MANAGEMENT STOCKHOLDERS AGREEMENT
This Management Stockholders Agreement (the "Agreement") is made as of
December __, 1992 by and among Xxxxxxx Engineering Acquisition Co., Inc., a
Delaware corporation (the "Company"), Connector Holding Company, a Delaware
corporation ("Buyer"), Connector Acquisition Company, a Delaware corporation
("Buyer Sub"), Oak Industries Inc., a Delaware corporation ("Oak"), and each
of Tyler Capital Fund, L.P., Tyler Massachusetts, L.P., Tyler International,
L.P.-II, BCIP Associates and BCIP Trust Associates, L.P. (collectively, the
"Investors") and each of Xxxxxx X. Xxxxx, the Xxxxxxxxx Family Trust dated
December 27, 1989, Xxxxxx X. Xxxxxxxx and Xxxxxx X. Xxxxxxx (each a
"Management Stockholder," collectively the "Management Stockholders" and,
together with Buyer, collectively referred to herein as the "Stockholders").
Recitals
1. The Stockholders own all of the issued and outstanding shares of the
Company's Common Stock, $.01 par value (the "Common Stock").
2. Reference is made to a Stock Purchase Agreement dated as of December 22,
1992 (the "Purchase Agreement") among the Company, Xxxxxxx Engineering Co.,
Inc., a Delaware corporation and a wholly-owned subsidiary of the Company
("Xxxxxxx"), Buyer, Buyer Sub and the stockholders of the Company (and as to
which Oak and the Investors have entered into a limited guaranty), pursuant to
which the Buyer and Buyer Sub will purchase from the stockholders of the
Company all of issued and outstanding shares of capital stock and rights to
purchase the same (other than the Retained Shares, as such term is defined in
the Purchase Agreement). Immediately following the closing of such stock
purchase, Buyer Sub and Xxxxxxx will be merged with and into the Company, and
Buyer and the Management Stockholders will hold all of the issued and
outstanding shares of the Common Stock.
3. Reference is also made to a Stockholders Agreement (the "Investors
Stockholders Agreement") among Buyer, Oak and each of the Investors pursuant
to which, among other things, the Investors have been granted a put option to
sell their shares of common stock of Buyer to Oak in accordance with the
provisions contained in Section 3 of the Investors Stockholders Agreement.
4. The parties believe that it is in the best interests of the Company and
the Stockholders (i) to provide for certain rights and obligations of the
Stockholders with respect to the election of directors of the Company, (ii) to
provide for certain rights and obligations of the Stockholders with respect to
the sale of shares of Common Stock and (iii) to set forth their agreements on
certain other matters.
Agreement
Now, therefore, the parties hereto hereby agree as follows:
DEFINITIONS.
"Effective Date" shall mean the date on which the merger of Buyer Sub with and
into the Company is consummated.
"Fair Market Value" shall mean the market value, per share, of the Common
Stock as determined in accordance with Section 4.3.
"Management Majority Holders" shall mean, as of any date, the holders of a
majority of the Management Shares outstanding on such date.
"Management Shares" shall mean all shares of Common Stock originally issued
to, or issued with respect to shares originally issued to, or held by, the
Management Stockholders.
"Management Stock Options" shall mean options to purchase shares of Oak common
stock granted to each Management Stockholder pursuant to a Management Stock
Option Plan.
"Person" shall mean any individual, partnership, corporation, company,
association, trust, joint venture, unincorporated organization, entity or
division, or any government, governmental department or agency or political
subdivision thereof.
"Shares" shall mean all Common Stock held by Buyer and the Management
Stockholders.
"Total Transaction Value" shall mean the aggregate cash purchase price payable
to the holders of the Shares pursuant to an Outside Offer pursuant to Section
4.6.
VOTING AGREEMENT.
Voting. Each holder of Shares hereby agrees to cast all votes to which such
holder is entitled in respect of the Shares, whether at any annual or special
meeting, by written consent or otherwise, as follows:
Number of Directors. To fix the number of directors of the Company at six
(6).
Election of Directors. (i) To elect as directors of the Company five (5)
persons, if any, who shall have been nominated by Buyer in a written notice
delivered to all of the holders of Shares (the "Buyer Directors"), and (ii) to
elect as a director of the Company one person, if any, who shall have been
nominated by the Management Majority Holders in a written notice delivered to
all of the holders of Shares (the "Management Directors").
