EXHIBIT 2
SHAREHOLDERS AGREEMENT
AGREEMENT, dated as of October 20, 1997, between Terbem
Limited, Tinvest Limited, Teribe Limited, TCR International Partners, LP,
Mitvest Limited, Bobst Investment Corp. and TCRI Offshore Partners CV
(collectively, the "TCR Group," each individually, a "TCR Group Member") and
Xxxxxxx X. Xxxxxx ("Xxxxxx").
WHEREAS, Xxxxxx Metalcraft Holding Co., a Delaware Corporation
("Xxxxxx Metalcraft"), and MLX Corp., a Georgia corporation ("MLX"), have
entered into an Agreement and Plan of Merger, dated as of October 20, 1997 (the
"Merger Agreement") pursuant to which Xxxxxx Metalcraft will be merged with and
into MLX (the "Merger"), with MLX being the surviving corporation (hereinafter
referred to as the "Corporation");
WHEREAS, pursuant to the Merger Agreement, Xxxxxx will acquire
1,218,990 shares of the Class A Common Stock, par value $.01 per share, of the
Corporation ("Class A Common Stock") and 100,000 shares of Class B Common Stock,
par value $.01 per share, of the Corporation ("Class B Common Stock" and
together with the Class A Common Stock, the "Common Stock" );
WHEREAS, pursuant to the Recapitalization, the TCR Group will
hold an aggregate of 888,178 shares of the Class A Common Stock and 100,000
shares of Class B Common Stock;
WHEREAS, the TCR Group and Xxxxxx desire to enter into an
agreement with respect to certain matters regarding the transfer and voting of
certain
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Shares of Common Stock that will be owned by the TCR Group and Xxxxxx upon
consummation of the Recapitalization and the Merger.
NOW THEREFORE, in consideration of the mutual promises and
agreements set forth herein, the adequacy of which are hereby acknowledged, the
parties hereto agree as follows:
1. Definitions. As used in this Agreement, the
following terms shall have the meanings set forth below:
"Affiliate" of any Person means (i) in the case of
any TCR Group Member, any other Person that directly, or indirectly through one
or more intermediaries, controls, or is controlled by, or is under common
control with, such TCR Group Member, and (ii) in the case of Xxxxxx, a member of
Xxxxxx'x immediate family, which shall include his parents, spouse, children or
grandchildren, and spouses of children or grandchildren ("Family Members"), or a
trust, corporation or partnership, all of the beneficial interests in which
shall be held by Xxxxxx or one or more Family Members of Xxxxxx; provided,
however, that during the period any such trust, corporation, or partnership
holds any right, title or interest in any Shares, no Person other than Xxxxxx or
one or more Family Members of Xxxxxx may be or become beneficiaries,
stockholders or limited or general partners thereof.
"Class A Common Stock" has the meaning set forth in the
recitals to this Agreement.
"Class B Common Stock" has the meaning set forth in the
recitals to this Agreement.
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"Common Stock" has the meaning set forth in the recitals to
this Agreement.
"Common Stock Equivalents" means any security or obligation
which is by its terms convertible into Shares of Common Stock, including,
without limitation, any option, warrant or other subscription or purchase right
with respect to Class A Common Stock or Class B Common Stock.
"Effective Time" means the date and time when the Merger
Agreement shall become effective (as specified in the Merger Agreement).
"Employment Agreement" means that certain Employment
Agreement, to be executed between Xxxxxx and the Corporation as of the Effective
Time.
"Fair Market Value" means with respect to (i) any security
traded on a registered securities exchange, the NASDAQ Stock Market, or the over
the counter market, the average of the last quoted trade of such security on the
twenty (20) consecutive trading days ended one trading day before the date of
determination of Fair Market Value (provided that for any such trading day on
which such security was not traded, the last quoted trade on the next preceding
trading day when such security was traded shall be used in computing such
average), and (ii) any other asset, the value as determined by a mutually agreed
upon appraiser, which shall be either a nationally recognized accounting firm
that is not the certified public accounting firm of any TCR Group Member or
Xxxxxx, or a nationally recognized investment banking firm.
