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Exhibit 3
STOCKHOLDERS AGREEMENT
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STOCKHOLDERS AGREEMENT, dated as of April 26, 1999 (this "Agreement"),
among Hilite Holdings, LLC, a Delaware limited liability company ("Buyer"),
Hilite Mergeco, Inc., a Delaware corporation ("Merger Subsidiary"), and the
parties listed on SCHEDULE A attached hereto (each a "Stockholder" and
collectively, the "Stockholders").
WHEREAS, each Stockholder is the owner of the number of shares (the
"Shares") of Common Stock, par value $.01 per share, of Hilite Industries, Inc.,
a Delaware corporation (the "Company"), set forth opposite such Stockholder's
name on SCHEDULE A and holds stock options (the "Options") to acquire the number
of Shares set forth opposite such Stockholder's name on SCHEDULE A; and
WHEREAS, Buyer, Merger Subsidiary and the Company propose to enter into
an Agreement and Plan of Merger, dated as of even date herewith (as the same may
be amended from time to time, the "Merger Agreement"), which provides, upon the
terms and subject to the conditions thereof, for (i) the Company to make a cash
tender offer (the "Offer") to acquire all of the issued and outstanding shares
of Common Stock, par value $.01 per share, of the Company for $14.25 per share,
net to the seller in cash, (ii) the purchase by Buyer and the sale by the
Company of 1,681,414 shares of Common Stock of the Company immediately prior to
the consummation of the Offer and (iii) the merger of Merger Subsidiary with and
into the Company (the "Merger"); and
WHEREAS, as a condition to the willingness of Buyer and Merger
Subsidiary to enter into the Merger Agreement, Buyer and Merger Subsidiary have
requested that the Stockholders agree, and, in order to induce Buyer and Merger
Subsidiary to enter into the Merger Agreement, each of the Stockholders have
agreed, to enter into this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements and covenants set forth herein and in the Merger Agreement, the
parties hereto agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS. Each Stockholder
hereby severally represents and warrants to Buyer and Merger Subsidiary as
follows:
(a) Such Stockholder is the sole record and beneficial owner
(as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), which meaning will apply for all purposes of this
Agreement) of, and has good title to, all of the Shares, and there exist no
liens, claims, security interests, options, proxies, voting agreements, charges
or encumbrances of whatever nature ("Liens") affecting the Shares.
(b) Upon transfer to the Company by such Stockholder of the
Shares upon consummation of the Offer or the Merger (whichever is earlier), the
Company will have good title to the Shares, free and clear of all Liens.
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(c) Other than the Options, the Shares constitute all of the
securities (as defined in Section 3(10) of the Exchange Act, which definition
will apply for all purposes of this Agreement) of the Company beneficially
owned, directly or indirectly, by such Stockholder (excluding any securities
beneficially owned by any of its or his affiliates or associates (as such terms
are defined in Rule 12b-2 under the Exchange Act, which definition will apply
for all purposes of this Agreement) as to which it or he does not have voting or
investment power).
(d) Except for the Shares and the Options, such Stockholder
does not, directly or indirectly, beneficially own or have any option, warrant
or other right to acquire any securities of the Company that are or may by their
terms become entitled to vote or any securities that are convertible or
exchangeable into or exercisable for any securities of the Company that are or
may by their terms become entitled to vote, nor is such Stockholder subject to
any contract, commitment, arrangement, understanding or relationship (whether or
not legally enforceable) that allows or obligates it or him to vote or acquire
any securities of the Company.
(e) The execution and delivery of this Agreement by such
Stockholder does not, and the performance by such Stockholder of its or his
obligations hereunder will not, constitute a violation of, conflict with, result
in a default (or an event which, with notice or lapse of time or both, would
result in a default) under, or result in the creation of any Lien on any Shares
under, (i) any contract, commitment, agreement, understanding, arrangement or
restriction of any kind to which such Stockholder is a party or by which such
Stockholder is bound or (ii) any judgment, writ, decree, order or ruling
applicable to the Stockholder.