Successors. No Buyer Director may be removed without the consent of Buyer.
No Management Director may be removed without the consent of the Management
Majority Holders. In the event a director shall cease to serve for any
reason, then, in the case of a Buyer Director, the Buyer shall have the right
to designate a successor, and in the case of the Management Director the
Management Majority Holders shall have the right to designate a successor.
Each holder of Shares shall, upon receipt of a written notice, identifying
such designee, promptly take all action necessary to cause the appointment of
such designee to the Company's board of directors pursuant to the Company's
By-laws and Certificate of Incorporation.
The Company. The Company agrees not to give effect or permit any subsidiary
to give effect to any action by any holder of Shares or any other Person which
is in contravention of this Section 2.
Period. The provisions of this Section 2 shall expire on the later of (i) the
tenth anniversary of the Effective Date and (ii) the date to which the
effectiveness of this Section 2 may have been extended by amendment hereof in
accordance with Section 8.2; provided, however, that such expiration shall not
affect any liability for breach prior to expiration. To the extent permitted
by law, each holder of Shares agrees from time to time, at the request of any
holder of Shares, to amend this Section 2 to extend the effectiveness of this
Section 2 to a date not later than the tenth anniversary of the date of such
request. Notwithstanding the foregoing, the provisions of this Section 2
shall expire on the date on which the Management Stockholders cease to own any
Shares.
TRANSFER RIGHTS.
Transfer of Management Shares. Except as otherwise expressly permitted by
this Agreement, no holder of Management Shares shall sell, pledge, assign,
encumber or otherwise transfer or dispose of any of such Shares to any other
Person, whether directly, indirectly, by operation of law or otherwise;
provided, however, that a Management Stockholder may at any time transfer any
Management Shares to another Management Stockholder; and provided, further,
that a Management Stockholder may pledge his shares to the Senior Lender (as
that term is defined in the Purchase Agreement), it being understood, however,
that the Senior Lender shall in no event (whether as a result of the pledge or
any foreclosure thereunder) acquire or assume any rights or obligations under
this Agreement.
OFFER AND CALL RIGHTS.
Right to Offer Management Shares to Oak. A Management Stockholder, or his
estate, heirs, devisees, executor or representative, as the case may be (the
"Stockholder's Estate"), may, at any time, by 90 days prior written notice
given by such Management Stockholder or Stockholder's Estate, as the case may
be, to Oak (the "Offer Notice"), offer to sell to Oak, and Oak may, at its
option, elect to purchase from such Management Stockholder or the
Stockholder's Estate, as the case may be, at a purchase price per share equal
to Fair Market Value, all of the Management Shares held by such Management
Stockholder or such Stockholder's Estate. If within 30 days after the final
determination of the Fair Market Value of such Management Shares pursuant to
Section 4.3 Oak elects to purchase such Management Shares, then the sale and
purchase shall be consummated in accordance with the terms of Section 4.4. If
a Management Stockholder or the Stockholder's Estate, as the case may be,
offers his Management Shares to Oak pursuant to this Section 4.1 and Oak does
not purchase such Management Shares, such Management Stockholder or the
Stockholder's Estate, as the case may be, may (a) as permitted by Section 3.1
hereof, at any time sell or transfer such Management Shares to another
Management Stockholder, (b) at any time after the date which is three (3)
years after the Effective Date, apply the Management Shares to the exercise of
his Management Stock Option, subject to and in accordance with Section 4.5 or
(c) at any time after the date which is six (6) years after the Effective
Date, exercise his rights under Section 4.6.