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"Fully Permitted Number" means, at any time, (i) in the event
that the Maximum Sale Number is less than the number of Shares of Class A Common
Stock owned by the TCR Group and its Affiliates and Xxxxxx and his Affiliates,
each group's pro rata share of the Maximum Sale Number, based upon each group's
ownership of outstanding Shares of Class A Common Stock, and (ii) in the event
that the Maximum Sale Number is greater than the number of Shares of Class A
Common Stock owned by the TCR group and its Affiliates and Xxxxxx and his
Affiliates (a) in the case of the TCR Group and its Affiliates, the number of
Shares of Class A Common Stock owned by the TCR Group and its Affiliates at such
time and (b) in the case of Xxxxxx and his Affiliates, the Maximum Sale Number
minus the number of Shares of Class A Common Stock owned by the TCR Group and
its Affiliates at such time. For purposes of this definition, the number of
Shares of Class A Common Stock owned by Xxxxxx and his Affiliates shall be
deemed to be 418,990 Shares less any Shares sold by Xxxxxx and his Affiliates
after the Effective Time, but not less than zero. Xxxxxx and his Affiliates'
Fully Permitted Number may exceed 418,990 pursuant to the terms of this
definition.
"Intention Notice" has the meaning set forth in Section 5.1.2
of this Agreement.
"Xxxxxx Put Right" has the meaning set forth in Section 4.1 of
this Agreement.
"Maximum Sale Number" means, at any time, the maximum number
of Shares of Class A Common Stock that can be sold without causing a "change in
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ownership," as defined in section 382 of the Internal Revenue Code of 1986, as
amended.
"Permitted Transferee" has the meaning set forth in Section
5.4 of this Agreement.
"Person" means any individual, corporation, partnership,
limited liability company, firm, joint venture, association, joint stock
company, trust, unincorporated organization, governmental body or other entity.
"Proxy Termination Date" has the meaning set forth in Section
3.2 of this Agreement.
"Put Notice" has the meaning set forth in Section 4.2 of this
Agreement.
"Put Securities" has the meaning set forth in Section 4.1 of
this Agreement.
"Recapitalization" means the recapitalization of MLX as
contemplated by Sections 4.4 and 5.10 of the Merger Agreement.
"Shares" means, with respect to each party, all shares,
whether now owned or hereafter acquired, of Class A Common Stock or Class B
Common Stock owned by such party or its Affiliates, including shares of Common
Stock which are issued upon conversion, exercise or exchange of all Common Stock
Equivalents.
"transfer" has the meaning set forth in Section 5 of this
Agreement.
"Transfer Notice" has the meaning set forth in Section 5.1.2
of this Agreement.
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"Transfer Notice Provider" has the meaning set forth in
Section 5.1.2 of this Agreement.
"Transfer Notice Recipient" has the meaning set forth in
Section 5.1.2 of this Agreement.
"1997 Stock Plan" means the 1997 Stock Option Plan whereby a
maximum of 1,166,896 shares of Class A Common Stock, par value $.01 per share,
of MLX are authorized to be delivered to certain officers, other key employees,
directors and consultants by MLX.
2. Effective Date; Term. This Agreement shall become effective
only upon the consummation of the Merger and shall remain in effect until the
Proxy Termination Date.
3. Irrevocable Proxy.
3.1 Grant of Proxy. The TCR Group hereby grants to,
and appoints Xxxxxx as its irrevocable proxy and attorney-in-fact (with full
power of substitution) to vote and/or to act by written consent with respect to
all of the Shares of Class A Common Stock and Class B Common Stock owned by the
TCR Group and its Affiliates with regard to all matters to be voted upon by the
stockholders of the Corporation (including the vote for directors of the
corporation), provided that the TCR Group does not grant to or appoint Xxxxxx as
its irrevocable proxy to vote or act with regard to the following matters: (i)
the liquidation of the Corporation; (ii) any sale of all, or substantially all,
of the assets of the Corporation; and (iii) any
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merger or consolidation involving the Corporation, if immediately thereafter
stockholders of the Corporation (including Xxxxxx) before such merger or
consolidation do not hold (by ownership of stock, by proxy or otherwise) the
power to vote at least 60% of votes entitled to elect the directors of the
corporation resulting from such transaction. The proxy hereby granted by the TCR
Group is given in consideration of the other mutual covenants herein contained,
and as such is coupled with an interest and shall be irrevocable until the
occurrence of an event of termination set forth in Section 3.2.
