Exhibit 10.1
EXECUTION VERSION
SETTLEMENT AGREEMENT
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THIS SETTLEMENT AGREEMENT (the "Agreement") dated as of August 30,
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2006 (the "Effective Date") by and among Xxxxxxxx Corporation, a Missouri
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corporation (the "Company"), Steel Partners, L.L.C., a Delaware limited
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liability company ("Steel Partners"), and Steel Partners II, L.P., a
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Delaware limited partnership ("Steel II" and, together with Steel Partners,
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"Steel").
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W I T N E S S E T H:
A. The Company has outstanding approximately 9,431,341 shares of
Common Stock (as defined below).
B. On February 6, 2006, Steel filed a twelfth amendment to Schedule
13D previously filed by Steel with respect to the Company indicating that
they planned to (i) seek representation on the Company's Board of Directors
(the "Board of Directors") by nominating a slate of two candidates,
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specifically Xxxxx Xxxxxxxxx and Xxxx Xxxxxx, for election as directors at
the 2006 annual meeting of the Company's shareholders (the "2006 Annual
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Meeting") and (ii) seek certain amendments to the Company's Articles (as
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defined below).
C. The Company and Steel (each a "Party") desire to enter into this
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Agreement, which (i) grants to Steel representation on the Board of
Directors, (ii) restricts certain purchases of the Company's capital stock
by Steel and its Affiliates and Associates, (iii) provides for certain other
limitations on Steel and its Affiliates and Associates and (iv) implements
certain corporate governance changes at the Company.
NOW, THEREFORE, in consideration of the premises, covenants and
agreements contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, each Party,
intending to be legally bound, hereby agrees as follows:
ARTICLE I
DEFINITIONS AND CONSTRUCTION
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Section 1.1 Certain Definitions. As used in this Agreement, the
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following terms will have the meanings specified below:
"Affiliate" has the meaning set forth in Rule 12b-2 of the General
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Rules and Regulations under the Exchange Act.
"Applicable Law" means all applicable provisions of all (a)
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constitutions, treaties, statutes, laws (including common law), rules,
regulations, ordinances or codes of any Governmental Authority, and (b)
orders, decisions, injunctions, judgments, awards and decrees of any
Governmental Authority.
"Articles" means the Articles of Incorporation of the Company, as
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amended, restated or supplemented from time to time.
"Associate" has the meaning ascribed to such term in Rule 12b-2 of
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the General Rules and Regulations of the Exchange Act.
"Beneficial Owner" A Person will be deemed the "Beneficial Owner"
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of, and will be deemed to "Beneficially Own," any securities:
(a) which such Person or any of such Person's Affiliates
or Associates beneficially owns, directly or indirectly (as determined
pursuant to Rule 13d-3 and Rule 13d-5(b) of the General Rules and
Regulations of the Exchange Act as in effect on the date hereof);
(b) which such Person or any of such Person's Affiliates
or Associates has (i) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding (other than customary agreements
with and between underwriters and selling group members with respect to a
bona fide public offering of securities), or upon the exercise of conversion
rights, exchange rights, rights (other than Rights issued pursuant to the
Rights Plan), warrants or options, or otherwise, provided, however, that a
Person will not be deemed the "Beneficial Owner" of securities tendered
pursuant to a tender or exchange offer made by or on behalf of such Person
or any of such Person's Affiliates or Associates until such tendered
securities are accepted for payment or exchange; or (ii) the right to vote
pursuant to any agreement, arrangement or understanding, provided, however,
that a Person will not be deemed the "Beneficial Owner" of any security
under this clause (ii) if the agreement, arrangement or understanding to
vote such securities (A) arises solely from a revocable proxy or consent
given in response to a proxy or consent solicitation made pursuant to, and
in accordance with, the applicable rules and regulations of the Exchange Act
and (B) is not also then reportable by such Person on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
(c) which are beneficially owned, directly or indirectly,
by any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or understanding
(other than customary agreements with and between underwriters and selling
group members with respect to a bona fide public offering of securities) for
the purpose of acquiring, holding, voting (except pursuant to a revocable
proxy or consent as described in clause (ii) of subparagraph (b) above) or
disposing of any securities of the Company.
"Business Day" means a day other than a Saturday, a Sunday, a day
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on which banking institutions in the States of New York or Missouri are
authorized or obligated by law or required by executive order to be closed,
or a day on which the New York Stock Exchange is closed.
"Class I Director" means a member of the class of the Board of
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Directors, the term of which expires at the 2006 Annual Meeting. For
avoidance of doubt, the term for each Class I Director elected at the 2006
Annual Meeting will be three years.
"Class II Director" means a member of the class of the Board of
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Directors, the term of which expires at the 2007 annual meeting of the
Company's shareholders (the "2007 Annual Meeting").
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"Class III Director" means a member of the class of the Board of
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Directors, the term of which expires at the 2008 annual meeting of the
Company's shareholders (the "2008 Annual Meeting").
