SETTLEMENT AGREEMENT
Exhibit 99.1
This
Settlement Agreement (this “Agreement”) is made and entered
into as of July 31, 2007, by
and among Breeze-Eastern Corporation (the “Company”), Tinicum Capital Partners II, L.P., and
Tinicum Capital Partners II Parallel Fund, L.P. (collectively “Tinicum”) and the persons and
entities listed on Exhibit A hereto (collectively, the “Stockholder Group”) (each of the
Company, Tinicum and the Stockholder Group, a “Party” to this Agreement, and collectively, the
“Parties”).
RECITALS
A. The Stockholder Group beneficially owns, in the aggregate, 3,206,007 shares of the
Company’s outstanding common stock, par value $0.01 per share (the “Common Stock”), and on June 18,
2007 filed a preliminary proxy statement with the Securities and Exchange Commission (the
“Commission”) in connection with its intention to solicit proxies (the “Proxy Solicitation”) to
elect four individuals to the Company’s Board of Directors (the “Company Board” or “Board of
Directors”);
B. Tinicum beneficially owns, in the aggregate, 2,471,067 shares of Common Stock;
C. After discussions between representatives of the Company Board and the Stockholder Group,
the Company Board has determined that it is in the best interests of the stockholders of the
Company to nominate for election to the Company Board at the Annual Meeting a slate of eight
persons who have been agreed upon by the Company, Tinicum and the Stockholder Group (the
“Nominees”), with the identity of such persons set forth on Exhibit B hereto;
D. In return, the Parties have agreed that the Stockholder Group shall withdraw its nominees
to the Company Board and terminate the Proxy Solicitation and that neither the Stockholder Group
nor Tinicum will present any nominees or proposals at the Company’s 2007 Annual Meeting of
Stockholders (including any adjournment or postponement thereof, the “Annual Meeting”);
E. The Stockholder Group and Tinicum have each agreed that they shall refrain from submitting
any stockholder proposal or director nominations at the Annual Meeting or at any other meetings of
stockholders which may be held prior to the end of the No Solicitation Period (as defined below)
and shall vote all of their respective Voting Securities and Tinicum Securities (each as defined
below), as the case may be, in favor of the Nominees at the Annual Meeting; and
F. The Company, Tinicum and the Stockholder Group desire, in connection with the foregoing, to
make certain covenants and agreements with one another pursuant to this Agreement.
NOW, THEREFORE, in consideration of the recitals set forth above and the covenants and
agreements set forth below, the Parties hereby agree as follows:
1. Termination of Proxy Solicitation. The Stockholder Group hereby withdraws its nominees to the
Company Board identified in the Stockholder Group’s preliminary proxy statement and shall
immediately terminate the Proxy Solicitation and the Agreement entered into as of April 2, 2007, by
and among, inter alia, Wynnefield Partners Small Cap Value, L.P., and Xxxxxxxxx & Xxxxxx
Incorporated in connection with the Proxy Solicitation. Without limiting the generality of the
foregoing, not later than three business days after the execution of this Agreement, the
Stockholder Group shall notify the staff of the Commission in writing that it has terminated the
Proxy Solicitation and will not be disseminating, or soliciting proxies based off of, the
Stockholder Group’s preliminary proxy statement filed in connection with the Proxy Solicitation.
Promptly following the execution of this Agreement, the Stockholder Group and Tinicum shall each
cause its Schedule 13D with respect to the Company to be amended consistent with the terms of this
Agreement (the “Schedule 13D Amendment”).
2. No Solicitation at Annual Meeting and Prohibition on Other Actions.
No member of the Stockholder Group or Tinicum shall, directly or indirectly:
(a) become a “participant” (as such term is defined in Instruction 3 to Item 4 of Schedule 14A
promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”)) in or assist any third
party in any “solicitation” of “proxies” (as such terms are defined in Rule 14a-1 promulgated under
the Exchange Act) for use at the Annual Meeting (whether or not the solicitation is subject to the
provisions of Rules 14a-3 to 14a-15 and specifically including any solicitation pursuant to Rule
14a-2(b)(1)), make any exempt communication pursuant to Rule 14a-1(l)(2)(iv) or otherwise seek to
advise or influence any person or entity or assist any third party in so advising or influencing
any person or entity with respect to the giving or withholding of any proxy or vote at the Annual
Meeting, other than in favor of the election of the Nominees;
(b) assert, commence or maintain or assist any third party in asserting, commencing or
maintaining any claim, action or proceeding before any court, agency or other governmental
authority (including, without limitation, the Commission and any state securities commissioner)
(i) seeking to enjoin, delay or accelerate the Annual Meeting, (ii) seeking to enjoin the
solicitation of proxies by the Board of Directors for use at the Annual Meeting, or (iii)
alleging that the definitive proxy statement of the Company in connection with the Annual Meeting
(the “Company Proxy Statement”) or any additional Company soliciting materials violates Rule 14a-9
promulgated under the Exchange Act or contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statement contained therein, in light of the
circumstances under which they were made, not misleading;
(c) other than as expressly provided herein, grant any proxy with respect to the Annual
Meeting or deposit any of the Company securities held by the Stockholder Group in a voting trust
or subject them to a voting agreement or other arrangement of similar effect with respect to the
Annual Meeting;
(d) make any proposal (whether pursuant to Rule 14a-8 or outside of Rule 14a-8) for
consideration at the Annual Meeting; or
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(e) participate in or assist any third party in any solicitation of written consents with
regard to the Company prior to the Annual Meeting.