3.2 Termination of Proxy. The proxy granted to Xxxxxx
pursuant to Section 3.1 shall terminate and be of no further force or effect
upon the earliest to occur of (i) ten years after the Effective Time; (ii)
Xxxxxx'x death or Disability (as defined in the Employment Agreement); (iii) in
the event Xxxxxx terminates his employment with the Corporation (other than a
Constructive Termination as defined in the Employment Agreement); (iv) in the
event of Xxxxxx'x termination by the Corporation for Cause (as defined in the
Employment Agreement) or (v) in the event that Xxxxxx'x ownership of Class A
Common Stock falls below 1,096,425 Shares, including for this purpose Shares
issuable upon conversion, exercise or exchange of all Common Stock Equivalents,
as adjusted to reflect stock splits and similar actions in respect of the Class
A Common Stock after the Effective Time (the date of the occurrence of any such
event described in clauses (i) through (v) being referred to as the "Proxy
Termination Date").
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4. Xxxxxx Put Right.
4.1 Exercise. If at any time prior to the Proxy
Termination Date (i) the TCR Group is entitled to vote for a transaction
described in (ii) and (iii) of the proviso to Section 3.1; (ii) any TCR Group
Member or Affiliate fails to vote in favor of any such transaction and (iii)
such transaction is not approved by the stockholders of the Corporation, then
Xxxxxx shall have the right and option (the "Xxxxxx Put Right") to require the
TCR Group to purchase all, but not less than all, of the Class A Common Stock
and Class B Common Stock then owned by Xxxxxx and his Affiliates (the "Put
Securities"). If Xxxxxx shall exercise the Xxxxxx Put Right, the TCR Group shall
be obligated, jointly and severally, to purchase the Put Securities for a
purchase price equal to the Fair Market Value Xxxxxx would have received in such
proposed transaction for his Class A Common Stock and Class B Common Stock,
provided that in the event that Xxxxxx would have retained any or all of the Put
Securities in such proposed transaction, the purchase price for such Put
Securities shall be equal to the Fair Market Value of such Put Securities.
4.2 Notice and Duration. Exercise of the Xxxxxx Put
Right may only be effected by delivering written notice to the TCR Group (the
"Put Notice"). The Put Notice shall state the number of Put Securities held by
Xxxxxx and his Affiliates. Exercise of the Xxxxxx Put Right shall be made, if at
all, within 20 days after the occurrence of the event giving rise to the Xxxxxx
Put Right.
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4.3 Closing of Purchase of Put Securities. In any
case where Xxxxxx exercises the Xxxxxx Put Right, the TCR Group shall purchase
for cash the Put Securities within 45 days of the delivery of the Put Notice.
4.4 Termination of Xxxxxx Put Right. Xxxxxx shall
have no right to exercise the Xxxxxx Put Right following, and the Xxxxxx Put
Right shall terminate and be of no further force and effect, on the earliest to
occur of (i) the expiration of the 20 day period described in Section 4.2 or
(ii) the Proxy Termination Date.
5. Restrictions on Transfer and Purchase of Shares. The TCR
Group and their Affiliates and Xxxxxx and his Affiliates shall not sell, give,
assign, hypothecate, pledge, encumber, grant a security interest in or otherwise
dispose of (whether by operation of law or otherwise) (each a "transfer") or
purchase any Shares or any right, title or interest therein or thereto, except
for transfers and purchases made in compliance with the provisions of this
Agreement. Notwithstanding the existence of the proxy contained in Section 3.1,
the TCR Group and its Affiliates may transfer Shares pursuant to the terms of
this Agreement and any Shares transferred in compliance with the terms of this
Agreement shall be free and clear of such proxy.
5.1 Limitation on Transfer of Class A Common Stock.
5.1.1 For three (3) years after the Effective
Time, neither the TCR Group, Xxxxxx, nor any of their respective Affiliates may
transfer any Shares of Class A Common Stock owned as of the Effective Time.
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5.1.2 Commencing three (3) years after the
Effective Time, neither Xxxxxx, any TCR Group Member nor any of their respective
Affiliates may transfer any Shares of Class A Common Stock without complying
with the procedures and requirements set forth in this Section 5.1.2. Prior to
making any such transfer, Xxxxxx or any of his Affiliates, on the one hand, or
the TCR Group or any of its Affiliates, on the other hand, shall provide written
notice (the "Transfer Notice" and such party providing the Transfer Notice
together with its Affiliates being referred to herein as the "Transfer Notice
Provider") to the other party (together with its Affiliates the "Transfer Notice
Recipient") of the Transfer Notice Provider's intention to make such transfer,
which notice shall state the number of Shares proposed to be transferred, which
number may be up to the Transfer Notice Provider's Fully Permitted Number.