(f) Such Stockholder has the legal capacity, power and
authority to enter into and perform all of such Stockholder's obligations under
this Agreement. This Agreement has been duly and validly authorized, executed
and delivered by such Stockholder and, assuming its due authorization, execution
and delivery by Buyer and Merger Subsidiary, constitutes a legal, valid and
binding obligation of such Stockholder, enforceable against such Stockholder in
accordance with its terms. If such Stockholder is married and such Stockholder's
Shares constitute community property or otherwise require spousal or other
approval for this Agreement to be legal, valid and binding, this Agreement, has
been duly authorized, executed and delivered by, and constitutes a valid and
binding agreement of, such Stockholder's spouse, enforceable against such person
in accordance with its terms.
(g) Neither the execution and delivery of this Agreement nor
the performance by such Stockholder of its or his obligations hereunder will (i)
violate any order, writ, injunction or judgment applicable to such Stockholder
or (ii) to the best knowledge of such Stockholder, violate any law, decree,
statute, rule or regulation applicable to such Stockholder or require any
consent, authorization or approval of, filing with or notice to, any court,
administrative agency or other governmental body or authority, other than any
required notices or filings pursuant to the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, and the rules and regulations promulgated
thereunder (the "HSR Act") or the federal securities laws, and except where the
failure to obtain such consents, approvals, authorizations or permits, or to
make such filings or notifications, would not prevent or materially delay the
performance by the Stockholder of its or his obligations under this Agreement.
2. REPRESENTATIONS AND WARRANTIES OF BUYER AND MERGER SUBSIDIARY. Each
of Buyer and Merger Subsidiary represents and warrants to each Stockholder as
follows:
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(a) Each of Buyer and Merger Subsidiary is duly organized and
validly existing and in good standing under the laws of the State of Delaware,
has the requisite corporate or limited liability company power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby, and has taken all necessary corporate or limited liability
company action to authorize the execution, delivery and performance of this
Agreement. This Agreement has been duly and validly executed and delivered by
each of Buyer and Merger Subsidiary and constitutes the legal, valid and binding
obligation of each of Buyer and Merger Subsidiary, enforceable against each of
Buyer and Merger Subsidiary in accordance with its terms.
(b) The execution and delivery of this Agreement by each of
Buyer and Merger Subsidiary does not, and the performance by each of Buyer and
Merger Subsidiary of its respective obligations hereunder will not, (i)
constitute a violation of, conflict with, or result in a default (or an event
which, with notice or lapse of time or both, would result in a default) under,
its respective certificate of incorporation or bylaws or equivalent documents or
any contract, commitment, agreement, understanding, arrangement or restriction
of any kind to which either of Buyer and Merger Subsidiary is a party or by
which either of Buyer and Merger Subsidiary is bound or any law, regulation,
judgment, writ, decree, order or ruling applicable to Buyer or Merger
Subsidiary, or (ii) result in any breach of or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, or give
to others any rights of termination, amendment, acceleration or cancellation of,
or result in the creation of a lien or encumbrance on any of the property or
assets of either Buyer or Merger Subsidiary pursuant to any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which either Buyer or Merger Subsidiary is a
party or by which it or any of its properties is bound or affected, except for
any such breaches, defaults or other occurrences that would not prevent or
materially delay the performance by either Buyer or Merger Subsidiary of its
obligations under this Agreement.
(c) Neither the execution and delivery of this Agreement nor
the performance by each of Buyer and Merger Subsidiary of its respective
obligations hereunder will violate any order, writ, injunction, judgment, law,
decree, statute, rule or regulation applicable to Buyer or Merger Subsidiary or
require any consent, authorization or approval of, filing with, or notice to,
any court, administrative agency or other governmental body or authority, other
than any required notices or filings pursuant to the HSR Act or the federal
securities laws.
3. TENDER OF SHARES. Each Stockholder hereby irrevocably undertakes to
(i) except as and to the extent provided in clause (ii) below, validly tender
and sell (and not withdraw) pursuant to and in accordance with the terms of the
Offer all of its or his Shares by the fifth Business Day (as defined in the
Merger Agreement) following commencement of the Offer, and (ii) not tender
pursuant to the Offer the number of Shares set forth opposite such Stockholder's
name on SCHEDULE A under the heading "Retained Shares." In the event,
notwithstanding the provisions of the first sentence of this Section 3, any
Shares tendered pursuant to clause (i) above are for any reason withdrawn from
the Offer or are not purchased pursuant to the Offer or any Retained Shares are
tendered in violation of clause (ii) above, such Shares will remain subject to
the terms of this Agreement. Each Stockholder acknowledges that the Company's
obligation to accept for payment and pay for the Shares in the Offer is subject
to all the terms and conditions of the Offer.
