AGREEMENT
EXHIBIT
10.1
THIS
AGREEMENT (“Agreement”),
dated the 7th day of December, 2007 (“Effective Date”), is made by and
between Fair Xxxxx Corporation, a Delaware corporation (the “Company”),
on the one hand, and Xxxxxxx Asset Management Corp., a Cayman Islands exempted
company (“SAMC”), Castlerigg Master Investments Ltd., a British Virgin
Islands company ("Castlerigg Master Investments"), Castlerigg
International Limited, a British Virgin Islands company ("Castlerigg
International"); Castlerigg International Holdings Limited, a British Virgin
Islands company ("Castlerigg Holdings"); Castlerigg Global Select Fund
Limited, a Cayman Islands exempted company ("Castlerigg Global Select");
CGS, Ltd., a Cayman Islands exempted company ("CGS"); and Castlerigg GS
Holdings, Ltd., a Cayman Islands exempted company (“CGSH”, and
collectively with SAMC, Castlerigg Master Investments, Castlerigg International,
Castlerigg Holdings, Castlerigg Global Select, CGS, and CGSH, the “Xxxxxxx
Group”), on the other hand.
WHEREAS,
the Xxxxxxx Group has filed a
Schedule 13D with the Securities and Exchange Commission (the “SEC”) on
June 29, 2007, as amended on October 12, 2007 and as may be amended from time
to
time (the "Schedule 13D");
WHEREAS,
the Company is willing to
undertake changes to the composition of the Company's Board of Directors (the
"Board") as set forth herein; and
WHEREAS,
the Company and the Xxxxxxx
Group have agreed that it is in their mutual interests to enter into this
Agreement as hereinafter described.
NOW,
THEREFORE, in consideration of the
premises and the representations, warranties, and agreements contained herein,
and other good and valuable consideration, the parties hereto mutually agree
as
follows:
1. Representations
and Warranties of the Xxxxxxx Group. The Xxxxxxx Group hereby represents and
warrants to the Company as follows:
(a) The
Xxxxxxx Group has beneficial ownership of 2,874,000 shares of common stock
of
the Company and has full power and authority to enter into this Agreement
and to
bind the entire number of shares of the common stock of the Company which
it
holds, or may hold, including any shares purchased in the future, to the
terms
of this Agreement.
(b) This Agreement
constitutes a valid and binding agreement of the Xxxxxxx Group. Except that
Xxxxxx X. Xxxxxxx may be deemed to beneficially own shares of the Company
and
except as set forth in Section 1(a) hereof, no “affiliate” or “associate” (as
such terms are defined in the Securities Exchange Act of 1934, as amended
(the
“Exchange Act”)) of the Xxxxxxx Group beneficially owns any shares or
rights to acquire shares of common stock of the Company.
2. Representations
and Warranties of the Company. The Company hereby represents and
warrants to the Xxxxxxx Group, as follows:
(a) The
Company has full power and authority to enter into and perform its obligations
under this Agreement, and the execution and delivery of this Agreement by the
Company has been duly authorized by the Board and requires no further Board
or
stockholder action, other than amendment of the bylaws of the Company to
increase the size of the Board by two members.
(b) This
Agreement constitutes a valid and binding obligation of the Company and the
performance of its terms does not constitute a violation of its certificate
of
incorporation or bylaws.
3. Directorships. The
Company agrees that:
(a) following
the execution of this Agreement and prior to filing the definitive proxy
statement in connection with the Company's 2008 Annual Meeting of Stockholders
(including any adjournment or postponement thereof, the "2008 Annual
Meeting"), the Board, at a duly convened meeting of directors, will take all
necessary action to increase the size of the Board by two members;
(b)
Xxxx Xxxxxxxx (the "Xxxxxxx Nominee") will be nominated by the Board as a
director at the 2008 Annual Meeting;
(c)
Xxxxx Xxxxx (the "Additional Nominee" and together with the Xxxxxxx
Nominee, the "Nominees"), will be nominated by the Board as a director at
the 2008 Annual Meeting;
(d) the
Company's Board will recommend a vote "for" the Nominees at the 2008 Annual
Meeting, and shall solicit its stockholders to vote for such
Nominees;
(e) proxies
solicited by the Company's Board will be voted "for" the Nominees at the 2008
Annual Meeting; and
(f) during
his term of office as a director, the Xxxxxxx Nominee and the Additional Nominee
may each be replaced by another designee of the Xxxxxxx Group who is reasonably
acceptable to the Company's Board in the event that the Xxxxxxx Nominee or
the
Additional Nominee dies, is unable to perform his duties as a director, or,
in
the case of the Xxxxxxx Nominee, is no longer associated with the Xxxxxxx
Group.
