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EXHIBIT 10.1
Translated from the French for Information Purposes Only
SHAREHOLDERS' AGREEMENT
This Shareholders' Agreement is made this day of July 20th 1999.
BETWEEN
Xx. XXXXXXX XXXXXXX, a French citizen born in Paris, France, on December 12,
1956 and residing at La Fouillarge, 24460 Chateau-l'Eveque.
AND:
XX XXXXX Corp., a US corporation incorporated under the laws of the State of
OHIO, whose corporate headquarters are located at 00000 Xxxxxxxx Xx. XX,
Xxxxxxxxxxxx, Xxxx 00000, XXX (hereafter referred to as "XX Xxxxx") represented
by Xx. Xxxx Xxxxx, duly empowered for the purpose of this Agreement pursuant to
a corporate resolution and power of attorney in accordance with the corporate
resolution attached as Exhibit (1) to this Agreement.
Xx. XXXXXXX XXXXXXX and XX XXXXX being collectively referred to hereinafter as
the "Parties", or "Shareholders".
WHEREAS:
A. XX Xxxxx has acquired 80% of the issued share capital of ESCAPADE SA
from Xx. Xxxxxxx Xxxxxxx, who holds the remaining 20% pursuant to a
stock purchase agreement entered into by and between the parties as of
the date hereof.
B. It is in the best interest of Escapade SA that XX Xxxxx and Xx. XXXXXXX
XXXXXXX have an orderly and harmonious shareholders relationship in
accordance with the terms of this Agreement.
NOW, THEREFORE, the parties hereby agree as follows:
CLAUSE 1 - DEFINITIONS
For the purpose of this Agreement, the following terms shall have the meanings
set forth below:
"BUSINESS DAY" means any week day (except Saturdays, Sundays
and public holidays).
"FARGEOT GROUP OF COMPANIES" means Escapade Etablissements Fargeot et
Compagnie, Xxxxxx Xxxxxxx SA and any other
company directly or indirectly controlled by
Escapade SA.
"STOCK PURCHASE AGREEMENT" means the agreement entered into by and
between Xx. XXXXXXX XXXXXXX and XX XXXXX.
THE CLOSING DATE means the date hereof.
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"THE COMPANY" means ESCAPADE SA, a societe anonyme with
share capital of FF 250,000, whose registered
office is in Thivviers 24800 Xxxxxxxxx, Xx
Xxxxx Xxx, Xxxxxx, registered with the
Perigueux Trade and Companies Registry under
number B 384 485 601.
CLAUSE 2 - GOVERNANCE OF ESCAPADE SA
2.1 BOARD OF DIRECTORS
The Board of Directors of each company of the Fargeot Group
consists of four (4) members and may be convened at any time, by
each and any of the Director members of the Board.
Xx. Xxxxxxx Xxxxxxx shall be the President and Chairman of the
Board of Directors ("President Directeur General") of each company
of the Fargeot group for a period of five years after the closing
date with an annual gross remuneration for his services to
Fargeot, in respect of the same scope of work and responsibilities
as he has hitherto assumed of 1 million French francs (FF.
1,000,000), as per the following breakdown: FF 216,000 paid by
Xxxxxx Xxxxxxx SA, and FF 784,000 paid by Etablissements Fargeot
et Cie SA.
The Board of each company of the Fargeot group shall meet at least
annually, unless a special meeting is required by any one
Director.
Agenda and Board Papers shall be distributed at least fourteen
(14) days before annual meetings, and at least three (3) Business
Days before any other scheduled meeting.
The parties expressly agree to consult each other on the
anniversary date of this agreement for the purpose of
restructuring Xx. Xxxxxxx'x remuneration if necessary and in the
best respective interests of the parties.
2.2 CATEGORIES OF SHARES
The shares of Escapade SA held by XX Xxxxx are Class A shares of Escapade SA and
the shares held by Xx. Xxxxxxx Xxxxxxx and any other shareholders
of Escapade SA are Class B shares of Escapade SA.
Holders of Class A shares are entitled to propose for nomination and election
three (3) members of the Board of Directors of Escapade SA and the
holder of Class B shares is entitled to propose for nomination and
election one (1) member of the Board of Directors.
CLAUSE 3 - SALE OF THE BALANCE OF XX. XXXXXXX'X SHARES IN ESCAPADE
3.1 XX Xxxxx irrevocably undertakes to purchase from Xx. Xxxxxxx the
number of company shares held by Xx. Xxxxxxx as of the date of the
exercise of the option provided for in Article 4.2 of this
agreement.
3.2 Said option shall be exercised by Xx. Xxxxxxx in whole only and as
from July 20, 2004 until December 31, 2009 at the latest.