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4. TRANSFER OF THE SHARES. During the term of this Agreement, except as
otherwise provided herein, each Stockholder will not (a) offer to sell, sell,
pledge or otherwise dispose of or transfer any interest in or encumber with any
Lien any of its or his Shares, (b) acquire any shares of Common Stock or other
securities of the Company (otherwise than in connection with a transaction of
the type described in Section 7 and any such additional shares or securities
will be deemed Shares and included in the Shares subject to this Agreement),
including, without limitation, by exercising any of the Options, except upon the
prior written consent of Buyer and Merger Subsidiary, (c) deposit its or his
Shares into a voting trust, enter into a voting agreement or arrangement with
respect to such Shares or grant any proxy or power of attorney with respect to
such Shares, or (d) enter into any contract, option or other arrangement or
undertaking with respect to the direct or indirect acquisition or sale,
assignment or other disposition of or transfer of any interest in or the voting
of any shares of Common Stock or any other securities of the Company.
5. VOTING OF SHARES. Each Stockholder, by this Agreement, does hereby
constitute and appoint Buyer, or any nominee thereof, with full power of
substitution, during and for the term of this Agreement, as his true and lawful
attorney and proxy for and in his name, place and xxxxx, to vote each of its or
his Shares at any annual, special or adjourned meeting of the stockholders of
the Company (and this appointment will include the right to sign its or his name
(as stockholder) to any consent, certificate or other document relating to the
Company which the laws of the State of Delaware may require or permit) (a) in
favor of the Merger, the execution and delivery by the Company of the Merger
Agreement and the approval and adoption of the terms thereof and hereof; (b)
against any action or agreement that would result in a breach in any respect of
any covenant, agreement, representation or warranty of the Company under the
Merger Agreement; and (c) against the following actions (other than the Merger
and the other transactions contemplated by the Merger Agreement): (i) any
extraordinary corporate transaction, such as a merger, consolidation or other
business combination involving the Company or its subsidiaries; (ii) a sale,
lease or transfer of a material amount of assets of the Company or one of its
subsidiaries, or a reorganization, recapitalization, dissolution or liquidation
of the Company or its subsidiaries; (iii) (A) any change in a majority of the
persons who constitute the board of directors of the Company as of the date
hereof; (B) any change in the present capitalization of the Company or any
amendment of the Company's certificate of incorporation or by-laws, as amended
to date; (C) any other material change in the Company's corporate structure or
business; or (D) any other action which, in the case of each of the matters
referred to in clauses (iii)(A), (B), (C) and (D), is intended, or could
reasonably be expected, to impede, interfere with, delay, postpone, or adversely
affect the Merger and the other transactions contemplated by this Agreement and
the Merger Agreement. This proxy and power of attorney is a proxy and power
coupled with an interest, and each Stockholder declares that it is irrevocable.
Each Stockholder hereby revokes all and any other proxies with respect to the
Shares that it or he may have heretofore made or granted.
6. ENFORCEMENT OF THE AGREEMENT. Each Stockholder acknowledges that
irreparable damage would occur in the event that any of the provisions of this
Agreement are not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that Buyer or Merger Subsidiary
will be entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof in any
court of the United States or any state having jurisdiction, this being in
addition to any other remedy to which it is entitled at law or in equity.
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7. ADJUSTMENTS. The number and type of securities subject to this
Agreement will be appropriately adjusted in the event of any stock dividends,
stock splits, recapitalizations, combinations, exchanges of shares or the like
or any other action that would have the effect of changing such Stockholder's
ownership of the Company's capital stock or other securities.
8. COMPLIANCE WITH MERGER AGREEMENT. Each Stockholder shall comply with
the requirements of Section 6.04 of the Merger Agreement.
9. TERMINATION. This Agreement, including the proxy under Section 5,
will terminate on the earlier of (a) the date the Merger Agreement is terminated
in accordance with its terms, or (b) the purchase of all the Shares (other than
the Retained Shares) pursuant to the Offer in accordance with Section 3.