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"Common Stock" means the common stock of the Company.
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"Disinterested Directors" means those members of the Board of
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Directors that (a) are Incumbent Directors and (b) are not "interested
directors" within the meaning of Applicable Law.
"Exchange Act" means the Securities Exchange Act of 1934, as
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amended, and the rules and regulations thereunder.
"Governmental Authority" means any federal, state, local or
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political subdivision, governmental or administrative body, instrumentality,
department or agency or any court, administrative hearing body, arbitration
tribunal, commission or other similar dispute resolution panel or body, and
any other entity exercising executive, legislative, judicial, regulatory or
administrative functions of a government.
"Group" means any group within the meaning of Section 13(d)(3) of
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the Exchange Act, and Rule 13d-5(b) thereunder, in each case as in effect on
the date hereof.
"Incumbent Directors" means those individuals who, as of the date
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hereof, constitute the Board of Directors; provided, however, that any
individual who becomes a director subsequent to the date hereof whose
election, or nomination for election by the Company's shareholders, was
approved by a vote of at least a majority of the Incumbent Directors then
serving on the Board of Directors will be considered as though such
individual were an Incumbent Director, but excluding, for this purpose, any
such individual whose initial assumption of office occurs as a result of
either an actual or threatened election contest or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person
other than the Board of Directors. For the avoidance of doubt, the Steel
Directors will not be Incumbent Directors.
"Percentage Limitation" means 19.99% of the then outstanding Voting
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Securities of the Company provided if Steel's ownership percentage is in
excess of 19.99% of the Voting Securities as a result of the Company buying
back its Voting Securities then the Percentage Limitation will increase to
such ownership percentage resulting from the buy back so long as Steel does
not acquire beneficial ownership of any additional shares of Voting
Securities.
"Person" means an individual, a partnership, an association, a
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joint venture, a corporation, a limited liability company, a business, a
trust, any entity organized under Applicable Law, an unincorporated
organization or any Governmental Authority.
"Rights Plan" means the Rights Agreement dated as of August 27,
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1998, as amended, between the Company and UMB Bank, n.a., as rights agent.
"SEC" means the Securities and Exchange Commission.
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"Securities Act" means the Securities Act of 1933, as amended, and
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the rules and regulations thereunder.
"Steel Director" means Xxxx Xxxxxx, with respect to the Class II
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Director designated in Section 3.2(a) and Xxxxx Xxxxxxxxx, with respect to
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the Class III Director designated in Section 3.2(a), and the successors of
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such individuals as set forth in Section 3.2(b), provided that no Person who
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has not received the approval of a majority of the Disinterested Directors
will be deemed a successor Steel Director if such Person (a) is, or is an
Affiliate, Associate, officer, director, member, partner, stockholder or
employee of, a Person (other than the Company, Steel and their respective
Affiliates and Associates), a substantial amount of the business of which is
similar to the business of the Company as then-currently conducted, (b) is,
or is an Affiliate, Associate, officer, director, member, partner,
stockholder or employee of a Person (other than the Company, Steel and their
respective Affiliates and Associates), which Person has taken any actions
which, if such Person were Steel, would violate Section 3.1, (c) is, or is
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an Affiliate, Associate, officer, director, member, partner, stockholder or
employee of, a Person (other than the Company, Steel and their respective
Affiliates and Associates), described in Rule 262 of Regulation A of the
Securities Act, or (d) has been convicted by a court of competent
jurisdiction of a misdemeanor involving moral turpitude or a felony.
"Vote" means, as to any entity, the ability to cast a vote at a
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shareholders' or comparable meeting of such entity with respect to the
election of directors or other members of such entity's governing body.
"Voting Power" means the aggregate number of Votes of the Company
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outstanding as at such date.
"Voting Securities" means the Common Stock and any other securities
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of the Company having the right to Vote.
Section 1.2 Interpretation and Construction of this Agreement. The
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definitions in Section 1.1 will apply equally to both the singular and
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plural forms of the terms defined. Whenever the context may require, any
pronoun will include the corresponding masculine, feminine and neuter forms.
The words "include," "includes" and "including" will be deemed to be
followed by the phrase "without limitation." All references herein to
Articles, Sections and Schedules will be deemed to be references to Articles
and Sections of, and Schedules to, this Agreement unless the context will
otherwise require. The headings of the Articles and Sections are inserted
for convenience of reference only and are not intended to be a part of or to
affect the meaning or interpretation of this Agreement. Unless the context
will otherwise require or provide, any reference to any agreement or other
instrument or statute or regulation is to such agreement, instrument,
statute or regulation as amended and supplemented from time to time (and, in
the case of a statute or regulation, to any successor provision).