3. No Public Statements or Other Actions Prior to the Completion of the Annual Meeting.
(a) Prior to the completion of the Annual Meeting, except with respect to the press release
provided in Section 10 hereof, neither the Company nor any of its officers, directors, employees,
affiliates or agents shall make any public announcement or statement directly relating to the
Stockholder Group or Tinicum, or the Stockholder Group’s Proxy Solicitation, other than (i) to
describe the terms of this Agreement, including, without limitation, in a Current Report on Form
8-K, the Company Proxy Statement and an amendment to Tinicum’s Schedule 13D, or (ii) as may be
required to comply with applicable Federal and State securities laws, rules and regulations or the
rules and regulations of any stock exchange or stock market on which the Company’s securities are
then listed, quoted or admitted to trading. A draft of any such press release shall be provided to
the Stockholder Group and Tinicum for review and comment within a commercially practicable period
of time prior to publication; provided, however, that nothing herein shall be deemed to cause the
Company to delay the public dissemination or filing with the Commission of information otherwise
required for compliance with applicable law or regulation, including the federal securities laws
and the rules of the American Stock Exchange or any other exchange on which the securities of the
Company are listed.
(b) Except as may be required by their Schedule 13D Amendments, prior to completion of the
Annual Meeting, no member of the Stockholder Group or Tinicum nor any of their respective partners,
officers, directors, employees, affiliates or agents shall make any public announcement or
statement with respect to, or submit a proposal for, or offer of (with or without conditions) any
extraordinary transaction or businesses combination transaction involving, the Company, its
directors or officers, or any of its securities or assets or form, join or in any way participate
in a “group” as defined in Section 13(d)(3) of the Exchange Act in connection with any of the
foregoing.
(c) Nothing in this Agreement shall prohibit or be construed to prohibit the Company, Tinicum
or the Stockholder Group from making any filings with the Commission which any of the foregoing
parties reasonably determines it is required to make.
4. Election of Company Nominees.
(a) Each member of the Stockholder Group shall cause all voting securities held of record or
beneficially by it or any affiliate on the Record Date (as defined below) or over which it has or
shares voting power, whether through beneficial ownership or by means of a proxy provided to such
member or affiliate by the beneficial owner thereof or by means of such member or affiliate serving
as a trustee of a voting trust with respect to which shares of Common Stock are subject (the
“Voting Securities”) and shall use commercially reasonable efforts to cause all voting securities
over which it shares investment discretion and does not have sole voting power (the “Investment
Securities” with the Voting Securities, collectively, the “Securities”) to be present at the Annual
Meeting for quorum purposes and to be voted at the Annual Meeting (i) in favor of election of the
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Nominees; and (ii) against approval of any proposal made in opposition to, or in competition with,
any proposal or Nominee recommended by the Company Board at the Annual Meeting. For purposes of
this Agreement, “affiliate” has the meaning set forth in Rule 12b-2 promulgated by the Commission
under the Exchange Act.
(b) Each Tinicum entity shall cause all voting securities held of record or beneficially by it
or any affiliate on the Record Date (as defined below) or over which it has or shares voting power
(the “Tinicum Securities”) to be present at the Annual Meeting for quorum purposes and to be voted
at the Annual Meeting (i) in favor of election of the Nominees; and (ii) against approval of any
proposal made in opposition to, or in competition with, any proposal or Nominee recommended by the
Company Board at the Annual Meeting.
5. Proxy.
In order to assure the performance of the obligations of the Stockholder Group and Tinicum
hereunder, if requested by the Company, each member of the Stockholder Group and each Tinicum
entity shall provide the Company with an irrevocable proxy authorizing the Company to vote the
Voting Securities and the Tinicum Securities, as applicable, as described above at the Annual
Meeting (the “Proxy”) in the form of Exhibit C hereto. The Company shall have the right to
deliver the Proxy on behalf of the members of the Stockholder Group and Tinicum in the event that
any member of the Stockholder Group or Tinicum does not perform its obligations hereunder. Each
member of the Stockholder Group and Tinicum hereby agrees that any Proxy so delivered shall be
coupled with an interest and therefore shall be irrevocable. Each member of the Stockholder Group
and Tinicum hereby irrevocably revokes any and all proxies given or granted with regard to the
Securities other than as provided in this Agreement or the Proxy and, except to comply with its
voting obligation under Section 4 hereof, will not grant any proxy to any third party in connection
with the Annual Meeting. In no event shall the Company request a proxy to vote the Voting
Securities without requesting a proxy for voting the Tinicum Securities, and vice
versa.