10. EXPENSES. All fees and expenses incurred by either of the parties
hereto will be borne by the party incurring such fees and expenses.
11. BROKERAGE. Each Stockholder, on the one hand, and Buyer and Merger
Subsidiary, on the other hand, represent and warrant to the other that the
negotiations relevant to this Agreement have been carried on by such
Stockholders, on the one hand, and Buyer and Merger Subsidiary, on the other
hand, directly with the other, and that there are no claims for finder's fees or
brokerage commissions or other like payments in connection with this Agreement
or the transactions contemplated hereby other than to Xxxxxx Xxxxxxxxx Xxxxxx.
Each Stockholder, on the one hand, and Buyer and Merger Subsidiary, on the other
hand, will indemnify and hold harmless the other from and against any and all
claims or liabilities for finder's fees or brokerage commissions or other like
payments incurred by reason of action taken by him, it or any of them, as the
case may be.
12. MISCELLANEOUS. (a) Any provision of this Agreement may be waived at
any time by the party that is entitled to the benefits thereof. No such waiver,
amendment or supplement will be effective unless in a writing and is signed by
the party or parties sought to be bound thereby. Any waiver by any party of a
breach of any provision of this Agreement will not operate as or be construed to
be a waiver of any other breach of such provision or of any breach of any other
provision of this Agreement. The failure of a party to insist upon strict
adherence to any term of this Agreement or one or more sections hereof will not
be considered a waiver or deprive that party of the right thereafter to insist
upon strict adherence to that term or any other term of this Agreement.
(b) This Agreement contains the entire agreement among Buyer,
Merger Subsidiary and the Stockholders with respect to the subject matter
hereof, and supersedes all prior agreements among Buyer, Merger Subsidiary and
the Stockholders with respect to such matters. This Agreement may not be
amended, changed, supplemented, waived or otherwise modified, except upon the
delivery of a written agreement executed by the parties hereto.
(c) This Agreement is to be governed by and construed in
accordance with the laws of the State of Delaware applicable to contracts made
and performed in that state.
(d) The descriptive headings contained herein are for
convenience and reference only and will not affect in any way the meaning or
interpretation of this Agreement.
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(e) All notices and other communications hereunder must be in
writing and are to be given (and will be deemed to have been duly given upon
receipt) by delivery in person, by telecopy, or by registered or certified mail,
postage prepaid, return receipt requested, addressed as follows:
If to the Stockholders to:
To the address or addresses on SCHEDULE A
With a copy to:
Xxxxxx Xxxxxx Flattau & Kimpl, LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: 000-000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
If to the Buyer or Merger Subsidiary to:
Carerras, Xxxxxxx & Co., LLC
Terminal Tower
00 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxx 00000
Telecopy: 000-000-0000
Attention: Chief Financial Officer
with copies to:
Xxxxx, Day, Xxxxxx & Xxxxx
North Point
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Telecopier: (000) 000-0000
or to such other address as any party may have furnished to the other parties in
writing in accordance herewith.
(f) This Agreement may be executed in any number of
counterparts, each of which will be deemed to be an original, but all of which
together will constitute one agreement.
(g) This Agreement is binding upon and is solely for the
benefit of the parties hereto and their respective successors, legal
representatives and assigns. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement will be assigned by any of the
parties hereto without the prior written consent of the other parties, except
that Buyer or Merger Subsidiary will have the right to assign to any direct or
indirect wholly owned subsidiary of Buyer or Merger Subsidiary any and all
rights and obligations of Buyer or Merger Subsidiary
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under this Agreement, provided that any such assignment will not relieve Buyer
or Merger Subsidiary from any of its obligations hereunder.
(h) If any term or other provision of this Agreement is
determined to be invalid, illegal or incapable of being enforced by any rule of
law or public policy, all other terms and provisions of this Agreement will
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party hereto. Upon any such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
will negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that the transactions contemplated by this Agreement are consummated to
the extent possible.
(i) All rights, powers and remedies provided under this
Agreement or otherwise available in respect hereof at law or in equity will be
cumulative and not alternative, and the exercise of any thereof by either party
will not preclude the simultaneous or later exercise of any other such right,
power or remedy by such party.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement on the date first above written.