ARTICLE II
REPRESENTATIONS AND WARRANTIES
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Section 2.1 Representation and Warranties by Steel. Steel Partners
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and Steel II hereby represent and warrant to the Company as follows:
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(a) Each of them has all requisite power and authority to execute,
deliver and perform their respective obligations under this Agreement. The
execution, delivery and performance of this Agreement by each of them and
the consummation of the transactions contemplated hereby have been duly
authorized by all requisite action on the part of each of them.
(b) This Agreement has been duly executed and delivered by each of
them and constitutes a legal, valid and binding obligation of each of them,
enforceable against each of them in accordance with its terms, except to the
extent that enforceability may be limited by bankruptcy, insolvency or other
similar laws affecting creditors rights generally or by general principles
of equity.
(c) No governmental consent, approval, authorization, license or
clearance, or filing or registration with any governmental or regulatory
authority, is required in order to permit either of them to perform its
respective obligations under this Agreement, except for such as have been
obtained.
(d) The shares of Common Stock set forth on Schedule 2.1(d)
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attached hereto represent all of the shares of Voting Securities of the
Company, if any, which are Beneficially Owned by either or both of them on
the date hereof. Such shares are owned free and clear of any charge, claim,
equitable interest, lien, option, pledge, security interest, right of first
refusal, encumbrance or similar restriction. Neither of them has the right
to vote shares of Voting Securities of the Company other than those set
forth on Schedule 2.1(d), and neither of them has granted any other Person
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the right to vote such shares.
(e) Each Steel Director satisfies the eligibility requirements for
members of the Board of Directors established by (i) the Company's corporate
governance documents and (ii) the New York Stock Exchange.
Section 2.2 Representations and Warranties by the Company. The
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Company represents and warrants to Steel as follows:
(a) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement. The
execution, delivery and performance of this Agreement by the Company and the
consummation of the transactions contemplated hereby have been duly
authorized by all requisite corporate action on the part of the Company.
(b) This Agreement has been duly executed and delivered by the
Company and constitutes a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms,
except to the extent that enforceability may be limited by bankruptcy,
insolvency or similar laws affecting creditors rights generally or by
general principles of equity.
(c) No governmental consent, approval, authorization, license or
clearance, or filing or registration with any governmental or regulatory
authority, is required in order to permit the Company to perform its
obligations under this Agreement, except for such as have been obtained.
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ARTICLE III
COVENANTS AND OTHER LIMITATIONS
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Section 3.1 Covenants. Steel by execution of this Agreement, hereby
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withdraws its slate of nominees for election to the Board of Directors at
the 2006 Annual Meeting. Steel by execution of this Agreement, hereby
withdraws the shareholder proposals it submitted for the 2006 Annual
Meeting. Within two (2) Business Days of the date of this Agreement, Steel
will file, or cause to be filed on their behalf, with the SEC an amendment
to its Schedule 13D with respect to the Company disclosing the material
contents of this Agreement.
In addition to the foregoing, Steel agrees that it will not, and it
will cause each of its Affiliates and Associates not to, directly or
indirectly, alone or in concert with others, take any of the actions set
forth below:
(a) effect, seek, offer, propose (whether publicly or otherwise) or
cause or participate in, or assist, encourage or seek to persuade, any other
Person to effect, seek, offer or propose (whether publicly or otherwise) or
participate in:
(i) any acquisition of Beneficial Ownership of Common
Stock or other Voting Securities; provided, however, that such
acquisition may be made to the extent it would not result in Steel
having Beneficial Ownership in excess of the Percentage Limitation;
(ii) any tender offer or exchange offer; provided,
however, that this clause (ii) will be inoperative to the extent a
third party which is not an Affiliate or Associate of Steel
commences a hostile tender offer or exchange offer with respect to
the Company's securities;
(iii) any merger, consolidation, share exchange, business
combination, sale of assets, recapitalization, restructuring,
liquidation, dissolution or other extraordinary transaction with or
involving the Company or any material portion of its business or
substantial part of the assets of the Company; provided, however,
that if the Company conducts a sale process, Steel will have the
opportunity to participate in such process under the same
procedures and guidelines established for the other participants in
the process; or
(iv) any "solicitation" of "proxies" (as such terms are
used in the proxy rules of the SEC) with respect to the Company or
any action resulting in such Person becoming a "participant" in any
"election contest" (as such terms are used in the proxy rules of
the SEC) with respect to the Company, except (A) the solicitation
of revocable proxies by Steel for the election of a maximum of
three members of the Board of Directors at the 2007 Annual Meeting
and (B) that Steel may make recommendations to shareholders
relating to and/or solicit revocable proxies or written consents
for the approval of any proposal (other than election of directors)
submitted by any other shareholder of the Company which is not an
Affiliate or Associate of Steel or a member of any Group of which
either Steel or its Affiliates or Associates is a member;
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(b) except for the nomination of a maximum of three individuals for
