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AMENDMENT NUMBER ONE
TO
STANDSTILL AGREEMENT
THIS AMENDMENT NUMBER ONE TO STANDSTILL AGREEMENT (this "Amendment") is
made and entered into as of April 23, 1999 by and between Rawlings Sporting
Goods Company, Inc., a Delaware corporation (the "Company"), and Bull Run
Corporation, a Georgia corporation ("Bull Run").
BACKGROUND:
The Company and Bull Run are parties to a certain Standstill Agreement
dated as of November 21, 1997 (the "Standstill Agreement"). On April 9, 1999,
Xxxxxx X. Xxxxxxx, Xxxxxxx Capital Management Company, Inc. and The Kaleidoscope
Fund, L.P. (collectively, "Xxxxxxx") filed a Schedule 13G/A with the Securities
and Exchange Commission (the "SEC") reflecting purchases (the "Additional
Xxxxxxx Purchases") of additional shares of the Company's Common Stock, par
value $.01 per share (the "Common Stock"), and disclosing that Xxxxxxx was the
Beneficial Owner of a total of 1,277,400 shares of the Common Stock, or 16.4% of
the outstanding shares of the Common Stock. Based upon information publicly
available to the Company, including reports filed by Bull Run and Xxxxxxx with
the SEC under the federal securities laws, the Company believes that Bull Run is
an Associate of Xxxxxxx, and that, unless the Company takes action to amend the
Rights Agreement, based on the number of shares of Common Stock Beneficially
Owned by Bull Run and Xxxxxxx collectively, that Xxxxxxx has or will become an
Acquiring Person under the Rights Plan and that a Stock Acquisition Date (as
defined in the Rights Plan) has occurred or will occur.
Both the Company and Bull Run desire to amend the Standstill Agreement
and the Rights Plan to reflect their mutual agreements and understandings with
respect thereto as set forth herein.
AGREEMENT:
IN CONSIDERATION OF the foregoing, the mutual covenants and agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. Definitions. Unless otherwise defined in this Amendment, capitalized
terms shall have the respective meanings ascribed to such terms in the
Standstill Agreement.
2. Amendment of Definition of "Percentage Limitation". The definition
of "Percentage Limitation" contained in Section 1.1 of the Standstill Agreement
is hereby amended by the deletion thereof in its entirety and the substitution
of the following in lieu thereof:
" `Percentage Limitation' shall mean 10.7% of the total number
of shares of the Common Stock outstanding from time to time,
or such lesser percentage as Bull Run may own from time to
time, but in no event less than 10.1% (the computation of the
Percentage Limitation shall not include any shares of the
Common Stock issuable or issued upon the exercise of the
Warrants or issuable upon conversion or exercise of any other
outstanding convertible or exchangeable securities)."
3. Amendment of Section 3.4. Section 3.4 of the Standstill Agreement is
hereby amended by adding the following new clause (c) at the end thereof:
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"and (c) for the slate of directors nominated by the Board of
Directors of the Company at the Annual Meeting of Stockholders
to be held in January 2000 or at any adjournment or
postponement thereof"
4. New Article 3A. The Standstill Agreement is hereby amended by adding
the following new Article 3A, which will follow Article 3 and precede Article 4
of the Standstill Agreement:
ARTICLE 3A
CERTAIN CONTROL TRANSACTIONS
Section 3A.1 Bull Run Participation. In the event
that the Board of Directors of the Company (or any committee
of the Board of Directors of the Company) shall determine (i)
to initiate any process to explore strategic alternatives
available to the Company that could reasonably be expected to
lead to a Control Transaction, including without limitation by
directing the officers, advisors or agents of the Company
(including an investment banking firm) to find or negotiate
with a third party regarding a Control Transaction or (ii) to
enter into an agreement with any Person other than Bull Run
with regard to a Control Transaction, the Company shall afford
Bull Run the opportunity to participate in such process on the
same basis as any other Person.
