1
Exhibit (99)(a)
---------------
DISTRIBUTION AGREEMENT
----------------------
THIS DISTRIBUTION AGREEMENT is dated as of March 12, 2001
("Agreement") and among THE XXXXXX-XXXX COMPANY, an Ohio corporation ("Xxxxxx-
Xxxx"), BANK ONE TRUST COMPANY, N.A., MANSFIELD, OHIO, as trustee of the Xxxxx
X. Xxxxxx, Xx. Trust dated December 29, 1952 (the "JCG Trust"), and as trustee
of the Xxxx X. Xxxxxx Trust dated December 29, 1952 (the "RBG Trust"), and
NATIONAL CITY BANK, as trustee of The Xxxxxx-Xxxx Company 401(k) Plan, as
amended and restated as of August 1, 2000 (the "Profit Sharing Trustee").
Recitals
--------
A. Bank One Trust Company, N.A., Mansfield, Ohio, as trustee
of the JCG Trust and as trustee of the RBG Trust (the "Selling Shareholder"), is
a holder of record of Xxxxxx-Xxxx Common Shares, without par value ("Shares").
B. The Selling Shareholder plans to sell not in excess of
90,000 Shares (the "Registered Shares"), of which 35,000 will be sold from the
JCG Trust and 55,000 will be sold from the RBG Trust, in the three years (unless
extended) immediately following the Effective Date (as defined in Section 3(a)
of this Agreement).
C. Pursuant to the Judgment of the Common Pleas Court of
Richland County, Ohio entered on February 1, 1971, the Selling Shareholder has
the authority to sell the Registered Shares irrespective of any restriction
contained in Article II, Paragraph A of the agreement creating the JCG Trust,
and in Article II, Paragraph A of the agreement creating the RBG Trust.
2
2
D. The Profit Sharing Trustee (the "Fiduciary") has occasion,
from time to time, to acquire varying amounts of Shares in order to fulfill its
obligations under The Xxxxxx- Xxxx Company 401(k) Plan, as amended and restated
as of August 1, 2000 (the "Plan").
E. The Fiduciary desires to purchase from the Selling
Shareholder, and the Selling Shareholder desires to sell to the Fiduciary, all
or a portion of the Registered Shares.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants hereinafter set forth, on the basis of the representations and
warranties contained herein, and as an inducement to Xxxxxx-Xxxx to effect the
registration and qualification of the Registered Shares under applicable law,
the parties hereto hereby agree as follows:
1. SALES OF REGISTERED SHARES TO THE FIDUCIARY. (a) (i) From
the Effective Date until the same day of the eleventh month following the
Effective Date, (ii) from the first anniversary of the Effective Date until the
same day of the eleventh month following such anniversary, and (iii) from the
second anniversary of the Effective Date until the same day of the eleventh
month following such anniversary, the Selling Shareholder agrees, to the extent
there are Registered Shares remaining in the Annual Share Allotment (as defined
in Section 1(c) below), or to the extent that the Selling Shareholder determines
to allocate Registered Shares from a subsequent year's Annual Share Allotment if
no such Registered Shares are remaining, to sell to the Fiduciary that number of
Registered Shares which the Fiduciary may from time to time request for a per
Share purchase price equal to the average of the mean between the high and low
sales prices of Shares on the American Stock Exchange on the nearest trading
date before the date of sale. No brokerage fee or commission shall be paid by or
to any party in connection with any sale of Registered Shares pursuant to this
Section 1(a).
3
3
(b) The Fiduciary agrees that, except as previously
communicated to Xxxxxx- Xxxx and the Selling Shareholder and as may be otherwise
required under applicable law, for so long as this Agreement remains in effect,
to the extent it seeks to acquire Shares, it shall attempt to purchase
Registered Shares from the Selling Shareholder before attempting to purchase
Shares from any other person or entity; provided, however, except as expressly
provided herein, nothing in this Agreement is intended or shall be construed to
require the Fiduciary to purchase Registered Shares.