election as members of the Board of Directors at the 2007 Annual Meeting,
propose any matter for submission to a vote of shareholders of the Company;
provided, however, that nothing in this Section 3.1(b) will restrict the
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manner in which the Steel Directors may (i) vote on any matter submitted to
the Board of Directors or stockholders, (ii) participate in deliberations or
discussions of the Board of Directors (including making suggestions and
raising issues to the Board of Directors) in their capacity as members of
the Board of Directors and in no other capacity; or (iii) take any other
actions that will allow them to exercise their fiduciary duties and
obligations as directors of the Company;
(c) form, join or participate with any Person in a Group with
respect to any Voting Securities;
(d) except with respect to the grant of revocable proxies for the
election of a maximum of three individuals as members of the Board of
Directors at the 2007 Annual Meeting, grant any proxy with respect to any
Voting Securities to any Person not designated by the Company;
(e) deposit any Voting Securities in a voting trust or subject any
Voting Securities to any arrangement, agreement or understanding with
respect to the Voting of such Voting Securities or other agreement having
similar effect;
(f) execute any written shareholder consent with respect to the
Company, except as specifically contemplated in Section 3.1(a)(iv);
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(g) except for the solicitation of revocable proxies for the
election of a maximum of three individuals as members of the Board of
Directors at the 2007 Annual Meeting, take any other action to seek to
affect the control of the management or Board of Directors of the Company;
provided, however, that nothing in this Section 3.1(g) will restrict the
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manner in which the Steel Directors may (i) vote on any matter submitted to
the Board of Directors or stockholders, (ii) participate in deliberations or
discussions of the Board of Directors (including making suggestions and
raising issues to the Board of Directors) in their capacity as members of
the Board of Directors and in no other capacity, or (iii) take any other
actions that will allow them to exercise their fiduciary duties and
obligations as directors of the Company; or
(h) call or seek to have called any meeting of the shareholders of
the Company other than through participation as a member of the Board of
Directors and with the prior approval of a majority of the Disinterested
Directors;
(i) unless such amendment, waiver or termination is approved by a
majority of Disinterested Directors, request the Company or the Board of
Directors, directly or indirectly, to amend, waive or terminate any
provision of this Agreement; provided, however, that a request for a waiver
or amendment is permitted to be made by Steel on a confidential basis to the
Board of Directors and no disclosure regarding such request or the subject
matter thereof will be made by Steel or any of its Affiliates or Associates
to any third party; or
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(j) enter into any discussions, negotiations, arrangements or
understandings with any Person other than the Company with respect to any of
the foregoing, or advise, assist, encourage or seek to persuade others to
take any action with respect to any of the foregoing.
Section 3.2 Steel Directors.
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(a) As of the Effective Date, one Class II Director and one Class
III Director will resign from their positions as members of the Board of
Directors and the remaining members of the Board of Directors will
immediately appoint the Steel Directors to fill the vacancies created by the
resignations of the Class II Director and the Class III Director.
(b) In the case of any vacancy occurring among the Steel Directors
serving on the Board of Directors, Steel will have the right to designate a
Steel Director for appointment as a successor to hold office for the
unexpired term of the Steel Director whose place will be vacant; provided
that such Steel Director; in the reasonable judgment of the Nominating and
Corporate Governance Committee, meets the eligibility requirements for
directors established by (i) the Company's corporate governance documents
and (ii) the New York Stock Exchange.
(c) To the extent Steel or any of its Affiliates or Associates or
any member of any Group of which Steel or its Affiliates or Associates are a
member does not run a slate in opposition to the slate recommended by the
Board of Directors as candidates for election to the Board of Directors at
the 2007 Annual Meeting, the Company will re-nominate, recommend and support
Steel's Director situated in Class II for election to another term. To the
extent Steel or any of its Affiliates or Associates or any member of any
Group of which Steel or its Affiliates or Associates are a member does not
run a rival slate of candidates for election to the Board of Directors at
the 2008 Annual Meeting, the Company will re-nominate, recommend and support
the Steel Directors for election to another term.
(d) Notwithstanding anything in this Section 3.2 to the contrary,
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the Company will have no obligation to nominate, appoint, recommend,
support, solicit proxies for or seat any Steel Director unless such Steel
Director has entered into an agreement with Steel and the Company in the
form attached hereto as Exhibit A.
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(e) If Steel is able to obtain Board of Directors representation
totaling four directors out of a possible eight directors, and if any
director subsequently ceases to serve for any reason and no successors
nominated by the Nominating and Corporate Governance Committee are elected
to fill those vacancies, then Steel and/or the Disinterested Directors, as
the case may be, will cause its Board of Directors' representatives to
resign proportionately so that the maximum representation each of Steel and
the Disinterested Directors have on the Board after the 2007 Annual Meeting
but before the 2008 Annual Meeting will not exceed 50%. The number of
directors serving on the Board of Directors will not exceed eight until the
conclusion of the 2008 Annual Meeting.
