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Exhibit 99.2
STOCKHOLDERS AGREEMENT
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THIS STOCKHOLDERS AGREEMENT (this "Agreement"), dated as of June 22, 1993,
is made by and among SHILOH INDUSTRIES, INC., a Delaware corporation (the
"Company"), MTD PRODUCTS INC, an Ohio corporation ("MTD"), and the individuals
signing this Agreement below (the "Original Shiloh Stockholders").
RECITALS
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A. MTD and the Original Shiloh Stockholders are the holders of all of the
issued and outstanding shares of Common Stock of the Company.
B. The Company, MTD and the Original Shiloh Stockholders desire to provide
for stability of the ownership and operation of the Company and to promote
continuity in the Company's management and policies.
AGREEMENTS
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NOW, THEREFORE, the parties hereby agree as follows:
SECTION l. DEFINITIONS
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The following terms when used in this Agreement shall have the following
respective meanings:
"AFFILIATE" shall mean with respect to any Person, any (i) officer,
director, partner or holder of more than 10% of the outstanding equity interests
of such Person, (ii) any Relation of such Person, or (iii) any other Person
which directly or indirectly controls, is controlled by, or is under common
control with such Person. A Person shall be deemed to control another Person if
such Person possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of the "controlled" Person, whether
through ownership of voting securities, by contract, or otherwise.
"COMMON SHARES" shall mean shares of the Common Stock, par value $.01 per
share, of the Company.
"GROUP" shall mean either the MTD Group or the Shiloh Group.
"MTD GROUP" shall mean MTD and any Person who becomes a holder of Common
Shares as a result of a Transfer of Common Shares by a member of the MTD Group
made pursuant to Section 3.3 of this Agreement, so long as such Person continues
to own Common Shares.
"OFFERED SHARES" shall have the meaning set forth in Section 3.2(a).
"OFFER" shall mean a bona fide third party offer (and not with the purpose
of circumventing this Agreement) to a Person from a financially responsible
Person who is not an Affiliate of such Person to purchase all or any portion of
the Common Shares owned by such Person.
"PERSON" shall mean an individual, corporation, partnership, joint venture,
trust, or unincorporated organization.
"PROPORTIONATE SHARE" shall mean, as used herein to determine the number of
Offered Shares or Reoffered Shares (as defined in Section 3.2(c) hereof), as the
case may be, which a Stockholder is entitled to purchase, the same proportion of
the Common Shares available for purchase as the Common Shares held by
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such Stockholder bears to the Common Shares held by all the stockholders who
have elected to purchase Common Shares from the Selling Stockholder.
"PURCHASE PRICE" shall mean the purchase price per Share set forth in the
applicable Offer.
"RELATION" shall mean with respect to any Person, such Person's spouse and
any of the descendants of such Person, or such Person's spouse, or either of
such Person's parents.
"SELLING STOCKHOLDER" shall have the meaning set forth in Section 3.2(a).
"SHILOH GROUP" shall mean each of the Original Shiloh stockholders and any
Person who becomes a holder of Common Shares as a result of a Transfer of Common
Shares by a member of the Shiloh Group made pursuant to Section 3.3 of this
Agreement, so long as such Person continues to own Common Shares.
"STOCKHOLDER" shall mean each of the members of the MTD coup and the Shiloh
Group.
"STOCKHOLDER'S OFFER" shall mean an irrevocable offer to sell Common Shares
to the Company and the Stockholders on the terms and conditions set forth in
Section 3.2, which shall include a copy of the applicable Offer and shall set
forth the terms of the proposed sale in reasonable detail, including, without
limitation, the name and address of the prospective buyer, the purchase price
and other terms and conditions of payment (or the basis for determining the
purchase price and other terms and conditions), the date on or about which such
sale is to be consummated, and the number of Common Shares to be sold.
"TRANSFER" shall mean any sale, assignment, pledge, hypothecation,
encumbrance, disposition, transfer (including, without limitation, a transfer by
will or intestate distribution), gift or attempt to create or grant a security
interest in Common Shares, whether voluntary, involuntary, by operation of law
or otherwise.
SECTION 2. GOVERNANCE
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2.1 COMPOSITION OF BOARD. Until the tenth anniversary of the date of this
Agreement, the Stockholders shall take any and all action necessary (including,
without limitation, voting their Common Shares, executing and delivering written
consents of stockholders, and calling special stockholders' meetings) to cause
the Board of Directors of the Company (the "Board") to be comprised as follows:
(a) The number of Directors on the Board shall be not less than six nor
more than fifteen. The Directors shall include:
(i) three individuals designated in writing by Persons holding not
less than a majority of the Common Shares then held by all of the members
of the MTD Group; and
(ii) three individuals designated in writing by Persons holding not
less than a majority of the Common Shares then held by all of the members
of the Shiloh Group.