Right to "Call" Management Shares. If a Management Stockholder's employment
with the Company is terminated "for cause" (as such term is defined in his
Employment Agreement with the Company) (a "Call Event"), then each other
Management Stockholder who is then employed by the Company (each an
"Interested Management Stockholder" and together "Interested Management
Stockholders") may at his option, by notice to all of the Management
Stockholders and Oak delivered within thirty (30) days after the occurrence of
the Call Event (the "First Call Notice"), elect to purchase from such
Management Stockholder or the Stockholder's Estate, as the case may be, and
such Management Stockholder or such Stockholder's Estate, as the case may be,
hereby agrees to sell to the Interested Management Stockholders, at a purchase
price per share equal to Fair Market Value, any or all of the Shares ("Option
Shares") held by such Management Stockholder or such Stockholder's Estate, as
the case may be. If there is more than one Interested Management Stockholder,
the obligation of the Management Stockholder or such Stockholder's Estate, as
the case may be, to sell the Option Shares, and the obligation of the
Interested Management Stockholders to buy the Option Shares, shall be divided
among the Interested Management Stockholders as the Interested Management
Stockholders may agree among themselves or, if they fail to agree on or before
the Call Closing Date (as defined in Section 4.4.2), pro rata in accordance
with the number of Shares then held by them. If the Interested Management
Stockholders do not elect to purchase all of the Shares of such Management
Stockholder within such thirty (30) day period, then Oak may, by notice to the
Management Stockholder or such Stockholder's Estate, as the case may be,
delivered within sixty (60) days after the occurrence of the Call Event
("Second Call Notice"), elect to purchase from such Management Stockholder or
such Stockholder's Estate, as the case may be, and such Management Stockholder
or such Stockholder's Estate, as the case may be, hereby agrees to sell to Oak
at a purchase price per share equal to the Fair Market Value determined in
connection with the First Call Notice, any or all of the remaining Shares held
by such Management Stockholder.
If the Interested Management Stockholders and Oak do not purchase all of the
Shares of such Management Stockholder, then (a) such Management Stockholder's
non-competition obligation contained in his Employment Agreement with the
Company shall continue for a period of two years following the date upon which
he ceases to, directly or indirectly, own or hold beneficially or of record
any Shares and (b) in the case of a deceased Management Stockholder, such
Stockholder's Estate may exercise such Management Stockholder's Management
Stock Option, subject to and in accordance with Section 4.5.
Determination of the Fair Market Value. At any time at which the Fair Market
Value of the Shares is to be determined pursuant to this Agreement, Oak shall
designate in a written notice (the "First Notice") to each holder of the
Shares a prominent national investment bank to determine the Fair Market Value
of the Shares, unless the parties hereto shall have theretofore agreed in
writing to the Fair Market Value of such Shares in which case such agreed upon
determination of Fair Market Value shall be binding upon the parties hereto.
If the Management Majority Holders do not object to the selection of such
investment bank within fifteen (15) days after receipt of the First Notice,
then the Fair Market Value shall be determined by such investment bank, and
such determination shall be binding upon the parties hereto. If the
Management Majority Holders object, they shall send written notice of such
objection to Oak within fifteen (15) days after receipt of the First Notice,
which notice shall designate a second prominent national investment bank. The
Management Stockholders and Oak shall then direct the investment bank
designated by each of them to select a third prominent national investment
bank to determine Fair Market Value, and the determination of such investment
bank shall be binding on the parties hereto. In each case, the parties shall
direct the investment bank which is making the determination of Fair Market
Value to do so as promptly as possible, and in no event later than sixty (60)
days after the selection of such investment bank.
When determining the Fair Market Value of the Shares, the investment bank
shall value the Shares based on a private sale of the Shares but shall make no
deduction or discount for the minority status of the holder of the Shares.
The investment bank shall also consider, among other factors, the projected
earnings of the Company as an on-going enterprise but as a stand-alone entity
that is, among other things, subject to taxation and shall "back-out" any
intercompany transactions (except that the arm's-length cost of any goods or
services provided to the Company and all debt and equity investments shall be
considered).
Closings.
Closing of Sale Pursuant to Section 4.1. The closing of any sale of
Management Shares pursuant to an Offer Notice given in accordance with Section
4.1 shall take place on a date to be determined by Oak, which date shall be
within ninety (90) days after the final determination of Fair Market Value of
the Management Shares pursuant to Section 4.3, at the principal office of Oak,
or at such other time and location as the parties to such sale may mutually
determine. At the closing, Oak shall pay to the Management Stockholder the
aggregate purchase price for the Management Shares being sold pursuant to such
Offer Notice by wire transfer of immediately available federal funds, and such
Management Stockholder shall deliver to Oak the certificate or certificates
representing the Management Shares being sold, duly endorsed for transfer and
with signature guaranteed, free and clear of any liens or encumbrances.