(f) Concurrently with the election of the two Steel Directors in
2006, one Steel Director will be appointed, at Steel's recommendation and in
any combination determined by Steel, to serve as a member of each of the
Compensation and Organization Committee and any future executive committee
or special committee established by the Board of Directors, the
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subject matter for which does not involve any matter which Steel or any
Steel Director would have, or be reasonably expected to have, an actual
conflict of interest.
Section 3.3 Voting of the Company's Voting Securities. Steel and
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its Affiliates and Associates will vote their shares of Common Stock for the
election of Xxxxxxx X. X'Xxxx and Xxxxxx X. Xxxxxxxxxx as Class I Directors
at the 2006 Annual Meeting. Xx. X'Xxxx will immediately tender an
irrevocable resignation from the position of member of the Board of
Directors; provided, however, that such resignation will only become
effective on the date Xx. X'Xxxx ceases to be Chief Executive Officer of the
Company.
Section 3.4 Declassification and Reorganization of the Board of
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Directors. As of the Effective Date, the Company will amend its Bylaws to
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provide that the Board of Directors will be declassified as described in
this Section 3.4. The declassification will be "phased-in" such that each
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member of the Board of Directors elected at or after the 2007 Annual Meeting
will be elected for a one year term. Members of the Board of Directors
elected before the 2007 Annual Meeting will serve the remaining duration of
their three year term. The Company has shifted two of the members of the
Classes of the Board of Directors in connection with this Agreement such
that the members of the Classes of the Board of Directors immediately
following the execution of this Agreement will be as follows:
Class I: Xxxxxxx X. X'Xxxx
Xxxxxx X. Xxxxxxxxxx
Class II: Xxxx Xxxxxx
Xxxxxx X. Xxxxx
Xxx X. Xxxxxx
Class III: Xxxxx Xxxxxxxxx
Xxxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxxxx
Section 3.5 Role of Lead Director and Evaluation of Split of Roles
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of Chairman CEO Within One Year.
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(a) Concurrently with the execution of this Agreement, the
Company's Bylaws will be amended to more clearly define the authority and
responsibilities of the Lead Director, which shall include:
(i) the right as Lead Director only to call meetings of
the Board of Directors;
(ii) the right as Lead Director only to call for and
conduct executive sessions of the Board of Directors at which only
outside, independent directors are permitted to be present, along
with other persons invited to attend such sessions by the Lead
Director or a majority of the outside, independent directors;
(iii) presiding at all meetings of the Board of Directors
at which the Chairman of the Board of Directors ("Chairman") is not
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present, including executive sessions of the independent directors;
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(iv) serving as liaison between the Chairman and the
independent directors;
(v) approving or adding materials sent to the Board of
Directors that are initially prepared by or under the direction of
the Chairman;
(vi) approving, or adding to the, meeting agendas for the
Board of Directors that are initially prepared by the Chairman;
(vii) approving meeting schedules that are initially
prepared by the Chairman in order to assure that there is
sufficient time for discussion of all agenda items;
(viii) making recommendations to the Board of Directors
regarding the structure of Board of Directors meetings;
(ix) recommending matters for consideration by the Board
of Directors;
(x) serving as an independent point of contact for
shareholders wishing to communicate with the Board of Directors
other than through the Chairman;
(xi) collaborating with the Chairman on recommending tasks
to be assigned to the appropriate committees;
(xii) with the approval of the Corporate Governance and
Nominating Committee, overseeing the annual evaluation of the Board
of Directors and its committees; and
(xiii) the right to engage legal, financial and other
advisers to represent the outside, independent directors.
(b) Within one year after the Effective Date, a meeting of the
Board of Directors shall be held to consider the separation of the roles of
the Chairman and the Chief Executive Officer. At that meeting, the outside,
independent directors, including the Steel Directors, acting by a majority
vote of such outside, independent directors, shall submit a recommendation
as to whether those roles should be split or whether the Chief Executive
Officer can continue to also serve as the Chairman. In formulating its
recommendation, the outside, independent directors, including the Steel
Directors, shall take into account all relevant facts and circumstances,
including the effectiveness of the then current Chairman in conducting
meetings of the Board of Directors, preparing agendas and briefing materials
for the Board of Directors, recommending the assignment of tasks to
committees of the Board of Directors, recommending other matters for
consideration by the Board of Directors, and the extent of collaboration
with the Lead Director.
Section 3.6 Special Committee. The Special Committee specifically
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formed for addressing matters related to Steel and reviewing strategic
alternatives for the Company will be disbanded upon execution of this
Agreement.
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Section 3.7 Anti-Takeover Provisions.
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(a) Until the conclusion of the 2007 Annual Meeting, the Company
will not (i) amend the timing or other procedures under which shareholders
are permitted to submit director nomination and business proposals for
consideration in meetings of shareholders, (ii) change the qualifications
for members of the Board of Directors, except as required by Applicable Law,
the New York Stock Exchange or any other self-regulatory organization with
jurisdiction over the Company, or (iii) issue any preferred stock or rights
to purchase preferred stock with voting rights in excess of one vote per
share of preferred stock; provided, however, that this clause (iii) shall
not limit in any way the Rights Plan or the issuance of preferred stock
under the Rights Plan.