Within fifteen (15) days of the delivery of such Transfer Notice, the Transfer
Notice Recipient shall deliver written notice (the "Intention Notice") to the
Transfer Notice Provider, which notice shall state one of the following: (i)
that the Transfer Notice Recipient does not intend to sell any Shares of Class A
Common Stock or (ii) that the Transfer Notice Recipient intends to sell Shares
of Class A Common Stock and the number of Shares such party intends to sell,
which number may be up to the Transfer Notice Recipient's Fully Permitted
Number. In the event that the Intention Notice contains the information
contained in clause (i) above or in the event that no Intention Notice is
provided, the Transfer Notice Provider may sell Shares of Class A Common Stock
in any amount up to the Transfer Notice Provider's Fully Permitted Number,
provided that such transfer shall
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be made within sixty (60) days from the earlier of (a) the date on which the
Intention Notice is provided or (b) fifteen (15) days from the date the Transfer
Notice is provided. In the event that the Intention Notice contains the
information contained in clause (ii) above, the Transfer Notice Provider and the
Transfer Notice Recipient may transfer Shares of Class A Common Stock in an
amount up to their respective Fully Permitted Numbers, provided that such
transfer shall be made within sixty (60) days from the earlier of (a) the date
on which the Intention Notice is provided or (b) fifteen (15) days from the date
the Transfer Notice is provided. Any attempt to transfer any Shares in violation
of this Section 5.1.2 shall be null and void ab initio and the Corporation shall
not register any such transfer. Nothing contained within this Section 5.1.2
shall be deemed to affect the obligations of Xxxxxx, any TCR Group Member or any
of their respective Affiliates to comply with any conditions or requirements set
forth in the Articles of Incorporation of the Corporation, including any
requirement to obtain any approval of the Board of Directors of the Corporation,
any other documents of corporate governance, any other contract or agreement, or
any applicable federal or state securities laws.
5.2 Limitation on Transfer of Class B Common Stock.
Neither the TCR Group, Xxxxxx, nor any of their respective Affiliates may
transfer any Shares of Class B Common Stock owned as of the Effective Time or
convert any Shares of Class B Common Stock owned as of the Effective Time into
Shares of Class A Common Stock pursuant to Section 2.3 of the Articles of
Amendment of the
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Articles of Incorporation of MLX until the earlier of (i) ten (10) years after
the Effective Time or (ii) the Proxy Termination Date.
5.3 Limitation on Purchase of Shares. Neither the TCR
Group or any of its Affiliates, on the one hand, nor Xxxxxx or any of his
Affiliates, on the other hand, shall purchase additional Shares of Class A
Common Stock or Class B Common Stock after the Effective Time without the
approval of Xxxxxx or the TCR Group, respectively, and of the Board of Directors
of the Corporation, provided that this limitation shall not apply to the
purchase of Shares of Class A Common Stock by Xxxxxx and his Affiliates pursuant
to Common Stock Equivalents owned by Xxxxxx immediately after the Merger or
issued to Xxxxxx pursuant to the 1997 Stock Plan. 5.4 Permitted Transfers.
Notwithstanding anything to the contrary contained in this Agreement, but
subject to this Section 5.4 and Section 5.5, at any time, any TCR Group Member
or Xxxxxx or their respective Affiliates may transfer all or a portion of its
Shares to any other TCR Group Member or to Xxxxxx or their respective Affiliates
(each, a "Permitted Transferee") and Xxxxxx and his Affiliates may transfer
their Shares pursuant to Section 4.1. 5.5 Permitted Transfer Procedures. If any
member of the TCR Group or Xxxxxx or any of their respective Affiliates wishes
to transfer Shares to a Permitted Transferee under Section 5.4, such party shall
give written notice to the other party of its intention to make any such
transfer not less than ten (10) days prior to effecting such transfer, which
notice shall state the name and address of each
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Permitted Transferee to whom such transfer is proposed and the number of Shares
proposed to be transferred to such Permitted Transferee; provided that the
Permitted Transferee shall have assumed in writing all of the obligations of his
transferor imposed by this Agreement and shall have agreed to be bound by each
of the terms and provisions of this Agreement to which such transferor was
bound.
