Exhibit 1
FAMILY STOCKHOLDERS AGREEMENT
Dated December 18, 1996
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The parties to this agreement are xXXxX*s Inc., a Delaware corporation
(the "Company"), Xxxxxxx X. Xxxx ("SIK") and the other parties listed on exhibit
A (such other parties, the "Family Holders"). The Family Holders and SIK are
referred to collectively as the "Existing Stockholders". Each Family Holder owns
the number of shares of the Company's common stock, par value $0.01 per share
(generally, "Common Stock"), set forth beside the Family Holder's name on
exhibit A to this agreement.
The parties agree as follows:
1. Restrictions on Transfer Generally.
1.1 TRANSFERS TO BE MADE ONLY AS PERMITTED OR REQUIRED BY THIS
AGREEMENT. For a period of six months from the date of this agreement, no Family
Holder may, directly or indirectly, sell, assign, transfer, pledge, hypothecate
or otherwise encumber or dispose of (each, a "transfer") any shares of the
Company's Common Stock without the prior written consent of Xxxxxxxxx & Xxxxx
LLC. Thereafter, no Family Holder may, directly or indirectly, transfer any
shares of the Company's Common Stock, except as specifically permitted by this
agreement. The Company shall not record on its books and records any purported
transfer of shares not permitted by this agreement, and any such purported
transfer shall have no force or effect.
1.2 PERMITTED TRANSFERS. Each Family Holder, other than a Family Holder
that owns shares of Common Stock as an executor, guardian, committee, trustee or
other fiduciary, may transfer any of such Family Holder's shares of Common Stock
to such Family Holder's spouse, heirs or descendants or any executor, guardian,
committee, trustee or other fiduciary acting as such on behalf or for the
benefit of such Family Holder or any such spouse, heir or descendant with
respect to such transfer. Any Family Holder that owns shares of Common Stock as
an executor, guardian, committee, trustee or other fiduciary may transfer any of
such shares to: (a) the person or persons on whose behalf or for whose benefit
such shares are held; (b) any other executor, guardian, committee, trustee or
other fiduciary acting as such on behalf or for the benefit of the person or
persons on whose behalf or for whose benefit such shares are held; or (c) any
spouse or descendant of the person or persons on whose behalf or for whose
benefit such shares are held. No transfer otherwise permitted by this section
1.2 or by section 1.3 of this agreement may be effected, unless, at or prior to
such transfer, the transferee executes and delivers to the Company and to SIK,
for the Company's benefit and for the benefit of each other Existing
Stockholder, a written agreement by the transferee (in form and substance
reasonably satisfactory to the Company and SIK) to be bound by this agreement,
including without limitation section 4 hereof (and, if SIK requests, an
irrevocable proxy as provided in section 4), as if the
transferee were the transferring Family Holder. In addition, any Family Holder
may transfer any shares of Common Stock to any other Existing Stockholder or any
other person permitted under this section 1.2 (any such other person being
referred to as a "Permitted Transferee").
1.3 PIGGYBACK SALES. Each Family Holder may sell the number of shares
of Common Stock owned by such Family Holder that are actually included in a
filed registration statement in accordance with section 2 of this agreement.
1.4 RULE 144 TRANSFERS. After the second anniversary of this agreement,
each Family Holder may transfer shares of Common Stock, in the same amounts and
in the same manner as that Family Holder would be permitted to transfer shares,
if the Family Holder was an affiliate (as defined in Rule 144 of the Securities
Act of 1933, as amended (the "Securities Act") of the Company.
1.5 APPROVED TRANSFERS. Any Family Holder may transfer any shares of
Common Stock to any other person, firm or entity with the prior written consent
of SIK (which SIK may withhold for any reason or for no reason in his sole
discretion).