HILITE HOLDINGS, LLC
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
Title: President
HILITE MERGECO, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
Title: President
Stockholders:
Xxxxx X. Xxxxxxxxxx, Xx. Trust
By: /s/ Xxxxx X. Xxxxxxxxxx, Xx.
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Name: Xxxxx X. Xxxxxxxxxx, Xx.
Title: Trustee
Xxxxxxx X. Xxxxxxxxxx Trust
By: /s/ Xxxxx X. Xxxxxxxxxx, Xx.
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Name: Xxxxx X. Xxxxxxxxxx, Xx.
Title: Trustee
Xxxxxxxxxxx Xxxxxxxxxx Trust
By: /s/ Xxxxx X. Xxxxxxxxxx, Xx.
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Name: Xxxxx X. Xxxxxxxxxx, Xx.
Title: Trustee
The Xxxxx Family Limited Partnership
By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
Title: General Partner
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/s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
/s/ Xxxxx X. Xxxxx
----------------------------------
Xxxxx X. Xxxxx
/s/ Xxxxxx X. Xxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxxxx
----------------------------------
Xxxxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxx
----------------------------------
Xxxxxx X. Xxxxx
/s/ Xxxxxxx Xxxxxxx
----------------------------------
Xxxxxxx Xxxxxxx
/s/ Xx. Xxxxxxxxxxxxx Xxxxxxxxxxxx
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Xx. Xxxxxxxxxxxxx Xxxxxxxxxxxx
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SCHEDULE A
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Number of Number of Number of
Name and Address of Stockholder Shares Options Retained Shares
------------------------------- -------- -------- ---------------
Xxxxx X. Xxxxxxxxxx, Xx. Trust 1,056,429 0 29,239
0000 Xxxxxx Xxxx Xxxx
Xxxxxx, XX 00000
Xxxxxxx X. Xxxxxxxxxx Trust 1,056,429 0 29,240
0000 Xxxxxx Xxxx Xxxx
Xxxxxx, XX 00000
Xxxxxxxxxxx Xxxxxxxxxx Trust 1,056,429 0 29,240
0000 Xxxxxx Xxxx Xxxx
Xxxxxx, XX 00000
The Xxxxx Family Limited Partnership 358,143** 0 7,018
0000 Xxxxxxxx Xxxx
Xxxxxx, XX 00000
Xxxxxx X. Xxxxx 178,570 18,800 21,053
c/o Hilite Industries, Inc.
0000 X. Xxxxxxxx
Xxxxxxxxxx, XX 00000
Xxxxx X. Xxxxx 500 5,000 2,759
c/o Hilite Industries, Inc.
0000 X. Xxxxxxxx
Xxxxxxxxxx, XX 00000
Xxxxxx X. Xxxxxxx 0 26,200 9,035*
c/o Hilite Industries, Inc.
0000 X. Xxxxxxxx
Xxxxxxxxxx, XX 00000
Xxxxxx X. Xxxxxx 0 17,000 5,762*
c/o Hilite Industries, Inc.
0000 X. Xxxxxxxx
Xxxxxxxxxx, XX 00000
Xxxxxx X. Xxxxx 0 26,200 9,035*
c/o Hilite Industries, Inc.
0000 X. Xxxxxxxx
Xxxxxxxxxx, XX 00000
Xxxxxx Xxxxxxx 0 1,750 455*
c/o Hilite Industries, Inc.
0000 X. Xxxxxxxx
Xxxxxxxxxx, XX 00000
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Number of Number of Number of
Name And Address of Stockholder Shares Options Retained Shares
------------------------------- ---------- --------- ----------------
Xx. Xxxxxxxxxxxxx Xxxxxxxxxxxx 0 1,200 312*
c/o Hilite Industries, Inc. --------- ------ -------
0000 X. Xxxxxxxx
Xxxxxxxxxx, XX 00000
TOTAL 3,706,500 96,150 143,148
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* To the extent such shares are obtained upon exercise of their respective
options.
** The Xxxxxxxxxx X. Xxxxx 1993 Living Trust U/A DTD 09/23/93 owns 1,000 shares
of those referenced.
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