(b) In the event that a Director so elected resigns from, is removed from,
or otherwise ceases to serve on, the Board, for whatever reason, the vacancy
shall be filled with an individual designated in accordance with paragraph (d),
and, to the extent necessary, the Stockholders shall call a special
stockholders' meeting and vote their Common Shares at such meeting upon the
request of the applicable Group, in order to fill such vacancy.
SECTION 3. RESTRICTIONS ON TRANSFERS OF SHARES
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3.1 RESTRICTION ON TRANSFERS. Except for Transfers of Common Shares made
pursuant to an Offer and in accordance with the provisions of this Section 3,
and Transfers of Common Shares which are excepted from the restrictions on
Transfer contained in this Section 3 by operation of Section 3.3, no stockholder
shall make any Transfer of Shares. Any Transfer of Shares by a stockholder which
is not made in accordance
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with, or which violates any of, the provisions of this Section 3, shall be null
and void and have no effect, and the Company shall not recognize any such
Transfer or recognize the transferee as the holder of such Shares for any
purpose.
3.2 RIGHTS OF FIRST REFUSAL. (a) Any Stockholder desiring to make a
Transfer of all or any portion of his, her or its Common Shares (a "Selling
Stockholder") pursuant to an Offer shall first deliver to the Company and the
other Stockholders a Stockholder's Offer in respect of such Common Shares (the
"Offered Shares").
(b) Each of the Stockholders who is a member of the Group of which the
Selling Stockholder is a member may, within 20 days after receipt of any
Stockholder's Offer, elect, in accordance with Section 3.2(d), to purchase any
or all of the Offered Shares (i) for a purchase price equal to the product of
the Purchase Price and the number of Offered Shares to be purchased by such
Stockholder and (ii) on the payment terms set forth in the Offer. In the event
more than one Stockholder elects to purchase Offered Shares pursuant to this
paragraph (b), the number of Offered Shares purchasable by such stockholders
shall be determined in accordance with the following procedures:
(i) if the Stockholder has elected to purchase a number of Offered
Shares equal to or less than its Proportionate Share of the Offered Shares,
it shall be entitled to purchase the number of the Offered Shares that it
has elected to purchase;
(ii) if Offered Shares remain to be purchased after the allocation
provided in clause (i) above, each stockholder who has elected to purchase
a number of Offered Shares in excess of its Proportionate Share shall be
entitled to purchase a number of such remaining Offered Shares equal to the
lesser of:
(A) the number of Offered Shares which such stockholder has
elected to purchase in excess of its Proportionate Share, or
(B) the same proportion of the total number of such remaining
Offered Shares as the number of Common Shares owned by such
Stockholder bears to the total number of Common Shares owned by the
stockholders who have elected to purchase a number of Offered Shares
in excess of the number of Offered Shares allocated to them under
clause (i) of this paragraph (b); and
(iii) any Offered Shares which remain to be purchased shall be
allocated in accordance with clause (ii) above until either all of the
Offered Shares which the stockholders have elected to purchase have been
allocated or one stockholder remains who has elected to purchase additional
Offered Shares, in which event all of the remaining Offered Shares which
such Stockholder has elected to purchase shall be allocated to it.
(c) In the event that the Stockholders who are members of the Group of
which the Selling Stockholder is a member do not elect to purchase all of the
Offered Shares within the 20-day period specified above, the Company shall give
written notice to the other Stockholders (the "Reoffer Notice") of the number of
Offered Shares available for purchase (the "Reoffered Shares") on or before the
final day of such 20-day period. Each of the other stockholders may, within 10
days after receipt of the Reoffer Notice, elect to purchase all or any of the
Reoffered Shares (i) for a purchase price equal to the product of the Purchase
Price and the number of Reoffered Shares to be purchased by such stockholder and
(ii) on the payment terms set forth in the Offer. In the event more than one of
such other Stockholders elects to purchase Reoffered Shares pursuant to this
paragraph (c), the number of Reoffered Shares purchasable by such other
Stockholders shall be determined by the same procedure as provided in paragraph
(b) of this Section 3.2.
(d) Acceptance of any stockholder's Offer or any offer of Reoffered Shares
shall be evidenced by a writing or writings signed by the Stockholder(s)
accepting same and delivered or mailed by first-class mail, postage prepaid, to
the Selling stockholder within the applicable time period. Each such acceptance
shall specify the number of Common Shares which such Person desires to purchase.