2. REGISTRATION RIGHTS
2.1 PIGGYBACK REGISTRATION. If at any time after the initial public
offering of the Company's Common Stock, SIK proposes to include in a
registration statement being filed under the Securities Act on any form (other
than on Form S-8 or any successor form) any shares of Common Stock he owns, the
Company or SIK shall give written notice to each Family Holder at least 10 days
before the initial filing of that registration statement, which notice (a
"Notice of Registration") shall set forth the intended method of disposition of
the securities proposed to be registered by SIK. Each Notice of Registration
shall offer to include in the registration statement up to a number of shares of
Common Stock owned by each Family Holder equal to the product of (a) the number
of shares owned by such Family Holder and/or such Family Holder's Permitted
Transferees as of the date of the agreement and (b) a fraction, the numerator of
which is the number of shares SIK proposes to include in the registration
statement and the denominator of which is the total number of shares SIK owns as
of the date of the agreement. If any Family Holder or Permitted Transferee
desires to have shares of Common Stock (up to the maximum number permitted by
the preceding sentence) so included, such Family Holder or Permitted Transferee
shall so notify SIK and the Company in writing, within 10 days after the date of
delivery of the Notice of Registration, specifying the number of shares for
which registration is requested. The Company shall thereupon include in the
registration statement the number of shares of Common Stock for which
registration is so requested, subject to the next sentence. If the managing
underwriter of a proposed public offering that is the subject of any such
registration statement advises the Company or SIK in writing that, in its
opinion, the distribution of the shares requested to be included in the
registration by all Family Holders, their Permitted Transferees and all other
selling stockholders (including SIK) would adversely affect a distribution by
the Company covered by such registration statement, the number of shares
requested to be registered by Family Holders and
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Permitted Transferees shall be reduced in the same proportion as the number of
shares of all other selling stockholders (including SIK) is reduced.
2.2 EXPENSES. All expenses incurred in complying with this section 2,
including, without limitation, all registration and filing fees, printing
expenses, fees and disbursements of counsel for the Company, expenses of any
special audits incident to or required by any such registration and expenses of
complying with the securities or blue sky laws of any jurisdictions, shall be
paid by the Company, except that the Company shall not (without its prior
written consent) be liable for (a) any fees, discounts or commissions to any
underwriter or broker and (b) the fees or expenses of more than one counsel to
SIK, the Family Holders and Permitted Transferees (which counsel may, in SIK's
discretion, be selected by SIK and may also be the Company's counsel).
2.3 DOCUMENTATION AND INFORMATION. Each Family Holder undertakes to
execute and deliver all agreements, certificates and other documents, and to
provide all information, in connection with or in furtherance of the
registration of the Family Holder's shares of Common Stock pursuant to this
section 2 as may from time to time be requested by SIK or the Company in his or
its discretion.
3. "MARKET STAND-OFF" AGREEMENT. SIK may request that any Family Holder
refrain from transferring any shares of Common Stock for a period of up to 90
days following the filing of a registration statement of the Company under the
Securities Act (a "90-Day Stand-off Request"); however, SIK may not make more
than one such request of each Family Holder in any 365-day period. In addition,
SIK may, on one occasion, request that each Family Holder refrain from
transferring any shares of Common Stock for a period of up to 180 days following
the filing of a registration statement under the Securities Act, which right may
not be exercised during any 365-day period in which SIK has made a 90-Day
Stand-off Request. If SIK makes any request as permitted by this section 3, each
Family Holder shall refrain from transferring any shares of Common Stock during
the period specified in such request.
4. VOTING. Each Family Holder shall be present in person or by proxy at
all meetings of the stockholders of the Company to enable all shares owned by
such Family Holder (and such Family Holder's Permitted Transferees) to be
counted for quorum purposes. Concurrently with the execution of this agreement,
each Family Holder is executing the form of irrevocable proxy annexed as exhibit
B and delivering it to SIK.
5. TERM. Sections 1, 2, 3 and 4 of this agreement shall terminate and
be of no force or effect after the tenth anniversary of this agreement.
6. REPRESENTATION AND WARRANTY. Each Family Holder represents and
warrants to the Company and SIK that, except for this agreement and lock-up
agreements entered into with the underwriters of the Company's initial public
offering, such Family Holder is not a party to or bound by any voting agreement,
voting trust, proxy or any other agreement, instrument or understanding with
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respect to the ownership or voting of Common Stock or any other capital stock or
security of the Company, or any agreement with respect to the transfer, purchase
or redemption of any Common Stock or any other capital stock or security of the
Company.
7. MISCELLANEOUS
7.1 LEGEND. As long as any of sections 1, 2, 3 or 4 hereof remains in
effect (or unless such requirement is waived by SIK), each certificate
representing shares of Common Stock owned by any Family Holder (or Permitted
Transferee) shall bear a legend substantially as follows:
"THE RIGHTS OR SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
STOCKHOLDERS AGREEMENT DATED DECEMBER 18, 1996, WHICH, AMONG OTHER
THINGS, RESTRICTS THE VOTING AND TRANSFER THEREOF; A COPY OF THAT
AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY."