Closing of Sale Pursuant to Section 4.2. The closing of the sale of any
Management Shares pursuant to Section 4.2 shall take place at the principal
office of the Company at 10:00 a.m. on a date selected by the selling
Management Stockholder or such Stockholder's Estate, which date shall be (i)
in the event of a sale to an Interested Management Stockholder, within ninety
(90) days after the date upon which the Fair Market Value of the Option Shares
is determined pursuant to Section 4.3, and (ii) in the event of a sale to Oak,
within ninety (90) days after the date of the Second Call Notice, or at such
other time and location as the parties to such sale may mutually determine
(the "Call Closing Date"). At the closing, each Interested Management
Stockholder or Oak, as the case may be, shall pay to such Management
Stockholder the aggregate purchase price for the Option Shares being purchased
by such Person by wire transfer of immediately available federal funds. At
such closing, the selling Management Stockholder or such Stockholder's Estate,
as the case may be, shall deliver to the Interested Management Stockholders or
Oak, as the case may be, the certificate or certificates representing the
Option Shares, duly endorsed for transfer, and with signature guaranteed, free
and clear of any liens or encumbrances.
Delivery of Certificates. If at a closing of a sale of Shares to Oak under
Section 4.4.1 or Section 4.4.2 any Management Stockholder fails to deliver to
Oak the certificate or certificates evidencing its Shares, Oak may, at its
option, in addition to all other remedies it may have, deposit the purchase
price for such Shares with The First National Bank of Boston (or any other
commercial bank approved by Oak and the Management Majority Holders), as
escrow agent (the "Escrow Agent"), and thereupon the Company shall cancel on
its books the certificate or certificates representing such Shares and shall
issue, in lieu thereof and in the name of Oak, a new certificate or
certificates representing such Shares, and thereupon all of the Management
Stockholder's rights in and to such Shares shall terminate. Thereafter, upon
delivery to the Company by such Management Stockholder of the certificate or
certificates evidencing such Shares (duly endorsed for transfer, with
signature guaranteed, and free and clear of any liens of encumbrances), the
Company shall instruct the Escrow Agent to deliver the purchase price (without
any interest from the date of deposit of such funds with the Escrow Agent to
the date of delivery of such stock certificates, any such interest to accrue
to Oak) to such Management Stockholder.
The delivery of a certificate or certificates for Shares by any Management
Stockholder to Oak at a closing of the purchase of Shares by Oak under Section
4.4.1 or Section 4.4.2 or to any other Management Stockholder at a closing of
the purchase of Shares by any other Management Stockholder under this
Agreement shall be deemed a representation and warranty by such selling
Management Stockholder that: (a) he has full right, title and interest in and
to such Shares; (b) he has all necessary power and authority and has taken all
necessary action to sell such Shares as contemplated; and (c) such Shares are
free and clear of any and all liens or encumbrances.
Management Stock Options. If a Management Stockholder delivers an Offer
Notice to Oak after the date which is three (3) years after the Effective Date
and Oak declines to purchase the Management Shares which are subject to such
Offer Notice in accordance with Section 4.1, or a Stockholder's Estate elects
to exercise its rights under clause (b) of the last paragraph of Section 4.2,
such Management Stockholder or Stockholder's Estate, as the case may be, shall
have the right to exercise the Management Stock Option granted to him to
purchase shares of the common stock, $.01 par value, of Oak ("Oak Shares") by
surrender of such Management Stockholder's Management Shares in payment of the
exercise price of such Management Stock Option. For purposes of this Section
4.5 and the Management Stock Option, the Management Shares shall be valued at
$533.33 per share. The exercise price under the Management Stock Option shall
be the closing price of Oak Shares as quoted on the New York Stock Exchange on
December 23, 1992, and the total number of Oak Shares issuable to each
Management Stockholder upon exercise of his Management Stock Option shall
equal $750,000 divided by such closing price of Oak Shares. The amount of Oak
Shares issuable upon exercise of a Management Stock Option shall be
appropriately adjusted for any increase or decrease in the number of Oak
Shares outstanding as a result of a stock split, subdivision or combination
pursuant to the provisions of the Management Stock Option Plan. Oak covenants
and agrees to maintain registered under the Securities Act of 1933 on a Form
S-8 a sufficient number of Oak Shares to be issued upon exercise of the
Management Stock Options.