A closing of the purchase
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of the Offered Shares or Reoffered Shares covered by such acceptance shall take
place at the principal office of the Company at 10:00 A.N. on the 40th business
day after the date on which the Company received the Stockholder's Offer, unless
the parties agree on a different place or time. The Purchase Price shall be
payable by bank cashiers check (or any other means acceptable to the Selling
Stockholder) at the closing.
(e) In the event that the other stockholders do not together elect to
purchase all of the Offered Shares within 30 days after the Company's receipt of
such stockholder's Offer, all of the Offered Shares may be Transferred by the
Selling Stockholder to the Person(s) named in the Stockholder's Offer free of
the rights of first refusal set forth in this Section 3.2 within 30 days after
the expiration of such 30 day period, on the terms described in the
Stockholder's Offer and applicable Offer.
(f) The rights of first refusal of the stockholders in this Section 3.2 may
be assigned by any stockholder to the Company or to any Affiliate of such
Stockholder or the Company.
3.3 UNRESTRICTED TRANSFERS. Notwithstanding any other provision of this
Section 3, the following Transfers of Common Shares shall not be subject to the
restrictions on Transfer contained in Section 3.1 or the rights of first refusal
contained in Section 3.2, but shall be subject to the provisions of Section 3.4:
(a) any Transfer of Common Shares by a stockholder to a Person who
immediately prior to such Transfer is a member of such stockholder's Group; or
(b) any Transfer of Common Shares by a stockholder to (i) an Affiliate of
such Stockholder (ii) a Relation of such stockholder or to a trust established
for the benefit of such stockholder and/or a Relation of such Stockholder or
(iii) in the case of a Stockholder which is a trust, to any of the beneficiaries
of such trust;
(c) any Transfer of Common Shares by MTD to any of its Affiliates;
PROVIDED, HOWEVER, that in each case any such transferee shall become a
stockholder for purposes of this Agreement and shall execute and deliver a
counterpart of this Agreement agreeing to be subject to the restrictions and
obligations of a Stockholder hereunder; or
(d) any Transfer of Common Shares pursuant to a sale which is the subject
of a registration statement which has become effective under the Securities Act
of 1933, as amended (the "1933 Act"); or
(e) any Transfer in connection with a merger of the Company with another
Person in which all of the issued and outstanding Common Shares of the Company
are being exchanged for or converted into the same consideration; or
(f) any Transfer by a stockholder of Common Shares which, when taken
together with all prior Transfers to the proposed transferee and its Affiliates,
represents less than 5.0% of the then issued and outstanding Common Shares of
the Company.
3.4 SECURITIES LAW RESTRICTIONS. Notwithstanding any other provision in
this Agreement, but subject to express written waiver by the Company in the
exercise of its good faith and reasonable judgment, no Stockholder shall
Transfer any Common Shares without the registration of the Transfer of such
Common Shares under the 1933 Act or until the Company shall have received such
legal opinions or other evidence that such Transfer is exempt from the
registration requirements under the 1933 Act and applicable state securities
laws as the Company in its good faith and reasonable discretion deems
appropriate in light of the facts and circumstances relating to such proposed
Transfer, together with such representations, warranties and indemnifications
from the transferor and the transferee as the Company in its good faith and
reasonable discretion deems appropriate to confirm the accuracy of the facts and
circumstances that are the basis for any such opinion or other assurances and to
protect the Company and the other stockholders from any liability resulting from
any such Transfer.
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3.5 LEGENDS. All certificates representing Common Shares now owned by the
Stockholders or issued to a Person acquiring Common Shares from a stockholder
pursuant to Section 3.2(d) or 3.3 shall bear the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE AND ANY SHARES THAT MAY BE
ISSUED UPON THE CONVERSION OF SUCH SHARES HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES LAWS.
NEITHER THIS SECURITY NOR ANY PORTION HEREOF OR INTEREST HEREIN MAY BE
SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF UNLESS THE
SAME IS REGISTERED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR
UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE AND THE COMPANY
SHALL HAVE RECEIVED, AT ThE EXPENSE OF THE HOLDER HEREOF, EVIDENCE OF SUCH
EXEMPTION REASONABLY SATISFACTORY TO THE COMPANY (WHICH MAY INCLUDE, AMONG
OTHER THINGS, AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY).
THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON
TRANSFER CONTAINED IN THAT CERTAIN STOCKHOLDERS AGREEMENT DATED AS OF JUNE
22, 1993 TO WHICH THE COMPANY IS A PARTY. A COPY OF SUCH AGREEMENT WILL BE
PROVIDED TO THE HOLDER OF THIS CERTIFICATE UPON WRITTEN REQUEST DELIVERED
TO THE COMPANY.