4. Voting
at Meetings of Stockholders.
(a) At
the 2008 Annual Meeting, the Xxxxxxx Group shall cause all of the shares of
the
Company common stock beneficially owned by it to be present for quorum purposes
and to be voted:
(i) For
each of (A) the Nominees and (B) the other candidates recommended by the Board
in the Schedule 14A filed by the Company with the SEC for election to the Board
(the "Company Nominees"); provided that the Company Nominees are
each either current members of the Board or otherwise reasonably acceptable
to
the Xxxxxxx Group; and
(ii) for
the ratification of the selection of the Company’s independent
auditors.
5. The
Xxxxxxx Group's Prohibited Conduct. During the period commencing
with the execution of this Agreement and ending on the earlier to occur of
(a)
the date that is eighty (80) days prior to the date of the Company's 2009 Annual
Meeting of Stockholders (provided, however, that if the Board takes any
action to amend the Company's restated bylaws in such a manner as to increase
the time period prior to the 2009 Annual Meeting of Stockholders by which a
holder of the Company's common stock must provide timely notice to the Company
of (i) its nomination of a person or persons to the Board at a meeting of the
Company's stockholders, (ii) or of its proposal to bring business before a
meeting of the Company's stockholders (clause (i) and (ii) together, the
"Stockholder Matters"), then the Standstill Period (as defined herein)
shall expire ten (10) days prior to the date on which a stockholder must give
notice to the Company with respect to any Stockholder Matters), and (b) a
material breach by the Company of its obligations under this Agreement (the
"Standstill Period"), neither the Xxxxxxx Group nor any of its controlled
affiliates shall, without the prior written consent of the Company:
(a)
acquire or agree to acquire, or
publicly offer or propose to acquire, directly or indirectly, by purchase or
otherwise, any voting securities or direct or indirect rights or options to
acquire any voting securities of the Company or any subsidiary thereof, or
any
assets of the Company or any subsidiary or division thereof; provided,
however, that nothing herein shall limit the ability of the Xxxxxxx Group
to (i) transfer any voting securities or direct or indirect rights or options
to
acquire any voting securities of the Company to any of its controlled
affiliates, so long as such any such controlled affiliates agree to be bound
by
the terms of this Agreement and execute a joinder agreement to this Agreement,
in the form attached hereto as Exhibit A (a "Joinder Agreement"), (ii)
enter into any swap or other arrangement whereby it acquires the economic
consequences of ownership of the common stock without also acquiring the voting
or other rights, privileges or powers associated with the ownership of the
underlying common stock, or (iii) subject to applicable law, including federal
securities laws prohibiting xxxxxxx xxxxxxx, acquire up to ten percent (10%)
of
the outstanding shares of Company common stock;
(b)
other than as provided in this
Agreement, seek or propose to influence or control the management or the
policies of the Company (provided that the Nominees' actions (or those
of their replacements as contemplated by Section 3) as members of the Board
shall not be deemed to violate the foregoing) or to obtain representation on
the
Board (other than the nomination of the Nominees), directly or indirectly engage
in any activities in opposition to the recommendation of the Board (including
the recommendation of the Nominees and the Company Nominees as directors to
be
elected at the 2008 Annual Meeting), submit any proposal (whether pursuant
to
Rule 14a-8 or otherwise) or nomination of a director or directors for
stockholder action, or solicit, or encourage or in any way participate in the
solicitation of, any proxies or consents with respect to any voting securities
of the Company, provided, however, that the foregoing shall not
prohibit the Xxxxxxx Group from (i) making public statements (including
statements contemplated by Rule 14a-1(1)(2)(iv) under the Exchange Act), or
(ii)
engaging in discussions with other stockholders or (iii) soliciting, or
encouraging or participating in the solicitation of, proxies or consents with
respect to voting securities of the Company (so long as such discussions are
in
compliance with subsection (d) hereof (clauses (i), (ii) and (iii), together,