6. Miscellaneous.
6.1 Waiver of Compliance; Consents. Any failure of
the TCR Group or its Affiliates, on the one hand, or Xxxxxx or his Affiliates,
on the other hand, to comply with any obligation, covenant, agreement or
condition herein may be waived by Xxxxxx or the TCR Group, respectively, only by
a written instrument signed by the party granting such waiver, but such waiver
or failure to insist upon strict compliance with such obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure. Whenever this Agreement requires or
permits consent by or on behalf of any party hereto, such consent shall be given
in writing in a manner consistent with the requirements for a waiver of
compliance as set forth in this Section 6.1.
6.2 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given when
delivered in person, by facsimile or telegram or on the next business day when
sent by overnight courier or on the second succeeding business day when sent by
registered or certified mail (postage prepaid, return receipt requested) to the
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respective parties at the following addresses (or at such other address for a
party as shall be specified by like notice);
(i) if to the TCR Group and its Affiliates, to
Three Cities Research, Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: W. Xxxxxx Xxxxxx
Telecopy: (000) 000-0000
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
Telecopy: (000) 000-0000
and
(ii) if to Xxxxxxx Xxxxxx and his Affiliates, to
Xxxxxx Metalcraft Holding Co.
0000 Xxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Telecopy: (000) 000-0000
with a copy to
Husch & Eppenberger
000 X.X. Xxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxx Xxxxxxxx
Telecopy: (000) 000-0000
6.3 Assignment. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns. Neither this
Agreement nor any of the
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rights, interests or obligations hereunder shall be assigned by either of the
parties hereto without the prior written consent of the other party. This
Agreement is not intended to confer upon any other person except the parties
hereto any rights or remedies hereunder.
6.4 Governing Law. This Agreement shall be governed
by the laws of the State of Delaware, without giving effect to the principles of
conflicts of law thereof or of any other jurisdiction.
6.5 Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
6.6 Headings. The article and section headings
contained in this Agreement are solely for the purpose of reference, are not
part of the agreement of the parties and shall not in any way affect the meaning
or interpretation of this Agreement.
6.7 Entire Agreement. This Agreement and the
documents or instruments referred to herein, embodies the entire agreement and
understanding of the parties hereto in respect of the subject matter contained
herein. There are no restrictions, promises, representations, warranties,
covenants, or undertakings, other than those expressly set forth or referred to
herein. This Agreement supersedes all prior agreements and the understandings
between the parties with respect to such subject matter.
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6.8 Specific Performance. The parties hereto intend
that each of the parties have the right to seek damages or specific performance
in the event that any other party hereto fails to perform such party's
obligations hereunder. Therefore, if any party shall institute any action or
proceeding to enforce the provisions hereof, any party against whom such action
or proceeding is brought hereby waives any claim or defense therein that the
plaintiff party has an adequate remedy at law.
6.9 Further Assurances. Each of the parties shall,
and shall cause their respective Affiliates to, execute such instruments and
take such action as may be reasonably required or desirable to carry out the
provisions hereof and the transactions contemplated hereby.
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IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
/s/ Xxxxxxx X. Xxxxxx
---------------------
Xxxxxxx X. Xxxxxx
TERBEM LIMITED
By: /s/ W. Xxxxxx Xxxxxx
------------------------
Name: W. Xxxxxx Xxxxxx
Title: Attorney-in-Fact
TINVEST LIMITED
By: /s/ W. Xxxxxx Xxxxxx
------------------------
Name: W. Xxxxxx Xxxxxx
Title: Attorney-in-Fact
TERIBE LIMITED
By: /s/ W. Xxxxxx Xxxxxx
------------------------
Name: W. Xxxxxx Xxxxxx
Title: Attorney-in-Fact
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TCR INTERNATIONAL PARTNERS, L.P.
By: Three Cities Research, Inc.,
its general partner
By: /s/ Xxxxxx xx Xxxxx
-----------------------
Name: Xxxxxx xx Xxxxx
Title: President
MITVEST LIMITED
By: /s/ W. Xxxxxx Xxxxxx
------------------------
Name: W. Xxxxxx Xxxxxx
Title: Attorney-in-Fact
BOBST INVESTMENT CORP.
By: /s/ W. Xxxxxx Xxxxxx
------------------------
Name: W. Xxxxxx Xxxxxx
Title: Attorney-in-Fact
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TCRI OFFSHORE PARTNERS CV
By: /s/ W. Xxxxxx Xxxxxx
------------------------
Name: W. Xxxxxx Xxxxxx
Title: Attorney-in-Fact
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