Section 3A.2 Bull Run Tender. In the event that (i)
the Board of Directors of the Company (or any committee of the
Board of Directors of the Company) shall determine to engage
in, and recommends, a Control Transaction within one year
following the date of this Amendment, (ii) the provisions of
Section 3A.1 have been complied with in respect of such
Control Transaction and (iii) Bull Run has not indicated a
willingness to make a proposal, within a reasonable time after
the Board determination or recommendation referred to in
clause (i) above, that would result in a higher value to the
stockholders of the Company than the Board recommended Control
Transaction, then Bull Run shall (a) vote all of its shares of
Common Stock in favor of such Control Transaction and (b) sell
all of its shares of Common Stock in such Control Transaction.
Nothing in this Article 3A is intended to or shall provide
Bull Run with any contractual rights of "first refusal" or
"last look."
5. Bull Run Willingness to Make Proposal. The Company acknowledges and
agrees that if Bull Run indicates to the Board of Directors of the Company (or a
committee thereof) its willingness to make a proposal to acquire the Company,
the indication of such interest by Bull Run shall not be deemed to be a
violation of the Standstill Agreement, as hereby amended.
6. Amendment of Rights Plan. Simultaneously with the execution and
delivery of this Amendment, the Company shall enter into an amendment to the
Rights Plan substantially in the form set forth in Exhibit A.
7. Expenses. Bull Run will reimburse the Company for up to $25,000 of
all documented reasonable legal fees and expenses incurred by the Company solely
in connection with the preparation and negotiation of this Amendment and the
actions taken to prevent the Rights (as defined in the Rights Plan) from being
triggered as a result of the Additional Xxxxxxx Purchases, including without
limitation the amendments of the Rights Plan for such purpose.
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8. Xxxx Xxxxxx Shares. Bull Run agrees that it will not purchase any
additional shares of Common Stock that Bull Run had a right to acquire from Xxxx
X. Xxxxxx ("Xxxxxx"). Bull Run further agrees that on or before July 1, 0000,
Xxxx Xxx will sell, in the open market, 30,000 shares of the Common Stock, such
number being equal to the number of shares acquired by Bull Run from Xxxxxx.
9. Bull Run Representations. Bull Run hereby represents to the Company
that as of the date of this Amendment, (i) Bull Run Beneficially Owns an
aggregate of 836,500 shares of the Common Stock, which number includes 30,000
shares of the Common Stock purchased from Xxxxxx pursuant to the Xxxxxx
Agreement and (ii) Xxxxxx X. Xxxxxxx, Xx. Beneficially Owns 3,200 shares of the
Common Stock, which number does not include any of the 836,500 shares of the
Common Stock owned directly by Bull Run and of which he may be deemed to have
indirect Beneficial Ownership by virtue of his relationship with Bull Run and of
which he disclaims Beneficial Ownership.
10. Miscellaneous. This Amendment shall be governed by the laws of the
State of Georgia, without regard to conflict or choice of laws principles. The
invalidity or unenforceability of any provision of this Amendment in any
jurisdiction will not affect the validity or enforceability of the remainder
hereof in that jurisdiction or the validity or enforceability of this Amendment,
including that provision, in any other jurisdiction. To the extent permitted by
Applicable Law, each Party hereby waives any provision of Applicable Law that
renders any provision hereof prohibited or unenforceable in any respect. If any
provision of this Agreement is held to be unenforceable for any reason, it shall
be adjusted rather than voided, if possible, in order to achieve the intent of
the Parties to the extent possible. This Amendment may be executed in one or
more counterparts, each of which when so executed and delivered will be deemed
an original but all of which will constitute one and the same Amendment. Except
as amended hereby, all of the terms and provisions of the Standstill Agreement
shall remain in full force and effect.
[Signatures On Following Page]
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IN WITNESS WHEREOF, the Company and Bull Run have caused their
respective duly authorized officers to execute this Amendment as of the day and
year first above written.
RAWLINGS SPORTING GOODS COMPANY, INC.