6. Annual Meeting.
(a) The Company Board shall (i) set a date for the Annual Meeting, which date is intended to
be within sixty (60) days of July 25, 2007, the record date (the “Record Date”) established by the
Company Board for the Annual Meeting, and provide notice of said date to its stockholders; (ii)
nominate for election at the Annual Meeting the Nominees; (iii) not change the number of Company
directors, which is currently set at eight; and (iv) shall not by its action present any
issues at the Annual Meeting other than the election of the Nominees and stockholder ratification
of the selection of the Company’s independent auditors.
(b) The Company shall (i) prepare the Company Proxy Statement, which Company Proxy Statement
will set forth the Nominees as the persons nominated by the Company Board for election to the
Company Board; (ii) recommend, and reflect such recommendation in the Company Proxy Statement, a
vote “for” the Nominees at the Annual Meeting; (iii) shall include in the Company Proxy Statement
the proposal to elect the Nominees and no other proposals, with the
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exception of a proposal for stockholder ratification of the selection of the Company’s independent
auditors, which proposal may be made in the discretion of the Company Board; and (iv) provide each
of the Stockholder Group and Tinicum a commercially practicable period of time to review and
comment on the Company Proxy Statement prior to its distribution to the Company’s stockholders and
filing with the Commission.; provided, however, that nothing herein shall be deemed to cause the
Company to delay the public dissemination of information or filing with the Commission otherwise
required for compliance with applicable law or regulation, including the federal securities laws
and the rules of the American Stock Exchange or any other exchange on which the securities of the
Company are listed.
7. Board/Committee Appointments. The Parties hereby agree that the Nominees, if elected to the
Board, at the first meeting of the Board of Directors following the Annual Meeting, which will be
held immediately following the conclusion of the Annual Meeting, shall, acting as a Board, take all
actions necessary and appropriate (a) to effectuate the appointment of (i) each Nominee set forth
on Exhibit D to the offices and positions indicated next to such person’s name, and (ii)
Xxxx Xxxxxxxxx as a consultant to the Board of Directors for the purpose of assisting the Board and
the Company in the transition of audit firms for a term of six (6) months with compensation of not
less than $15,000; and (b) to revise the compensation of the non-employee members of the Board of
Directors so that effective immediately non-employee members of the Board shall receive as their
sole and total compensation for service on the Board annual compensation in the form of restricted
Company stock the number of shares of which shall equal the number of shares determined by dividing
$30,000 by the closing price of the stock on the date of the annual meeting. In furtherance of the
covenants set forth in this section 7, the Parties shall undertake the execution and delivery by
the Nominees, and each of them, of a letter addressed to the Company in the form of Exhibit
E.
8. No Solicitation Period.
During the period commencing with the execution of this Agreement and ending on the earliest to
occur of (each, a “Termination Date”) (a) the date of the Company’s 2008 Annual Meeting of
Stockholders (the “2008 Annual Meeting”) and (b) a material breach by the Company, the Stockholder
Group or Tinicum, or any member thereof, of their respective obligations under this Agreement (the
“No Solicitation Period”), provided however that the breaching party shall continue to remain
subject to the obligations and restrictions set forth herein, neither the Stockholder Group nor
Tinicum, or any member thereof, nor any of their controlled affiliates shall, directly or
indirectly:
(a) become a “participant” (as such term is defined in Instruction 3 to Item 4 of Schedule 14A
promulgated under the Exchange Act) in or assist any third party in any “solicitation” of
“proxies” (as such terms are defined in Rule 14a-1 promulgated under the Exchange Act) for use at
the 2008 Annual Meeting (whether or not the solicitation is subject to the provisions of Rules
14a-3 to 14a-15 and specifically including any solicitation pursuant to Rule 14a-2(b)(1)), make any
exempt communication pursuant to Rule 14a-1(l)(2)(iv) or otherwise seek to advise or influence any
person or entity or assist any third party in so advising or influencing any person or entity with
respect to the giving or withholding of any proxy or vote at any meeting of the Company’s
stockholders held after the Annual Meeting and prior to the Termination Date
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(each, a “Subsequent Stockholder Meeting”) , other than in favor of the election of the nominees
selected by the Board of Directors of the Company for election at the 2008 Annual Meeting;
(b) assert, commence or maintain or assist any third party in asserting, commencing or
maintaining any claim, action or proceeding before any court, agency or other governmental
authority (including, without limitation, the Commission and any state securities commissioner) (i)
seeking to enjoin, delay or accelerate the 2008 Annual Meeting, (ii) seeking to enjoin the
solicitation of proxies by the Board of Directors for use at the 2008 Annual Meeting, or (iii)
alleging that the definitive proxy statement of the Company for mailing to stockholders in
connection with the 2008 Annual Meeting (the “2008 Company Proxy Statement”) or any additional
Company soliciting materials violates Rule 14a-9 or contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statement contained therein, in light
of the circumstances under which they were made, not misleading;
(c) other than as expressly provided herein, grant any proxy with respect to the 2008 Annual
Meeting or deposit any of the Voting Securities or the Tinicum Securities held by the Stockholder
Group or Tinicum, as the case may be, in a voting trust or subject them to a voting agreement or
other arrangement of similar effect with respect to a Subsequent Stockholder Meeting;
(d) make any proposal (whether pursuant to Rule 14a-8 or outside of Rule 14a-8) for
consideration at Subsequent Stockholder Meeting; or
(e) participate in or assist any third party in any solicitation of written consents with
regard to the Company prior to Subsequent Stockholder Meeting.