"Permitted Actions") with respect to any transaction that has been
publicly announced by the Company involving (1) the recapitalization of the
Company, (2)
an
acquisition, disposition or sale of assets or a business by the Company where
(A) the consideration to be received or paid in such transaction exceeds $400
million in the aggregate or (B) requires approval by the holders of common
stock
of the Company, or (3) a change of control of the Company (each, a "Material
Transaction"), provided, further, that in the event that one of the
Nominees votes against an acquisition, disposition or sale of assets or a
business by the Company, which is neither a Material Transaction nor an
acquisition, disposition or sale of assets or a business by the Company where
the consideration to be received or paid in such transaction is less than $125
million in the aggregate, at the Board meeting approving such transaction,
the
Company will make a public statement that such Nominee so voted;
(c)
make any public announcement with
respect to, or publicly offer to effect, seek or propose (with or without
conditions) a merger, consolidation, business combination or other extraordinary
transaction with or involving the Company or any of its subsidiaries or any
of
its or their securities or assets, provided, however, that nothing in
this subsection (c) shall restrict the Xxxxxxx Group from taking Permitted
Actions with respect to a Material Transaction;
(d)
(i) form, join or in any way
participate in a "group" as defined in Section 13(d)(3) of the Exchange Act,
and
the rules and regulations promulgated thereunder, other than a "group" that
includes all or some lesser number of persons identified as members of the
Xxxxxxx Group, or (ii) enter into any negotiations, arrangements or
understandings with any third parties, other than members of the Xxxxxxx Group
solely with respect to the existing members of the Xxxxxxx Group, in connection
with becoming a "group" as defined in Section 13(d)(3) of the Exchange
Act;
(e)
publicly disparage any member of
the Board or management of the Company; or
(f)
publicly seek or request
permission to do any of the foregoing, request to amend or waive any provision
of this Section 5 (including, without limitation, any of clauses (a)-(e)
hereof), or make or seek permission to make any public announcement with respect
to any of the foregoing.
6. Transfer
Restrictions. The Xxxxxxx Group agrees that, during the
Standstill Period, it shall not offer, pledge, sell, contract to sell, sell
any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase, lend (other than in a customary
commingled brokerage account in the ordinary course of business), or otherwise
transfer or dispose of, directly or indirectly, any shares of common stock
or
any securities convertible into or exercisable or exchangeable, directly or
indirectly, for common stock, whether any such transaction described above
is to
be settled by delivery of common stock or such other securities, in cash or
otherwise (any such action a "Transfer"), in each case without the prior
written consent of the Company; provided that the foregoing shall not
restrict the Xxxxxxx Group from (i) a Transfer of any shares to a controlled
affiliate which agrees to be bound by the terms of this Agreement and executes
a
Joinder Agreement, (ii) subject to compliance with law, the Transfer of shares
in either (1) brokers' transactions (within the meaning of Rule 144(g) of the
Securities Act of 1933 (the "Securities Act")), but not in transactions
directly with a market maker (as defined in Section 3(a)(38) of the Exchange
Act), or (2) private Transfers (including transactions with, or indirectly
through, a market maker), in a single Transfer or series of related Transfers,
so long as the Xxxxxxx Group,
at
the time of such Transfer, does not have actual knowledge, after reasonable
inquiry, that such Transfer or series of Transfers would result in the ultimate
purchaser of such shares of common stock from the Xxxxxxx Group beneficially
owning, together with its affiliates, following such Transfer or Transfers,
in
excess of five percent (5%) of the Company's common stock in the aggregate,
or
(iii) Transfers made pursuant to (x) tender offers in respect of the Company's
common stock made by the Company or any third party, or (y) repurchase offers
in
respect of the Company's common stock made directly with the
Company.
