EXHIBIT 1
TRANSACTION AGREEMENT
JANUARY 2, 1996
This is a Transaction Agreement among XXXXXXXX'X, INC., a Tennessee
corporation ("XXXXXXXX'X"), YOUNKERS, INC., a Delaware corporation ("YOUNKERS"),
and XXXXXX XXXXX XXXXX & CO., an Illinois corporation ("CPS").
PRELIMINARY STATEMENTS
A. On October 22, 1995, Xxxxxxxx'x, Baltic Merger Corporation, and Younkers
entered into an Agreement and Plan of Merger (the "MERGER AGREEMENT"). The
Merger Agreement, which is subject to the approval of the Xxxxxxxx'x
stockholders and the Younkers stockholders, provides for the merger of Baltic
Merger Corporation into Younkers (the "MERGER"). As of the date of this
Agreement, CPS is the record and beneficial owner of 1,047,500 shares of the
Younkers common stock. The shares of Younkers common stock owned by CPS from
time to time during the term of this Agreement are defined as the "CPS SHARES".
B. This Agreement includes the following agreements, among others, all of
which are subject to the terms of this Agreement:
1. CPS agrees to support publicly, and vote all of the CPS Shares in
favor of approval of, the Merger Agreement;
2. CPS agrees not to transfer for specified periods any shares of
common stock of Younkers or of Xxxxxxxx'x if the effect of the transfer would
materially and adversely affect pooling-of-interests accounting for the Merger;
3. CPS agrees for a specified period not to make a competing offer for
Younkers; and
4. Xxxxxxxx'x agrees, in a separate Registration Rights Agreement, to
register under the Securities Act of 1933, as amended (the "1933 ACT"), the
shares of common stock of Xxxxxxxx'x to be received by CPS upon consummation of
the Merger.
TERMS AND CONDITIONS
Proffitt's, Younkers, and CPS agree as follows:
SECTION 1 VOTING OF THE CPS SHARES.
(a) THE MERGER. Subject to paragraphs (b) and (d) of this section, CPS
will announce publicly its support, and vote the CPS Shares in favor of
approval, of the
Merger Agreement and each Amendment (defined in paragraph (c) of this section)
at the Company Stockholder Meeting (as defined in the Merger Agreement) and at
all adjournments and postponements of that meeting.
(b) EXCEPTIONS. CPS will have no obligation to announce publicly its
support or to vote the CPS Shares in accordance with paragraph (a) of this
section, and may withdraw publicly its support and revoke any vote made in
accordance with paragraph (a) of this section, if in CPS's reasonable judgment
any of the following occur:
(i) a third party has made and has not withdrawn a bona fide proposal
or offer to acquire Younkers pursuant to a tender or exchange offer, a merger,
consolidation, or other business combination or a sale of all or substantially
all of Younkers's assets on terms that are more favorable to Younkers's
stockholders than the transactions contemplated in the Merger Agreement unless
the Younkers board of directors announces publicly that the consideration
contemplated to be paid pursuant to the proposal or offer is "grossly
inadequate";
(ii) Xxxxxxxx'x or Younkers suffers a Material Adverse Change (as
defined in the Merger Agreement);
(iii) Xxxxxxxx'x or Younkers breaches any agreement with CPS provided
in this Agreement or in the Registration Rights Agreement and the breach, either
alone or together with other breaches by Xxxxxxxx'x or Younkers, has, or with
the lapse of time would have, a material adverse effect on CPS; or
(iv) the Merger does not qualify for pooling-of-interests accounting
treatment but only if the nonqualification is due to causes other than the
failure of CPS to perform its obligations in this Agreement.
