EXHIBIT 3
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SUCCESSION AGREEMENT
THIS SUCCESSION AGREEMENT (this "Agreement") is made as of 11/27,
1997, by and between XXXXXX'X FURNITURE, INC., a Delaware corporation (the
"Corporation"), and XXXXXX X. XXXXXX ("Xxxxxx"), XXXX X. XXXXXX ("Xxxx
Xxxxxx"), as Trustee of the Trusts named on the signature page hereof (the
"Xxxxxx Trusts"), XX. XXXXXX X. XXXXXX, XX., GENERAL ELECTRIC CAPITAL
CORPORATION ("GECC") and PERMAL CAPITAL MANAGEMENT, INC. ("Permal"), and each
of the other stockholders of the Corporation whose name is set forth on the
signature page(s) hereof (all of such parties other than the Corporation,
collectively, the "Stockholders"), with reference to the following facts:
A. The Stockholders and the Corporation, among others, are parties
to that certain Stockholders Agreement dated August 26, 1996 by and among the
Corporation and certain of its stockholders (the "Stockholders Agreement"),
which sets forth certain rights and obligations of certain stockholders of the
Corporation, including the designation of Xxxxxx X. Xxxxxx ("Xxxxxx") as a
director and Chairman of the Board of Directors of the Corporation (the
"Board") for so long as he serves as Chief Executive Officer of the
Corporation and certain rights of first refusal among the parties thereto.
X. Xxxxxx has requested that the other parties hereto agree to a
designated successor that will represent the interests of the Xxxxxx Group on
the Board if Xxxxxx no longer serves as a director of the Corporation and, in
reliance on the agreement thereto by certain of the parties hereto, the
persons composing the Xxxxxx Group entered into the Stockholders Agreement.
C. The Stockholders own a majority of the issued and outstanding
shares of the Common Stock of the Corporation (the "Shares") and deem it to be
in their best interests and in the best interest of the Corporation to provide
for the designation of a successor to Xxxxxx in his capacity as a member of
the Board of the Corporation (but not as Chairman of the Board).
D. The members of the Xxxxxx Group and GECC have determined that it
is in their best interests to enter into an agreement with respect to any
purchase of any Common Stock offered by members of the Permal Group.
NOW, THEREFORE, IN CONSIDERATION OF the foregoing facts and the
mutual interests of the parties hereto in the success of the Company, and in
reliance hereon, the parties agree as follows:
1. Definitions. Any capitalized term used in this Agreement without
definition shall have the meaning ascribed to that term in the Stockholders
Agreement.
2. Voting. If Xxxxxx ceases to serve as a member of the Board, each
Stockholder shall vote such Stockholder's shares of the Corporation and shall
take all actions necessary and within its power to insure that Xxxx Xxxxxx is
elected to fill the vacancy created by Xxxxxx'x absence as soon as practicable
after Xxxxxx has ceased to serve, and to vote such Stockholder's shares and
take all actions necessary to insure that Xxxx Xxxxxx continues to serve as a
member of the Board thereafter. If Xxxx Xxxxxx is unavailable to serve as
director or ceases to serve as director, then each Stockholder shall vote such
Stockholder's shares of the Corporation and shall take all actions necessary
to insure that the individual nominated by Xxxx Xxxxxx'x successor as Trustee
of the Xxxxxx Trusts and having qualifications similar to those of Xxxx Xxxxxx
or any other director of the Corporation serves as director under the same
terms that would have applied to Xxxx Xxxxxx hereunder.
3. No Change in Directors. The parties shall take all appropriate
measures to cause the number of directors of the Corporation to remain at a
level that will permit the continued service of Xxxxxx or a successor as
designated herein as a member of the Board of Directors of the Corporation.
4. Permal Shares. GECC and each of the members of the Xxxxxx Group,
each in favor of the others, covenants that if any of them (for purposes of
this Section, an "Offeree") has the opportunity to purchase any Common Stock
owned by any member of the Permal Group, whether by offer to the Offeree from
a member of the Permal Group or due to a solicitation by the Offeree, or
otherwise, the Offeree shall promptly notify the parties subject of this
Section of the opportunity and shall allow them the right to participate in
such purchase and acquire Common Stock sold by any member of the Permal Group.