9. Mutual Release. In consideration of the mutual promises and covenants contained herein,
and after consultation with their respective counsel, the Company, Tinicum, the Stockholder Group,
and each of them, on behalf of themselves and for all of their past and present affiliated,
associated, related, parent and subsidiary companies, joint venturers and partnerships, successors,
assigns, and the respective owners, officers, directors, partners, agents, employees, shareholders,
consultants and attorneys of each of them (collectively “Affiliated Persons”), irrevocably and
unconditionally release, acquit and forever discharge each of the others and all of their
Affiliated Persons, from any and all causes of action, claims, actions, rights, judgments,
obligations, damages, demands, losses, controversies, contentions, complaints, promises,
accountings, bonds, bills, debts, dues, sums of money, expenses, specialties and fees and costs
(whether direct, indirect or consequential, incidental or otherwise including, without limitation,
attorney’s fees or court costs, of whatever nature) incurred in connection therewith of any kind
whatsoever, whether known or unknown, suspected or unsuspected, in their own right and
derivatively, in law or in equity or liabilities of whatever kind or character (the “Claims”),
which the Parties have or may have against one another based upon events occurring prior to the
date of the execution of this Agreement arising out of or related to the proxy solicitations being
conducted by each of the Company and the Stockholder Group in connection with the Annual Meeting,
as well as the purchase and ownership of the Common Stock by each of Tinicum and the Stockholder
Group (the “Released Matters”). The Parties acknowledge that this general release of claims
includes, but is not limited to, any and all statutory and common law claims for, among other
things, fraud and breach of fiduciary duty based upon events occurring prior to the date of the
execution of this Agreement. The Parties intend that the foregoing release be broad with respect to
the Released Matters, provided, however, this release and waiver of Claims shall not include claims
to enforce the terms of this Agreement;
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and provided further that nothing in the foregoing release shall be deemed or construed, now or
hereafter, as limiting in any manner any right of indemnification inuring to the benefit of any
director or former director of the Company arising under the Certificate of Incorporation, as
amended, of the Company, the Company’s by-laws or otherwise.
10. Press Release.
(a) Promptly following the execution of this Agreement, the Company, Tinicum and the
Stockholder Group shall jointly issue a mutually agreeable press release announcing the terms of
this Agreement, in the form attached hereto as Exhibit F.
(b) During the No Solicitation Period, none of the Company, Tinicum or the Stockholder Group,
nor any of their respective affiliates will, directly or indirectly, make or issue or cause to be
made or issued any disclosure, announcement or statement (including without limitation the filing
of any document or report with the Commission or any other governmental agency or any disclosure to
any journalist, member of the media or securities analyst) concerning the other Parties or any of
their controlled affiliates, which disparages such other Party or any of its controlled affiliates
as individuals (provided that each Party, after consultation with counsel, may make any disclosure
that it determines in good faith is required to be made under applicable law).
11. Fees and Expenses. The Company agrees to reimburse the Stockholder Group its documented
out-of-pocket fees and expenses in connection with the negotiation of this Agreement, the
preparation and filing of the 13D Amendment, and the preparation and filing of its preliminary
proxy statement, in an amount not to exceed $125,000 in the aggregate and to reimburse Tinicum its
documented out-of-pocket fees and expenses in connection with the review of the Stockholder Group’s
preliminary proxy statement, the negotiation of this Agreement and the preparation and filing of an
amendment to its Schedule 13D in an amount not to exceed $25,000 in the aggregate. Except as
expressly provided herein, each Party shall pay its own expenses incident to this Agreement and the
transactions contemplated herein.
12. Miscellaneous
(a) Each of the Parties agrees that it will cause its controlled affiliates to comply with
the terms of this Agreement. In no event shall any member of the Stockholder Group, or its
affiliates be liable for any breach of this Agreement by any other member of the Stockholder Group,
or its affiliates.
(b) All notices, consents, requests, instructions, approvals and other communications
provided for herein and all legal process in regard hereto shall be in writing and shall be deemed
validly given, made or served, if (i) given by telecopy, when such telecopy is transmitted to the
telecopy number set forth below and the appropriate confirmation is received or (ii) if given by
any other means, when actually received during normal business hours at the address specified in
Exhibit G or such other address as may be given pursuant to this notice provision.
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(c) This Agreement (including the Exhibits hereto) constitutes the entire agreement between
the Parties with respect to the subject matter hereof and supersedes all prior agreements
understandings, both written and oral, among the parties with respect to the subject matter hereof.
No modifications of this Agreement can be made except in writing signed by an authorized
representative of each the Company, Tinicum and the Stockholder Group. This Agreement shall inure
to the benefit of and be binding upon the parties hereto and their respective successors and
assigns, and nothing in this Agreement is intended to confer on any person other than the parties
hereto or their respective successors and assigns, any rights, remedies, obligations or liabilities
under or by reason of this Agreement.