(c) DEFINITION OF AMENDMENT. For purposes of this section, "AMENDMENT"
means an amendment to the Merger Agreement if, in CPS's reasonable judgment,
each of the following conditions is satisfied:
(i) the amendment does not reduce the per share or aggregate amount of
consideration to be received by CPS in or as a result of the Merger or otherwise
to be paid to CPS in the Merger;
(ii) the amendment does not purport to treat, or have the effect of
treating, CPS, as a shareholder of Younkers or Xxxxxxxx'x, differently with
respect to or as a result of the Merger than any other similarly situated
shareholder of Younkers or Xxxxxxxx'x; and
(iii) CPS is not otherwise adversely affected by the amendment.
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(d) NOMINATION RIGHTS UNAFFECTED. Nothing in this section, in Section 2,
or otherwise in this Agreement will restrict CPS's rights as a stockholder of
Younkers (i) to nominate persons to serve as directors of Younkers or (ii) after
March 1, 1996 to take all actions necessary to elect such persons to the
Younkers board of directors.
SECTION 2 NO COMPETING OFFERS.
During the period that CPS will be obligated to vote the CPS Shares in
favor of approval of the Merger Agreement and each Amendment in accordance with
Section 1, CPS will not do any of the following without the prior approval of
the Younkers board of directors: (a) acquire, agree to acquire, or make any
proposal to acquire, directly or indirectly, any securities of Younkers; (b)
propose to enter into any merger, consolidation, recapitalization, business
combination, or other similar transaction involving Younkers; (c) subject to
Section 1(d), make or participate in any "solicitation" of "proxies" (as these
terms are used in the proxy rules of the Securities and Exchange Commission (the
"SEC")) to vote any voting securities of Younkers; (d) form, join, or
participate in a "group" (within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "1934 ACT") with respect to
voting securities of Younkers; or (e) otherwise act alone or in concert with
others to seek to control Younkers.
SECTION 3 RESTRICTIONS ON TRANSFERS.
(a) CPS NOT AN AFFILIATE. Younkers and Xxxxxxxx'x each (i) will honor and
rely on a legal opinion of qualified counsel, who may be the Vice President and
General Counsel of CPS, that CPS is not an "affiliate" of Younkers and, after
consummation of the Merger, is not an "affiliate" of Xxxxxxxx'x (as "affiliate"
is used for purposes of the 1933 Act, the 1934 Act, and the related rules and
regulations of the SEC, including without limitation Accounting Series Releases
130 and 135, as amended, and Staff Accounting Bulletins 65 and 76 of the SEC and
paragraphs (c) and (d) of Rule 145 ("RULE 145") promulgated by the SEC under the
0000 Xxx) and (ii) will not refer to CPS as, or in any way assert that CPS is,
an affiliate of Younkers or Xxxxxxxx'x for any purpose except as required by
law.
(b) TRANSFER RESTRICTION. During the Limitation Period (defined in
paragraph (c) of this section), CPS will not, sell, transfer, or otherwise
dispose of, or direct or cause the sale, transfer, or other disposition of, any
shares of Younkers common stock or any shares of common stock of Xxxxxxxx'x, or
warrants or options to purchase any such shares, whether owned on the date of
this Agreement or acquired after this date, if, in the reasonable opinion of
Coopers & Xxxxxxx (expressed in writing and addressed to CPS (a "PROHIBITED SALE
NOTICE")), the Merger would otherwise qualify for pooling-of-interests
accounting and the proposed sale, transfer, or other disposition would
materially and adversely affect the availability of pooling-of-interests
accounting for the Merger. CPS will give Xxxxxxxx'x seven days' advance written
notice of any proposed sale, transfer, or other disposition by CPS, that would
occur during the Limitation Period, of any shares
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of Younkers common stock of any shares of common stock of Xxxxxxxx'x (a "SALE
NOTICE"). The first sentence of this paragraph will not restrict or otherwise
apply to the proposed sale, transfer, or other disposition referred to in the
Sale Notice unless Xxxxxxxx'x delivers to CPS a Prohibited Sale Notice by 5:00
p.m. (Central Time) on the seventh day after the day Xxxxxxxx'x receives the
Sale Notice. The parties acknowledge that paragraph (a) of this section will not
be binding on Coopers & Xxxxxxx.