(c) The "Annual Share Allotment" from the Effective Date until
the end of the day preceding the first anniversary of the Effective Date shall
mean 30,000 Registered Shares, and from the first anniversary of the Effective
Date until the end of the day preceding the second anniversary of the Effective
Date shall mean 30,000 Registered Shares (plus any Registered Shares from the
Annual Share Allotment for the prior year which were not sold pursuant to this
Agreement), and from the second anniversary of the Effective Date until the end
of the day preceding the third anniversary of the Effective Date shall mean
30,000 Registered Shares (plus any Registered Shares from the Annual Share
Allotment for the prior year which were not sold pursuant to this Agreement);
provided, however, that the number of Registered Shares set forth above may be
increased or decreased as provided in Section 11 hereof.
2. SALES OF REGISTERED SHARES TO THIRD PARTIES. (a) From the
day following the last day of the period described in any of clauses (i), (ii)
or (iii) of Section 1(a) hereof until the day preceding the next anniversary of
the Effective Date, the Selling Shareholder may sell any Registered Shares
remaining in the Annual Share Allotment to any person or entity; provided,
however, no sales shall be made under this Section 2 unless, upon inquiry of the
Selling Shareholder, the Fiduciary has advised the Selling Shareholder not less
4
4
than two business days prior to any proposed sale that the Fiduciary does not
anticipate purchasing any Registered Shares prior to the next anniversary of the
Effective Date. If the Fiduciary advises the Selling Shareholder in response to
an inquiry pursuant to the preceding sentence that it anticipates purchasing
Registered Shares prior to the next anniversary of the Effective Date, the
Fiduciary shall estimate the number of Registered Shares that it anticipates
purchasing, which number of Registered Shares shall be reserved from the
Registered Shares remaining in the Annual Share Allotment for that year and,
unless included in the Annual Share Allotment for the following year, such
Registered Shares shall not be available for sale to a third party pursuant to
this Section 2.
3. REGISTRATION STATEMENT. (a) Xxxxxx-Xxxx shall prepare and
file with the Securities and Exchange Commission ("SEC") a registration
statement on Form S-3, or other appropriate form under the Securities Act of
1933 (the "Act"), in respect of the Registered Shares. Xxxxxx-Xxxx shall use all
reasonable efforts to cause such registration statement (the "Registration
Statement") to become effective and will advise the Selling Shareholder and the
Fiduciary when it has become effective. Xxxxxx-Xxxx shall also advise the
Selling Shareholder and the Fiduciary promptly of the issuance by the SEC of any
stop order suspending the effectiveness of the Registration Statement or of the
institution of any proceedings for that purpose, and Xxxxxx-Xxxx shall use all
reasonable efforts to prevent the issuance of any such stop order and to obtain
as soon as possible the lifting thereof, if issued. Xxxxxx-Xxxx shall use all
reasonable efforts to comply with the Act and the Securities Exchange Act of
1934 (the "Exchange Act"), as well as any relevant "blue sky" statutes, so as to
permit the continuance of sales of and dealing in the Registered Shares for a
period of three years (unless extended) following the day the Registration
Statement first becomes effective (the "Effective Date").
5
5
Xxxxxx-Xxxx shall furnish to the Selling Shareholder and the Fiduciary a copy of
the Registration Statement and all amendments and supplements thereto, any
preliminary and the final prospectus contained therein (the "Prospectus") and
all amendments and supplements thereto, in each case as soon as available.
(b) Xxxxxx-Xxxx shall pay or cause to be paid all costs and
expenses incurred in connection with the transactions contemplated by this
Section 3, including, without limitation, fees and disbursements of counsel (but
excluding any fees and disbursements of counsel for the Selling Shareholder or
for the Fiduciary); costs and expenses in connection with the preparation,
printing and delivery of the Registration Statement, the Prospectus and the
certificates for the Registered Shares; fees and expenses of the transfer agent
and registrar for the Shares; accounting fees and disbursements; and any
transfer taxes on any sales of Registered Shares.
(c) In connection with the distribution of the Prospectus, and
all amendments and supplements thereto to all participants in the Plan,
Xxxxxx-Xxxx shall deliver the appropriate number of copies of the Prospectus,
and all amendments or supplements thereto, to the Fiduciary as soon as
available.
4. REPRESENTATIONS AND WARRANTIES OF XXXXXX-XXXX. Xxxxxx-Xxxx
represents and warrants to the Selling Shareholder and to the Fiduciary that it
has full legal right, power and authority to enter into this Agreement, that
this Agreement has been duly authorized, executed and delivered by Xxxxxx-Xxxx
and, that when duly executed and delivered by each of the other parties hereto,
this Agreement will constitute a valid and binding obligation of Xxxxxx-Xxxx.