(d) Any provision of this Agreement may be amended or waived if, and only if, such amendment
or waiver is in writing and signed (in the case of an amendment) by each Party hereto or (in the
case of a waiver) by the Party against whom the waiver is to be effective. No failure or delay by
any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof
nor shall any single or partial exercise thereof preclude any other or further exercise thereof or
the exercise of any other right, power or privilege.
(e) If at any time subsequent to the date hereof, any provision of this Agreement shall be
held by any court of competent jurisdiction to be illegal, void or unenforceable, such provision
shall be of no force and effect, but the illegality or unenforceability of such provision shall
have no effect upon the legality or enforceability of any other provision of this Agreement.
(f) Each of the Parties acknowledges and agrees that irreparable injury to the other Parties
hereto would occur in the event any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached and that such injury would not be
adequately compensable in damages. It is accordingly agreed by each of the Parties that a Party so
moving (the “Moving Party”) shall each be entitled to seek specific enforcement of, and injunctive
relief to prevent any violation of, the terms hereof and the other Parties hereto will not take
action, directly or indirectly, in opposition to the Moving Party seeking such relief on the
grounds that any other remedy or relief is available at law or in equity.
(g) This Agreement shall be governed by and construed and enforced in accordance with the
laws of the State of Delaware without reference to the conflict of laws principles thereof. Each of
the Parties hereto irrevocably agrees that any legal action or proceeding with respect to this
Agreement and the rights and obligations arising hereunder, or for recognition and enforcement of
any judgment in respect of this Agreement and the rights and obligations arising hereunder brought
by the other party hereto or its successors or assigns, shall be brought and determined exclusively
in the Delaware Court of Chancery and any state appellate court therefrom within the State of
Delaware (or, if the Delaware Court of Chancery declines to accept jurisdiction over a particular
matter, any state or federal court within the State of Delaware).
(h) This Agreement may be executed in one or more counterparts which together shall
constitute a single agreement.
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[SIGNATURES FOLLOW ON THE NEXT PAGE]
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IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement, or caused the same
to be executed by its duly authorized representative, as of the date first above written.
BREEZE-EASTERN CORPORATION |
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By: | /s/ Xxxxxx L.G. Xxxxx | ||||
Xxxxxx X. X. Xxxxx | |||||
President and Chief Executive Officer | |||||
TINICUM CAPITAL PARTNERS II, L.P. |
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By: | TINICUM LANTERN, LLC | ||||
Its: | General Partner |
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By: | /s/ Xxxxxxx X. Xxxxxxxx | ||||
Name: | Xxxxxxx X. Xxxxxxxx | ||||
TINICUM CAPITAL PARTNERS PARALLEL FUND II, L.P. |
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By: | TINICUM LANTERN, LLC | ||||
Its: | General Partner |
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By: | /s/ Xxxxxxx X. Xxxxxxxx | ||||
Name: | Xxxxxxx X. Xxxxxxxx | ||||
WYNNEFIELD PARTNERS SMALL CAP VALUE, L.P. |
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By: Wynnefield Capital Management, LLC, its General Partner |
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By: | /s/ Xxxxxx Xxxx | ||||
Xxxxxx Xxxx, Co-Managing Member | |||||
WYNNEFIELD PARTNERS SMALL CAP VALUE, L.P., I |
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By: Wynnefield Capital Management, LLC, its General Partner |
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By: | /s/ Xxxxxx Xxxx | ||||
Xxxxxx Xxxx, Co-Managing Member | |||||
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WYNNEFIELD SMALL CAP VALUE OFFSHORE FUND, LTD. |
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By: | By Wynnefield Capital, Inc., | |||
its Investment Manager |
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By: | /s/ Xxxxxx Xxxx | |||
Xxxxxx Xxxx, President | ||||
WYNNEFIELD CAPITAL MANAGEMENT, LLC |
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By: | /s/ Xxxxxx Xxxx | |||
Xxxxxx Xxxx, Co-Managing Member | ||||
WYNNEFIELD CAPITAL, INC. |
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By: | /s/ Xxxxxx Xxxx | |||
Xxxxxx Xxxx, President | ||||
CHANNEL PARTNERSHIP II, L.P. |
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By: | /s/ Xxxxxx Xxxx | |||
Xxxxxx Xxxx, General Partner | ||||
/s/ Xxxxxx Xxxx | ||||
Xxxxxx Xxxx, Individually | ||||
/s/ Xxxxxx X. Xxxxxx | ||||
Xxxxxx X. Xxxxxx, Individually | ||||
XXXXXXXXX & XXXXXX INCORPORATED |
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By: | /s/ Xxxxxx X. Xxxxxxxxx | |||
Xxxxxx X. Xxxxxxxxx, Chairman | ||||
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XXXXXXXXX & XXXXXX ASSET MANAGEMENT, LLC |
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By: | /s/ Xxxxxx X. Xxxxxxxxx | |||
Xxxxxx X. Xxxxxxxxx, Managing Director | ||||
XXXXXXXXX & XXXXXX CAPITAL APPRECIATION, LLC |
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By: | /s/ Xxxxxx X. Xxxxxxxxx | |||
Xxxxxx X. Xxxxxxxxx, Managing Director | ||||
/s/ Xxxxxx X. Xxxxxxxxx | ||||
Xxxxxx X. Xxxxxxxxx, Individually | ||||
/s/ Xxx X. Xxxxxx | ||||
Xxx X. Xxxxxx, Individually | ||||
/s/ Xxxxxx X. Xxxx | ||||
Xxxxxx X. Xxxx, Individually | ||||
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EXHIBIT A
STOCKHOLDER GROUP
Wynnefield Partners Small Cap Value, L.P.
