Exhibit 99(c)(3)
SHAREHOLDER'S AGREEMENT
THIS SHAREHOLDER'S AGREEMENT is made and entered into as of this 26th
day of October 1999, among SIGMA CIRCUITS, INC., Inc., a Delaware corporation
("PARENT"), T MERGER SUB (OR), INC., an Oregon corporation and a wholly owned
subsidiary of Parent ("PURCHASER"), and XXXXXX X. XXXXXXXXXX (the
"SHAREHOLDER").
WHEREAS the Shareholder desires that XXXXXXXXXX INDUSTRIES INC., Inc.,
an Oregon corporation (the "COMPANY"), Parent and Purchaser enter into an
Agreement and Plan of Merger dated as of the date hereof (as the same may be
amended or supplemented, the "MERGER AGREEMENT") with respect to the merger of
Purchaser with and into the Company (the "MERGER"); and
WHEREAS the Shareholder is executing this Agreement as an inducement to
Parent to enter into and execute, and to cause Purchaser to enter into and
execute, the Merger Agreement.
NOW, THEREFORE, in consideration of the execution and delivery by
Parent and Purchaser of the Merger Agreement and the mutual covenants,
conditions and agreements contained herein and therein, the parties agree as
follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES. The Shareholder represents
and warrants to Parent and Purchaser as follows:
(a) The Shareholder is the record and beneficial owner of the
number of shares of Common Stock of the Company (the "COMPANY COMMON STOCK"),
separately identified as such, set forth opposite the Shareholder's name in
SCHEDULE A hereto (as may be adjusted from time to time pursuant to Section 5,
the Shareholder's "SHARES"). Except for the Shareholder's Shares and any other
shares of Company Common Stock subject hereto, the Shareholder is not the record
or beneficial owner of any shares of Company Common Stock.
(b) This Agreement has been duly authorized, executed and
delivered by the Shareholder and constitutes the legal, valid and binding
obligation of the Shareholder, enforceable against the Shareholder in accordance
with its terms, except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors' rights generally. Neither the execution and delivery
of this Agreement nor the consummation by the Shareholder of the transactions
contemplated hereby will result in a violation of, or a default under, or
conflict with, any contract, trust, commitment, agreement, understanding,
arrangement or restriction of any kind to which the Shareholder is a party or
bound or to which the Shareholder's Shares are subject. To the best of the
Shareholder's knowledge, consummation by the Shareholder of the
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transactions contemplated hereby will not violate, or require any consent,
approval, or notice under, any provision of any judgment, order, decree,
statute, law, rule or regulation applicable to the Shareholder or the
Shareholder's Shares.
(c) The Shareholder's Shares and the certificates representing
such Shares are now and at all times during the term hereof will be held by the
Shareholder, or by a nominee or custodian for the benefit of the Shareholder,
free and clear of all liens, claims, security interests, proxies, voting trusts
or agreements, understandings or arrangements or any other encumbrances
whatsoever, except for any such encumbrances or proxies arising hereunder or as
listed on Annex I annexed hereto.
(d) Except for fees payable to Xxxxx, Xxxxxxxx & Xxxx, Inc.
and McDonald Investments, Inc., no broker, investment banker, financial adviser
or other person is entitled to any broker's, finder's, financial adviser's or
other similar fee or commission from Parent, Purchaser or the Company in
connection with the transactions contemplated hereby based upon arrangements
made by or on behalf of the Shareholder.
(e) The Shareholder understands and acknowledges that Parent
is entering into, and causing Purchaser to enter into, the Merger Agreement in
reliance upon the Shareholder's execution and delivery of this Agreement. The
Shareholder acknowledges that the irrevocable proxy set forth in Section 4 is
granted in consideration for the execution and delivery of the Merger Agreement
by Parent and Purchaser.