6
6
5. REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDER.
The Selling Shareholder represents and warrants to Xxxxxx-Xxxx and to the
Fiduciary that:
(a) The Selling Shareholder has full legal right, power and
authority to enter into this Agreement and to sell the Registered Shares to be
sold pursuant to this Agreement.
(b) Upon delivery of the consideration for any Registered
Shares, the purchaser acquiring the Registered Shares pursuant to this Agreement
will acquire good and marketable title to such Registered Shares, free and clear
of any lien, pledge, equity, restriction, claim or encumbrance.
(c) This Agreement has been duly authorized, executed and
delivered by the Selling Shareholder and, when duly executed and delivered by
each of the other parties hereto, this Agreement will constitute a valid and
binding obligation of the Selling Shareholder.
(d) All information furnished to Xxxxxx-Xxxx by the Selling
Shareholder for use in the preparation of the Registration Statement and the
Prospectus, and all amendments and supplements thereto, is, and will be at the
Effective Date or as of the date of any amendment or supplement, as the case may
be, true, correct and complete in all material respects, and will include all
material facts required to be stated therein or necessary to make the statements
therein not misleading.
6. REPRESENTATIONS AND WARRANTIES OF THE FIDUCIARY. The
Fiduciary represents and warrants to Xxxxxx-Xxxx and the Selling Shareholder
that it has full legal right, power and authority to enter into this Agreement,
that this Agreement has been duly authorized, executed and delivered by the
Fiduciary and, that when duly executed and delivered by each of the other
parties hereto, this Agreement will constitute a valid and binding obligation of
the Fiduciary.
7
7
7. INDEMNIFICATION. (a) Xxxxxx-Xxxx shall indemnify and hold
harmless the Selling Shareholder and each person, if any, who controls the
Selling Shareholder within the meaning of Section 15 of the Act, jointly and
severally, against any and all loss, cost, damage or expense (including
attorneys' and experts' fees) to which such person may become subject insofar as
such loss, cost, damage or expense arises out of or is based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement or Prospectus, or any amendments or supplements thereto,
or arises out of or is based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading, except insofar as any such loss, cost, damage or expense arises out
of or is based upon any untrue statement or omission or alleged untrue statement
or omission in the Registration Statement or Prospectus, or any amendments or
supplements thereto, made in reliance upon and in conformity with information
furnished to Xxxxxx-Xxxx by the Selling Shareholder specifically for use in the
Registration Statement or the Prospectus, or any amendments or supplements
thereto.
(b) The Selling Shareholder shall indemnify and hold harmless
Xxxxxx-Xxxx and each person who controls Xxxxxx-Xxxx within the meaning of
Section 15 of the Act, jointly and severally, against any and all loss, cost,
damage or expense (including attorneys' and experts' fees) to which such person
may become subject insofar as such loss, cost, damage or expense arises out of
or is based upon (i) any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement or Prospectus, or any
amendments or supplements thereto, or arises out of or is based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of
8
8
the circumstances in which they were made, not misleading, but only to the
extent such loss, cost, damage or expense arises out of or is based upon
information furnished by the Selling Shareholder to Xxxxxx-Xxxx specifically for
use in the Registration Statement or the Prospectus, or any amendments or
supplements thereto; or (ii) any violation or alleged violation of any statute,
rule, regulation or order (whether judicial or otherwise) arising out of or
based upon any sale of Registered Shares pursuant to Section 2 of this
Agreement.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnification may be sought pursuant to this Section 7, any person seeking
such indemnification (the "Claimant") shall promptly notify the person against
whom such indemnity is sought (the "Indemnitor") in writing. Upon request of the
Claimant, the Indemnitor shall retain counsel reasonably satisfactory to the
Claimant to represent the Claimant. In any such proceeding, the Claimant shall
have the right to retain its own counsel, but fees and expenses of such counsel
shall be at the Claimant's expense unless (i) the Claimant and the Indemnitor
shall have mutually agreed to the retention of such counsel, or (ii) the named
parties to such proceeding (including any impleaded parties) include both the
Claimant and the Indemnitor and the actual or potential differing interest
between them makes the representation of both parties by the same counsel
inappropriate. It is understood that an Indemnitor shall not, in connection with
any proceeding or related proceedings in the same jurisdiction, be liable to
provide more than one separate counsel for all Claimants in such proceedings.