(c) DEFINITION OF LIMITATION PERIOD. For purposes of this section,
"LIMITATION PERIOD" means the period beginning on the 30th day prior to the
Effective Time (as defined in the Merger Agreement) and ending on the day that
Xxxxxxxx'x publicly releases a report in the form of a quarterly earnings
report, registration statement filed with the SEC, a report filed with the SEC
on Forms 10-K, 10-Q, or 8-K, or any other public filing, statement, or
announcement which includes the combined financial results (including combined
sales and net income) of the operations of Younkers and Xxxxxxxx'x for at least
30 days following the Effective Time.
(d) REPORT OF COMBINED RESULTS. Not later than the 60th day following the
Effective Time, Xxxxxxxx'x will publish, within the meaning of Section 201.01 of
the SEC's Codification of Financial Reporting Policies, combined financial
results (including combined sales and net income) of the operations of Younkers
and Xxxxxxxx'x for at least 30 days following the Effective Time.
(e) XXXXXXXX'X TO FILE REPORTS. Xxxxxxxx'x will use all reasonable
efforts to file all reports required to be filed by it pursuant to the 1934 Act
and the related rules of the SEC so as to satisfy the requirements of paragraph
(c) of Rule 144 under the 1933 Act that there be available current public
information with respect to Xxxxxxxx'x and to that extent to make available to
CPS the exemption afforded by Rule 145 with respect to the sale, transfer, or
other disposition of shares of Xxxxxxxx'x common stock owned by CPS.
SECTION 4 REGISTRATION RIGHTS AGREEMENT.
Xxxxxxxx'x will register for offer and sale under the 1933 Act the shares
of Xxxxxxxx'x common stock received by CPS in or as a result of the Merger in
accordance with and subject to the Registration Rights Agreement attached to
this Agreement as Attachment A (the "REGISTRATION RIGHTS AGREEMENT"). The
Registration Rights Agreement has been executed by CPS and Xxxxxxxx'x as of the
date of this Agreement and is incorporated into this Agreement by reference. The
performance in good faith by Xxxxxxxx'x of its obligations in the Registration
Rights Agreement is an inducement and a condition to the performance by CPS of
its obligations in this Agreement. Except as provided in the Registration Rights
Agreement, Xxxxxxxx'x is not obligated to register under the 1933 Act any sale,
transfer, or other disposition of the shares of Xxxxxxxx'x common stock received
by CPS in or as a result of the Merger.
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SECTION 5 DISMISSAL OF LITIGATION.
Not later than the fifteenth day after the date of execution of this
Agreement, CPS will use its reasonable best efforts to cause the litigation
entitled Xxxxxx Xxxxx Xxxxx & Co. v. W. Xxxxxx Xxxxx, et al. (Del. Chan. Civil
Action No. 14359) to be dismissed without prejudice. Subject to the next
sentence, not later than the first anniversary of the Effective Time, CPS will
use its reasonable best efforts to cause the litigation to be dismissed with
prejudice. CPS will have no obligation to dismiss the litigation in accordance
with this section if Younkers or Xxxxxxxx'x breaches any agreement with CPS
provided in this Agreement or in the Registration Rights Agreement and the
breach, either alone or together with other breaches by Xxxxxxxx'x or Younkers,
in CPS's reasonable judgment has, or would have with the lapse of time, a
material adverse effect on CPS.
SECTION 6 REPRESENTATIONS AND WARRANTIES.