By: /s/ Xxxxxxx X. X'Xxxx
----------------------------------------------
Name: Xxxxxxx X. X'Xxxx
Title: Chairman of the Board and
Chief Executive Officer
BULL RUN CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
----------------------------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: President and Chief Executive Officer
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EXHBIT A
AMENDMENT TO RIGHTS AGREEMENT
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THIRD AMENDMENT TO RIGHTS AGREEMENT
This Third Amendment to Rights Agreement (the "Amendment") is entered
into as of April 23, 1999, by and between Rawlings Sporting Goods Company, Inc.,
a Delaware corporation (the "Company"), and ChaseMellon Shareholder Services,
L.L.C. (the "Rights Agent").
WITNESSETH:
WHEREAS, the Company and the Rights Agent are parties to that certain
Rights Agreement dated July 1, 1994, as amended on November 21, 1997, and April
19, 1999 (the "Agreement");
WHEREAS, the Company desires to amend the Agreement on the terms and
conditions herein set forth and the Company is hereby directing the Rights Agent
to enter into this Amendment in accordance with Section 26 of the Agreement; and
WHEREAS, the execution and delivery of this Amendment has been duly
authorized by the Board of Directors of the Company.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Defined Terms. Capitalized terms used herein and not otherwise
defined herein shall have the meanings attributed to such terms in the
Agreement, as amended hereby.
2. Amendments to Agreement.
2.1 Section 1 is amended by adding thereto a new subsection
(s) which shall read as follows:
"Bull Run" shall mean Bull Run Corporation, a Georgia
corporation.
2.2 Section 1 is amended by adding thereto a new subsection
(t) which shall read as follows:
"Xxxxxxx" shall mean Xxxxxxx Capital Management
Company, Inc., Xxxxxx X. Xxxxxxx and The Kaleidoscope Fund,
L.P., individually and collectively.
2.2 A new Section 34 shall be added to the Rights Agreement
which shall read as follows:
Section 34. Exception. Notwithstanding any provision
of this Agreement to the contrary, neither a Distribution
Date, Triggering Event nor a Stock
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Acquisition Date shall be deemed to have occurred, neither
Bull Run nor Xxxxxxx nor any of their Affiliates or Associates
shall be deemed to have become an Acquiring Person, and no
holder of any Rights shall be entitled to exercise such Rights
under, or be entitled to any rights pursuant to, any of
Sections 3(a), 7(a), 11(a) or 13 of this Agreement, as a
result of the purchases of Common Shares disclosed in the
Schedule 13G/A, dated April 9, 1999, filed by Xxxxxxx with the
Securities and Exchange Commission, but only if and for so
long as Bull Run has not breached in any material respect, as
determined in good faith by the Board of Directors of the
Company, the terms of its Standstill Agreement with the
Company (as the same may be amended from time to time). Unless
and until the Rights Agent shall have received written notice
to the contrary from the Company, the Rights Agent shall be
fully protected and incur no liability in always assuming that
neither Bull Run nor Xxxxxxx nor any of their Affiliates or
Associates are Acquiring Persons.
3. Reference to and Effect on the Agreement.
3.1 Upon the effectiveness of this Amendment, each reference
in the Agreement to "this Agreement," "hereunder," "hereof," and
"herein" shall mean and be a reference to the Agreement as amended
hereby.
3.2 Except as specifically amended above, all of the terms,
conditions and covenants of the Agreement shall remain unaltered and in
full force and effect and shall be binding upon the parties thereto in
all respects and are hereby ratified and confirmed.
4. Choice of Law. This Amendment shall be construed in accordance with
the internal laws (and not the law of conflicts) of the State of Delaware, but
giving effect to applicable federal laws.
5. Headings. Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.
6. Counterparts. This Amendment may be executed in one or more
counterparts each of which when so executed and delivered will be deemed an
original but all of which will constitute one and the same Amendment.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the day and year first above written.
RAWLINGS SPORTING GOODS
COMPANY, INC.
By: __________________________________
Name:
Title:
CHASEMELLON SHAREHOLDER
SERVICES, L.L.C.
By: __________________________________
Name:
Title:
