Exhibit 2.2
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EARNOUT AGREEMENT
AMONG
THE STOCKHOLDERS OF
VIEWPOINT INTERNATIONAL, INC.
AND
OXFORD INDUSTRIES, INC.
DATED AS OF JUNE 13, 2003
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TABLE OF CONTENTS
Page
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1. DEFINITIONS..............................................................................................1
1.1. Certain Definitions.............................................................................1
1.2. Certain Matters of Construction.................................................................7
2. EARNOUT PAYMENTS.........................................................................................7
2.1. Basic Earnout Payment...........................................................................7
2.2. Additional Earnout Payment.....................................................................10
2.3. Review and Dispute Procedures..................................................................10
2.4. Payment of Earnout Payments; Form of Consideration.............................................11
2.5. Operating and Accounting Procedures of the Company.............................................18
3. MISCELLANEOUS...........................................................................................22
3.1. Sellers' Representatives.......................................................................22
3.2. Entire Agreement; Waivers......................................................................23
3.3. Amendment or Modification......................................................................23
3.4. Severability...................................................................................23
3.5. Successors and Assigns.........................................................................23
3.6. Notices........................................................................................23
3.7. Headings.......................................................................................24
3.8. Third-Party Beneficiaries......................................................................24
3.9. Counterparts...................................................................................25
3.10. Governing Law..................................................................................25
3.11. Consent to Jurisdiction........................................................................25
3.12. WAIVER OF JURY TRIAL...........................................................................25
EARNOUT AGREEMENT
This EARNOUT AGREEMENT (this "Agreement") is made as of the 13th day of
June, 2003, among each holder of Shares and/or Warrants of VIEWPOINT
INTERNATIONAL, INC., a Delaware corporation (the "Company") listed on Schedule 1
hereto (each, a "Seller" and collectively, the "Sellers"); S. Xxxxxxx Xxxxxxxx,
an individual resident of Connecticut and Xxxxx X. Xxxx, an individual resident
of Connecticut, as the Sellers' Representatives (the "Sellers'
Representatives"); and OXFORD INDUSTRIES, INC., a Georgia corporation (the
"Buyer").
W I T N E S S E T H:
WHEREAS, Buyer, the Company, and the Sellers entered into a Stock Purchase
Agreement (the "Purchase Agreement"), dated as of April 26, 2003, pursuant to
which the Sellers agreed to sell, and Buyer agreed to purchase, all of the
outstanding stock and equity interests of the Company on the terms and
conditions set forth in the Purchase Agreement;
WHEREAS, pursuant to Section 8.13 and Section 9.5 of the Purchase
Agreement, the parties agreed to enter into this Agreement as a condition to
consummation of the transactions contemplated by the Purchase Agreement.
NOW, THEREFORE, in consideration of the premises and mutual promises
contained herein, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. DEFINITIONS. For purposes of this Agreement:
1.1. Certain Definitions. The following terms shall have the following
meanings:
1.1.1. "Accelerated Stock Amount" shall mean (a) with respect to a
Full Accelerated Payment (i) the applicable Sellers Stock Amount divided by the
Agreed Closing Oxford Stock Value plus (ii) the applicable Buyer Stock Amount
divided by the applicable Average Oxford Trading Price; (b) with respect to a
Pro-Rata Accelerated Payment due in FY 2005, (i) the applicable Sellers Stock
Amount divided by the Agreed Closing Oxford Stock Value plus (ii) the applicable
Buyer Stock Amount divided by the Average Oxford Trading Price and (c) with
respect to a Pro-Rata Accelerated Payment due in either FY 2006 or FY 2007, the
applicable Buyer Stock Amount divided by the applicable Average Oxford Trading
Price.
1.1.2. "Accelerated Stock Percentage" shall have the meaning set
forth in Section 2.2 hereof.
1.1.3. "Additional Earnout Payment" shall have the meaning set forth
in Section 2.2 hereof.
1.1.4. "Additional Earnout Payment Calculations" shall mean the
amounts for the Four-Year Period Adjusted PBT, the Four-Year Period Target PBT
and the Additional Earnout Payment.
1.1.5. "Adjusted PBT" for a Fiscal Year shall mean the applicable
EBIT for such Fiscal Year less the applicable Company Capital Charge for such
Fiscal Year.
1.1.6. "Affiliate" shall mean, as to the Buyer (or other specified
Person), each Person directly or indirectly controlling or controlled by or
under common control with the Buyer (or such specified Person). For purposes of
this definition, the term "control" (including the terms "controlling,"
"controlled by" and "under common control with") means the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of a Person, whether through ownership of voting securities, contract
or otherwise.
1.1.7. "Agreed Closing Oxford Stock Value" shall be $25.76 per
share, subject to adjustment to reflect the effect of any forward or reverse
stock split, stock dividend, recapitalization or other similar change with
respect to the Oxford Securities occurring after the date hereof and prior to
the applicable issuance of Oxford Securities.
1.1.8. "Arbitrator" shall mean a person who shall be, or shall have
been, an audit partner in a nationally recognized independent accounting firm
and who shall be appointed by agreement of the Buyer and the Sellers'
Representatives or, failing such agreement, by the American Arbitration
Association (the "AAA") in accordance with the Commercial Arbitration Rules of
the AAA.
1.1.9. "Available Amount" shall have the meaning set forth in
Section 2.4.1.2 hereof.
1.1.10. "Average Oxford Trading Price" shall mean the average of the
high and low per share sales prices of Oxford Securities during the regular
trading sessions on the applicable Stock Exchange for each of the ten (10) full
trading days (the "10 Trading Days") immediately preceding (but not including)
the applicable Payment Date. For purposes of this definition, "Stock Exchange"
shall mean (a) the New York Stock Exchange or (b) if Oxford Securities are not
listed on the New York Stock Exchange at the time of any payment pursuant to
Section 2.3, another national securities exchange on which shares of Oxford
Securities are listed. The "Average Oxford Trading Price" shall be adjusted as
necessary to reflect the effect of any forward or reverse stock split, stock
dividend, recapitalization or other similar change with respect to the Oxford
Securities effective during the applicable 10 Trading Days during which the
applicable "Average Oxford Trading Price" is determined.
1.1.11. "Basic Earnout Payment" and "Basic Earnout Payments" shall
have the respective meanings set forth in Section 2.1.1 hereof.
1.1.12. "Basic Earnout Payment Calculations" shall mean, for each
Fiscal Year, the amounts for the applicable Adjusted PBT, the applicable Target
PBT and the applicable Basic Earnout Payment.
1.1.13. "Bonus Plan" shall mean the Employee Cash Bonus Plan
established pursuant to Section 7.18 of the Purchase Agreement.
1.1.14. "Business Day" shall mean any day on which banking
institutions in New York, New York are customarily open for the purpose of
transacting business.
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1.1.15. "Buyer Accelerated Stock Percentage" shall have the meaning
set forth in Section 2.4.2 hereof.
1.1.16. "Buyer Stock Amount" shall mean (a) with respect to a Basic
Earnout Payment, (i) for each of FY 2004 and FY 2005, respectively, the Basic
Earnout Payment for such Fiscal Year multiplied by the FY 04/05 Buyer Percentage
for such Fiscal Year, and (ii) for each of FY 2006 and FY 2007, respectively,
the Basic Earnout Payment for such Fiscal Year multiplied by the FY 06/07 Buyer
Percentage for such Fiscal Year; (b) with respect to a Full Accelerated Payment,
the Full Accelerated Payment multiplied by the FY04/05 Accelerated Buyer
Percentage; and (c) with respect to a Pro-Rata Accelerated Payment, (i) for FY
2005, the Pro-Rata Accelerated Payment multiplied by the FY 04/05 Accelerated
Buyer Percentage for such Fiscal Year, and (ii) for each of FY 2006 and FY 2007,
respectively, the Pro-Rata Accelerated Payment multiplied by the Buyer
Accelerated Stock Percentage.
1.1.17. "Cash Amount" shall mean (a) with respect to a Basic Earnout
Payment, a cash payment equal to the Basic Earnout Payment for the applicable
Fiscal Year multiplied by the applicable Cash Percentage; (b) with respect to a
Full Accelerated Payment, a cash payment equal to the Full Accelerated Payment
multiplied by the applicable Cash Percentage; and (c) with respect to a Pro-Rata
Accelerated Payment, a cash payment equal to the Pro-Rata Accelerated Payment
multiplied by the applicable Cash Percentage.
1.1.18. "Cash Percentage" shall mean (a) with respect to a Basic
Earnout Payment (i) for each of FY 2004 and FY 2005, respectively, 100% minus
the sum of the applicable Sellers Stock Percentage and the applicable FY 04/05
Buyer Percentage for such Fiscal Year, and (ii) for each of FY 2006 and FY 2007,
respectively, 100% minus the applicable FY 06/07 Buyer Percentage for such
Fiscal Year; (b) with respect to a Full Accelerated Payment, 100% minus the sum
of the applicable Accelerated Stock Percentage and the applicable FY 04/05
Accelerated Buyer Percentage; and (c) with respect to a Pro-Rata Accelerated
Payment, (i) for FY 2005, 100% minus the sum of the applicable Accelerated Stock
Percentage and the applicable FY 04/05 Accelerated Buyer Percentage, and (ii)
for each of FY 2006 and FY 2007, respectively, 100% minus the applicable Buyer
Accelerated Stock Percentage.