Exercise of Management Stock Options. A Management Stock Option shall be
exercised in accordance with the terms and provisions of the Management Stock
Option Plan pursuant to which it was granted. Additionally, a Management
Stockholder shall give thirty (30) days notice to the Company and to all other
Management Stockholders prior to exercising his Management Stock Option, which
notice shall set forth the exercise date.
Limitation on Exercise of Management Stock Options. The total number of Oak
Shares that may be issued to all Management Stockholders as a group upon
exercise of their Management Stock Options shall not exceed: (a) during the
one-year period commencing on the date that is three (3) years after the
Effective Date, 470,588 Oak Shares; and (b) during the one-year period
commencing on the date that is four (4) years after the Effective Date,
941,176 Oak Shares, plus such number of Oak Shares that were issuable in the
preceding one-year period that were not so issued. There shall be no
limitation on the number of Oak Shares issuable upon exercise of the
Management Stock Options after the date which is five (5) years after the
Effective Date. A Management Stockholder shall have the right to exercise his
Management Stock Option not more than three times during any twelve month
period. If at any time when the number of Oak Shares issuable upon exercise
of the Management Stock Options is limited pursuant to this Section 4.5.2 and
more than one Management Stockholder elects to exercise his Management Stock
Option pursuant to the provisions of Section 4.5, then the number of Oak
Shares issuable under clauses (a) and (b) of this Section 4.5.2 shall be
allocated among such electing Management Stockholders pro rata in accordance
with the number of Shares then held by them.
Right of Forced Sale. If a Management Stockholder delivers to Oak an Offer
Notice exercising his rights under Section 4.1 to offer his Management Shares
to Oak after the date which is six (6) years after the Effective Date and Oak
does not purchase such Management Shares in accordance with Section 4.1, then
such Management Stockholder shall have the right to offer such Management
Shares to the Investors upon the same terms and conditions as offered to Oak;
provided that the Investors then hold an equity interest in Buyer. The
Investors may, at their option, elect to purchase such Management Shares, in
which case the purchase and sale shall be consummated in accordance with the
provisions of Sections 4.1 and 4.4 (treating the Investors as Oak for such
purposes). If neither Oak nor the Investors elects to purchase such
Management Shares, then upon the vote of 75% of the then outstanding
Management Shares, the Management Stockholders shall have the right to seek a
purchaser of all the Shares or of all or substantially all of the assets of
the Company. If the Management Stockholders receive a bona fide, offer (an
"Outside Offer") from a third party (the "Proposed Purchaser") within a six
(6) month period after the date of the Offer Notice that is not contingent
upon the Proposed Purchaser obtaining financing, to purchase all of the Shares
or all or substantially all of the assets of the Company for cash, then,
subject to the provisions of this Section 4.6, all of the holders of Shares
agree to sell their Shares or consent to a sale of all or substantially all of
the assets of the Company to the Proposed Purchaser, in the manner and subject
to the terms set forth in the Outside Offer. The Outside Offer must
acknowledge the rights of Oak and the Investors (if the Investors then hold an
equity interest in Buyer) to purchase the Management Shares and terminate the
Outside Offer pursuant to this Section 4.6. If the Management Stockholders do
not receive an Outside Offer within such six (6) month period, then Buyer, Oak
and the Investors will not be obligated to sell any such Shares or consent to
any such sale of all or substantially all of the assets of the Company under
this Section 4.6; provided that nothing herein shall be deemed to limit the
rights of the Management Stockholders to thereafter submit additional Offer
Notices to Oak pursuant to this first paragraph of Section 4.6.
Offer to Oak. Promptly upon receipt of an Outside Offer, a written notice
(the "First Purchase Notice") shall be delivered by the Management
Stockholders to Oak and the Investors (the "Offerees"). The First Purchase
Notice shall contain the following:
(a) a true, fully-executed copy of the Outside Offer from the Proposed
Purchaser;
(b) a written offer by each Management Stockholder to sell all but not less
than all of the Management Shares to Oak in accordance with the terms of this
Agreement, for a purchase price per share equal to the purchase price per
share set forth in the Outside Offer plus, in the event the price per share
set forth in the Outside Offer equals or exceeds the Fair Market Value of the
Shares at the date on which the Offer Notice was delivered to Oak pursuant to
Section 4.1, 3% of the Total Transaction Value; and
(c) a date and time for closing the sale to Oak if all the Management Shares
are accepted for purchase by Oak, which date shall not be fewer than 60 nor
more than 90 days after the date of delivery to Oak of the First Purchase
Notice.