(a) OF XXXXXXXX'X. Xxxxxxxx'x represents and warrants to Younkers and
CPS as follows:
(i) Xxxxxxxx'x has full power and authority to execute and deliver,
and to consummate the transactions contemplated by, this Agreement and the
Registration Rights Agreement (together, the "CONSTITUENT AGREEMENTS");
(ii) all acts required to be taken by or on the part of Xxxxxxxx'x to
authorize it to perform the Constituent Agreements have been duly and properly
taken;
(iii) the Constituent Agreements have been duly executed and delivered
by Xxxxxxxx'x and constitute the valid and binding obligations of Xxxxxxxx'x
enforceable in accordance with their terms; and
(iv) the execution and delivery by Xxxxxxxx'x of the Constituent
Agreements will not (A) violate any law or (B) conflict with or result in any
breach of or constitute a default (or event which with notice or lapse of time
or both would become a default) under, any agreement or instrument to which
Xxxxxxxx'x is a party or by which any of its property may be bound or affected
in any case in which the conflict, breach, or default would have a material
adverse effect on the business, financial condition, or results of operations of
Xxxxxxxx'x.
(b) OF YOUNKERS. Younkers represents and warrants to Xxxxxxxx'x and
CPS as follows:
(i) Younkers has full power and authority to execute and deliver,
and to consummate the transactions contemplated by, this Agreement;
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(ii) all acts required to be taken by or on the part of Younkers to
authorize it to perform this Agreement have been duly and properly taken;
(iii) this Agreement has been duly executed and delivered by Younkers
and constitute the valid and binding obligations of Younkers enforceable in
accordance with its terms; and
(iv) the execution and delivery by Younkers of this Agreement will not
(A) violate any law or (B) conflict with or result in any breach of or
constitute a default (or event which with notice or lapse of time or both would
become a default) under, any agreement or instrument to which Younkers is a
party or by which any of its property may be bound or affected in any case in
which the conflict, breach, or default would have a material adverse effect on
the business, financial condition, or results of operations of Younkers.
(c) OF CPS. CPS represents and warrants to Xxxxxxxx'x and Younkers as
follows:
(i) CPS has full power and authority to execute and deliver, and to
consummate the transactions contemplated by, the Constituent Agreements;
(ii) all acts required to be taken by or on the part of CPS to
authorize it to perform the Constituent Agreements have been duly and properly
taken;
(iii) the Constituent Agreements have been duly executed and delivered
by CPS and constitute the valid and binding obligations of CPS enforceable in
accordance with their terms; and
(iv) the execution and delivery by CPS of the Constituent Agreements
will not (A) violate any law or (B) conflict with or result in any breach of or
constitute a default (or event which with notice or lapse of time or both would
become a default) under, any agreement or instrument to which CPS is a party or
by which any of its property may be bound or affected in any case in which the
conflict, breach, or default would have a material adverse effect on the
business, financial condition, or results of operations of CPS.
SECTION 7 TERMINATION.
This Agreement may be terminated as follows:
(a) by mutual written consent of Proffitt's, Younkers, and CPS;
(b) by CPS upon five days' written notice to Xxxxxxxx'x and Younkers, if
Xxxxxxxx'x or Younkers fails to comply in any material respect with any of its
obligations in the Constituent Agreements;
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(c) by Xxxxxxxx'x or Younkers upon five days' written notice to CPS if CPS
fails to comply in any material respect with any of its obligations in the
Constituent Agreements;
(d) by Proffitt's, Younkers, or CPS if the Merger Agreement has been
terminated;
(e) by CPS if the Merger has not been consummated on or before the close
of business on June 30, 1996, but CPS may not terminate this Agreement in
accordance with this subparagraph if the failure to consummate the Merger is due
to the failure of CPS to perform its obligations in this Agreement; or
(f) by CPS if the stockholders of Younkers do not approve the Merger
Agreement at the Company Stockholder Meeting or at any adjournment or
postponement of that meeting, but CPS may not terminate this Agreement in
accordance with this subparagraph if the stockholders of Younkers do not approve
the Merger Agreement due to the failure of CPS to perform its obligations in
this Agreement.