1.1.19. "Closing" shall mean the closing of the transactions
contemplated by the Purchase Agreement.
1.1.20. "Company Accounting Entities" shall mean those entities set
forth on Schedule 1.1.20 hereto.
1.1.21. "Company Capital Charge" for a Fiscal Year shall mean the
product of (a) the average of the month-end "Adjusted Net Assets" included in
such Fiscal Year (for purposes of clarity, Exhibit 1.1.21 sets forth the months
and weeks in each Fiscal Year and (b) 0.1. "Adjusted Net Assets" shall be
determined in accordance with the guidelines set forth in Schedule 1.1.21
hereto.
1.1.22. "Credit Facility" shall mean the "Senior Debt," as that term
is defined in the Earnout Subordination Agreement (the "Subordination
Agreement"), dated as of June 13, 2003, among SunTrust Bank, as Agent for the
"Lenders" (as defined in the Subordination
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Agreement), SunTrust Bank, as Trustee for the Noteholders (as defined in the
Subordination Agreement), the Sellers and the Buyer.
1.1.23. "EBIT" for a Fiscal Year shall be equal to net after tax
income of the Company Accounting Entities calculated on a stand-alone basis
without giving effect to the impact from the payments contemplated in this
Agreement or the Purchase Agreement (including the payments pursuant to Section
3.1 of the Purchase Agreement and any fees and expenses of Buyer) plus (a) state
and federal income taxes plus (b) interest expense or financing fees included in
such interest expense plus (c) amounts paid or payable to the Buyer which are in
excess of those which would be incurred on an arm's length basis for services
performed by the Buyer to Company plus (d) any other amounts paid or payable to
Buyer for services or charges not historically incurred by the Company
Accounting Entities prior to the Closing less (e) Other Income (Plus Expense) as
consistent with past practice.
1.1.24. "Fiscal Year" shall mean, as the case may be, FY 2004, FY
2005, FY 2006 or FY 2007.
1.1.25. "Foreign Accounts Payable Monthly Average" shall have the
meaning set forth in Section 2.5.4.5 hereof.
1.1.26. "Four-Year Period" shall have the meaning set forth in
Section 2.1.1 hereof.
1.1.27. "Four-Year Period Adjusted PBT" shall mean the sum of the
Adjusted PBT for FY 2004, the Adjusted PBT for FY 2005, the Adjusted PBT for FY
2006, and the Adjusted PBT for FY 2007, each as finally determined pursuant to
Section 2.3 for the applicable Fiscal Year's Basic Earnout Payment.
1.1.28. "Four-Year Period Excess Amount" shall mean the Four-Year
Period Adjusted PBT less the Four-Year Period Target PBT.
1.1.29. "Four-Year Period Target PBT" shall mean the sum of the FY
2004 Target PBT and $177,800,000.
1.1.30. "Full Accelerated Payment" shall have the meaning set forth
in Section 2.5.8.2.1 hereof.
1.1.31. "Fully Diluted Shares" shall mean 17,096,698 Shares of
Common Stock. It is understood that the respective Shares of Common Stock shown
as owned by the Sellers on Schedule 1 have been determined based on a fully
diluted basis.
1.1.32. "FY 04/05 Accelerated Buyer Percentage" shall have the
meaning set forth in Section 2.4.1.2 hereof.
1.1.33. "FY 04/05 Buyer Percentage" with respect to a Basic Earnout
Payment for FY 2004 and FY 2005, as applicable, shall have the meaning set forth
in Section 2.4.1.2 hereof.
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1.1.34. "FY 06/07 Buyer Percentage" with respect to a Basic Earnout
Payment for FY 2006 and FY 2007, as applicable, shall have the meaning set forth
in Section 2.4.2 hereof.
1.1.35. "FY 2004" shall mean the period beginning on the date hereof
and ending May 28, 2004.
1.1.36. "FY 2004 Target PBT" shall mean $42,300,000 multiplied by a
fraction (a) the numerator of which shall be the number of actual days in FY
2004 and (b) the denominator of which shall be 365.
1.1.37. "FY 2005" shall mean the fiscal year beginning May 29, 2004
and ending June 3, 2005.
1.1.38. "FY 2005 Target PBT" shall mean $50,000,000, as adjusted
pursuant to Section 2.1.2.4 herein.
1.1.39. "FY 2006" shall mean the fiscal year beginning June 4, 2005
and ending June 2, 2006.
1.1.40. "FY 2006 Target PBT" shall mean $58,100,000, as adjusted
pursuant to Section 2.1.3.4 herein.
1.1.41. "FY 2007" shall mean the fiscal year beginning June 3, 2006
and ending June 1, 2007.
1.1.42. "FY 2007 Target PBT" shall mean $69,700,000, as adjusted
pursuant to Section 2.1.4.4 herein.
1.1.43. "GAAP" shall mean generally accepted accounting principles
in the United States as in effect as of the date hereof, consistently applied.
1.1.44. "Governmental Authority" shall mean any domestic or foreign
national, state, multi-state or municipal or other local government or any
subdivision, agency, commission or authority or regulatory or administrative
agency thereof.
1.1.45. "Minimum Foreign Accounts Payable" shall have the meaning
set forth in Section 2.5.4.5 hereof.
1.1.46. "Maximum Amount" shall have the meaning set forth in Section
2.4.1.1 hereof.
1.1.47. "Oxford Limit" shall have the meaning set forth in Section
2.4.1.2 hereof.
1.1.48. "Oxford Securities" shall mean shares of common stock, par
value $1.00 per share, of the Buyer.
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1.1.49. "Payment Date" shall mean, with respect to each Fiscal Year,
the date on which the Buyer pays an applicable Basic Earnout Payment to the
Sellers in accordance with Section 2.3 herein.
1.1.50. "Person" shall mean any individual, partnership, limited
liability company, corporation, association, trust, joint venture,
unincorporated organization, labor union or other entity other than any
Governmental Authority.
1.1.51. "Pro-Rata Accelerated Payment" shall have the meaning set
forth in Section 2.5.8.2.2 hereof.
1.1.52. "Sale Notice" is defined in Section 2.5.8.2.1.
1.1.53. "Sale Transactions" is defined in Section 2.5.8.2.1.
1.1.54. "Seller's Percentage" shall mean, as to each Seller
(calculated as of the date hereof), a percentage equal to (a) the sum of (i) the
number of shares of Common Stock owned by such Seller and (ii) the number of
shares of Common Stock subject to the Warrant owned by such Seller divided by
(b) the Fully Diluted Shares. For all purposes of this Agreement, the respective
Seller's Percentage for each Seller shall be as set forth on Schedule 1 hereto.
1.1.55. "Sellers Stock Amount" shall mean (a) with respect to a
Basic Earnout Payment, for each of FY 2004 and FY 2005, respectively, the Basic
Earnout Payment for such Fiscal Year multiplied by the Sellers Stock Percentage
for such Fiscal Year; (b) with respect to a Full Accelerated Payment, the Full
Accelerated Payment multiplied by the Accelerated Stock Percentage; and (c) with
respect to a Pro-Rata Accelerated Payment due in FY 2005, the Pro-Rata
Accelerated Payment multiplied by the Accelerated Stock Percentage.
1.1.56. "Sellers Stock Percentage" shall have the meaning set forth
in Section 2.4.1.1 hereof.
1.1.57. "Senior Lenders" shall mean the lenders under the Credit
Facility.
1.1.58. "Shares" shall mean the issued and outstanding shares of
Class A Common Stock of the Company, $.0001 par value per share ("Class A Common
Stock"), and Class C Common Stock of the Company, $.0001 par value per share
("Class C Common Stock" and, together with the Class A Common Stock, the "Common
Stock"), assuming for this purpose the full exercise of the Warrants and the
issuance of all Shares issuable thereunder.
1.1.59. "Stock Amount" shall mean (a) with respect to each of FY
2004 and FY 2005, respectively, (i) the Sellers Stock Amount for such Fiscal
Year divided by the Agreed Closing Oxford Stock Value plus (ii) the Buyer Stock
Amount for such Fiscal Year divided by the Average Oxford Trading Price for such
Fiscal Year and (b) with respect to each of FY 2006 and FY 2007, respectively,
the Buyer Stock Amount for such Fiscal Year divided by the Average Oxford
Trading Price for such Fiscal Year.
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1.1.60. "Subsidiary" shall mean any Person of which any specified
Person shall own directly or indirectly through a Subsidiary, a nominee
arrangement or otherwise, at least a majority of the outstanding capital stock
(or other shares of beneficial interest) entitled to vote generally or otherwise
have the power to elect a majority of the board of directors or similar
governing body or the legal power to direct the business or policies of such
Person.
1.1.61. "Target PBT" shall mean, as the case may be, the FY 2004
Target PBT, the FY 2005 Target PBT, the FY 2006 Target PBT, or the FY 2007
Target PBT.
1.1.62. "Warrants" shall mean the Contingent Warrants to Purchase
Shares of Class C Common Stock of the Company, issued to SKM-TB, LLC on February
9, 2001.
1.2. Certain Matters of Construction. In addition to the definitions
referred to or set forth in this Section 1:
1.2.1. The words "hereof", "herein", "hereunder" and words of
similar import shall refer to this Agreement as a whole and not to any
particular Section or provision of this Agreement, and reference to a particular
Section of this Agreement shall include all subsections thereof.
1.2.2. The words "party" and "parties" shall refer to the Sellers
and the Buyer.
1.2.3. Definitions shall be equally applicable to both the singular
and plural forms of the terms defined, and references to the masculine,
feminine, or neuter gender shall include each other gender.
1.2.4. Accounting terms used herein and not otherwise defined herein
are used herein as defined by GAAP in effect as of the date hereof, consistently
applied.
1.2.5. The word "including" shall mean including without limitation.
2. EARNOUT PAYMENTS.
2.1. Basic Earnout Payment.
2.1.1. Generally. The Buyer will pay the Sellers up to an aggregate
of Twelve Million Five Hundred Thousand Dollars ($12,500,000) (individually, a
"Basic Earnout Payment," and collectively, the "Basic Earnout Payments") with
respect to each of FY 2004, FY 2005, FY 2006, and FY 2007 (collectively, the
"Four-Year Period"), in each case, subject to the review and dispute procedures
set forth in Section 2.3, based on the achievement of the performance targets
for the applicable periods specified below. The aggregate Basic Earnout Payments
paid to all the Sellers with respect to the entire Four-Year Period shall not in
the aggregate exceed Fifty Million Dollars ($50,000,000).
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2.1.2. FY 2004 Basic Earnout Payment.
2.1.2.1 If, for FY 2004, Adjusted PBT is equal to or less than 90%
of the FY 2004 Target PBT, then no Basic Earnout Payment will be earned with
respect to FY 2004.
2.1.2.2 If, for FY 2004, Adjusted PBT is greater than 90% of the FY
2004 Target PBT but less than 100% of the FY 2004 Target PBT, then a Basic
Earnout Payment payable to the Sellers, in accordance with Section 2.3 and
Section 2.4 herein, in the following total amount will be earned with respect to
FY 2004: $12,500,000 multiplied by a fraction (a) the numerator of which shall
be (i) the Adjusted PBT for FY 2004 minus (ii) the product of (1) the FY 2004
Target PBT multiplied by (2) 0.9 and (b) the denominator of which shall be the
FY 2004 Target PBT multiplied by 0.1.
2.1.2.3 If, for FY 2004, Adjusted PBT is greater than or equal to
100% of the FY 2004 Target PBT, then a Basic Earnout Payment payable to the
Sellers, in accordance with Section 2.3 and Section 2.4 herein, in the total
amount of $12,500,000 will be earned with respect to FY 2004.
2.1.2.4 If, for FY 2004, Adjusted PBT is less than the FY 2004
Target PBT, then the FY 2005 Target PBT shall be increased by the amount by
which the Adjusted PBT for FY 2004 is less than the FY 2004 Target PBT. If, for
FY 2004, Adjusted PBT is greater than the FY 2004 Target PBT, then the FY 2005
Target PBT shall be decreased by an amount equal to the lesser of (a) the amount
by which the Adjusted PBT for FY 2004 is greater than the FY 2004 Target PBT or
(b) the amount equal to the FY 2005 Target PBT prior to any adjustment pursuant
to this Section 2.1.2.4.
2.1.3. FY 2005 Basic Earnout Payment.
2.1.3.1 If, for FY 2005, Adjusted PBT is equal to or less than 90%
of the FY 2005 Target PBT, then no Basic Earnout Payment will be earned with
respect to FY 2005.
2.1.3.2 If, for FY 2005, Adjusted PBT is greater than 90% of the FY
2005 Target PBT but less than 100% of the FY 2005 Target PBT, then a Basic
Earnout Payment payable to the Sellers, in accordance with Section 2.3 and
Section 2.4 herein, in the following total amount will be earned with respect to
FY 2005: $12,500,000 multiplied by a fraction (a) the numerator of which shall
be (i) the Adjusted PBT for FY 2005 minus (ii) the product of (1) the FY 2005
Target PBT multiplied by (2) 0.9 and (b) the denominator of which shall be the
FY 2005 Target PBT multiplied by 0.1.
2.1.3.3 If, for FY 2005, Adjusted PBT is greater than or equal to
100% of the FY 2005 Target PBT, then a Basic Earnout Payment payable to the
Sellers,
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in accordance with Section 2.3 and Section 2.4 herein, in the total amount of
$12,500,000 will be earned with respect to FY 2005.
2.1.3.4 If, for FY 2005, Adjusted PBT is less than the FY 2005
Target PBT, then the FY 2006 Target PBT shall be increased by the amount by
which the Adjusted PBT for FY 2005 is less than the FY 2005 Target PBT. If, for
FY 2005, Adjusted PBT is greater than the FY 2005 Target PBT, then the FY 2006
Target PBT shall be decreased by an amount equal to the lesser of (a) the amount
by which the Adjusted PBT for FY 2005 is greater than the FY 2005 Target PBT or
(b) the amount equal to the FY 2006 Target PBT prior to any adjustment pursuant
to this Section 2.1.3.4.
2.1.4. FY 2006 Basic Earnout Payment.
2.1.4.1 If, for FY 2006, Adjusted PBT is equal to or less than 90%
of the FY 2006 Target PBT, then no Basic Earnout Payment will be earned with
respect to FY 2006.
2.1.4.2 If, for FY 2006, Adjusted PBT is greater than 90% of the FY
2006 Target PBT but less than 100% of the FY 2006 Target PBT, then a Basic
Earnout Payment payable to the Sellers, in accordance with Section 2.3 and
Section 2.4 herein, in the following total amount will be earned with respect to
FY 2006: $12,500,000 multiplied by a fraction (a) the numerator of which shall
be (i) the Adjusted PBT for 2006 minus (ii) the product of (1) the FY 2006
Target PBT multiplied by (2) 0.9 and (b) the denominator of which shall be the
FY 2006 Target PBT multiplied by 0.1.
2.1.4.3 If, for FY 2006, Adjusted PBT is greater than or equal to
100% of the FY 2006 Target PBT, then a Basic Earnout Payment payable to the
Sellers, in accordance with Section 2.3 and Section 2.4 herein, in the total
amount of $12,500,000 will be earned with respect to FY 2006.
2.1.4.4 If, for FY 2006, Adjusted PBT is less than the FY 2006
Target PBT, then the FY 2007 Target PBT shall be increased by the amount by
which the Adjusted PBT for FY 2006 is less than the FY 2006 Target PBT. If, for
FY 2006, Adjusted PBT is greater than the FY 2006 Target PBT, then the FY 2007
Target PBT shall be decreased by an amount equal to the lesser of (a) the amount
by which the Adjusted PBT for FY 2006 is greater than the FY 2006 Target PBT or
(b) the amount equal to the FY 2007 Target PBT prior to any adjustment pursuant
to this Section 2.1.4.4.
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2.1.5. FY 2007 Basic Earnout Payment.
2.1.5.1 If, for FY 2007, Adjusted PBT is equal to or less than
90% of the FY 2007 Target PBT, then no Basic Earnout Payment will be
earned with respect to FY 2007.
2.1.5.2 If, for FY 2007, Adjusted PBT is greater than 90% of
the FY 2007 Target PBT but less than 100% of the FY 2007 Target PBT, then
a Basic Earnout Payment payable to the Sellers, in accordance with Section
2.3 and Section 2.4 herein, in the following total amount will be earned
with respect to FY 2007: $12,500,000 multiplied by a fraction (a) the
numerator of which shall be (i) the Adjusted PBT for FY 2007 minus (ii)
the product of (1) the FY 2007 Target PBT multiplied by (2) 0.9 and (b)
the denominator of which shall be the FY 2007 Target PBT multiplied by
0.1.
2.1.5.3 If, for FY 2007, Adjusted PBT is greater than or equal
to 100% of the FY 2007 Target PBT, then a Basic Earnout Payment payable to
the Sellers, in accordance with Section 2.3 and Section 2.4 herein, in the
total amount of $12,500,000 will be earned with respect to FY 2007.
2.2. Additional Earnout Payment. The Buyer will pay the Sellers a total of
up to Twenty-Five Million Dollars ($25,000,000) (the "Additional Earnout
Payment") with respect to the Four-Year Period, subject to the review and
dispute procedures set forth in Section 2.3, based on the achievement of the
following performance targets for the Four-Year Period:
2.2.1. If, during the Four-Year Period, the Four-Year Period
Adjusted PBT is equal to or less than 100% of the Four-Year Period Target PBT,
then no Additional Earnout Payment will be earned.
2.2.2. If, during the Four-Year Period, the Four-Year Period
Adjusted PBT is greater than 100% of the Four-Year Period Target PBT, then the
Buyer shall pay the Sellers, in the aggregate, an Additional Earnout Payment
equal to: the lesser of (a) the Four-Year Period Excess Amount multiplied by
0.3333 or (b) Twenty-Five Million Dollars ($25,000,000).