7. Resignation. Each
of the Nominees shall immediately tender his resignation from the Board, if
requested by the Board as a result of a majority vote of the directors, other
than the Nominees, in favor of such resignations from the Board, in the event
that the Xxxxxxx Group's beneficial ownership of the Company's common stock
becomes less than three percent (3%) of the outstanding shares of common stock
of the Company solely as a result of a Transfer or series of Transfers by the
Xxxxxxx Group.
8. Nondisparagement. During
the Standstill Period, the Company shall not publicly disparage the Xxxxxxx
Group or any member of the management of the Xxxxxxx Group.
9. Public
Announcement. The parties shall promptly disclose the existence
of this Agreement after its execution pursuant to a joint press release in
the
form attached hereto as Exhibit B; however, neither party shall disclose the
existence of this Agreement until the press release is issued.
10. Remedies.
The Company and the Xxxxxxx Group acknowledge and agree that a breach or
threatened breach by either party may give rise to irreparable injury
inadequately compensable in damages, and accordingly each party shall be
entitled to injunctive relief to prevent a breach of the provisions hereof
and
to enforce specifically the terms and provisions hereof in any state or federal
court having jurisdiction, in addition to any other remedy to which such
aggrieved party may be entitled to at law or in equity. In the event either
party institutes any legal action to enforce such party’s rights under, or
recover damages for breach of, this Agreement, the prevailing party or parties
in such action shall be entitled to recover from the other party or parties
all
costs and expenses, including but not limited to reasonable attorneys’ fees,
court costs, witness fees, disbursements and any other expenses of litigation
or
negotiation incurred by such prevailing party or parties.
11. Notices.
All notice requirements and other communications shall be deemed given when
delivered or on the following business day after being sent by overnight courier
with a nationally recognized courier service such as Federal Express, addressed
to the Company, SAMC, Castlerigg Master Investments, Castlerigg International,
Castlerigg Holdings, Castlerigg Global Select, CGS, CGSH and Xx. Xxxxxxx as
follows:
The
Company:
Fair
Xxxxx Corporation
000
Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxx,
XX 00000-0000
Facsimile: (000)
000-0000
Attention:
General Counsel
With
a copy to (which shall not constitute notice):
Skadden,
Arps, Slate, Xxxxxxx & Xxxx LLP
000
Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxx
Xxxx, Xxxxxxxxxx 00000
Facsimile: (000)
000-0000
Attention: Xxxxxx
X. Xxxx
Xxxxxxx
X. Xxxxxx
The
Xxxxxxx Group:
Xxxxxxx
Asset Management Corp.
00
X 00xx Xxxxxx,
00xx
Xxxxx
Xxx
Xxxx, XX 00000
Facsimile:
(000) 000-0000
Attn:
General Counsel
with
copies to (which shall not constitute notice):
Xxxxxxx
Xxxx & Xxxxx LLP
000
Xxxxx Xxxxxx
Xxx
Xxxx, XX 00000
Facsimile:
(000) 000-0000
Attention: Xxxx
Xxxxxxxxxx
12. Entire
Agreement. This Agreement constitutes the entire agreement between the
parties hereto pertaining to the subject matter hereof and supersedes all prior
and contemporaneous agreements understandings, negotiations and discussions
of
the parties in connection therewith not referred to herein.
13. Counterparts;
Facsimile. This Agreement may be executed in any number of counterparts and
by the parties hereto in separate counterparts, and signature pages may be
delivered by facsimile, each of which when so executed shall be deemed to be
an
original and all of which taken together shall constitute one and the same
agreement.
14. Headings.
The headings in this Agreement are for convenience of reference only and shall
not limit or otherwise affect the meaning hereof.
15. Governing
Law. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware, without regard to choice
of
law principles that would compel the application of the laws of any other
jurisdiction.
16. Severability.
In the event one or more of the provisions of this Agreement should, for any
reason, be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions
of this Agreement, and this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein.
17. Successors
and Assigns. This Agreement shall not be assignable by any of the parties to
this Agreement. This Agreement, however, shall be binding on
successors of the parties hereto.
18. Survival
of Representations, Warranties and Agreements. All representations,
warranties, covenants and agreements made herein shall survive the execution
and
delivery of this Agreement.