8. COVENANT OF THE SELLING SHAREHOLDER. From the Effective
Date until the earlier of the termination of this Agreement pursuant to Section
10 or the third anniversary
9
9
(unless extended) of the Effective Date, the Selling Shareholder shall not sell
any Registered Shares except pursuant to this Agreement.
9. COVENANT OF THE FIDUCIARY. The Fiduciary shall furnish a
copy of the Prospectus, and all amendments and supplements thereto, received by
it from Xxxxxx-Xxxx to all participants in the Plan as promptly as possible.
10. TERMINATION AND AMENDMENT. This Agreement may be
terminated (i) by the Selling Shareholder upon the death of Xxxx Xxxxx (the
income beneficiary under the JCG Trust and the RBG Trust), or (ii) at any time
by the written agreement of Xxxxxx-Xxxx and the Selling Shareholder; and upon
any such termination, no party hereto shall have any further obligation to
comply with the terms and provisions of this Agreement. This Agreement may only
be amended by the unanimous written consent of the parties hereto. Each party
agrees that it shall not withhold its consent to any amendment to this Agreement
which amendment cannot reasonably be construed to affect the rights or
obligations of such party hereunder.
11. PROTECTION AGAINST DILUTION. In case of a dividend payable
in Shares or the recapitalization of Xxxxxx-Xxxx through a split of outstanding
Shares or a combination of such outstanding Shares into a lesser number, any
number of Registered Shares provided for in this Agreement shall be adjusted so
that the new number when divided by the number of outstanding Shares immediately
following such event equals the quotient of the number provided in this
Agreement (after any prior adjustments pursuant to this Section 11) divided by
the number of Shares outstanding immediately prior to such event.
12. SURVIVAL. The respective covenants, representations and
warranties of the parties contained in this Agreement shall survive delivery of
and payment for the Registered Shares and any termination of this Agreement.
10
10
13. NOTICES. All communications under this Agreement shall be
in writing and shall be effective when sent to each party at the address set
forth beneath its signature or, if any party has designated a different address
by notice to the others, then to the last address so designated.
14. SUCCESSORS; GOVERNING LAW. This Agreement shall inure to
the benefit of and be binding upon each of the parties hereto and their
respective successors. This Agreement and its provisions are for the sole
benefit of only such parties, except that (a) the covenants and indemnity of
Xxxxxx-Xxxx contained in this Agreement shall also be deemed to be for the
benefit of the person or persons, if any, who control the JCG Trust and the RBG
Trust within the meaning of Section 15 of the Act, and (b) the covenants and
indemnity of the Selling Shareholder shall also be deemed to be for the benefit
of Xxxxxx-Xxxx, the directors and officers of Xxxxxx-Xxxx who sign the
Registration Statement and any person controlling Xxxxxx-Xxxx within the meaning
of Section 15 of the Act. Nothing in this Agreement is intended or shall be
construed to give any person, other than the persons referred to in this Section
14, any legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision contained herein. This Agreement shall be governed by
and construed in accordance with the internal substantive laws of the State of
Ohio.
11
11
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed by their respective duly authorized officers as of the day and year
first above written.
THE XXXXXX-XXXX COMPANY
By: /s/ XXXXXX X. XXXXXXXXXX
------------------------
Vice President and Corporate Secretary
Address: 000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
BANK ONE TRUST COMPANY, N.A.,
MANSFIELD, OHIO, AS TRUSTEE of the
Xxxxx X. Xxxxxx, Xx. Trust dated
December 29, 1952, and AS TRUSTEE of
the Xxxx X. Xxxxxx Trust dated
December 29, 1952
By: /s/ XXXXX X. XXXXX
------------------
Vice President
Address: 00 Xxxx Xxxxxx Xxxx
Xxxxxxxxx, Xxxx 00000
NATIONAL CITY BANK, AS TRUSTEE of
The Xxxxxx-Xxxx Company 401(k) Plan,
as amended and restated as of August
1, 2000
By: /s/ A. XXXXX XXXXXXXX
---------------------
Regional Manager, Vice President
Address: 0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