7.2 GOVERNING LAW. This agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements made
and to be performed wholly in New York (except to the extent this agreement is
ineffective under the corporation law of the jurisdiction of incorporation of
the Company; to that extent, but only to that extent, the laws of such
jurisdiction shall apply).
7.3 CONSENT TO JURISDICTION. Each party irrevocably submits to the
exclusive jurisdiction of the state courts of the State of New York and the
courts of the United States of America for the Southern District of New York
(and appellate courts from any thereof) for the purposes of any suit, action or
other proceeding arising out of this agreement or any transaction contemplated
by this agreement (and agrees not to commence any action, suit or proceeding
relating to this agreement or any such transaction, except in those courts).
Each party further agrees that service of any process, summons, notice or
document in accordance with section 7.4 of this agreement shall be effective
service of process for any action, suit or proceeding in New York with respect
to any matters to which it has submitted to jurisdiction as set forth in the
immediately preceding sentence. Each party irrevocably and unconditionally
waives any objection to the laying of venue of any action, suit or proceeding
arising out of this agreement or the transactions contemplated by this agreement
in the courts described above, and further irrevocably and unconditionally
waives and agrees not to plead or claim in any such action, suit or proceeding
brought in any such court that such action, suit or proceeding has been brought
in an inconvenient forum.
7.4 NOTICES. All notices and other communications under this agreement
shall be in writing and may be given by any of the following methods: (a)
personal delivery; (b) facsimile transmission; (c) registered or certified mail,
postage prepaid, return receipt requested; or (d) overnight commercial delivery
service. Notices shall be sent to the appropriate party at its, his or her
address or
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facsimile number given below (or at such other address or facsimile number as
specified by notice given under this section 7.4):
If to the Company or SIK, to him or it at:
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: President
Fax: (000) 000-0000
with a copy to:
Proskauer Xxxx Xxxxx & Xxxxxxxxxx LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
If to any Family Holder or such Family Holder's Permitted
Transferees, to such person at the address set forth below
such person's name on exhibit A hereto.
All such notices and communications shall be deemed received upon (i) actual
receipt by the addressee, (ii) actual delivery to the appropriate address or
(iii) in the case of a facsimile transmission, upon transmission by the sender
and issuance by the transmitting machine of a confirmation slip confirming the
number of pages constituting the notice have been transmitted without error. In
the case of notices sent by facsimile transmission, the sender shall
contemporaneously mail a copy of the notice to the addressee at the address
provided above; however, that mailing shall not alter the time at which the
facsimile notice is deemed received.
7.5 COUNTERPARTS. This agreement may be executed in counterparts, each
of which shall be considered an original, but all of which together shall
constitute the same instrument.
7.6 EQUITABLE RELIEF. The parties acknowledge that the remedy at law
for breach of this agreement may be inadequate and that, in addition to any
other remedy a party may have for a breach of this agreement, that party may be
entitled to an injunction restraining any such breach or threatened breach, or a
decree of specific performance, without posting any bond or furnishing any
security. The remedy in this section 7.6 is in addition to, and not in lieu of,
any other rights or remedies a party may have.
7.7 SEPARABILITY. If any provision of this agreement is invalid or
unenforceable, the balance of this agreement shall remain in effect, and, if any
provision is inapplicable to any person or circumstance, it shall nevertheless
remain applicable to all other persons and circumstances.
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7.8 ENTIRE AGREEMENT. This agreement contains a complete statement of
all the arrangements among the parties with respect to its subject matter,
supersedes all existing agreements among them with respect to that subject
matter, may not be changed or terminated orally and any amendment or
modification must be in writing and signed by the party to be charged.
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[Signature Page for xXXxX*s Family Stockholder Agreement]
IN WITNESS WHEREOF, the undersigned have caused this agreement to be
executed as of the date first set forth above.
THE COMPANY: xXXxX*s INC.
