EXHIBIT 10.48
STANDSTILL AGREEMENT
dated as of
December 5, 2002
between
U.S. Industries, Inc.
and
Southeastern Asset Management, Inc.
(
STANDSTILL AGREEMENT
AGREEMENT dated as of December 5, 2002 between U.S. Industries, Inc., a
Delaware corporation (the "COMPANY"), and Southeastern Asset Management, Inc., a
Tennessee corporation ("SHAREHOLDER").
WHEREAS Shareholder has requested that its Longleaf Partners Small-Cap
Fund and other managed funds be permitted to own beneficially in the aggregate
up to 19.9% of the outstanding Voting Securities (as defined below); and
WHEREAS, the Board of Directors of the Company has determined that it
would be in the best interests of the Company and its shareholders to permit
Shareholder to increase its beneficial ownership on the terms and conditions
stated herein.
Therefore, in consideration of the covenants and undertakings set for
the herein, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. DEFINITIONS.
(a) The following terms, as used herein, have the following meanings:
"AFFILIATE" means, with respect to any Person, any Person directly or
indirectly controlling, controlled by, or under common control with, such other
Person. For the purposes of this definition, "control" when used with respect to
any Person, means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise; the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"ACQUISITION PROPOSAL" means any offer or proposal for, or any
indication of interest in, a merger or other business combination involving the
Company or any subsidiary of the Company or the acquisition of any equity
interest in, or a substantial portion of the assets of, the Company or any
subsidiary of the Company.
"BENEFICIAL OWNERSHIP" and "BENEFICIALLY OWN" shall be determined in
accordance with Rules 13d-3 and 13d-5 under the Exchange Act.
"BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which commercial banks in New York are authorized by law to close.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"PERSON" means an individual, a corporation, a partnership, an
association, a trust or other entity or organization, including a government or
political subdivision or an agency or instrumentality thereof, including its
Affiliates.
"COVERED SECURITIES" means any Voting Securities and any other
securities or rights convertible into or exchangeable or exercisable (whether
immediately or otherwise) for such Voting Securities.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"SHAREHOLDER GROUP" means Shareholder and its Affiliates.
"TOTAL VOTING POWER" means the aggregate number of votes which may be
cast by holders of outstanding Voting Securities.
"VOTING SECURITIES" means all securities of the Company entitled, in
the ordinary course, to vote in the election of directors of the Company.
ARTICLE 2
COVENANTS OF SHAREHOLDER
During the term of this Agreement, Shareholder agrees that:
SECTION 2.01 . Acquisition of Voting Securities. Shareholder will not,
and will not permit its Affiliates to, purchase or otherwise acquire, or agree
or offer to purchase or otherwise acquire, beneficial ownership of any Voting
Securities, if after giving effect thereto Shareholder would beneficially own
Voting Securities representing more than 19.9% of Total Voting Power; PROVIDED
that the Shareholder Group shall not be deemed to have violated this Section
2.01 if the Shareholder Group beneficially owns Voting Securities representing
more than 19.9% of Total Voting Power as a result of a recapitalization of the
Company, a repurchase or redemption of securities by the Company or any other
action taken by the Company.
SECTION 2.02 . Sale or Transfer of Covered Securities. Shareholder will
not, and will not permit its Affiliates to, sell, or otherwise transfer, or
agree to sell, or otherwise transfer, directly or indirectly, any Covered
Securities, except:
(a) to any Person; provided that such Person (1) agrees in writing
to be bound by the terms of this Agreement and (2) after
giving effect to such sale or transfer, would beneficially own
Voting Securities representing in the aggregate not more than
19.9% of Total Voting Power;
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(b) to any Person who, after giving effect to such sale or
transfer, would beneficially own Voting Securities
representing in the aggregate not more than 14.9% of Total
Voting Power;
(c) in the open market in the ordinary course of business so long
as the provisions of paragraph (b) of this Section 2.02 are
satisfied;
(d) pursuant to a tender or exchange offer made by the Company or
recommended by the Company's board of directors to the
Company's stockholders; or
(e) with the prior written consent of the Company, which consent
shall not be unreasonably withheld.
Notwithstanding anything contained in this Section 2.02, neither the Company nor
its board of directors shall not be obligated to approve any Person for purposes
of Section 203 of the Delaware General Corporation Law or the Company's rights
plan referred to below in Section 2.03(f).
Section 2.03. Certain Actions. Shareholder will not, and will not
permit its Affiliates to:
(a) make, or take any action to solicit, initiate or encourage, an
Acquisition Proposal;
(b) "solicit", or become a "participant" in any "solicitation" of,
any "proxy" (as such terms are defined in Regulation 14A under
the Exchange Act) from any holder of Voting Securities in
connection with any vote on any matter, or agree or announce
its intention to vote with any Person undertaking a
"solicitation";
(c) form, join or in any way participate in a "group" (within the
meaning of Section 13(d)(3) of the Exchange Act) with respect
to any Voting Securities;
(d) grant any proxies with respect to any Voting Securities to any
Person (other than as recommended by the Board of Directors of
the Company) or deposit any Voting Securities in a voting
trust or enter into any other arrangement or agreement with
respect to the voting thereof;
(e) propose any amendment to this Agreement that is or may be
required to be publicly disclosed; or
(f) request the Company or the Company's Board of Directors to
redeem the rights issued pursuant to the Rights Agreement
dated as of October 15, 1998 between the Company and Chase
Manhattan Bank, as Rights Agent, or any successor or similar
rights plan in effect from time to time, or challenge the
validity of any such rights plan.