(b) In the event the Board of Directors approves an amendment to
the Rights Plan prior to the conclusion of the 2007 Annual Meeting which
would lower the ownership threshold in the definition of "Acquiring Person",
Steel will be excepted from such lowered ownership threshold. For avoidance
of doubt, the current ownership threshold in the definition of "Acquiring
Person" under the Rights Plan in effect as of the Effective Date will not be
affected with respect to Steel.
Section 3.8 Rights Plan. The Parties acknowledge that certain
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technical changes to the Rights Plan have been made prior to the execution
of this Agreement. If neither Steel nor any of its Affiliates or Associates
or any member of any Group of which Steel or its Affiliates or Associates
are a member, elects to run an election contest for the Board of Directors
at the 2007 Annual Meeting, the Company will not extend the term of the
Rights Plan beyond its currently scheduled expiration date, unless either
(a) approved by a majority of the members of the Board of Directors,
including at least one Steel Director, or (b) approved by holders of a
majority of the Voting Securities voting at a meeting at which such matter
is acted upon.
Section 3.9 Dispositions. Any disposition of shares of Common Stock
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of the Company by Steel or its Affiliates or Associates must be made (a) in
open market transactions in a manner designed to effect an orderly
disposition of such shares or (b) under any method approved by a majority of
the Disinterested Directors.
Section 3.10 Covenant Not to Xxx. The Company will not initiate
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litigation against Steel or its Affiliates or Associates for any events or
activities based on conduct occurring prior to the Effective Date. If the
Company initiates litigation against Steel or its affiliates or Associates
for any activities or events occurring after the Effective Date, the Company
will not utilize any events or activities occurring prior to the Effective
Date as evidence in support of its claim. Steel will not initiate litigation
against the Company or its directors, officers, employees or agents with
respect to any events or activities occurring prior to the Effective Date.
If Steel initiates litigation against the Company or its directors,
officers, employees or agents for any activities or events occurring after
the Effective Date, Steel will not utilize any events or activities
occurring before the Effective Date as evidence in support of its claim.
This Section 3.10 will survive indefinitely the termination of this
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Agreement.
Section 3.11 Press Releases, Etc.
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(a) Each Party (including, for purposes of this Section 3.11,
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Steel's Affiliates and Associates) may issue press releases and make other
public filings and communications to the
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financial community and to its investors in the ordinary course relating to
the matters covered by this Agreement; provided, however, that prior to
making any such press release or public filings or communications, each
Party will provide the other Party a reasonable opportunity to review and
comment on any such press release or public filings or communications.
(b) Neither the Company, Steel or Steel's Affiliates or Associates,
nor any of their respective partners, members, directors, officers,
employees or agents, will publicly disparage any other Party to this
Agreement nor any of their respective partners, members, directors,
officers, employees or agents; provided, however, that the solicitation of
revocable proxies for the election of members of the Board of Directors at
the 2007 Annual Meeting that occurs within 120 days in advance of such
meeting shall not be subject to this Section 3.11(b).
--------------
Section 3.12 No Public Information. In connection with discussions
---------------------
between Steel and their representatives and the Company and its
representatives, the Company or its representatives may disclose to Steel or
its representatives information which is confidential to the Company. To
protect the confidentiality of such information, and as a condition to the
furnishing of such information, Steel agrees, as set forth below, to treat
confidentially all such information furnished to or otherwise received by
Steel or its representatives from the Company or on its behalf (herein
collectively referred to as the "Confidential Information"). For purposes of
------------------------
this Agreement, the phrase "Confidential Information" will not include
information which (a) becomes lawfully available to the public other than as
a result of a disclosure by Steel or its representatives, (b) was lawfully
available to Steel on a nonconfidential basis prior to its disclosure to the
Company or its representatives by the Company or on its behalf or (c)
lawfully becomes available to Steel on a nonconfidential basis from a source
other than the Company or the Company's representatives or agents, provided
that such source is not bound by a confidentiality agreement with the
Company of which Steel has been made aware. The Company has no obligation to
furnish Confidential Information to Steel or its representatives by virtue
of this Agreement except for Confidential Information provided to Steel
Directors in their capacity as directors of the Company. The Company shall
use its reasonable efforts not to provide Confidential Information to Steel
unless requested or consented to by Steel; provided that the Parties
acknowledge that the provision of Confidential Information to Steel
representatives serving on the Board of Directors shall not violate this
provision. The Confidential Information will not be disclosed by Steel or
its representatives except to the extent the Company has given its prior
written consent. This Section 3.12 will survive the termination of this
------------
Agreement for two (2) years.