2.3. Review and Dispute Procedures. Within seventy-five (75) days of the
end of each Fiscal Year, the Buyer shall submit to the Sellers' Representatives
in writing the proposed figures for the applicable Basic Earnout Payment
Calculations for the most recently ended Fiscal Year and, with respect to FY
2007, the Additional Earnout Payment Calculations (collectively, the "Earnout
Calculations"), together with all supporting documentation necessary for a
review of such Earnout Calculations. The Buyer shall give the Sellers'
Representatives and other appropriate representatives of the Sellers such access
during normal business hours to the books and records of each of the Buyer and
the Company as the Sellers' Representatives shall reasonably request in order to
evaluate such Earnout Calculations. If the Sellers' Representatives object to
any of the Earnout Calculations within thirty (30) days of delivery thereof,
they will deliver to the Buyer a notice of objection (an "Objection Notice")
with respect to such Earnout Calculations. If no Objection Notice is delivered
to the Buyer within such thirty (30) day period or if the Sellers'
Representatives deliver to the Buyer a notice of acceptance of such calculations
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(the "Acceptance"), the applicable Earnout Calculations for such Fiscal Year
shall be final and binding, and any Basic Earnout Payment and, if applicable,
any Additional Earnout Payment shall be paid to the Sellers by the Buyer in
accordance with Section 2.4 herein within the later of (a) ten (10) Business
Days after the earlier of (i) the expiration of such thirty (30) day period or
(ii) the date the Acceptance is delivered to the Buyer, as the case may be, and
(b) with respect to FY 2004 and FY 2005, ten (10) Business Days following the
Buyer's receipt of the Sellers Stock Percentage pursuant to Section 2.4.1.1. If
an Objection Notice is given, the Buyer and the Sellers' Representatives shall
attempt in good faith to resolve the objection. If the Buyer and the Sellers'
Representatives are unable to reach agreement within twenty (20) days after an
Objection Notice has been given, the parties shall submit their final
calculations of the items in dispute to the Arbitrator as soon as practical
following the end of such twenty (20) day period, but in any event within
thirty-five (35) days after the applicable Objection Notice has been received by
the Buyer. The Arbitrator will be directed to review such final calculations
and, within fifteen (15) days, make a selection as to which of the final
calculations presented to it is, in the aggregate, more accurate and to provide
a written report that sets forth the Arbitrator's determination of the
applicable Earnout Calculations for such Fiscal Year. The resolution of the
dispute by the Arbitrator will be final and binding on the parties hereto. The
fees and expenses of the Arbitrator shall be paid by the party whose proposed
calculation is not selected by the Arbitrator. Within the later of (a) ten (10)
Business Days after the final determination of the Earnout Calculations by the
Arbitrator and (b) with respect to FY 2004 and FY 2005, ten (10) Business Days
following the Buyer's receipt of the Sellers Stock Percentage pursuant to
Section 2.4.1.1, the Buyer shall pay, in accordance with Section 2.4 herein, to
the Sellers any Basic Earnout Payment and, if applicable, any Additional Earnout
Payment which is payable hereunder. Each Seller acknowledges that receipt of the
applicable Adjusted PBT for any Fiscal Year, to the extent not already disclosed
to the public, may constitute receipt of material, non-public information
concerning the Buyer. Each Seller acknowledges that they are prohibited from (a)
purchasing or selling securities of the Buyer until such information (or
financial information of Buyer covering the relevant time period) is disclosed
to the public and (b) communicating such information to any other person under
circumstances in which it is reasonably foreseeable that such person is likely
to purchase or sell securities of the Buyer until such information is disclosed
to the public.
2.4. Payment of Earnout Payments; Form of Consideration.
2.4.1. FY 2004 and 2005 Election.
2.4.1.1 Sellers Stock Percentage. If any Basic Earnout Payment
shall be due and payable for FY 2004 or FY 2005 pursuant to Section 2.3
hereof, the Sellers' Representatives may elect (on behalf of all of the
Sellers as a whole), at their sole option, that up to 50% of such Basic
Earnout Payment for such applicable Fiscal Year be paid by the Buyer
through the issuance of Oxford Securities valued at the Agreed Closing
Oxford Stock Value (such percentage, as selected for FY 2004 or FY 2005,
as the case may be, is referred to herein as the "Sellers Stock
Percentage"). The Sellers' Representatives shall submit the applicable
Sellers Stock Percentage to the Buyer within five (5) Business Days after
the date of the determination of the final Earnout Calculations for FY
2004 or FY 2005, as applicable, pursuant to Section 2.3 herein.
Notwithstanding the foregoing, in the event a Full Accelerated Payment or
a
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Pro-Rata Accelerated Payment shall be due and payable for FY 2004 or FY
2005 pursuant to Section 2.5.8.2, the Sellers' Representatives may elect
(on behalf of all of the Sellers as a whole), at their sole option and
subject to the last sentence of this Section 2.4.1.1, that up to 50% of
such Full Accelerated Payment or Pro-Rata Accelerated Payment, as the case
may be, be paid by the Buyer through the issuance of Oxford Securities
valued at the Agreed Closing Oxford Stock Value (such percentage is
referred to herein as the "Accelerated Stock Percentage"). The Sellers'
Representatives shall submit the Accelerated Stock Percentage applicable
to the Full Accelerated Payment or a Pro-Rata Accelerated Payment, as the
case may be, to the Buyer within five (5) Business Days after receipt of
the Sale Notice. Notwithstanding any other provision in this Agreement,
(a) the aggregate amount of all Basic Earnout Payments, Full Accelerated
Payments and Pro-Rata Accelerated Payments payable by the Buyer to the
Sellers in accordance with this Section 2.4.1.1 through the issuance of
Oxford Securities valued at the Agreed Closing Oxford Stock Value shall
not exceed $12,500,000 (the "Maximum Amount") and (b) if the Sellers Stock
Percentage or the Accelerated Stock Percentage, as the case may be,
otherwise selected by the Sellers' Representatives would otherwise result
in the issuance, in the aggregate, of Oxford Securities in accordance with
this Section 2.4.1.1 in excess of the Maximum Amount, then the Sellers
Stock Percentage or the Accelerated Stock Percentage, as the case may be,
shall be deemed for all purposes hereunder to be adjusted downward as
necessary to limit such issuance, in the aggregate, to the Maximum Amount.
2.4.1.2 FY 04/05 Buyer Percentage. If any Basic Earnout
Payment shall be due and payable for FY 2004 or FY 2005 and the Sellers
Stock Percentage for such applicable Fiscal Year is less than 50% (the
difference, if any, between such percentages being referred to herein as
the "Available Buyer Percentage"), the Buyer may elect, at its sole
option, to pay up to the Available Buyer Percentage of such Basic Earnout
Payment for such applicable Fiscal Year by issuing Oxford Securities to
the Sellers valued at the applicable Average Oxford Trading Price (such
percentage, as selected for FY 2004 or FY 2005, as the case may be, is
referred to herein as the "FY 04/05 Buyer Percentage"). For such Fiscal
Years, the Buyer shall submit the FY 04/05 Buyer Percentage to the
Sellers' Representatives within five (5) Business Days after the Buyer
receives the applicable Sellers Stock Percentage from the Sellers'
Representatives pursuant to Section 2.4.1.1. Notwithstanding anything in
this Agreement to the contrary, if and to the extent that the Buyer is
precluded under the terms of the Credit Facility from paying in cash any
Basic Earnout Payment otherwise payable for FY 2004 or FY 2005, then, at
the written request of the Sellers' Representatives, the Buyer shall be
required to pay the full Available Buyer Percentage of such Basic Earnout
Payment for such applicable Fiscal Year by issuing Oxford Securities to
the Sellers valued at the Applicable Average Oxford Trading Price (and, if
required, the Buyer shall as soon as possible take all commercially
reasonable efforts necessary to obtain approval of the stockholders of the
Buyer to issue such Oxford Securities). Notwithstanding the foregoing, in
the event a Full Accelerated Payment or a Pro-Rata Accelerated Payment
shall be due and payable for FY 2004 or FY 2005 pursuant to Section
2.5.8.2 and the Accelerated Stock Percentage applicable to such payment is
less than 50% (such difference, if any, the "Available Amount"), the Buyer
may elect, at its sole option, to pay up to the Available Amount of such
Full Accelerated Payment or Pro-Rata
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Accelerated Payment, as the case may be, by issuing Oxford Securities to
the Sellers valued at the Average Oxford Trading Price (such percentage is
referred to herein as the "FY 04/05 Accelerated Buyer Percentage"). The
Buyer shall submit the FY 04/05 Accelerated Buyer Percentage applicable to
the Full Accelerated Payment or Pro-Rata Accelerated Payment, as the case
may be, to the Sellers' Representatives within five (5) Business Days
after receipt of the Accelerated Stock Percentage. Notwithstanding any
other provision in this Agreement, (a) the aggregate amount of all Basic
Earnout Payments, Full Accelerated Payments and Pro-Rata Accelerated
Payments payable by the Buyer to the Sellers in accordance with this
Section 2.4.1.2 and/or Section 2.4.2 hereof through the issuance of Oxford
Securities valued at the Average Oxford Trading Price shall not exceed the
Oxford Limit and (b) if the FY 04/05 Buyer Percentage, the FY 04/05
Accelerated Buyer Percentage, the FY 06/07 Buyer Percentage or the Buyer
Accelerated Stock Percentage, as the case may be, otherwise selected by
the Buyer would otherwise result in the issuance, in the aggregate, of
Oxford Securities in accordance with this Section 2.4.1.2 and/or Section
2.4.2 hereof in excess of the Oxford Limit, then the FY 04/05 Buyer
Percentage, the FY 04/05 Accelerated Buyer Percentage, the FY 06/07 Buyer
Percentage or the Buyer Accelerated Stock Percentage, as the case may be,
shall be deemed for all purposes hereunder to be adjusted downward as
necessary to limit such issuance, in the aggregate, to the Oxford Limit.
As used herein, the term "Oxford Limit" shall mean an amount equal to (i)
$25,000,000 less (2) the cumulative amount of Basic Earnout Payments, Full
Accelerated Payments and Pro-Rata Accelerated Payment which the Sellers'
Representatives have elected to have paid by the Buyer through the
issuance of Oxford Securities valued at the Agreed Closing Oxford Stock
Value in accordance with Section 2.4.1.1.