SECTION 2. AGREEMENT TO TENDER OR SELL. (a) The Shareholder hereby
agrees that it shall tender his Shares into the Offer (as defined in the Merger
Agreement) and that it shall not withdraw any Shares so tendered (it being
understood that the obligation contained in this sentence is unconditional);
PROVIDED, HOWEVER, that if the Shareholder is unable to tender any Shares that
are pledged to KeyBank National Association ("KEYBANK"), as set forth on
Annex I, the Shareholder shall not be obligated to tender such Shares; PROVIDED
FURTHER that the Shareholder shall sell such Shares to Purchaser, and Purchaser
shall purchase such Shares from Shareholder at the Per Share Amount prior to the
Effective Time promptly upon termination of the pledge agreements between the
Shareholder and KeyBank relating to such Shares. Purchaser hereby agrees that,
if the Offer is consummated, it will satisfy the liabilities secured by the
pledge of Shares to KeyBank prior to the Effective Time.
(b) The Shareholder shall tender his Shares (other than the Shares
pledged to KeyBank) not later than fourteen business days following commencement
of the Offer, other than with respect to the Shares subject to the CBL Insured
Credit Facility Agreement (the "CBL AGREEMENT") referred to on Annex I which
shall be tendered not later than one business day prior to the initially
scheduled expiration of the Offer; PROVIDED, HOWEVER, that if the Shares subject
to the CBL Agreement are not tendered as aforesaid, any damages of Purchaser
shall be limited to $5,000,000.
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SECTION 3. COVENANTS. The Shareholder agrees with, and covenants to,
Parent and Purchaser as follows:
(a) The Shareholder shall not, except as contemplated by the
terms of this Agreement, (i) transfer (the term "TRANSFER" shall include,
without limitation, for the purposes of this Agreement, any sale, gift, pledge
or other disposition), or consent to any transfer of, any or all of the
Shareholder's Shares or any interest therein, (ii) enter into any contract,
option or other agreement or understanding with respect to any transfer of any
or all of such Shares or any interest therein, (iii) grant any proxy,
power-of-attorney or other authorization or consent in or with respect to such
Shares except with respect to election of directors at the Company's annual
meeting, (iv) deposit such Shares into a voting trust or enter into a voting
agreement or arrangement with respect to such Shares or (v) take any other
action that would in any way restrict, limit or interfere with the performance
of its obligations hereunder or the transactions contemplated hereby.
(b) Subject to Section 8, the Shareholder shall not, nor shall
it permit any investment banker, attorney or other adviser or representative of
the Shareholder to, directly or indirectly, (i) solicit, initiate or encourage
the submission of, any Acquisition Proposal (as defined in the Merger Agreement)
or (ii) participate in any discussions or negotiations regarding, or furnish to
any person any information with respect to, or take any other action to
facilitate any inquiries or the making of any proposal that constitutes, or may
reasonably be expected to lead to, any Acquisition Proposal. Without limiting
the foregoing, it is understood that any violation of the restrictions set forth
in the preceding sentence by an investment banker, attorney or other adviser or
representative of the Shareholder, whether or not such person is purporting to
act on behalf of the Shareholder or otherwise, shall be deemed to be a violation
of this Section 3(b) by the Shareholder.
SECTION 4. GRANT OF IRREVOCABLE PROXY; APPOINTMENT OF PROXY.
(a) Subject to the provisions of the pledge agreements with
Keybank, the Shareholder hereby irrevocably grants to, and appoints, Parent and
Xxxx X. Xxxxxxx, and any other individual who shall hereafter be designated by
Parent, the Shareholder's proxy and attorney-in-fact (with full power of
substitution), for and in the name, place and stead of the Shareholder, to vote
the Shareholder's Shares, or grant a consent or approval in respect of such
Shares, at any meeting of shareholders of the Company or at any adjournment
thereof or in any other circumstances upon which their vote, consent or other
approval is sought, against (i) any merger agreement or merger (other than the
Merger Agreement and the Merger), consolidation, combination, sale of
substantial assets, reorganization, joint venture, recapitalization,
dissolution, liquidation or winding up of or by the Company and (ii) any
amendment of the Company's Articles of Incorporation or By-laws or other
proposal or transaction (including any consent solicitation to remove or elect
any directors of the Company) involving the Company or any of its subsidiaries
which amendment or other proposal or transaction would in any manner impede,
frustrate, prevent or nullify, or result in
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a breach of any covenant, representation or warranty or any other obligation or
agreement of the Company under or with respect to, the Offer, the Merger, the
Merger Agreement or any of the other transactions contemplated by the Merger
Agreement (each of the foregoing in clause (i) or (ii) above, a "COMPETING
TRANSACTION").