The number of Shares that may be purchased by each of them, respectively,
shall be (i) as between GECC and all of the members of the Xxxxxx Group
together, in proportion with the number of shares of Common Stock owned by
GECC or the Xxxxxx Group, respectively, as a percentage of the aggregate
Common Stock then owned by GECC and all Xxxxxx Group together, and (ii) as
among the members of the Xxxxxx Group, in proportion with the number of shares
of Common Stock owned by such member as a percentage of the Common Stock then
owned by all Xxxxxx Group members electing to purchase Common Stock hereunder.
The rights in this Section are in addition to and subordinate to the
provisions of the Stockholders Agreement, which are not amended or altered
hereby. Any failure to exercise the rights in this Section within 15 days of
receipt of notice shall be deemed a waiver of such rights.
5. Duration. The obligations of the Stockholders under this
Agreement shall continue so long as (a) the Xxxxxx Group owns an aggregate of
at least (i) 1,000,000 shares of the Common Stock.
6. Counterparts. This agreement may be executed in two or more
counterparts and by different parties hereto in separate counterparts, with
the same effect as if all parties had signed the same document. All such
counterparts shall be deemed an original, shall be construed together and
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Succession
Agreement as of the date first above written.
XXXXXX'X FURNITURE, INC.
a Delaware corporation
By:/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx, President
Stockholders:
Dated 11/27/97, 1997 /s/ Xxxxxx X. Xxxxxx
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XXXXXX X. XXXXXX
Dated Nov. 27, 1997 /s/ Xx. Xxxxxx X. Xxxxxx, Xx.
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XX. XXXXXX X. XXXXXX, XX.
Dated Nov. 27, 1997 /s/ Xxxx X. Xxxxxx
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XXXX X. XXXXXX, as Trustee of
the following Trusts
XXXXXXX XXXXX XXXXXX TRUST I
XXXXXXX XXXX XXXXXX TRUST I
XXXXXXX XXXX XXXXXX TRUST I
XXXXXXX XXXXXX XXXXXX TRUST I
XXXXXX FAMILY TRUST
GENERAL ELECTRIC CAPITAL
CORPORATION
Dated 12/3, 1997 By:/s/ Xxxxxx Xxxxxxxxxx Xx.
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Name: Xxxxxx Xxxxxxxxxx Xx.
Title: DEPT OPERATIONS MANAGER
PERMAL CAPITAL MANAGEMENT, INC.
Dated 12-3, 1997 By:/s/ Xxxxxx X. XxXxxxx
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Xxxxxx X. XxXxxxx, President
PERMAL CAPITAL PARTNERS, LP
By: PERMAL MANAGEMENT CORPORATION
Its: Investment Manager
Dated 12-3, 1997 By:/s/ Xxxxxx X. XxXxxxx
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Xxxxxx X. XxXxxxx, President
JAPAN OMNIBUS LIMITED
(formerly known as Xxxxx Investments, Inc.)
Dated ___________, 1997 By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: Portfolio Manager
Dated ___________, 1997 /s/ Xxxx X. Xxxxxxxx
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XXXX X. XXXXXXXX
Dated ___________, 1997 /s/ Xxxxx Xxxxxx Souede
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XXXXX XXXXXX SOUEDE
Dated 12-3-, 1997 /s/ Xxxxxx X. XxXxxxx
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XXXXXX X. XXXXXXX
ATCO HOLDINGS, LTD.
Dated 12/23/, 1997 By:/s/ Xxxxx Xxxxxxxxx
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Xxxxx Xxxxxxxxx, Authorized Agent
ATCO DEVELOPMENT, INC.
Dated 12/23/, 1997 By:/s/ Xxxxx Xxxxxxxxx
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Xxxxx Xxxxxxxxx, President/CEO