2.4.2. FY 2006 and 2007 Election. If any Basic Earnout Payment shall
be due and payable for FY 2006 or FY 2007 pursuant to Section 2.3 hereof, the
Buyer may elect, at its sole option, to pay up to 50% of the amount of such
Basic Earnout Payment by issuing Oxford Securities to the Sellers valued at the
applicable Average Oxford Trading Price (such percentage, as selected for FY
2006 or FY 2007, as the case may be, is referred to herein as the "FY 06/07
Buyer Percentage"). The Buyer shall submit the FY 06/07 Buyer Percentage to the
Sellers' Representatives within five (5) Business Days after the date of the
determination of the final Earnout Calculations for a particular Fiscal Year
pursuant to Section 2.3 herein. Notwithstanding anything in this Agreement to
the contrary, if and to the extent that the Buyer is precluded under the terms
of the Credit Facility from paying in cash any Basic Earnout Payment otherwise
payable for FY 2006 or FY 2007, then, at the written request of the Sellers'
Representatives, the Buyer shall be required to pay the full FY 06/07 Buyer
Percentage of such Basic Earnout Payment for such applicable Fiscal Year by
issuing Oxford Securities to the Sellers valued at the Applicable Average Oxford
Trading Price (and, if required, the Buyer shall as soon as possible take all
commercially reasonable efforts necessary to obtain approval of the stockholders
of the Buyer to issue such Oxford Securities). Notwithstanding the foregoing, in
the event a Pro-Rata Accelerated Payment shall be due and payable in FY 2006 or
FY 2007 pursuant to Section 2.5.8.2, the Buyer may elect, at its sole option, to
pay up to 50% of such Pro-Rata Accelerated Payment by issuing Oxford Securities
to the Sellers valued at the Applicable Oxford Trading Price (such percentage is
referred to herein as the "Buyer Accelerated Stock Percentage"). The Buyer shall
submit the Buyer Accelerated Stock Percentage applicable to the
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Pro-Rata Accelerated Payment to the Sellers' Representatives within five (5)
Business Days after delivery of the Sale Notice.
2.4.3. Payment of Earnout Amounts.
2.4.3.1 Basic Earnout Payments. At such time as any Basic
Earnout Payment shall be due and payable pursuant to Section 2.3, the
Buyer shall pay and issue to each Seller, to such account or accounts (or
address) as specified by the Sellers' Representatives to the Buyer in
writing from time to time (a) such Seller's Seller's Percentage of the
Cash Amount and (b) subject to Section 2.4.4 hereof, such Seller's
Seller's Percentage of the number of shares of Oxford Securities equal to
the Stock Amount.
2.4.3.2 Full Accelerated Payment. At such time as any Full
Accelerated Payment shall be due and payable pursuant to Section
2.5.8.2.1, the Buyer shall pay and issue to each Seller, to such account
or accounts (or address) as specified by the Sellers' Representatives to
the Buyer in writing from time to time (a) such Seller's Seller's
Percentage of the Cash Amount and (b) subject to Section 2.4.4 hereof,
such Seller's Seller's Percentage of the number of shares of Oxford
Securities equal to the Accelerated Stock Amount.
2.4.3.3 Pro-Rata Accelerated Payment. At such time as any
Pro-Rata Accelerated Payment shall be due and payable pursuant to Section
2.5.8.2.2, the Buyer shall pay and issue to each Seller, to such account
or accounts (or address) as specified by the Sellers' Representatives to
the Buyer in writing from time to time (a) such Seller's Seller's
Percentage of the Cash Amount and (b) subject to Section 2.4.4 hereof,
such Seller's Seller's Percentage of the number of shares of Oxford
Securities equal to the Accelerated Stock Amount.
2.4.4. Additional Provisions Relating to Oxford Securities.
2.4.4.1 The number of Oxford Securities to be issued pursuant
to Section 2.4.3 of this Agreement based upon the Buyer's election
pursuant to Section 2.4.1.2 or Section 2.4.2, if any, shall be adjusted as
necessary to reflect the effect of any forward or reverse stock split,
stock dividend, recapitalization, or other similar change with respect to
the Oxford Securities occurring during or after the 10 Trading Days during
which the Average Oxford Trading Price is determined and prior to the
applicable issuance of Oxford Securities (with any such adjustment to be
determined in recognition of any related adjustment being made to the
applicable Average Oxford Trading Price.
2.4.4.2 No fractional shares of Oxford Securities shall be
issued pursuant to this Agreement. In lieu thereof, each Seller who would
otherwise be entitled to receive a fraction of a share of Oxford
Securities shall be entitled to receive, within two (2) Business Days
following the date on which any Basic Earnout Payment, Full Accelerated
Payment or Pro-Rata Accelerated Payment shall be due and payable pursuant
to Section 2.3 or Section 2.5.8.2, as applicable, an amount of cash equal
to (a)
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the Average Oxford Trading Price (except with respect to any issuance of
Oxford Securities attributable to the Sellers Stock Percentage or
Accelerated Stock Percentage of any Basic Earnout Payment for each of FY
2004 or FY 2005 or any Full Accelerated Payment or Pro-Rata Accelerated
Payment, in which case the value for this subpart (a) shall be the Agreed
Closing Oxford Stock Value) multiplied by (b) the fraction of a share of
Oxford Securities to which such Seller otherwise would be entitled.
2.4.4.3 As soon as practicable following the date on which any
Basic Earnout Payment, Full Accelerated Payment or Pro-Rata Accelerated
Payment shall be due and payable pursuant to Section 2.3 or Section
2.5.8.2, and subject to each Seller complying with Section 2.4.9 of this
Agreement, if the FY 04/05 Buyer Percentage, the FY 06/07 Buyer
Percentage, the FY 04/05 Accelerated Buyer Percentage, the Buyer
Accelerated Stock Percentage, the Sellers Stock Percentage or the
Accelerated Stock Percentage, as the case may be, is greater than 0%, the
Buyer will issue and deliver to the Sellers stock certificates
representing the applicable Oxford Securities.
2.4.5. Additional Earnout Payment. At such time as any Additional
Earnout Payment shall be due and payable pursuant to Section 2.3 herein, the
Buyer shall pay to each Seller, to such account or accounts as specified by the
Sellers' Representatives to the Buyer in writing from time to time, a cash
payment equal to such Seller's Seller's Percentage of the Additional Earnout
Payment.
2.4.6. Restrictions on Payment of Earnout Payments. Notwithstanding
anything to the contrary herein, except as provided in the immediately following
sentence,the Buyer shall not be required to pay any portion of any Basic Earnout
Payment or any portion of the Additional Earnout Payment if (a) any of the
Senior Lenders restrict such payments due to a default under the Credit Facility
(or such payment would otherwise result in a default under the Credit Facility)
or (b) payment of any Basic Earnout Payment or Additional Earnout Payment would
prevent the Buyer from making the minimum level of capital expenditures not to
exceed $2 million within twelve (12) months following such payment that the
Buyer reasonably determines are necessary for the operation of the Buyer's
and/or the Company's business in a manner consistent with past practice. The
Buyer shall not under any circumstance be permitted to defer or withhold
pursuant to this Section 2.4.6 any amount otherwise payable as a Full
Accelerated Payment or a Pro-Rata Accelerated Payment. The Buyer shall notify
the Sellers' Representatives as soon as is reasonably practicable after the
Buyer becomes aware of circumstances that would permit non-payment of any Basic
Earnout Payment or Additional Earnout Payment pursuant to the first sentence of
this Section 2.4.6. The parties agree that payment of a Basic Earnout Payment or
Additional Earnout Payment that is due and payable pursuant to Section 2.3, as
applicable, shall have priority and be paid prior to any dividend to the Buyer's
shareholders. If payment of all or any portion of a Basic Earnout Payment or an
Additional Earnout Payment is withheld pursuant to this Section 2.4.6, then
interest, compounded on an annual basis, will accrue on the unpaid balance at
the rate of 12.5% per annum from the date such payment is due until the date
such payment is made. Any payment withheld pursuant to clause (a) of the first
sentence of this Section 2.4.6 shall be paid by the Buyer at the earliest date
as of which such payment can be made without being in violation of the standards
set forth in such clause (a). Any payment withheld pursuant to clause (b) of the
first
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sentence of this Section 2.4.6 shall be payable in any event as of the earlier
of (i) one (1) year after such payment was originally payable hereunder or (ii)
such date as of which the Buyer has made capital expenditures of at least $2
million following the last day of the Fiscal Year to which such Basic Earnout
Payment or Additional Earnout Payment relates.
2.4.7. Offset. The Buyer shall have the right to offset from any
Basic Earnout Payment, Additional Earnout Payment, Full Accelerated Payment
and/or Pro-Rata Accelerated Payment (including the amount of any accelerated
payments pursuant to Section 2.5.8.2 hereof) then due and payable to the Sellers
(a) up to the full amount due and payable to the Buyer from the Sellers for any
purchase price adjustment pursuant to Section 3.6.5.1 of the Purchase Agreement,
(b) up to the full amount of any shortfall in the Foreign Accounts Payable
Monthly Average in accordance with Section 2.5.4.5 hereof and Schedule 2.5.4.5
hereto, and (c) for any indemnification claims against the Sellers by the Buyer
pursuant to Section 10.2 of the Purchase Agreement on the terms and subject to
the limitations set forth therein. The offset rights of the Buyer pursuant to
this Section 2.4.7 shall be in addition to any rights of the Buyer pursuant to
the Escrow Agreement.