Offer to the Investors. If Oak does not elect to purchase the Management
Shares within 30 days after the date of the First Purchase Notice and the
Investors then hold an equity interest in Buyer, the Management Stockholders
shall send the Investors a written notice (the "Second Purchase Notice")
containing the following:
(a) a statement that the Shares have been offered to but have not been
accepted for purchase by Oak;
(b) a written offer by the Management Stockholders to sell all but not less
than all of the Management Shares to the Investors upon the same terms as
offered to Oak pursuant to the First Purchase Notice; and
(c) a date and time for closing the sale to the Investors if all the Shares
are accepted for purchase by the Investors, which date shall not be fewer than
45 nor more than 60 days from the date of delivery to the Investors of the
Second Purchase Notice.
Exercise by Oak or the Investors. Oak shall have the right to accept the
offer contained in the First Purchase Notice with respect to all (but not less
than all) of the Management Shares for a period of 30 days after the date of
delivery of the First Purchase Notice. If Oak does not accept such offer, the
Investors shall have the right to accept such offer (as modified by the Second
Purchase Notice) with respect to all (but not less than all) of the Management
Shares for a period of 30 days after the date of delivery of the Second
Purchase Notice. If Oak or the Investors elects to purchase the Management
Shares, the Outside Offer shall terminate and Oak, the Investors, Buyer, the
Company and the Management Stockholders shall have no obligation or liability
thereunder. Oak or the Investors, as the case may be, shall exercise its
rights to purchase the Management Shares by mailing a written notice to the
Management Stockholders, with a copy to the other Offeree (the Offeree who has
agreed to purchase the Shares being referred to in this Section 4.6 as an
"Accepting Offeree"). The closing of a sale of the Management Shares to the
Accepting Offeree shall take place at the principal office of the Company at
the time designated in the First Purchase Notice or the Second Purchase
Notice, as the case may be.
Closing. At the closing of any purchase and sale of Management Shares
pursuant this Section 4.6, the Management Stockholders shall deliver to the
Accepting Offeree a certificate or certificates representing the Management
Shares, duly endorsed for transfer with signature guaranteed, free and clear
of any lien or encumbrance, with any necessary stock transfer tax stamps
affixed, and the Accepting Offeree shall pay to the Management Stockholders by
certified or bank check the purchase price of the Management Shares being
purchased by the Accepting Offeree. If any Management Stockholder fails to
deliver to the Accepting Offeree the certificate or certificates evidencing
its Shares, the Accepting Offeree may, at its option, in addition to all other
remedies it may have, deposit the purchase price for such Shares with the
Escrow Agent and shall furnish satisfactory evidence of such deposit to the
Company and thereupon the Company shall cancel on its books the certificate or
certificates representing such Shares and shall issue, in lieu thereof and in
the name of the Accepting Offeree, a new certificate or certificates
representing such Shares, and thereupon all of the Management Stockholder's
rights in and to such Shares shall terminate. Thereafter, upon delivery to
the Company by such Management Stockholder of the certificate or certificates
evidencing such Shares (duly endorsed for transfer, with signature guaranteed,
and free and clear of any liens or encumbrances), the Company shall instruct
the Escrow Agent to deliver the purchase price (without any interest from the
date of the closing to the date of such delivery, any such interest to accrue
to the Accepting Offeree) to such Management Stockholder. The delivery of
certificate or certificates for Shares by any Management Stockholder shall be
deemed a representation and warranty by such Management Stockholder that: (a)
he has full right, title and interest in and to such Shares; (b) he has all
necessary power and authority and has taken all necessary action to sell such
Shares as contemplated; and (c) such Shares are free and clear of any and all
liens or encumbrances.
Continued Applicability of this Agreement. If the Offerees fail to exercise
their respective purchase rights within the specified periods, then, for 60
days after the termination of the 30-day period referred to in Section 4.6.2
hereof relating to the Second Purchase Notice or if no Second Purchase Notice
is given, for 60 days after the termination of the 30-day period referred to
in Section 4.6.1 hereof relating to the First Purchase Notice, Oak and the
Investors agree to cause the Buyer to sell all of its Shares or consent to the
sale of all or substantially all of the assets of the Company and the
Management Stockholders shall sell all but not less than all of their Shares
or consent to the sale of all or substantially all of the assets of the
Company to the Proposed Purchaser in strict accordance with the Outside Offer.