Wynnefield Partners Small Cap Value, L.P. I
Wynnefield Small Cap Value Offshore Fund, Ltd.
Wynnefield Capital Management, LLC
Stockholder Capital, Inc.
Channel Partnership II, L.P.
Xxxxxx Xxxx
Xxxxxx X. Xxxxxx
Xxxxxxxxx & Xxxxxx Incorporated
Xxxxxxxxx & Xxxxxx Asset Management, LLC
Xxxxxxxxx & Xxxxxx Capital Appreciation
Xxxxxx X. Xxxxxxxxx
Xxx X. Xxxxxx
Xxxxxx X. Xxxx
Wynnefield Partners Small Cap Value, L.P. I
Wynnefield Small Cap Value Offshore Fund, Ltd.
Wynnefield Capital Management, LLC
Stockholder Capital, Inc.
Channel Partnership II, L.P.
Xxxxxx Xxxx
Xxxxxx X. Xxxxxx
Xxxxxxxxx & Xxxxxx Incorporated
Xxxxxxxxx & Xxxxxx Asset Management, LLC
Xxxxxxxxx & Xxxxxx Capital Appreciation
Xxxxxx X. Xxxxxxxxx
Xxx X. Xxxxxx
Xxxxxx X. Xxxx
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EXHIBIT B
NOMINEES
Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxx
Xxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
Xxxxxxxxx Xxxxxxxxx
Xxxxxx X. X. Xxxxx
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EXHIBIT C
IRREVOCABLE PROXY
The undersigned hereby revokes any and all prior proxies and consents and hereby irrevocably
appoints and constitutes Xxxxxx X. X. Xxxxx, Xxxxxx X. Xxxxxxx and Xxxxxx X. Xxxxxx, and each of
them, with full power of substitution, as my proxy (a) to vote the shares of Breeze-Eastern
Corporation (the “Company”) Common Stock held of record or beneficially by it or any affiliate or
over which it has or shares voting power (the “Shares”) held by the undersigned at the 2007 Annual
Meeting of Stockholders of the Company currently anticipated to be held on or before September 24,
2007, including any adjournments or postponements thereof, (the “Annual Meeting”) and/or (b) to
execute and deliver any stockholder consent in lieu thereof, as in either case any one of them may
determine in their sole discretion in order to (i) revoke all prior proxies or consents given by
the undersigned with respect to the Shares, and (ii) to cause the Shares to be represented at the
Meeting and to be voted at the Meeting in favor of the “Nominees” (as such term is defined in the
Settlement Agreement, dated as of July 31, 2007, among the Company, the undersigned and the other
parties thereto). The proxy authority contained herein shall be deemed to be coupled with an
interest and shall be irrevocable, subject to the terms and conditions and limitations of the
Settlement Agreement. This proxy shall survive my death or incapacity in the case of an individual,
and, dissolution, bankruptcy, liquidation or change in control in the case of an entity, during the
term hereof, may not be revoked by any guardian or other personal representative in the case of an
individual or trustee or receiver in the case of an entity, for any reason whatsoever.
IN WITNESS WHEREOF, the undersigned has executed this proxy or caused its duly authorized
representative to execute this proxy as of the date written below.
WITNESS:
[name] | ||||
14
EXHIBIT D
BOARD/COMMITTEE APPOINTMENTS
Chairman of the Board:
Xxxxxxx X. Xxxxx
Governance and Nominating Committee:
Chair: Xxxxxxx X. Xxxxxxxx
Membership: Xxxxxxxxx Xxxxxxxxx, Xxxxxxx X. Xxxxxx and Xxxxxxx X. Xxxxxxxx
Audit Committee:
Chair: Xxxxxxxxx. Xxxxxxxxx
Membership: Xxx X. Xxxxxx* and Xxxxxxx X. Xxxxxx
*Subject to confirmation that Xx. Xxxxxx meets the requirement of independence to be
eligible to serve as a member of the Audit Committee in accordance with the rules of the
American Stock Exchange, and in lieu thereof Xxxxxxx X. Xxxxxxxx
Strategic Planning Committee:
Chair: Xxxxxxx X. Xxxxxx
Membership: Xxxxxxx X. Xxxxxxxx, Xxxxxxx X. Xxxxxxxx and Xxxxxxx X. Xxxxxxxx
Incentive and Compensation Committee:
Chair: Xxxxxxx X. Xxxxxxxx
Membership: Xxx X. Xxxxxx, Xxxxxxxxx Xxxxxxxxx and Xxxxxxx X. Xxxxx
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EXHIBIT E
FORM OF NOMINEE LETTER
FORM OF NOMINEE LETTER
July 30, 2007
Breeze-Eastern Corporation
000 Xxxxxxx Xxxxxx
Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, General Counsel
000 Xxxxxxx Xxxxxx
Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, General Counsel
To whom it may concern:
The undersigned hereby acknowledges that I have been or will be nominated for election to the Board
of Directors of Breeze-Eastern Corporation (the “Company”) at its upcoming 2007 Annual Meeting
(the “Meeting”) of Stockholders pursuant to a Settlement Agreement by and among the Company
and certain of its major stockholders (the “Agreement”).