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Section 2.04 . Voting Arrangements. Shareholder shall vote or cause to
be voted all Voting Securities beneficially owned by the Shareholder Group in
excess of 15% of Total Voting Power on all matters submitted to the holders of
Voting Securities either in accordance with the recommendation of the Company's
Board of Directors or in proportion to votes cast by the other holders of Voting
Securities (excluding, for these purposes, all Voting Securities beneficially
owned by the Shareholder Group, and, at Shareholder's option, any votes cast by
any Person or group (within the meaning of Rule 13d-3 under the Exchange Act)
that beneficially owns Voting Securities representing at least 10% of Total
Voting Power). Shareholder shall cause all Voting Securities owned by the
Shareholder Group to be represented, in person or by proxy, at all meetings of
holders of Voting Securities of which Shareholder has actual notice, so that
such Voting Securities may be counted for the purpose of determining the
presence of a quorum at such meetings.
ARTICLE 3
TERMINATION
SECTION 3.01 . Termination. This Agreement shall terminate upon the
occurrence of any of the following:
(a) the written agreement of the Company and Shareholder to
terminate this Agreement;
(b) the tenth anniversary of the date hereof;
(c) Shareholder shall beneficially own Covered Securities
representing less than 15% of Total Voting Power; PROVIDED
that if Shareholder shall again beneficially own Covered
Securities representing 15% or more of Total Voting Power
prior to the tenth anniversary of the date of this Agreement,
this Agreement shall be reinstated;
(d) any Person shall have acquired Voting Securities representing
more than 50% of Total Voting Power; or
(e) the dissolution, liquidation or winding up of the Company.
ARTICLE 4
MISCELLANEOUS
SECTION 4.01. Stop Transfer Order.
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Shareholder agrees to the entry of a stop transfer order with the
transfer agent and registrar of the stock subject to this Agreement against
transfer of stock held by the Shareholder Group if such transfer would not be in
compliance with the requirements of this Agreement.
Section 4.02. Specific Performance. Shareholder agrees that any breach
by it of any provision of this Agreement would irreparably injure the Company
and that money damages would be an inadequate remedy therefor. Accordingly,
Shareholder agrees that the Company shall be entitled to one or more injunctions
enjoining any such breach and requiring specific performance of this Agreement
and consents to the entry thereof, in addition to any other remedy to which the
Company is entitled at law or in equity.
SECTION 4.03. Notices. All notices, requests and other communications
to either party hereunder shall be in writing (including telecopy or similar
writing) and shall be given,
if to the Company, to:
U.S. Industries, Inc.
Xxxxxxxx Point - West Tower
000 Xxxxx Xxxxxxx Xxxxx
Xxxxx 0000
Xxxx Xxxx Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx,
General Counsel
Telecopier: 000-000-0000
if to Shareholder, to:
Southeastern Asset Management, Inc.
0000 Xxxxxx Xxx., Xxxxx 000
Xxxxxxx, XX 00000
Attention: X. Xxxxxx Xxxxx
Telecopier: 000-000-0000
With a copy to:
Southeastern Asset Management, Inc.
0000 Xxxxxx Xxx., Xxxxx 000
Xxxxxxx, XX 00000
Attention: General Counsel
Telecopier: 000-000-0000
or such other address or telecopier number as such party may hereafter specify
for the purpose by notice to the other party hereto. Each such notice, request
or other communication shall be effective when delivered at the address
specified in this Section 4.03.
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SECTION 4.04. Amendments; No Waivers.
(a) Any provision of this Agreement may be amended or waived if,
and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by Shareholder and the
Company, or in the case of a waiver, by the party against whom
the waiver is to be effective.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof
nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights
or remedies provided by law.
Section 4.05. Expenses. Except as otherwise provided herein and in
Exhibit A hereto, all costs and expenses incurred in connection with this
Agreement shall be paid by the party incurring such cost or expense.
Section 4.06. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; PROVIDED that, except as provided in Section
2.02(a) hereof, neither of the parties may assign, delegate or otherwise
transfer any of its rights or obligations under this Agreement without the
written consent of the other party hereto. Neither this Agreement nor any
provision hereof is intended to confer upon any Person other than the parties
hereto any rights or remedies hereunder.
Section 4.07. Counterparts; Effectiveness. This Agreement may be signed
in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have received
a counterpart hereof signed by the other party hereto.
SECTION 4.08. Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements, understandings and negotiations, both written
and oral, between the parties with respect thereto. No representation,
inducement, promise, understanding, condition or warranty not set forth herein
has been made or relied upon by any of the parties hereto.
SECTION 4.09. Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of Delaware, without
regard to the conflicts of law rules of such state.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
U.S. Industries, Inc.
By: /s/ Xxxxxx X. Xxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
Southeastern Asset Management, Inc.
By: /s/ X. Xxxxxx Xxxxx
----------------------------------------
Name: X. Xxxxxx Xxxxx
Title: President
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