If such sale is not so consummated within such 60-day period, then Buyer, Oak
and the Investors will not be obligated to sell any such Shares or consent to
any such sale of all or substantially all of the assets of the Company under
this Section 4.6; provided that nothing herein shall be deemed to limit the
rights of the Management Stockholders to thereafter submit additional Offer
Notices to Oak pursuant to the first paragraph of this Section 4.6.
CERTAIN TRANSACTIONS.
Go Along Rights. If Buyer shall propose to sell, in any single transaction or
any series of related transactions, all or substantially all of the Shares
held by Buyer (a "Go Along Sale"), then Buyer shall give each Management
Stockholder written notice of such Go Along Sale at least fifteen (15)
business days prior to the consummation of such Go Along Sale ("Go Along Sale
Notice"). Each Management Stockholder may, by written notice to Buyer within
ten (10) business days after receipt of the Go Along Sale Notice, sell in such
Go Along Sale the same proportion of the Management Shares then held by him as
the proportion of Shares to be sold by Buyer in such Go Along Sale bears to
the total number of Shares held by Buyer. The sale of such Management Shares
shall be at the same per share sale price (including the time and manner of
payment and type of consideration) and on other terms in substance similar to
those received by Buyer for its Shares in the Go Along Sale.
Take Along Rights. If a holder of Management Shares does not elect to sell
his Shares in a Go Along Sale pursuant to Section 5.1, then the Buyer shall
have the right, by notice to such holder at least three (3) days prior to
consummation of the Go Along Sale, to cause such holder, and upon receipt of
such notice each such holder agrees, to sell to the purchaser of Shares in
such Go Along Sale, substantially contemporaneously with the closing of such
Go Along Sale, such portion of such holder's Shares as the proportion of
Shares to be sold by Buyer in such Go Along Sale bears to the total number of
Shares held by Buyer. The sale of such Management Shares shall be at the same
per share sale price (including the time and manner of payment and type of
consideration) and on other terms (including representations, warranties and
indemnities) in substance similar to those received by Buyer for its Shares in
the Go Along Sale. Each Management Stockholder shall take such actions and
execute such documents and instruments as shall be reasonably necessary to
expeditiously consummate such Go Along Sale. Except as may be otherwise
provided in the Company's certificate of incorporation or by-laws, the consent
of the holders of the Management Shares or the Management Stockholders shall
not be required to a Go Along Sale or any other sale, transfer or disposition
of any Shares by Buyer.
Rights of Second Refusal in Stock of Buyer held by the Investors. If Oak is
unable to purchase the shares of common stock of the Buyer held by the
Investors ("Buyer Shares") in accordance with Section 3.1 of the Investor
Stockholders Agreement, then the Management Stockholders shall have the right
to purchase such Buyer Shares on the same terms offered to Oak; provided,
however, that (a) within thirty (30) days after being notified of Oak's
inability to purchase the Buyer Shares, the Management Stockholders shall
notify the Investors of their intention to purchase such Buyer Shares and (b)
within sixty (60) days after such notice (i) the Management Stockholders
purchase such Buyer Shares or (ii) the Management Stockholders provide the
Investors with binding commitments necessary to accomplish the purchase of
such Buyer Shares within thirty (30) days thereafter and the Management
Stockholders purchase such Buyer Shares within such thirty (30) day period.
Piggyback Registration Rights. Whenever the Company proposes to register any
shares of Common Stock for its own or others' account under the Securities Act
of 1933 for a public offering for cash, other than a registration relating to
employee benefit plans, the Company shall give each holder of Management
Shares prompt written notice of its intent to do so. Upon the written request
of any such holder given within 30 days after receipt of such notice, the
Company will use its best efforts to cause to be included in such registration
all of the Management Shares which such holder requests. If the Company is
advised in writing in good faith by any managing underwriter of the securities
being offered pursuant to any registration statement under this Section 5.4
that the number of shares to be sold by persons other than the Company is
greater than the number of such shares which can be offered without adversely
affecting the offering, the Company may reduce pro rata (based upon the number
of shares requested to be included and the number of shares proposed to be
registered by the Company) the number of shares offered for the accounts of
such persons and for the account of the Company to a number of shares deemed
satisfactory by such managing underwriter. Management Stockholders
participating in any such public offering shall take all such actions and
execute all such documents and instruments that are reasonably necessary to
effect the sale of their Shares in such public offering and shall be parties
to the underwriting agreement entered into by the Company in connection
therewith, and the representations and warranties by, and the other agreements
(including indemnifications and "lock-up" agreements) on the part of, the
Company to and for the benefit of the underwriters in such underwriting
agreement shall also be made by such Management Stockholders.