I hereby consent to such nomination, to serve if elected and to the inclusion of my name and
relevant biographical information in the Company’s proxy materials relating to the Meeting and its
other required filings with the Securities and Exchange Commission. I further agree to vote any
shares of Company common stock that I beneficially own on the record date for the election of the
Nominees named in the Company’s proxy materials relative to the Meeting.
I have reviewed the covenants set forth in Section 7 of the Agreement (including Exhibit D thereto)
with respect to Company Board of Director appointments, committee chairs and committee membership,
the appointment of Xxxx Xxxxxxxxx as a consultant upon the terms set out therein, and the reduction
of annual non-employee Board of Director compensation to $30,000 payable in restricted stock of the
Company. I hereby agree to support such appointments and actions, subject to my election as a
director of the Company.
Sincerely,
Name:
Date:
Acknowledged and agreed:
BREEZE-EASTERN CORPORATION
By: | ||||
Xxxxxx X. Xxxxxx, | ||||
Executive Vice President, General Counsel and Secretary | ||||
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EXHIBIT F
FORM OF PRESS RELEASE
PROPOSED PRESS RELEASE
[FOR IMMEDIATE DISTRIBUTION]
Contact: | Xxxxxx X.X. Xxxxx President and CEO |
Phone: 908/000-0000
BREEZE-EASTERN ANNOUNCES BOARD NOMINEES FOR ANNUAL MEETING
— Company Settles Threatened Proxy Contest
— Company Settles Threatened Proxy Contest
Union, New Jersey — July 31, 2007 — Breeze-Eastern Corporation (AMEX:BZC) today announced
that it has entered into an agreement with certain of its major stockholders with respect to the
slate of nominees to be proposed by the company for election as directors at the company’s 2007
annual meeting. Under the terms of a Settlement Agreement dated as of
July 31, 2007, by and among
the company, Tinicum Capital Partners II, L.P. and its affiliates (“Tinicum”), and a stockholder
group consisting primarily of Wynnefield Partners Small Cap Value, L.P., Xxxxxxxxx & Xxxxxx
Incorporated, and their respective affiliated entities and persons (collectively, the “Stockholder
Group”), the nominees to be named in the company’s proxy materials for election to the company’s
eight member board will be current directors Xxxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxxxx and Xxxxxx X.
X. Xxxxx, and new nominees Xxxxxxx X. Xxxxxxxx, Xxxxxxx X. Xxxxx, Xxx X. Xxxxxx, Xxxxxxx X.
Xxxxxxxx and Xxxxxxxxx Xxxxxxxxx (collectively, the “Nominees”). Messrs. Alderman, Harris,
Saracheck and Xxxxxxxxx previously had been proposed as nominees to the company board by the
Stockholder Group in a preliminary proxy statement filed with the Securities and Exchange
Commission (“SEC”). Messrs. Xxxxx and Xxxxxxxx are affiliated with Tinicum.
The Agreement further provides that the Stockholder Group will withdraw its nominees to the company
Board and terminate its proxy solicitation. The members of the Stockholder Group and Tinicum have
further agreed to refrain from submitting any stockholder proposal or director nominations at the
2007 annual meeting and at any other meetings of company stockholders which may be held prior to
and including the company’s 2008 annual meeting, subject to certain conditions. As of the date of
the Settlement Agreement, the members of the Stockholder Group
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beneficially owned, in the
aggregate, 3,206,007 shares, or 34.4%, of the company’s common stock and Tinicum beneficially
owned 2,471,067 shares, or 26.5% of the company’s common stock. The Company also agreed to
reimburse certain out-of-pocket expenses of the Stockholder Group and Tinicum.
The Settlement Agreement provides that the company will recommend, and reflect such recommendation
in its definitive proxy statement, a vote “for” the Nominees at the 2007 annual meeting which will
be held within 60 days of the previously announced record date of July 25, 2007.
Under the Settlement Agreement, the members of the Stockholder Group and Tinicum have agreed to
cause all shares of company common stock held of record or beneficially owned by them or any
affiliate on the record date, with respect to which they have shared or sole voting power, to be
present at the 2007 annual meeting for quorum purposes and to be voted at the 2007 annual meeting
in favor of the election of the Nominees and against any proposal made in opposition to, or in
competition with, any proposal or Nominee recommended by the company Board at the annual meeting.
In addition, each member of the Stockholder Group is obligated to use commercially reasonable
efforts to cause all shares of common stock with respect to which such member shares investment
discretion and does not have sole voting power to be present at the annual meeting for quorum
purposes and to be voted in the manner described above.