(b) Subject to the provisions of the pledge agreements with
KeyBank, the Shareholder represents that any proxies heretofore given in respect
of the Shareholder's Shares are not irrevocable, and that any such proxies are
hereby revoked.
(c) The Shareholder hereby affirms that the irrevocable proxy
set forth in this Section 4 is given in connection with the execution of the
Merger Agreement, and that such irrevocable proxy is given to secure the
performance of the duties of the Shareholder under this Agreement. The
Shareholder hereby further affirms that the irrevocable proxy is coupled with an
interest and may under no circumstances be revoked. The Shareholder hereby
ratifies and confirms all that such irrevocable proxy may lawfully do or cause
to be done by virtue hereof. Such irrevocable proxy is executed and intended to
be irrevocable in accordance with the provisions of Section 60.231 of the Oregon
Business Corporation Act (the "CORPORATION LAW").
SECTION 5. CERTAIN EVENTS. The Shareholder agrees that this Agreement
and the obligations hereunder shall attach to the Shareholder's Shares and shall
be binding upon any person or entity to which legal or beneficial ownership of
such Shares shall pass, whether by operation of law or otherwise, including
without limitation the Shareholder's heirs, guardians, administrators or
successors. In the event of any stock split, stock dividend, merger,
reorganization, recapitalization or other change in the capital structure of the
Company affecting the Company Common Stock, or the acquisition of additional
shares of Company Common Stock or other securities or rights of the Company by
any Shareholder, the number of Shares listed on Schedule A beside the name of
the Shareholder shall be adjusted appropriately and this Agreement and the
obligations hereunder shall attach to any additional shares of Company Common
Stock or other securities or rights of the Company issued to or acquired by the
Shareholder.
SECTION 6. STOP TRANSFER. The Company agrees with, and covenants to,
Parent that the Company shall not register the transfer of any certificate
representing any Shareholder's Shares, unless such transfer is made to Parent or
Purchaser or otherwise in compliance with this Agreement.
SECTION 7. VOIDABILITY. If prior to the execution hereof, the Board of
Directors of the Company shall not have duly and validly authorized and approved
by all necessary corporate action the acquisition of Company Common Stock by
Parent and Purchaser and the other transactions contemplated by this Agreement
and the Merger Agreement, so that by the execution and delivery hereof Parent or
Purchaser would become, or could reasonably be expected to become, an
"Interested shareholder" with whom the Company would be
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prevented for any period pursuant to Section 60.825 - 60.845 of the Corporation
Law from engaging in any "Affiliated transaction" (as such terms are defined in
Section 60.825 of the Corporation Law) then this Agreement shall be void and
unenforceable until such time as such authorization and approval shall have been
duly and validly obtained.
SECTION 8. SHAREHOLDER CAPACITY. The Shareholder does not make any
agreement or understanding in his capacity as director or officer of the
Company. The Shareholder signs solely in his capacity as the record holder and
beneficial owner of Shareholder's Shares and nothing herein shall limit or
affect any actions taken by the Shareholder in his capacity as an officer or
director of the Company to the extent specifically permitted by the Merger
Agreement.
SECTION 9. FURTHER ASSURANCES. The Shareholder shall, upon request of
Parent or Purchaser execute and deliver any additional documents and take such
further actions as may reasonably be deemed by Parent or Purchaser to be
necessary or desirable to carry out the provisions hereof and to vest the power
to vote the Shareholder's Shares as contemplated by Section 4 in Parent and the
other irrevocable proxies described therein.
SECTION 10. TERMINATION. This Agreement, and all rights and obligations
of the parties hereunder, shall terminate upon the earlier of (a) the date upon
which the Merger Agreement is terminated in accordance with its terms or (b) the
date that Parent or Purchaser shall have purchased and paid for the Shares of
the Shareholder pursuant to Section 2; PROVIDED, HOWEVER, that the termination
of this Agreement shall not relieve any party of liability for breach of this
Agreement prior to termination.