2.4.8. Tax Treatment. Any payment of Basic Earnout Payment,
Additional Earnout Payment, Full Accelerated Payment and/or Pro-Rata Accelerated
Payment (other than payments made to the Bonus Plan) shall be treated as an
adjustment to the Cash Purchase Price (as defined in the Purchase Agreement) in
the Purchase Agreement for tax purposes.
2.4.9. Investment and Securities Matters. Each Seller, solely as to
itself, hereby represents and warrants to the Buyer (and prior to each issuance
of Oxford Securities pursuant to this Agreement, each Seller hereby agrees to
issue the Buyer a certificate certifying as of such date to) the following:
2.4.9.1 No Registration. Each Seller acknowledges and
understands that the (a) issuance of the Oxford Securities pursuant to
this Agreement will not be registered under the Securities Act of 1933, as
amended, (the "Securities Act"), or any other applicable securities laws
and (b) issuance of the Oxford Securities pursuant to this Agreement is
intended to be exempt from registration under the Securities Act and any
other applicable securities laws by virtue of certain exemptions
thereunder, including Section 4(2) of the Securities Act and the
provisions of Regulation D promulgated thereunder, and, therefore, the
Oxford Securities issued pursuant to this Agreement cannot be resold
unless registered under the Securities Act and any other applicable
securities laws or unless an exemption from registration is available.
2.4.9.2 Reliance on Representations. Each Seller acknowledges
that the Buyer and its advisors will rely on the representations and
warranties of such Seller contained in this Section 2.4.9 for purposes of
determining whether the issuance of the Oxford Securities pursuant to this
Agreement is exempt from registration under the Securities Act and any
other applicable securities laws.
2.4.9.3 Restricted Securities/Rule 144. Each Seller
understands that the Oxford Securities issued pursuant to this Agreement
will be characterized as "restricted securities" under the Securities Act.
In this connection, each Seller
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represents that such Seller is familiar with Rule 144 promulgated under
the Securities Act.
2.4.9.4 Acquiring For Own Account. Each Seller is acquiring
the Oxford Securities issued pursuant to this Agreement solely for his or
its own account for investment purposes and not with a view toward any
distribution.
2.4.9.5 Financial Ability. Each Seller (a) has the financial
ability to bear the economic risk of the investment in the Oxford
Securities issued pursuant to this Agreement, (b) has adequate means for
providing for his or its current needs and contingencies, (c) has no need
for liquidity with respect to the investment in the Oxford Securities
issued pursuant to this Agreement, and (d) can afford a complete loss of
the investment in the Oxford Securities issued pursuant to this Agreement
at this time and in the foreseeable future.
2.4.9.6 Knowledge and Experience. Each Seller has such
knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of an investment in Oxford
Securities issued pursuant to this Agreement and of making an informed
investment decision with respect thereto.
2.4.9.7 Tax Consequences. Each Seller understands that the
transactions contemplated by this Agreement are not structured to obtain
"tax-free" treatment under the federal Internal Revenue Code of 1986, as
amended from time to time. Accordingly, such Seller may be required to
recognize taxable gain based on the fair market value of the Oxford
Securities issued pursuant to this Agreement as of the date received even
though it will likely not be permissible to liquidate such Oxford
Securities in order to pay such taxes.
2.4.9.8 Accredited Investor. Each Seller is an "accredited
investor" as that term is defined in Rule 501(a) of Regulation D
promulgated under the Securities Act.
2.4.9.9 Further Limitations on Dispositions. Without in any
way limiting the representations set forth above, each Seller further
agrees not to make any disposition of all or any portion of the Oxford
Securities issued pursuant to this Agreement unless and until:
(a) there is then in effect a registration statement
under the Securities Act covering such proposed disposition and such
disposition is made in accordance with such registration statement;
or
(b) (i) such Seller shall have notified the Buyer of the
proposed disposition and shall have furnished the Buyer with a
statement of the circumstances surrounding the proposed disposition
and (ii) unless waived by the Buyer, the Buyer shall have received
an opinion of counsel to the Buyer providing that such disposition
will not require registration of such securities under the
Securities Act or any other applicable securities laws.
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2.4.9.10 Legend. Each Seller acknowledges and agrees that the
certificates representing the Oxford Securities issued pursuant to this
Agreement shall bear substantially the following legend:
The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended (the "Securities Act"),
or under any other applicable securities laws in reliance upon
various exemptions therefrom. These shares have been acquired for
investment and may not be offered for sale, sold, transferred, or
otherwise disposed of, nor will any assignee or transferee thereof
be recognized by the Corporation as having any interest in such
shares, in the absence of (i) an effective registration statement
with respect to the shares under the Securities Act or (ii) an
opinion of the Corporation's counsel to the effect that the
transaction by which such shares will be offered for sale, sold,
transferred, or otherwise disposed of, is exempt from or otherwise
in compliance with the registration requirements of the Securities
Act and any other applicable securities laws. The shares represented
by this certificate may not be sold, transferred, or otherwise
disposed of, nor will any assignee or transferee thereof be
recognized by the Corporation as having any interest in such shares,
unless such sale, transfer or disposition is otherwise in accordance
with the terms of the Earnout Agreement, dated as of June 13, 2003,
among Viewpoint International, Inc., the stockholders of Viewpoint
International, Inc. and the Corporation.
2.4.9.11 Oxford Disposition Legal Opinion. If any Seller proposes to
make a disposition of Oxford Securities in accordance with Section
2.4.9.9(b) herein, the Buyer shall use its commercially reasonable efforts
to obtain the opinion of counsel to the Buyer contemplated by Section
2.4.9.9(b) herein.
2.4.10. Payment Allocation. Notwithstanding anything herein to the
contrary, each Basic Earnout Payment, Additional Earnout Payment, Full
Accelerated Payment and Pro-Rata Accelerated Payment otherwise payable to the
Sellers pursuant to this Agreement shall be payable in the respective amounts
and to the respective parties as shall be specified in Schedule 2.4.10 hereto,
and any resulting Tax Benefit to the Company or the Buyer resulting from any
such payments (including Tax Benefits resulting from subsequent payments of such
amounts from the Bonus Plan to the employee beneficiaries thereof) shall be
promptly paid by the Buyer to the Sellers in accordance with their respective
Seller's Percentages.
2.5. Operating and Accounting Procedures of the Company.
2.5.1. Generally. The parties agree that the guidelines and rules set
forth in this Section 2.5 shall be used in calculating the Adjusted PBT, the
Basic Earnout Payments, and the Additional Earnout Payment. The Buyer shall use
its commercially reasonable efforts to enable the Company to achieve the earnout
targets contemplated by this Agreement, including taking all
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reasonable steps to provide the Company with sufficient liquidity in order to
make the capital expenditures contemplated in the agreed-upon budgets of the
Company; provided, however, that nothing contained in this Agreement shall be
construed to restrict in any way the Buyer's management from operating the
Buyer's business (including the business of the Company) in the manner which the
Buyer's management and board of directors deem most beneficial for the Buyer and
the Buyer's shareholders. For the purposes of this Section 2.5, unless the
context requires otherwise, references to "the Company" shall include all the
Company Accounting Entities.
2.5.2. Accounting Standards. Unless otherwise agreed to in writing by the
parties, all financial statements of the Company for all times from and after
the Closing shall be prepared in accordance with GAAP applied on a basis
consistent with the Company's past practices set forth on Exhibit 2.5.2 hereto
in a manner such that Adjusted PBT, any Basic Earnout Payment and any Additional
Earnout Payment will be reasonably determinable pursuant to the terms of this
Agreement. All matters relating to the calculation of Adjusted PBT, any Basic
Earnout Payment, and the Additional Earnout Payment (including the determination
with respect to capitalization or expense of various items and related
depreciation or amortization periods, reserve methods for accounts receivable
and inventory, and the treatment of other unusual or extraordinary items) shall
be determined in accordance with the Company's past practices set forth on
Exhibit 2.5.2 hereto.
2.5.3. Corporate Administrative Charges. Throughout the Four-Year Period,
intercompany charges for services provided by the Buyer or any of its Affiliates
to the Company will not exceed then current market rates for arms-length
transactions with third parties for such services. The Company will only be
charged for services actually rendered by the Buyer or any of its Affiliates. No
"general corporate administrative" charge will be levied during the Four-Year
Period.
2.5.4. Management of Company. Following the Closing, the Company will be
subject to all policies, procedures, and requirements applicable to the Buyer's
operating units, as communicated to the Company by the Buyer from time to time.