Section 3.13 Quorum. Steel will use reasonable efforts to ensure
------
that it will be present, and will use reasonable efforts to cause its
Affiliates and Associates owning Voting Securities to be present, in each
case, in person or by proxy, at all meetings of shareholders of the Company
so that all Voting Securities Beneficially Owned by Steel and its Affiliates
and Associates will be counted for purposes of determining the presence of a
quorum at such meeting.
ARTICLE IV
TERM AND TERMINATION
--------------------
Section 4.1 Termination. Except with respect to Sections 3.2(c),
----------- ---------------
3.2(e), 3.8, 3.10 and 3.12, the provisions of this Agreement will terminate
------ --- ---- ----
at the conclusion of the 2007 Annual
12
Meeting and the provisions of Section 3.2(c), 3.2(e) and 3.8 will terminate
-------------- ------ ---
at the conclusion of the 2008 Annual Meeting. The provisions of this
Agreement may also be terminated by the non-breaching Party in the event of
a material breach by any Party of any of the terms of this Agreement. Any
termination of this Agreement as provided herein will be without prejudice
to the rights of any Party arising out of the breach by any other Party of
any provision of this Agreement.
ARTICLE V
MISCELLANEOUS
-------------
Section 5.1 Notices. All notices, requests and other communications
-------
to any Party hereunder will be in writing (including prepaid overnight
courier, facsimile transmission or similar writing) and will be given to
such Party at its address or facsimile number set forth in this Section 5.1
-----------
or at such other address or facsimile number as such Party may hereafter
specify in writing. Each such notice, request or other communication will be
effective (a) if given by facsimile, when transmitted to the facsimile
number specified in this Section 5.1 and confirmation of receipt is received
-----------
by the sender, (b) if given by mail, upon the earlier of actual receipt or
three (3) Business Days after deposit in the United States Mail, registered
or certified mail, return receipt requested, properly addressed and with
proper postage prepaid, (c) one (1) Business Day after deposit with an
internationally reputable overnight courier properly addressed and with all
charges prepaid or (d) when received, if by any other means.
The Company: Xxxxxxxx Corporation
000 Xxxxx Xxxxx Xxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxx, Esq.
Telecopy No.: (000) 000-0000
with a copy to: Xxxxxxx Xxxxxxxx Xxxxxx, LLP
0000 Xxxxxx, Xxxxx 0000
Xxxxxx Xxxx, Xxxxxxxx 00000
Attn: Xxxx X. Xxxxxx, Esq.
Telecopy No.: (000) 000-0000
Steel: Steel Partners, L.L.C.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xx. Xxxxxx X. Xxxxxxxxxxxx
Telecopy No.: (000) 000-0000
with a copy to: Xxxxxx Xxxxxxxx Frome
Xxxxxxxxxx & Wolosky LLP
Park Avenue Tower
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxxx, Esq.
Telecopy No.: (000) 000-0000
13
The Parties will promptly notify each other in the manner provided in this
Section 5.1 of any change in their respective addresses. A notice of change
of address will not be deemed to have been given until received by the
addressee. Communications by telecopier also will be sent concurrently by
mail, but will in any event be effective as stated above.
Section 5.2 Expenses. The Company will pay its own expenses with
--------
respect to this Agreement. The Company will reimburse Steel for reasonable
attorneys fees up to, but not in excess of $75,000 relating to this
Settlement Agreement and the matters covered hereby including the
nominations and proposals withdrawn by Steel at the 2006 Annual Meeting.
Upon any request for reimbursement, Steel will provide the Company with
copies of invoices from its counsel containing descriptions, in reasonable
detail, of the work performed.
Section 5.3 Assignment. No Party will assign this Agreement or any
----------
rights, interests or obligations hereunder, or delegate performance of any
of its obligations hereunder, without the prior written consent of each of
the other Parties.
Section 5.4 Entire Agreement. This Agreement, including the
----------------
Schedule and Exhibit attached hereto, embodies the entire agreement and
understanding of the Parties in respect of the subject matter contained
herein. This Agreement supersedes all prior agreements and understandings
between the Parties with respect to such subject matter.
Section 5.5 Waiver, Amendment, etc. This Agreement may not be
-----------------------
amended or supplemented, and no waivers of or consents to departures from
the provisions hereof will be effective, unless set forth in a writing
signed by, and delivered to, all the Parties. No failure or delay of any
Party in exercising any power or right under this Agreement will operate as
a waiver thereof, nor will any single or partial exercise of any right or
power, or any abandonment or discontinuance of steps to enforce such right
or power, preclude any other or further exercise thereof or the exercise of
any other right or power.
Section 5.6 Binding Agreement; No Third Party Beneficiaries. This
-----------------------------------------------
Agreement will be binding upon and inure to the benefit of the Parties and
their successors and permitted assigns. Nothing expressed or implied herein
is intended or will be construed to confer upon or to give to any third
party any rights or remedies by virtue hereof.
