreement.
b. Each Stockholder hereby irrevocably grants to, and
appoints Purchaser and any nominee thereof, its proxy and
attorney-in-fact (with full power of substitution) during the
term of this Agreement, for and in the name, place and stead of
such Stockholder, to vote such Stockholder's Section 5 Shares, or
grant a consent or approval in respect of such Stockholder's
Section 5 Shares, in connection with any meeting of the
stockholders of the Company (i) in favor of the Merger during the
term of the Merger Agreement, and (ii) against any Competing
Transaction (as defined in the Merger Agreement) during the term
of this Agreement.
c. Except as otherwise disclosed to Purchaser, each
Stockholder represents that any proxies heretofore given in
respect of such Stockholder's Subject Shares, if any, are not
irrevocable, and that such proxies are hereby revoked.
d. Each Stockholder hereby affirms that the irrevocable
proxy set forth in this Section 5 is given in connection with the
execution of the Merger Agreement and that such irrevocable proxy
is given to secure the performance of the duties of such
Stockholder under this Agreement. Each Stockholder hereby further
affirms that the irrevocable proxy is coupled with an interest
and, except as set forth in Section 5 hereof, is intended to be
irrevocable in accordance with the provisions of Section 212(e)
of the Delaware General Corporation Law (the "DGCL").
e. Purchaser agrees that, until any such Stockholder's
Section 5 Shares are purchased by Merger Sub pursuant to Section
3 hereof, such Stockholder shall retain the right to vote such
Stockholder's Section 5 Shares (as well as any other Shares) for
the election of directors of the Company and for any other matter
other than those specified in clauses (a) and (b) of this Section
5.
SECTION 6. Competing Transactions. Each Stockholder will
not, and will instruct its Representatives during the term of the
Merger Agreement not to, initiate, solicit or encourage
(including by way of furnishing information or assistance) any
Competing Transaction (as defined in the Merger Agreement), or
enter into or maintain discussions or negotiate with any person
in furtherance of or relating to or to obtain a Competing
Transaction, or agree to or endorse any Competing Transaction, or
authorize or permit any Representative to take any such action,
and such Stockholder shall use its reasonable best efforts to
cause its Representatives not to take any such action. Such
Stockholder shall promptly advise Purchaser if any such proposal
or offer, or any inquiry or contact made with any person with
respect thereto, is made.
SECTION 7. Further Assurances; Stockholder Capacity.
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a. Each Stockholder shall, upon request of Purchaser or
Merger Sub, execute and deliver any additional documents and take
such further actions as may reasonably be deemed by Purchaser or
Merger Sub to be necessary or desirable to carry out the
provisions hereof and to vest the power to vote the Shares as
contemplated by Section 5 hereof in Purchaser.
b. Nothing in this Agreement shall be construed to prohibit
any Stockholder or any affiliate of any Stockholder who is or has
designated a member of the Board of Directors of the Company from
taking any action solely in his capacity as a member of the Board
of Directors of the Company or from exercising his, her or its
fiduciary duties as a member of such Board of Directors.
SECTION 8. Termination. This Agreement and all rights and
obligations of the parties hereunder shall terminate immediately
upon the earlier of (a) the date (the "Termination Date") that is
one year following a Competing Transaction Termination or the
date upon which the Merger Agreement is terminated in accordance
with its terms pursuant to Section 8.3(b) or 8.4(b) of the Merger
Agreement or immediately on the date upon which the Merger
Agreement is otherwise terminated in accordance with its terms or
(b) the Effective Time (as defined in the Merger Agreement). In
the event that the Merger is consummated, the provisions set
forth in Section 9 shall survive any termination of this
Agreement.
SECTION 9. Expenses. Except as provided in Section 6
hereof, all fees and expenses incurred by any one party hereto
shall be borne by the party incurring such fees and expenses.
SECTION 10. Public Announcements. Each of Purchaser, Merger
Sub and each Stockholder agrees that it will not issue any press
release or otherwise make any public statement with respect to
this Agreement or the transactions contemplated hereby without
the prior consent of the other party, which consent shall not be
unreasonably withheld or delayed; provided, however, that such
disclosure can be made without obtaining such prior consent if
(i) the disclosure is required by law or regulation or by
obligations imposed pursuant to any listing agreement with the
NASDAQ National Market and (ii) the party making such disclosure
has first used its reasonable best efforts to consult with the
other party about the form and substance of such disclosure.