SECTION 8 PUBLIC ANNOUNCEMENTS.
Each party to this Agreement will use its reasonable best efforts to
consult with the other parties to this Agreement before making any news release
or governmental filing regarding this Agreement, except (a) as may be required
by law or any listing agreement with or rules of the New York Stock Exchange,
Inc. or NASDAQ, or (b) as may be reasonably necessary in order to use any
registration form under the 1933 Act.
SECTION 9 GENERAL.
(a) AMENDMENTS. No amendment or waiver of any provision of this Agreement
will be effective unless in writing and signed by Proffitt's, Younkers, and CPS.
(b) SUCCESSORS AND ASSIGNS; ASSIGNMENTS RESTRICTED. Subject to the next
sentence, this Agreement is binding upon each party to this Agreement and its
successors and permitted assigns and all references to a party includes their
successors and permitted assigns. Neither this Agreement nor any right under
this Agreement may be assigned (whether by operation of law or otherwise) by any
party, and no purported assignment will be given effect, without the prior
written consent of the other parties to this Agreement.
(c) NOTICES. All notices, demands, and requests required or permitted
under this Agreement will be in writing, and must be personally served,
telecopied, telexed or sent by courier service or United States mail and will be
deemed to have been given when delivered in person or by courier service, upon
receipt of a telecopy (such
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receipt evidenced by a confirmation from the sender's telecopy machine that the
notice was sent) or telex or if mailed, five days after deposit in the United
States mail (registered or certified, with postage prepaid and return receipt
requested) addressed to the party so notified and sent to the address so
indicated as follows:
if to Xxxxxxxx'x:
Xxxxxxxx'x, Inc.
0000 Xxxxxx Xxxx Xxxxx
Xxxxxxx, Xxxxxxxxx 00000
Attention: Mr. R. Xxxx Xxxxxx
Xxxxxxxx'x, Inc.
0000 Xxxxxxx 00 Xxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxxx
if to Younkers:
Younkers, Inc.
0xx xxx Xxxxxx Xxxxxxx
Xxx Xxxxxx, Xxxx 00000
Attention: Mr. W. Xxxxxx Xxxxx
if to CPS:
Xxxxxx Xxxxx Xxxxx & Co.
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xx. Xxxxxxx X. XxxXxxxxx
with a copy to:
Xx. Xxxxxxx X. Xxxxxx
Xxxxxx Xxxxx Xxxxx & Co.
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Each party may specify a different address or addressee upon giving five days'
written notice to the other parties.
(d) TIME OF THE ESSENCE. Time will be of the essence for the
performance of this Agreement.
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(e) INTEGRATION; INDUCEMENTS; NO THIRD-PARTY BENEFICIARIES. The
Constituent Agreements constitute the entire agreements among Proffitt's,
Younkers, and CPS concerning all matters covered by the Constituent Agreements.
Any other understandings concerning the matters covered by the Constituent
Agreements are void and of no effect. The performance in good faith by each of
Younkers, Proffitt's, and CPS of its obligations in the Constituent Agreements
is an inducement and a condition to the performance by each other party of its
obligations in the Constituent Agreements. This Agreement is not intended to
confer upon any person other than Proffitt's, Younkers, and CPS any rights or
remedies.
(f) HEADINGS. All section and paragraph headings in this Agreement are for
convenience of reference and are not to be used to interpret this Agreement.
(g) GOVERNING LAW. This Agreement will be governed by, and construed in
accordance with, the laws of the State of Illinois (without giving effect to
choice of laws principles).
XXXXXXXX'X, INC.
By: /s/ XXXXX X. XXXXXX
---------------------------------
Senior Vice President
YOUNKERS, INC.
By: /s/ W. XXXXXX XXXXX
---------------------------------
Chief Executive Officer
XXXXXX XXXXX XXXXX & CO.
By: /s/ XXXXXXX X. XXXXXX
---------------------------------
Vice President
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