Such requirements will include, among other things, detailed budget review
meetings at least twice per year, a meeting to review in detail the Company's
strategy at least once per year and other mutually-agreed upon meetings between
the Buyer and the Company to discuss the Company's business. Without limiting
the foregoing, it is specifically understood that:
2.5.4.1 The Company will review and discuss with the Buyer the
Company's recommendations for opening any new company-owned stores,
including the proposed locations, detailed financial projections
(including required capital expenditures), detailed monthly projected
income statements (including an appropriate charge for the capital
invested in such store), cash flow statements and balance sheets. The
Company and the Buyer shall work together to select only new store
locations that are reasonably projected to provide a return on the capital
employed in accordance with the guidelines set forth on Schedule
2.5.4.1(a) (the "Required Return on Capital"). For a proposed store to
meet the required threshold standards for the Required Return on Capital,
the projections for a proposed store must be reasonable in light of the
recent historical performance of comparable stores and such projections
must reasonably
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substantiate that the proposed store will achieve at least 90% of the annual and
cumulative ROI's reflected on Schedule 2.5.4.1(a). Except as otherwise indicated
on Schedule 2.5.4.1(a), the Buyer will advise the Sellers' Representatives in
writing whether or not the Buyer approves each of the Company's proposed store
openings, and the Company shall not open any such store or commit to any lease
or other capital expenditure in the absence of such written approval from the
Buyer. In the event the Company proposes a new store opening and the Buyer does
not give approval for such opening as provided in this Section 2.5.4.1 and (a)
the Company has achieved at least 90% of the cumulative Target PBT for each of
the preceding Fiscal Years prior to such proposal and (b) the proposed store is
reasonably projected to meet the Required Return on Capital, (as provided in
this Section 2.5.4.1 and as provided in Schedule 2.5.4.1(a) then the Target PBT
for each subsequent year following such proposal will be adjusted as provided in
Schedule 2.5.4.1(a). Schedule 2.5.4.1(b) sets forth the proposed timetable for
projected new stores. It is understood that in no event will adjustments for a
proposed store be made prior to its projected opening date consistent with the
timetable set forth on Schedule 2.5.4.1(b).
2.5.4.2 The Company will review and discuss with the Buyer the Company's
future product sourcing plans and will at all times take reasonable steps to
ensure that all of its suppliers comply with the Standards for Business Partners
attached hereto as Exhibit A.
2.5.4.3 The Company will review and discuss with the Buyer the Company's
future product pricing plans, and the Buyer and the Company will work together
to ensure that such product pricing plans are consistent with preserving the
reputation and market position of the "Xxxxx Bahama" brand and other brands
owned by the Company.
2.5.4.4 The Company will review and discuss with the Buyer the Company's
recommendations for any new licenses or extensions of existing licenses,
including the proposed licensee, products, territory, royalties and other terms.
The Company and the Buyer will work together to enter into only licenses that
provide appropriate royalty income and also maintain and enhance the reputation
and market position of the "Xxxxx Bahama" brand and other brands owned by the
Company. The Buyer will advise the Sellers' Representatives in writing whether
or not the Buyer approves each of the Company's proposed licenses, and the
Company shall not enter into any new license or license extension in absence of
such written approval from the Buyer.
2.5.4.5 The Company will be expected to maintain a minimum monthly-average
accounts payable (the "Foreign Accounts Payable") balance for goods purchased
from non-U.S. suppliers and for buying agent commissions payable in connection
with such goods (the "Foreign Accounts Payable Monthly Average") of at least
$12,500,000 (the "Minimum Foreign Accounts Payable"), all as determined in
accordance with Schedule 2.5.4.5 hereto. To the extent the Foreign Accounts
Payable Monthly Average during any Fiscal Year is less than the Minimum Foreign
Accounts Payable (as adjusted pursuant to Schedule 2.5.4.5 hereto), the Buyer
shall have the right
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to offset any shortfall (except the amount of such shortfall, if any,
caused by a reduction in the Foreign Accounts Payable at the sole
direction of the Buyer) against any Basic Earnout Payment and/or
Additional Earnout Payment otherwise payable hereunder in accordance with
Schedule 2.5.4.5 hereto.
2.5.5. Business Practices. Unless the Company has received prior written
authorization from the Buyer, the Company shall not accelerate or delay the
recognition of revenue or expense or delay investment in working or fixed
capital, but shall account for such items on a basis consistent with the Buyer's
past practices. If any such acceleration, deferral, or change occurs (without
written authorization of the Buyer), Adjusted PBT, any Basic Earnout Payment,
and the Additional Earnout Payment will be adjusted to negate the effects
thereof.
2.5.6. Internal Control. The Company shall be subject to a system of
internal accounting controls consistent with the system of internal accounting
controls applicable to the Buyer from time to time.
2.5.7. Changes in GAAP. The parties agree that any changes in GAAP
accounting rules from and after the date hereof shall not affect the calculation
of any Basic Earnout Payment or any Additional Earnout Payment. The parties
shall use the GAAP rules, regulations and standards in effect as of the date
hereof as a basis for calculation of all Basic Earnout Payments and any
Additional Earnout Payment.
2.5.8. Acquisitions or Sale of Company.
2.5.8.1 Acquisitions by Company. Nothing in this Agreement shall be
interpreted as a restriction or limitation on the Buyer and its
Affiliates' or its representative shareholders right and ability (a) to
acquire by purchase, exchange, or otherwise, any other Person, whether or
not engaged in a business similar or related to the business of the
Company (an "Acquired Business"), provided, however, that the Buyer shall
account for such Acquired Business such that Adjusted PBT, any Basic
Earnout Payment, and any Additional Earnout Payment will continue to be
reasonably determinable pursuant to the terms of this Agreement, or (b) to
sell all or any shares of capital stock of the Buyer or any of its
Affiliates, to sell all or any all of the assets of the Buyer or any of
its Affiliates, or to merge with another Person. Unless the Company
operates an Acquired Business, as determined by the Buyer, the Company
shall have no rights or interests in or relating to any Acquired Business.
If the Company operates an Acquired Business, the Company shall account
for such Acquired Business separate from its business as of the Closing
such that Adjusted PBT, any Basic Earnout Payment, and any Additional
Earnout Payment will in no way be affected by such Acquired Business.
2.5.8.2 Sale of Company.
2.5.8.2.1. In the event that all or substantially all of the assets
or stock of the Company are sold, transferred or otherwise disposed of by
the Buyer (a "Sale Transaction") prior to the end of FY 2004 to any Person
other than a wholly-owned subsidiary of the Buyer, the Buyer shall, within
one Business
-21-
Day of the consummation of such Sale Transaction, deliver written notice
of such Sale Transaction to the Sellers' Representatives (such notice, the
"Sale Notice"). Within fifteen (15) days of such Sale Transaction, the
Buyer shall pay to the Sellers, in accordance with Section 2.4.3.2, Thirty
Seven Million Five Hundred Thousand Dollars ($37,500,000) (the "Full
Accelerated Payment") (which amount consists of $25,000,000 as an
acceleration of one-half of the maximum total Basic Earnout Payments which
could otherwise be earned by the Sellers hereunder and $12,500,000 as an
acceleration of one-half of the maximum Additional Earnout Payment which
could otherwise be earned by the Sellers hereunder). All future Basic
Earnout Payments and any Additional Earnout Payment which thereafter
otherwise become due pursuant to the terms of this Agreement shall be
reduced by the aggregate amount paid to the Sellers pursuant to this
Section 2.5.8.2.1 prior to the Buyer paying the Sellers any future Basic
Earnout Payment or any Additional Earnout Payment. For purposes of
clarification, Exhibit 2.5.8.2.1 sets forth an example.
2.5.8.2.2. In the event of a Sale Transaction after the end of FY
2004 but prior to the end of FY 2007 to any Person other than a
wholly-owned subsidiary of the Buyer, the Buyer shall, within one Business
Day of the consummation of such Sale Transaction, deliver a Sale Notice to
the Sellers' Representatives. Within fifteen (15) days of such Sale
Transaction, the Buyer shall pay to the Sellers, in accordance with
Section 2.4.3.3, an amount (the "Pro-Rata Accelerated Payment") equal to
(a)(i) the average percentage of the maximum potential Basic Earnout
Payment earned under this Agreement for each of the preceding Fiscal
Year(s) prior to such sale, transfer or disposition multiplied by (ii) the
maximum potential remaining amount of all future Basic Earnout Payments
and Additional Earnout Payment which could become due pursuant to the
terms of this Agreement multiplied by (b) 50%. All future Basic Earnout
Payments and any Additional Earnout Payment which thereafter otherwise
become due pursuant to the terms of this Agreement shall be reduced by the
aggregate amount paid to the Sellers pursuant to this Section 2.5.8.2.2
prior to the Buyer paying the Sellers any future Basic Earnout Payment or
any Additional Earnout Payment. For purposes of clarification, Exhibit
2.5.8.2.2 sets forth an example.
2.5.8.2.3. The Buyer shall not consummate a Sale Transaction if the
Buyer would be precluded, under the terms of the Credit Facility, from
paying in full, as and when due hereunder, any Full Accelerated Payment or
Pro-Rata Accelerated that would otherwise become payable by the Buyer
hereunder as a result of such Sale Transaction.
3. MISCELLANEOUS.
3.1. Sellers' Representatives. The appointment and removal of the Sellers'
Representatives, as well as the authority of the Company and the Buyer to rely
on the consent and approval of the Sellers' Representatives, shall be governed
by Section 7.7 of the Purchase
-22-
Agreement. Any action taken by the Sellers' Representatives with respect to this
Agreement shall bind and otherwise affect any rights and obligations of each
Seller hereunder.
3.2. Entire Agreement; Waivers. This Agreement constitutes the entire
agreement among the parties hereto pertaining to the subject matter hereof and
supersedes all prior and contemporaneous agreements, understandings,
negotiations and discussions, whether oral or written, of the parties with
respect to such subject matter. No waiver of any provision of this Agreement
shall be deemed or shall constitute a waiver of any other provision hereof
(whether or not similar), shall constitute a continuing waiver unless otherwise
expressly provided nor shall be effective unless in writing and executed (a) in
the case of a waiver by the Buyer, by the Buyer, and (b) in the case of a waiver
by the Sellers, by the Sellers' Representatives.