3.3 The purchase price of the company shares shall be calculated on
the basis of the following formula:
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Formula =
8.75 x 20% of the average pro forma net Fargeot group profit of
the last two years preceding the year during which said option is
exercised
where:
"Pro forma net Fargeot group profit" means: the net accounting
profit of the Fargeot Group of companies determined according
to French consolidation principles.
The net accounting profit of the Fargeot group will be adjusted to
take account of any transactions between the Fargeot Group and the
XX Xxxxx Group which may not be on arms' length terms.
For the purpose of calculating the consolidated net accounting
profit of the Fargeot Group of Companies in accordance with French
consolidation principles, the statutory auditors of the Fargeot
Group of Companies shall annually draw up consolidated accounts as
from the Closing Date and on the basis of the certified accounts
of each Fargeot group company.
CLAUSE 4 - PUT OPTION CLAUSE
4.1 In the event of Xx. Xxxxxxx'x resignation as Chairman of the Board
of Directors for reason of:
(i) a person or persons acting together acquiring
control of XX Xxxxx (whether by tender offer, merger
or otherwise); or
(ii) the death of Xx. Xxxxxx Zacks or his dismissal or
resignation as chief executive of XX Xxxxx (or his
otherwise ceasing to perform the functions of chief
executive of XX Xxxxx for a continuous period of at
least 12 months), and/or
(iii) in the event of death, permanent incapacity or
ill-health of Xx. Xxxxxxx,
(iv) in the event of Xx. Xxxxxxx Xxxxxxx'x resignation as
President (President Directeur General) of one of
the Companies of the group for any reason
whatsoever,
XX Xxxxx irrevocably undertakes to purchase Xx. Xxxxxxx'x
shareholding in the Company's capital on the basis of a price
calculated in accordance with the price formula and procedure set
forth in Article 4.3.
4.2 In case of the occurrence of an event referred to in Article
5.1.(i), (ii) and (iii), Xx. Xxxxxxx Xxxxxxx or his assignees may
exercise this option as from the date of the event and for a
period of six months. The exercise of this option shall be carried
out upon first demand by Xx. Xxxxxxx Xxxxxxx or his assignees by
registered letter with return receipt requested.
4.3 The sale of shares must occur no later than the fifth Business Day
following the date on which the option shall be exercised by Xx.
Xxxxxxx Xxxxxxx or his assignees. Xx. Xxxxxxx Xxxxxxx shall remit,
duly signed, the share transfer forms (ordres de mouvements)
relating to the shares. XX Xxxxx shall remit to Xx. Xxxxxxx
Xxxxxxx or his assignees a bank check or any other means of
payment accepted by Xx. Xxxxxxx Xxxxxxx or his assignees, made
payable to him in payment of the price of these shares.
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CLAUSE 5 - CALL OPTION CLAUSE
XX Xxxxx shall have the right to purchase Xx. Xxxxxxx'x shares of
Escapade SA after 12 months from the closing date (i.e. after July
20, 2000) and until December 31, 2009.
For this purpose, XX Xxxxx shall notify Xx. Xxxxxxx Xxxxxxx of its
intent to purchase his shares by registered letter with
acknowledgment of receipt, in accordance with the price formula
and procedure set forth in Article [4].
The parties further agree that in the event that, within 12 months
as from the sale of shares pursuant to this Article, more than 50%
of the Company's voting rights and capital are sold at a higher
unitary realization value per share than the price resulting from
this call option, Xx. Xxxxxxx Xxxxxxx shall receive from XX Xxxxx
the difference between the value of the shares on the day the call
option is exercised and the value on the day of the sale of more
than 50% of the Company's voting rights and capital, in due
proportion to the number of shares actually sold in respect of the
day on which this call option is exercised, after subtraction of
the portion of costs of any kind whatsoever generated by XX
Xxxxx'x sale of more than 50% of Escapade SA's voting rights and
capital. It is understood that, in the event that the unitary
share price on the day of the sale of more than 50% of the
Company's voting rights and capital is less than the unitary share
price on the day of the call option, Xx. Xxxxxxx Xxxxxxx shall not
owe any sum.
CLAUSE 6 - TRANSFER OF SHARES
6.1 Xx. Xxxxxxx Xxxxxxx undertakes not to sell or pledge his shares of
the Company, unless a pledge of such shares is required to obtain
the bank financing necessary for the Company to purchase shares of
Fargeot et Cie.
6.2 Any sale, transfer, pledge, encumbrance or other disposition in
violation of this Agreement will be null and void, if the
potential beneficiary of such sale, transfer, pledge or
encumbrance has not been approved by the other parties and/or if
the transferor does not procure the transferee's written consent
to be bound by the terms of this Agreement.