Section 5.7 Governing Law; Exclusive Jurisdiction; Service of
-------------------------------------------------
Process. This Agreement will be governed by and construed in accordance with
-------
the internal laws of the state of Missouri, without regard to conflicts of
laws principles.
Section 5.8 Severability. The invalidity or unenforceability of any
------------
provision hereof in any jurisdiction will not affect the validity or
enforceability of the remainder hereof in that jurisdiction or the validity
or enforceability of this Agreement, including that provision, in any other
jurisdiction. To the extent permitted by Applicable Law, each Party waives
any provision of Applicable Law that renders any provision hereof prohibited
or unenforceable in any respect. If any provision of this Agreement is held
to be unenforceable for any reason, it will be adjusted rather than voided,
if possible, in order to achieve the intent of the Parties to the extent
possible.
14
Section 5.9 Counterparts. This Agreement may be executed in one or
------------
more counterparts each of which when so executed and delivered will be
deemed an original but all of which will constitute one and the same
Agreement.
Section 5.10 Remedies. Each of the Parties acknowledges and agrees
--------
that each Party would suffer irreparable damage in the event that any of the
provisions of this Agreement was not performed in accordance with its
specific terms or was otherwise breached and that such damage may not be
compensable in money damages. It is accordingly agreed that, in the event of
a breach, violation or threatened breach or violation of the terms this
Agreement by any of the Parties, each of the other Parties will be entitled
to seek specific enforcement of, and injunctive relief to prevent any
breach, violation or further breach or violation of, the terms hereof, in
addition to any other remedy or relief available at law or in equity. In the
event an action seeking injunctive relief hereunder, no Party will be
required to post a bond.
[signature page follows]
15
IN WITNESS WHEREOF, the Company and Steel have caused their
respective duly authorized officers to execute this Agreement as of the day
and year first above written.
XXXXXXXX CORPORATION
By: /s/ Xxxxxx X. Xxxx
--------------------------------------------
Name: Xxxxxx X. Xxxx
Title: Vice President and General Counsel
STEEL PARTNERS, L.L.C.
By: /s/ Xxxxxx Xxxxxxxxxxxx
--------------------------------------------
Name: Xxxxxx Xxxxxxxxxxxx
Title:
STEEL PARTNERS II, L.P.
By: Steel Partners, L.L.C., its General Partner
By: /s/ Xxxxxx Xxxxxxxxxxxx
--------------------------------------------
Name: Xxxxxx Xxxxxxxxxxxx
Title:
16
SCHEDULE 2.1(D)
---------------
NUMBER OF SHARES BENEFICIALLY OWNED
Steel Partners II, L.P.
-----------------------
1,847,250
Steel Partners, L.L.C.
-----------------------
1,847,250
17
EXHIBIT A
---------
AGREEMENT
---------
THIS AGREEMENT (the "Agreement") dated as of _________, 200__ by
---------
and among Xxxxxxxx Corporation, a Missouri corporation (the "Company"),
-------
Steel Partners, L.L.C., a Delaware limited liability company ("Steel
-----
Partners"), Steel Partners II, L.P., a Delaware limited partnership ("Steel II"
-------- --------
and, together with Steel Partners, "Steel"), and ______________________,
-----
an individual residing at _____________________________ ("Steel Director").
--------------
W I T N E S S E T H:
WHEREAS, the Company and Steel have entered into that certain
Settlement Agreement dated as of August __, 2006 (the "Settlement
----------
Agreement") pursuant to which the Company has agreed to appoint or nominate
---------
certain individuals designated by Steel to be directors of the Company; and
WHEREAS, as a condition to its entering into the Settlement
Agreement, and as a condition to the Board of Directors of the Company
nominating or appointing such designee to the Board of Directors, the
Company requires that each individual designated by Steel enter into this
Agreement.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements contained herein, and
for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, each of the Company, Steel and the Steel
Director (each a "Party"), intending to be legally bound, hereby agrees as
-----
follows:
1. The Steel Director agrees to serve as a member of the Board of
Directors until the earlier of his or her resignation or upon the expiration
of the term thereof. The Steel Director further agrees to immediately resign
all positions as a director and officer of the Company and any subsidiary of
the Company upon the written request by Steel delivered to the Steel
Director requesting the Steel Director to resign as a director of the
Company.
2. The Steel Director acknowledges, and agrees to be bound by, the
terms of the Settlement Agreement as fully as if the Steel Director was a
Party thereto.
18
IN WITNESS WHEREOF, the Company, Steel and the Steel Director have
caused their respective duly authorized officers to execute this Agreement
as of the day and year first above written.
XXXXXXXX CORPORATION
By:
---------------------------------------------
Name:
Title:
STEEL PARTNERS, L.L.C.
By:
---------------------------------------------
Name:
Title:
STEEL PARTNERS II, L.P.
By: Steel Partners, L.L.C., its General Partner
By:
---------------------------------------------
Name:
Title:
"Steel Director"
By:
---------------------------------------------
Name:
19