3.3. Amendment or Modification. The parties hereto may amend or modify
this Agreement only by a written instrument executed by the Buyer and the
Sellers' Representatives, and any such amendment or modification shall be
enforceable against the Buyer and all the Sellers.
3.4. Severability. In the event that any provision hereof would, under
applicable law, be invalid or unenforceable in any respect, such provision shall
(to the extent permitted under applicable law) be construed by modifying or
limiting it so as to be valid and enforceable to the maximum extent compatible
with, and possible under, applicable law. The provisions hereof are severable,
and in the event any provision hereof should be held invalid or unenforceable in
any respect, it shall not invalidate, render unenforceable or otherwise affect
any other provision hereof.
3.5. Successors and Assigns. All of the terms and provisions of this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective permitted transferees and assigns (each of which
transferees and assigns shall be deemed to be a party hereto for all purposes
hereof); provided, however, that (a) no transfer or assignment by any party
hereto shall be permitted without the prior written consent of the other parties
hereto and any such attempted transfer or assignment without consent shall be
null and void and (b) no transfer or assignment by any party shall relieve such
party of any of its obligations hereunder; provided, further, that Buyer may
assign its rights, but not its obligations, under this Agreement, in whole or in
part, to any Affiliate; and provided, further, that after the Closing, the Buyer
may assign its rights under this Agreement to any Senior Lender; and provided,
further, that the Buyer may assign its rights and obligations under this
Agreement to any purchaser of all or substantially all capital stock or assets
of the Company.
3.6. Notices. Any notices or other communications required or permitted
hereunder shall be deemed to have been properly given and delivered if in
writing by such party or its legal representative and delivered personally or
sent by nationally recognized overnight courier service guaranteeing overnight
delivery, or registered or certified mail, postage prepaid, addressed as
follows:
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If to any Seller or the x/x Xxxxxxxxx Xxxxxxxxxxxxx, Inc.
Sellers' Representatives: 0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attn: S. Xxxxxxx Xxxxxxxx
and
x/x Xxxxxxxx Xxxx & Xxxxxx LLC
000 Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxx
With a copy to: Xxxxxx & Bird LLP
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxx, III, Esq.
and
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx, Esq.
If to the Buyer: Oxford Industries, Inc.
000 Xxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxx, III, Esq.
With a copy to: King & Spalding LLP
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Unless otherwise specified herein, such notices or other communications shall be
deemed given (a) on the date delivered, if delivered personally, (b) one
Business Day after being sent by a nationally recognized overnight courier
guaranteeing overnight delivery, and (c) five Business Days after being sent, if
sent by registered or certified mail. Each of the parties hereto shall be
entitled to specify a different address by delivering notice as aforesaid to
each of the other parties hereto.
3.7. Headings. Section and subsection headings are not to be considered
part of this Agreement, are included solely for convenience, are not intended to
be full or accurate descriptions of the content thereof and shall not affect the
construction hereof.
3.8. Third-Party Beneficiaries. Except as otherwise set forth herein,
nothing in this Agreement is intended or shall be construed to entitle any
Person, other than the parties hereto,
-24-
their respective transferees and assigns permitted hereby, to any claim, cause
of action, remedy or right of any kind.
3.9. Counterparts. This Agreement and any claims related to the subject
matter hereof may be executed in any number of counterparts, each of which shall
be deemed an original, but all of which together shall constitute but one and
the same instrument.
3.10. Governing Law. This Agreement and any claims related to the subject
matter hereof shall be governed by and construed in accordance with the domestic
substantive laws of the State of New York, without giving effect to any choice
or conflict of law provision or rule that would cause the application of the
laws of any other jurisdiction.
3.11. Consent to Jurisdiction. Each party to this Agreement, by its
execution hereof, (a) hereby irrevocably submits, and agrees to cause each of
its Subsidiaries to submit, to the exclusive jurisdiction of the state courts of
the State of New York located in New York County or the United States District
Court for the Southern District of New York for the purpose of any action,
claim, cause of action or suit (in contract, tort or otherwise), inquiry
proceeding or investigation arising out of or based upon this Agreement or
relating to the subject matter hereof, (b) hereby waives, and agrees to cause
each of its Subsidiaries to waive, to the extent not prohibited by applicable
law, and agrees not to assert, and agrees not to allow any of its Subsidiaries
to assert, by way of motion, as a defense or otherwise, in any such action, any
claim that it is not subject personally to the jurisdiction of the above-named
courts, that its property is exempt or immune from attachment or execution, that
any such proceeding brought in one of the above-named courts is improper, or
that this Agreement or the subject matter hereof may not be enforced in or by
such court and (c) hereby agrees not to commence or to permit any of its
Subsidiaries to commence any action, claim, cause of action or suit (in
contract, tort or otherwise), inquiry, proceeding or investigation arising out
of or based upon this Agreement or relating to the subject matter hereof other
than before one of the above-named courts nor to make any motion or take any
other action seeking or intending to cause the transfer or removal of any such
action, claim, cause of action or suit (in contract, tort or otherwise),
inquiry, proceeding or investigation to any court other than one of the
above-named courts whether on the grounds of inconvenient forum or otherwise.
Each party hereby consents to service of process in any such proceeding in any
manner permitted by New York law, and agrees that service of process by
registered or certified mail, return receipt requested, at its address specified
pursuant to Section 3.6 is reasonably calculated to give actual notice.
3.12. WAIVER OF JURY TRIAL. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW
WHICH CANNOT BE WAIVED, EACH OF THE PARTIES HERETO HEREBY WAIVES, AND AGREES TO
CAUSE EACH OF ITS SUBSIDIARIES TO WAIVE, AND COVENANTS THAT NEITHER IT NOR ANY
OF ITS SUBSIDIARIES WILL ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE)
ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, ACTION, CLAIM,
CAUSE OF ACTION, SUIT (IN CONTRACT, TORT OR OTHERWISE), INQUIRY, PROCEEDING OR
INVESTIGATION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT MATTER
HEREOF OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE TRANSACTIONS
CONTEMPLATED HEREBY, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING. THE
BUYER
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ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY THE SELLERS THAT THIS SECTION
3.12 CONSTITUTES A MATERIAL INDUCEMENT UPON WHICH THE SELLERS ARE RELYING AND
WILL RELY IN ENTERING INTO THIS AGREEMENT AND ANY OTHER AGREEMENTS RELATING
HERETO OR CONTEMPLATED HEREBY. ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART
OR A COPY OF THIS SECTION 3.12 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT
OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.
[SIGNATURE PAGES FOLLOW.]
-26-
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have caused this Agreement to be executed, as of the date first above
written by their respective officers thereunto duly authorized.
THE SELLERS: SKM-TB, LLC
By: SKM EQUITY FUND III, L.P.
By: SKM PARTNERS, L.L.C.
By: /s/ Xxxxx X. Xxxx
-----------------------------
Name: Xxxxx X. Xxxx
A duly authorized signatory
WHOLE DUTY INVESTMENT, LTD.
By: /s/ CT Xxxxx
------------------------------
Name: CT Xxxxx
A duly authorized signatory
/s/ S. Xxxxxxx Xxxxxxxx
------------------------------
S. Xxxxxxx Xxxxxxxx
XXXXXXXX FAMILY STOCK TRUST u/a/d
May 1, 2001
By: /s/ Xxxxxxx X. Xxxxxx, III
-----------------------------
Name: Xxxxxxx X. Xxxxxx, III
Title: Trustee
/s/ Xxxxx Xxxxx Gasperina
------------------------------
Xxxxx Xxxxx Xxxxxxxxx
XXXXXX BEACH BLUES, INC.
By: /s/ Xxxxxx Xxxxxxx
--------------------------
Name: Xxxxxx Xxxxxxx
Title: President
SELLERS'
REPRESENTATIVES: /s/ Xxxxx X. Xxxx
------------------------------
Xxxxx X. Xxxx
/s/ S. Xxxxxxx Xxxxxxxx
------------------------------
S. Xxxxxxx Xxxxxxxx
THE BUYER: OXFORD INDUSTRIES, INC.
By: /s/ X. Xxxxx Xxxxxx
--------------------------
Name: X. Xxxxx Xxxxxx
Title: Chairman, President and Chief
Executive Officer
[Schedules and similar attachments omitted pursuant to Item 601(b)(2) of
Regulation S-K.
Document Description
-------- -----------
SCHEDULE 1 Sellers' Stock Ownership
SCHEDULE 1.1.20 Company Accounting Entities
SCHEDULE 1.1.21 Company Capital Charge Guidelines
SCHEDULE 2.4.10 Payment Schedule
SCHEDULE 2.5.4.1(a) Adjustments to Target PBT
SCHEDULE 2.5.4.1(b) New Store Timetable
SCHEDULE 2.5.4.5 Minimum Foreign Accounts Payable
EXHIBIT 1.1.21 Fiscal Year Month Ends
EXHIBIT 2.5.2 Accounting Standard
EXHIBIT 2.5.8.2.1 Acceleration of Earnout Payments
Example For Sale prior to FY 2004
EXHIBIT 2.5.8.2.2 Acceleration of Earnout Payments
Example for Sale after FY 2004
EXHIBIT A Standards for Xxxxx Bahama Business
Partners]