SECTION 11. Miscellaneous.
a. Capitalized terms used and not otherwise defined in this
Agreement shall have the respective meanings assigned to such
terms in the Merger Agreement.
b. All notices and other communications hereunder shall be
in writing and shall be deemed given upon (i) transmitter's
confirmation of a receipt of a facsimile transmission, (ii)
confirmed delivery by a standard overnight carrier or when
delivered by hand or (iii) the expiration of five business days
after the day when mailed in the United States by certified or
registered mail, postage prepaid, addressed at the following
addresses (or at such other address for a party as shall be
specified by like notice):
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i. If to the Purchaser or Merger Sub, to the address
set forth on Exhibit C:
ii. If to any Stockholder, to the address set forth
next to such Stockholder's name on Exhibit A hereto.
c. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
d. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all
of which shall be considered one and the same agreement.
e. This Agreement (including the Merger Agreement and any
other documents and instruments referred to herein) constitutes
the entire agreement and supersedes all prior agreements and
understandings, whether written or oral, among the parties hereto
with respect to the subject matter hereof.
f. This Agreement shall be governed by, and construed in
accordance with the laws of the State of Delaware without giving
effect to the principles of conflicts of laws thereof.
g. Except as provided in Section 4 hereof, neither this
Agreement nor any of the rights, interests, or obligations
hereunder shall be assigned by any of the parties hereto (whether
by operation of law or otherwise) without the prior written
consent of the other parties. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of and
be enforceable by, the parties and their respective successors
and assigns, and the provisions of this Agreement are not
intended to confer upon any person other than the parties hereto
any rights or remedies hereunder.
h. If any term, provision, covenant or restriction herein
is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable or against its regulatory
policy, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
i. Each of the parties hereto acknowledges and agrees that
in the event of any breach of this Agreement, each non-breaching
party would be irreparably and immediately harmed and could not
be made whole by monetary damages. It is accordingly agreed that
the parties hereto (i) will waive, in any action for specific
performance, the defense of adequacy of a remedy at law and (ii)
shall be entitled, in addition to any other remedy to which they
may be entitled at law or in equity, to compel specific
performance of this Agreement.
j. No amendment, modification or waiver in respect of this
Agreement shall be effective against any party unless it shall be
in writing and signed by such party.
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IN WITNESS WHEREOF, Purchaser, Merger Sub and each
Stockholder has executed and delivered or caused this Agreement
to be duly executed and delivered as of the date first written
above.
Xxxxxxx plc /s/ Xxxxx Xxxx
-----------------------------
Xxxxx Xxxx
By: /s/
------------------------------
Name: /s/ Xxxxxx Xxxxxxxx
Title: -----------------------------
Xxxxxx Xxxxxxxx
Xxxxxxx Merger Company, Inc. /s/ Sydney X. Xxxxxxxx
-----------------------------
Sydney X. Xxxxxxxx
By: /s/
------------------------------ /s/ Xxxxxxxx X. Xxxxxxxxx
Name: -----------------------------
Title: Xxxxxxxx X. Xxxxxxxxx
/s/ Xxxxxxx X. Xxxxxx
--------------------------------- The Interpublic Group
Xxxxxxx X. Xxxxxx of Companies, Inc.
/s/ Xxxxxxxx Xxxxxx
---------------------------------
Xxxxxxxx Xxxxxx By:
---------------------------
Name:
Title:
Accepted and Agreed:
THE INTERPUBLIC GROUP OF
COMPANIES, INC.
By /s/
---------------------------
EXHIBIT A
Ownership of Outstanding Shares
Name Class A Class B
---- ------- -------
Xxxxxxx X. Xxxxxx 1,504,690 0
Xxxxxxxx Xxxxxx 1,435,995 0
Xxxxx Xxxx 340,850 0
Xxxxxx Xxxxxxxx 315,850 0
Sydney X. Xxxxxxxx 141,875 0
Xxxxxxxx X. Xxxxxxxxx 0 0
The Interpublic Group
of Companies, Inc. 580,000 2,470,000
EXHIBIT B
Subject Shares
Name Class A Class B
---- ------- -------
Xxxxxxx X. Xxxxxx 1,220,248 0
Xxxxxxxx Xxxxxx 1,164,538 0
Xxxxx Xxxx 276,417 0
Xxxxxx Xxxxxxxx 256,143 0
Sydney X. Xxxxxxxx 115,055 0
Xxxxxxxx X. Xxxxxxxxx 0 0
The Interpublic Group
of Companies, Inc. 470,358 2,470,000