The summary of the terms of the Settlement Agreement as set forth in this press release is
qualified in its entirety by reference to the Settlement Agreement, a copy of which is being filed
by the company with the SEC, as an exhibit to its Current Report on Form 8-K, and which is
available on the SEC website at xxx.xxx.xxx and also available free of charge by directing a
request to Breeze-Eastern Corporation, 000 Xxxxxxx Xxxxxx, Xxxxx, Xxx Xxxxxx, 00000, Attention:
Secretary.
The company plans to file with the SEC and mail to its stockholders a proxy statement in connection
with its 2007 annual meeting, and advises its stockholders to read the proxy statement relating to
the annual meeting when it becomes available because it will contain important information.
Stockholders may obtain a free copy of the proxy statement and any other relevant documents (when
available) that the company files with the SEC at the SEC’s web site at xxx.xxx.xxx. The proxy
statement and these other documents, when available, may also be obtained free of charge from the
company by directing a request to Breeze-Eastern Corporation, 000 Xxxxxxx Xxxxxx, Xxxxx, XX 00000,
Attention: Secretary.
The company, its directors and named executive officers may be deemed to be participants in the
solicitation of the company’s stockholders in connection with the annual meeting. Stockholders may
obtain information regarding the names, affiliations and interests of such individuals in the
company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2007 and in the company’s
definitive proxy statement with respect to its 2006 annual meeting, each of which is filed with the
SEC, and (when available) in the company’s definitive proxy statement with respect to the 2007
annual meeting that the company will file with the SEC. To the extent holdings of the company’s equity
securities by such persons have changed since the information reflected in the foregoing documents,
such changes have been reflected on Statements of Changes in Beneficial Ownership of Securities on
Form 4 filed with the SEC.
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INFORMATION ABOUT FORWARD-LOOKING STATEMENTS
Certain statements in this press release constitute “forward-looking statements” within the meaning
of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended (the
“Acts”). Any statements contained herein that are not statements of historical fact are deemed to
be forward-looking statements.
The forward-looking statements in this press release are based on current beliefs, estimates and
assumptions concerning the operations, future results, and prospects of the company. As actual
operations and results may materially differ from those assumed in forward-looking statements,
there is no assurance that forward-looking statements will prove to be accurate. Forward-looking
statements are subject to the safe harbors created in the Acts.
Any number of factors could affect future operations and results, including, without limitation,
competition from other companies; changes in applicable laws, rules and regulations affecting the
company in the locations in which it conducts its business; the availability of equity and/or debt
financing in the amounts and on the terms necessary to support the company’s future business;
interest rate trends; determination by the company to dispose of or acquire additional assets;
general industry and economic conditions; events impacting the U.S. and world financial markets and
economies; and those specific risks that are discussed in the company’s previously filed Annual
Report on Form 10-K for the fiscal year ended March 31, 2007.
The company undertakes no obligation to update publicly any forward-looking statements, whether as
a result of new information or future events.
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EXHIBIT G
ADDRESSES FOR NOTICE
if to the Company:
Breeze-Eastern Corporation
000 Xxxxxxx Xxxxxx
Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, General Counsel
Facsimile No.: (000) 000-0000
Email: xxxxxxx@xxxxxx-xxxxxxx.xxx
000 Xxxxxxx Xxxxxx
Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, General Counsel
Facsimile No.: (000) 000-0000
Email: xxxxxxx@xxxxxx-xxxxxxx.xxx
with a copy to:
Xxxx Xxxxxx & Parks LLP
000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, XX 00000
Attention: F. Xxxxxx X’Xxxxx, Esq.
Facsimile No.: (000) 000-0000
Email: xxxxxxxx@xxxxxxx.xxx
000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, XX 00000
Attention: F. Xxxxxx X’Xxxxx, Esq.
Facsimile No.: (000) 000-0000
Email: xxxxxxxx@xxxxxxx.xxx
if to Tinicum:
Tinicum Capital Partners II, L.P.
&
Tinicum Capital Partners Parallel Fund II, L.P.
c/o Tinicum Incorporated
Attention: Xxxx Xxxxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Email: xxxxxxxxxxx@xxxxxxx.xxx
&
Tinicum Capital Partners Parallel Fund II, L.P.
c/o Tinicum Incorporated
Attention: Xxxx Xxxxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Email: xxxxxxxxxxx@xxxxxxx.xxx
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Fax: (000) 000-0000
Email: xxxxxxxx@xxxxxxx.xxx
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Fax: (000) 000-0000
Email: xxxxxxxx@xxxxxxx.xxx
20
if to the Stockholder Group:
Wynnefield Capital, Inc.
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxx
Facsimile: (000) 000-0000
Email: xxxxx@Xxxxxxxxxxxxxxxxx.xxx
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxx
Facsimile: (000) 000-0000
Email: xxxxx@Xxxxxxxxxxxxxxxxx.xxx
with a copy to:
Xxxx Xxxxxxx, P.C.
1350 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx
Fax: (000) 000-0000
E-mail: Xxxxxxxx@xxxxxxxxxxx.xxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx
Fax: (000) 000-0000
E-mail: Xxxxxxxx@xxxxxxxxxxx.xxx
21