6.3 Subject to the terms and conditions set forth in this Agreement
and in the Articles of Association, in case XX Xxxxx intends to
transfer, in whole or in part, its shares in the Company to a
third party, XX Xxxxx shall undertake to procure an offer from
said third party providing that the shares held by Xx. Xxxxxxx
Xxxxxxx will be transferred to said third party at the same price
as its own shares.
For this purpose, XX Xxxxx shall notify by registered letter with acknowledgment
of receipt to Xx. Xxxxxxx Xxxxxxx the number of shares that it
intends to transfer as well as the transfer price and any other
substantial terms and conditions of the transaction.
Xx. Xxxxxxx Xxxxxxx shall notify by registered letter with acknowledgment of
receipt to XX Xxxxx his intent to transfer his shares to said
third party under the same terms and conditions. In that case, XX
Xxxxx is not allowed to transfer its shares to said third party
unless the shares held by Xx. Xxxxxxx Xxxxxxx are offered to be
transferred at the same terms and conditions.
In the event of failure by Xx. Xxxxxxx Xxxxxxx to respond within fifteen (15)
days as from the date of notification by XX Xxxxx, Xx. Xxxxxxx
Xxxxxxx shall be deemed to have waived his right provided for
under this clause.
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CLAUSE 7 - RIGHT OF PREEMPTION
XX Xxxxx may at any time sell part or all of its shares of the Company to any
third party, subject to the following:
Such sale of all or part of its shares by XX Xxxxx to a third party shall be
subject to Xx. Xxxxxxx Xxxxxxx'x preemptive right to purchase said
shares under the same terms and conditions as those offered to the
third party.
Notice of the planned transfer shall be given by XX Xxxxx to Xx. Xxxxxxx Xxxxxxx
by registered letter with acknowledgement of receipt and contain
complete details of the identity of the third party, the number of
shares concerned in the envisaged transfer and the offer price.
Xx. Xxxxxxx Xxxxxxx shall have, under penalty of foreclosure, a time limit of 30
days as from the receipt of the notice by XX Xxxxx of the said
information, to purchase the relevant shares, his decision being
notified by registered letter with acknowledgement of receipt and
having to be sent to XX Xxxxx within this time period.
If, within the time period granted to him, Xx. Xxxxxxx Xxxxxxx has not purchased
all the shares concerned, the preemptive right shall be deemed not
to have been exercised and the transfer of all the shares may be
made by XX Xxxxx to the third party.
Xx. Xxxxxxx Xxxxxxx shall have no preemptive right in the event of a sale of XX
Xxxxx Corporation.
CLAUSE 8 - ANTI-DILUTION CLAUSE
XX Xxxxx undertakes not to effect any increase in the share capital of Escapade
SA involving a waiver of the shareholders' preferential rights of
subscription, whilst Xx Xxxxxxx Xxxxxxx remains a shareholder of
Escapade SA.
CLAUSE 9 - INFORMATION OBLIGATION
Xx. Xxxxxxx shall draw up monthly reports of the activities
concerning the Companies in a form agreed upon by the Parties,
which reports shall be transmitted to XX Xxxxx.
CLAUSE 10 - SHAREHOLDERS' ADVANCES
10.1 In connection with Escapade's acquisition, on the date hereof, of
49% of the shares making up the capital of Etablissements Fargeot
et Compagnie, pursuant to the Stock Purchase Agreement, the
financing was set up and paid to Escapade as follows:
- FF 3,234,000 by Xx. Xxxxxxx Xxxxxxx in the form of a
shareholder's current account advance,
- FF 11,536,780 by XX Xxxxx France Holding Inc. in the form of a
loan.
In this respect, it is provided that this advance and loan are
entered into for a term of one month, which is automatically
extendible for a period of one months, up to a limit of two
months. It is understood that Escapade may repay this advance and
loan prior to the due date in the event that it takes out a bank
loan prior to the due date, which bank loan is to be intended to
repay said advance and loan on a preferred basis. Said advance and
loan shall
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bear interest as set out in Article 39-1.3(degree) of the Xxxxxx
Xxxxxxx Tax Code, i.e. currently 4.38%.
10.2 Xx. Xxxxxxx Xxxxxxx shall make his best effort to negotiate and
propose to Escapade, XX Xxxxx and XX Xxxxx France Holding, bank
financing in the amount of FF 14,770,780. XX Xxxxx may not
unreasonably refuse the terms and conditions of said bank
financing.
In the event that XX Xxxxx and XX Xxxxx France Holding refuse the
terms and conditions of the bank financing proposed by Xx.
Xxxxxxx, XX Xxxxx and XX Xxxxx France Holding undertake either (i)
to purchase from Xx. Xxxxxxx Xxxxxxx the amount of the advance he
contracted, referred to in 10.1., or (ii) that Escapade shall take
out a bank loan in the same amount as that advanced by Xx. Xxxxxxx
Xxxxxxx, referred to in 10.1., under the terms and conditions
negotiated by the latter.