By: /s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx, Chairman of the Board
and Chief Executive Officer
SIK:
/s/ Xxxxxxx X. Xxxx
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XXXXXXX X. XXXX
FAMILY HOLDERS:
/s/ Xxxxxx X. Xxxx
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XXXXXX X. XXXX, individually and as trustee
for The Xxxx Xxxx Trust f/b/o Xxxxxx X. Xxxx
/s/ Xxxxxx Xxxxxxxx
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XXXXXX XXXXXXXX
/s/ Xxxxxxxxx Xxxxxxxx
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XXXXXXXXX XXXXXXXX, individually and as
trustee for the Xxxx Xxxx Trust f/b/o
Xxxxxx X. Xxxx
/s/ Xxxxx Xxxx
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XXXXX XXXX
/s/ Xxxxxxx Xxxx
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XXXXXXX XXXX
/s/ Xxxx Xxxx
------------------------
XXXX XXXX
/s/ Xxxxxx Xxxxxxxx
------------------------
XXXXXX XXXXXXXX
/s/ Xxxxxxxx Xxxxxxxx
------------------------
XXXXXXXX XXXXXXXX
/s/ Xxxxxx Xxxx
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XXXXXX XXXX
/s/ Xxxxxx Xxxxxxx
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XXXXXX XXXXXXX
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/s/ Xxxxxx Xxxxx
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XXXXXX XXXXX
/s/ Xxxxxx Xxxxx
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XXXXXX XXXXX
/s/ Xxxxxxxxx Xxx
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XXXXXXXXX XXX
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Exhibit A
[to xXXxX*s Family Stockholders Agreement]
Name and Address of Family Holder Number of Shares Owned
Xxxxxx X. Xxxx 953,808
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxxxx 617,626
c/x Xxxxx
000 Xxxx Xxxxxx, #00X
Xxx Xxxx, XX 00000
Xxxxxxxxx Xxxxxxxx 1,235,458
c/x Xxxxx
000 Xxxx Xxxxxx, #00X
Xxx Xxxx, XX 00000
Xxxxxx X. Xxxx and Xxxxxxxxx 147,356
Karetsky, as trustees, for The Xxxx
Xxxx Trust f/b/o Xxxxxx X. Xxxx
c/o Xxxxxx X. Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Xxxx 168,529
000 Xxxxxx Xxxxxx, #0
Xxx Xxxx, XX 00000
Xxxxxxx Xxxx 168,529
0000 Xxxxx Xxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Xxxx Xxxx 168,529
000 Xxxxx Xxxxxx, #0
Xxxxxxxx, XX 00000
Xxxxxx Xxxxxxxx 168,529
c/o Waverly Reds Baseball Club
00 Xxxxx Xxxxxx, Xxxxxxxx
Xxxxxxxx, Xxxxxxxxx 0000
Xxxxxxxx Xxxxxxxx 168,529
0000 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Xxxxxx Xxxx 68,944
0000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxxx 9,192
00 Xxxx Xxxx Xxxx
Xxxxx Xxxxxx Xxxxx, XX 00000
Xxxxxx Xxxxx 9,192
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxx 9,192
X.X. Xxx 000
Xxx Xxxxxx, XX 00000
Xxxxxxxxx Xxx 22,981
0000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
TOTAL 3,916,394
EXHIBIT B
[to xXXxX*s Family Stockholders Agreement]
IRREVOCABLE TEN-YEAR PROXY
The undersigned hereby irrevocably appoints Xxxxxxx X. Xxxx ("SIK") the attorney
and proxy of the undersigned, with full power of substitution, to represent and
vote in such manner as XXX xxxxx proper, with respect to all of the shares of
Common Stock, par value $0.01 per share, of xXXxX*s Inc., a Delaware corporation
(the "Company"), the undersigned owns as of the date hereof as set forth on
Exhibit A to the Family Stockholders Agreement dated December 18, 1996 (the
"Agreement"), and is entitled to vote. This proxy revokes any other proxy
granted by the undersigned at any time with respect to such shares. This proxy
is issued for good and valuable consideration, is coupled with an interest and
shall be irrevocable to the full extent permitted by law. In the event that this
proxy is invalid, the undersigned agrees to vote its shares of Common Stock as
directed by SIK.
THIS PROXY SHALL TERMINATE ON DECEMBER 18, 2006.
If the undersigned sells or otherwise disposes of shares of the Company's Common
Stock, then the undersigned agrees to send written notice of such sale or
disposal to SIK immediately upon such sale or disposal.
Dated: November ___, 1996
Signature:________________________
Print or
type name:________________________