SECTION 11. PUBLIC ANNOUNCEMENTS. The Shareholder will consult with
Parent before issuing, and provide Parent with the opportunity to review and
comment upon, any press release or other public statements with respect to the
transactions contemplated by this Agreement and the Merger Agreement, and shall
not issue any such press release or make any such public statement prior to such
consultation, except as may be required by applicable law, court process or by
obligations pursuant to any listing agreement with any national securities
exchange.
SECTION 12. MISCELLANEOUS.
(a) Capitalized terms used and not otherwise defined in this
Agreement shall have the respective meanings assigned to such terms in the
Merger Agreement.
(b) All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given if delivered personally or sent by overnight courier (providing proof of
delivery) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice): (i) if to Parent or
Purchaser, to the address set forth in Section 8.5 of the Merger Agreement; and
(ii) if to a
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Shareholder, to the address set forth on Schedule A hereto, or such other
address as may be specified in writing by the Shareholder.
(c) The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
(d) This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each of
Parent, Purchaser and the Shareholder and delivered to Parent, Purchaser and the
Shareholder.
(e) This Agreement (including the documents and instruments
referred to herein) constitutes the entire agreement, and supersedes all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof.
(f) This Agreement shall be governed by, and construed in
accordance with, the laws of the New York and, to the extent expressly provided
herein, the Corporation Law, regardless of the laws that might otherwise govern
under applicable principles of conflicts of laws thereof.
(g) Neither this Agreement nor any of the rights, interests or
obligations under this Agreement shall be assigned, in whole or in part, by
operation of law or otherwise, by any of the parties without the prior written
consent of the other parties, except by laws of descent. Any assignment in
violation of the foregoing shall be void.
(h) If any term, provision, covenant or restriction herein, or
the application thereof to any circumstance, shall, to any event, be held by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions herein and the
application thereof to any other circumstances, shall remain in full force and
effect, shall not in any way be affected, impaired or invalidated, and shall be
enforced to the fullest extent permitted by law.
(i) The Shareholder agrees that irreparable damage would occur
and that Parent and Purchaser would not have any adequate remedy at law in the
event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that Parent and Purchaser shall be entitled to an injunction
or injunctions to prevent breaches by any Shareholder of this Agreement and to
enforce specifically the terms and provisions of this Agreement. Each of the
parties hereto (i) consents to submit such party to the personal jurisdiction of
any Federal court located in the State of New York in the event any dispute
arises out of this Agreement or any of the transactions contemplated hereby, and
(ii) agrees that such party will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court.
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The prevailing party in any judicial action shall be entitled to receive from
the other party reimbursement for the prevailing party's reasonable attorneys'
fees and disbursements, and court costs.
(j) No amendment, modification or waiver in respect of this
Agreement shall be effective against any party unless it shall be in writing and
signed by such party.
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IN WITNESS WHEREOF, Parent, Purchaser and the Shareholder have
caused this Agreement to be duly executed and delivered as of the date first
written above.
/s/ Xxxxxx X. Xxxxxxxxxx
------------------------
Xxxxxx X. Xxxxxxxxxx,
Shareholder
SIGMA CIRCUITS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
T MERGER SUB (OR), INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
ACKNOWLEDGED AND AGREED
TO AS TO SECTION 6:
XXXXXXXXXX INDUSTRIES INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President and Chief Operating Officer
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SCHEDULE A
Xxxxxx X. Xxxxxxxxxx 8,119,375 shares outstanding
00000 XX 00xx Xxxxxx 125,000 shares issuable upon
Xxxxxxxx, Xxxxxx 00000 exercise of options
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ANNEX I TO
SHAREHOLDER'S AGREEMENT
1. An aggregate of 2,656,500 shares of Company Common Stock have been pledged to
Keybank National Association ("Keybank") pursuant to two Pledge Agreements dated
June 11, 1999 between Xx. Xxxxxxxxxx and Keybank.
2. 2,900,000 shares of Company Common Stock are subject to the CBL Insured
Credit Facility Agreement dated April 21, 1998 between Xx. Xxxxxxxxxx and Credit
Bancorp Limited.
3. 700,000 shares of Company Common Stock are subject to a margin account
agreement with Xxxxxxx Xxxxx.
4. 1,619,875 shares of Company Common Stock are subject to a margin account
agreement with EVEREN Securities.
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