10.3 It is expressly provided that any repayment in respect of the
advances effected by XX Xxxxx France Holding and Xx. Xxxxxxx
Xxxxxxx shall be made on a pro-rata basis according to the amounts
advanced by Xx. Xxxxxxx Xxxxxxx and XX Xxxxx France Holding.
CLAUSE 11 - CONFLICTS
In the event of any conflict between the terms of this agreement and those of
the Articles of Association of Escapade SA, the terms of this
Agreement shall prevail and the shareholders shall take all
necessary steps to modify the Articles of Association in order to
make them consistent with terms of this Agreement, subject to
mandatory public policy rules provided by French company law.
CLAUSE 12 - NOTICES
It shall be a sufficient receipt of any notice or other communication in writing
hereunder if one Party desiring to give such notice or other
communication sends the notice or communication by registered or
certified mail, delivery in person or express courier to the other
Party. Such notice or other communication shall be deemed to have
been duly given upon receipt by the other Party, at the address
set forth below or at such other address as such other Party shall
have designated in writing:
To Xx. Xxxxxxx Xxxxxxx: XX. XXXXXXX XXXXXXX,
with copy to: XXXXXXX AND XXXXXXX
To the attention of Xxxxxx Xxxxxxx de Taisne
00, xxx xx Xxxxxxxx Xxxxx-Xxxxxx
00000 Xxxxx
To XX Xxxxx: XX XXXXX CORPORATION,
Attention: Xx. Xxxxxxx
00000 Xxxxxxxx Xx. XX
Xxxxxxxxxxxx, Xxxx, 00000 X.X.X.
with copy to: FIDAL Direction Paris et International,
5, cours Valmy,
F92923 Paris La Defense
Attention: Maitre Xxxxxxxx Xxxxxx and Xxxxxx
Xxxxxx Xxxxxx-Xxxxxx
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Xx XX Xxxxx Xxxxxx Holding Inc.:
00000 Xxxxxxxx Xx. XX
Xxxxxxxxxxxx, Xxxx 00000 X.X.X.
with copy to: FIDAL Direction Paris et International,
5, cours Valmy,
F92923 Paris La Defense
Attention: Maitre Xxxxxxxx Xxxxxx and Maitre
Xxxxxx Xxxxxx-Xxxxxx
CLAUSE 13 - TERMINATION
The Shareholders' Agreement shall take effect as from the date hereof and shall
remain effective until December 31, 2009 so long as XX Xxxxx and
Xx. Xxxxxxx Xxxxxxx remain shareholders of the Company.
CLAUSE 14 - APPLICABLE LAW AND JURISDICTION
14.1 This Agreement shall be governed and construed in accordance with
French law.
14.2 Any dispute between the Parties as to the interpretation or
performance of this Agreement shall be brought before the
competent courts falling within the jurisdiction of the Court of
Appeal of Paris.
CLAUSE 15 - ENTIRE AGREEMENT AND AMENDMENTS
This Agreement, including those agreements and documents to the extent
incorporated herein by reference, constitutes the entire agreement
between the Parties and supersedes all prior agreements or
understandings relating to the subject matter hereof.
No Party shall claim any amendment to this Agreement unless it is in writing,
sets forth the exact nature of such amendment and is signed by a
duly authorized representative of each Party hereto.
CLAUSE 16 - MISCELLANEOUS
16.1 WAIVER
The failure of any of the Parties to enforce any of the provisions
of this Agreement at any time shall not be construed to be a
waiver of such provision unless specifically so notified by a duly
authorized representative of the non defaulting Party to the other
Party in writing which writing expressly sets forth the exact
nature of such waiver. No waiver of any breach of this Agreement
shall be held to be a waiver of any other breach.
16.2 SEVERABILITY
In the event any term or provision of this Agreement shall for any
reason be held invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect
any other term or provision of the Agreement, and this Agreement
shall be interpreted and construed as if such term or provision,
to the extent to which it is invalid, illegal or unenforceable,
had never been contained in this Agreement provided, however,
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that such invalidity, illegality or unenforceability shall not
result in a material change of this Agreement.
16.3 CONFIDENTIALITY
Neither Party shall disclose any information whatsoever relating
to this Agreement without having obtained the prior written
consent of the other Party.
16.4 LANGUAGE
This Agreement is entered into and executed in French.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
Executed in two (2) counterparts
On July 22, 1999,
In Paris
/s/ Xxxxxxx Xxxxxxx /s/ Xxxx Xxxxx
Xx. Xxxxxxx Xxxxxxx XX XXXXX
Represented by Xx. Xxxx Xxxxx