All certificates evidencing Shares hereafter reissued to a stockholder, when
reissued, shall bear a similar legend.
SECTION 4. GENERAL PROVISIONS
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4.1 WAIVERS AND AMENDMENTS. This Agreement may be amended or modified in
whole or in part only by a writing which makes reference to this Agreement
executed by those Persons holding not less than a majority of the Common shares
held by the members of the MTD Group and those Persons holding not less than a
majority of the Common Shares held by the members of the Shiloh Group; PROVIDED,
HOWEVER, that no such amendment or modification shall increase the obligations
of the Company unless such amendment or modification is in a writing signed by
the Company, and no such amendment or modification shall increase the
obligations of any stockholder unless such amendment or modification is in a
writing signed by such stockholder.
4.2 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and shall
inure to the benefit of the Company, its successors and permitted assigns, and
shall be binding upon and inure to the benefit of the other parties hereto and
their respective heirs, successors and permitted assigns.
4.3 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same instrument.
4.4 NOTICES. All notices, elections and other communications pursuant to
this Agreement shall be made in writing and be deemed to have been duly when
given personally delivered or five days after being sent by registered or
certified mail, return receipt requested, postage prepaid, to (i) the Company at
its principal business address or (ii) to any stockholder at his, her or its
address as shown from time to time on the books and records of the Company. The
Company shall provide each stockholder with a list of all such addresses
promptly upon request.
4.5 ENTIRE AGREEMENT. This Agreement embodies the entire agreement among
the parties in relation to its subject matter.
4.6 GOVERNING LAW. This Agreement shall in all respects be governed by and
construed in accordance with the internal substantive laws of the State of
Delaware without giving effect to the principles of conflicts of law thereof.
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4.7 SEVERABILITY. Each section, subsection and lesser section of this
Agreement constitutes a separate and distinct undertaking, covenant and/or
provision hereof. In the event that any provision of this Agreement shall
finally be determined to be unlawful, all such provisions shall be deemed
severed from this Agreement, but every other provision of this Agreement shall
remain in full force and effect, and in substitution for any such provision held
unlawful, there shall be substituted a provision of similar import reflecting
the original intent of the parties hereto to the extent permissible under law.
4.8 SPECIFIC PERFORMANCE. The parties hereto agree that upon a breach of
any provision of this Agreement a remedy at law would not be adequate, and that
the parties hereto are entitled to injunctive relief and specific performance,
and any other legal or equitable remedies, as remedies for the enforcement of
this Agreement.
4.9 TERMINATION. This Agreement shall terminate and be of no further force
or effect on the date on which either the members of the MTD Group or the
members of the Shiloh Group cease to own at least 10% of the issued and
outstanding Common Shares of the Company.
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IN WITNESS WHEREOF, the Company, MTD and the Original Shiloh Stockholders
have executed this Stockholders Agreement as of the day and year first above
written.
MTD PRODUCTS INC SHILOH INDUSTRIES, INC.
By: /s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxxxx X. Xxxxxxxxxx
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Name: Xxxxx X. Xxxxxxxx Name: Xxxxxx X. Xxxxxxxxxx
Its: President Its: President
ORIGINAL SHILOH STOCKHOLDERS
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XXXXXXXX X. XXXXXXX TRUST XXXXX X. XXXXXXX TRUST
By: The Richland Bank, By: Society Bank & Trust at
as Trustee Mansfield, as Trustee
By: /s/ Xxxxxx Xxxxx By: /s/ X. X. Xxxxxx
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Title: Vice President & Trust Officer Title: Vice President
XXXX X. XXXXXXX TRUST XXXXXXXX X. XXXXXXX TRUST
By: The Richland Bank, By: Society Bank & Trust at
as Trustee Mansfield, as Trustee
By: /s/ Xxxxxx Xxxxx By: /s/ X. X. Xxxxxx
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Title: Vice President & Trust Officer Title: Vice President
/s/ Xxxxxxx X. Xxxxxxx /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx Xxxxxxx X. Xxxxxxx
/s/ Xxxxxxxx X. Xxxxxxx /s/ Xxxxxxxx Xxxxxxx
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Xxxxxxxx X. Xxxxxxx Xxxxxxxx Xxxxxxx
/s/ Xxxxx X. Layacona /s/ Xxxxxx X. Xxxxxx
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Xxxxx X. LaYacona Xxxxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxxxxxxx
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Xxxxxx X. Xxxxxxxxxx
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