19. Amendments.
This Agreement may not be modified, amended, altered or supplemented except
upon
the execution and delivery of a written agreement executed by all of the parties
hereto.
20. Further
Action. Each party agrees to execute any and all documents, and to do and
perform any and all acts and things necessary or proper to effectuate or further
evidence the terms and provisions of this Agreement.
21. Consent
to Jurisdiction. Each of the parties hereby irrevocably submits to the
exclusive jurisdiction of any state court sitting in the State of Delaware
in
any action or proceeding arising out of or relating to this Agreement and each
of the parties hereby irrevocably agrees that all claims in respect of such
action or proceeding may be heard and determined in any such court.
22. Expenses.
Each party agrees to bear its own expenses in connection with the transactions
contemplated hereby.
[Signature
Page Follows]
The
Company and the Xxxxxxx Group each
indicate its agreement with the foregoing by signing and returning one copy
of
this agreement, whereupon this letter agreement will constitute their agreement
with respect to the subject matter hereof.
Accepted
to and agreed, as of the date
first
written above:
Fair
Xxxxx Corporation
By: /s/
Xxxx X.
Xxxxxx
Name: Xxxx
X.
Xxxxxx
Title: CEO
Xxxxxxx
Asset Management Corp.
By: /s/
Xxxxxx X.
Xxxxxxx
Name: Xxxxxx
X.
Xxxxxxx
Title: Chief
Executive
Officer
Castlerigg
Master Investments Ltd.
By: /s/
Xxxxxx X.
Xxxxxxx
Name: Xxxxxx
X.
Xxxxxxx
Title: Chief
Executive
Officer
Castlerigg
International Limited
By: /s/
Xxxxxx X.
Xxxxxxx
Name: Xxxxxx
X.
Xxxxxxx
Title: Chief
Executive
Officer
Castlerigg
International Holdings Limited
By: /s/
Xxxxxx X.
Xxxxxxx
Name: Xxxxxx
X.
Xxxxxxx
Title: Chief
Executive
Officer
Castlerigg
Global Select Fund Limited
By: /s/
Xxxxxx X.
Xxxxxxx
Name: Xxxxxx
X.
Xxxxxxx
Title: Chief
Executive
Officer
CGS,
Ltd.
By: /s/
Xxxxxx X.
Xxxxxxx
Name: Xxxxxx
X.
Xxxxxxx
Title: Chief
Executive
Officer
Castlerigg
GS Holdings, Ltd.
By: /s/
Xxxxxx X.
Xxxxxxx
Name: Xxxxxx
X.
Xxxxxxx
Title: Chief
Executive
Officer
EXHIBIT
A
FORM
OF JOINDER AGREEMENT
The
undersigned hereby agrees, effective as of the date hereof, to become a party
to
that certain Agreement, dated as of December 7, 2007, by and among Fair Xxxxx
Corporation, a Delaware corporation (the "Company"), Xxxxxxx Asset Management
Corp., a Cayman Islands exempted company (“SAMC”), Castlerigg Master Investments
Ltd., a British Virgin Islands company ("Castlerigg Master Investments"),
Castlerigg International Limited, a British Virgin Islands company ("Castlerigg
International"); Castlerigg International Holdings Limited, a British Virgin
Islands company ("Castlerigg Holdings"); Castlerigg Global Select Fund Limited,
a Cayman Islands exempted company ("Castlerigg Global Select"); CGS, Ltd.,
a
Cayman Islands exempted company ("CGS"); and Castlerigg GS Holdings, Ltd.,
a
Cayman Islands exempted company (“CGSH” and collectively with SAMC, Castlerigg
Master Investments, Castlerigg International, Castlerigg Holdings, Castlerigg
Global Select, CGS, and CGSH, the “Xxxxxxx Group”) (the "Agreement"). By
executing this joinder agreement, the undersigned hereby agrees to be, and
shall
be, deemed a member of the "Xxxxxxx Group" for all purposes of the Agreement,
entitled to the rights and subject to the obligations thereunder with respect
to
the voting securities of the Company acquired from the Xxxxxxx
Group.
The
address and facsimile number to which notices may be sent to the undersigned
is
as follows:
Facsimile
No.:
By: | |
Name: | |
Title: | |
Date: |