Dividends. All dividends payable on the Common Stock shall be payable pro
rata to each holder of shares of the Common Stock in accordance with the
number of shares held by such holder. It is understood and agreed that the
term "dividends" as used in this Section 5.5 shall not include any payments
under the Tax-Sharing Agreement (as such term is defined in the Purchase
Agreement), management fees and expenses, expenses of shareholders and board
of directors and loan repayments.
REMEDIES.
Generally. Buyer, Oak, the Investors and each holder of Shares shall have all
remedies available at law, in equity or otherwise in the event of any breach
or violation of this Agreement or any default hereunder by the Company, any
subsidiary or any holder of Shares. The parties acknowledge and agree that in
the event of any breach of this Agreement, in addition to any other remedies
which may be available, each of the parties hereto shall be entitled to
specific performance of the obligations of the other parties hereto and, in
addition, to such appropriate injunctive relief as may be granted by a court
of competent jurisdiction.
LEGENDS. Each certificate representing Shares shall have the following legend
endorsed conspicuously thereupon:
The shares of stock represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and may not be sold, assigned,
pledged or otherwise transferred in the absence of an effective registration
statement under said Act covering the transfer or an opinion of counsel
satisfactory to the issuer that registration under said Act is not required.
The voting of the shares of stock represented by this certificate, and the
sale, encumbrance or other disposition thereof, are subject to the provisions
of a Stockholders Agreement to which the issuer and certain of its
stockholders are party, a copy of which may be inspected at the principal
office of the issuer or obtained from the issuer without charge.
Any person who acquires Shares which are not subject to all or part of the
terms of this Agreement shall have the right to have such legend (or the
applicable portion thereof) removed from certificates representing such
Shares.
AMENDMENT, TERMINATION, ETC.
Oral Modifications. This Agreement may not be orally amended, modified,
extended or terminated, nor shall any oral waiver of any of its terms be
effective.
Written Modifications. This Agreement may be amended, modified, extended or
terminated, and the provisions hereof may be waived, by an agreement in
writing signed by the Investors, Oak, Buyer, Company and the Management
Majority Holders. Each such amendment, modification, extension, termination
and waiver shall be binding upon each party hereto and each holder of Shares
subject hereto. In addition, each party hereto and each holder of Shares
subject hereto may waive any right hereunder by an instrument in writing
signed by such party or holder.
EFFECTIVENESS.
Effective Date. This Agreement shall become effective and binding upon the
parties hereto only upon the consummation of the merger of Buyer Sub with and
into the Company.
MISCELLANEOUS.
Authority; Effect. Each party hereto represents and warrants to and agrees
with each other party that the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby have been duly
authorized on behalf of such party and do not violate any agreement or other
instrument applicable to such party or by which its assets are bound. This
Agreement does not, and shall not be construed to, give rise to the creation
of a partnership among any of the parties hereto, or to constitute any of such
parties members of a joint venture or other association.
Notices. Notices and other communications provided for in this Agreement
shall be in writing and shall be effective (i) when one day shall have elapsed
(exclusive of Saturdays, Sundays and banking holidays in the City of Boston)
from their deposit for overnight delivery with Federal Express or other bonded
courier, addressed to the party or parties sought to be charged with notice of
the same at the respective addresses set forth or referred to below, subject
to written notice of change of address given by any party to each other party,
or (ii) if earlier, upon receipt.
If to Oak, to it at:
Oak Industries, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxx III
with a copy to:
Oak Industries, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxx X. Xxxxx, Esq.
If to the Investors, to them at:
Xxxx Capital
Two Xxxxxx Xxxxx, 0xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxxx
with a copy to:
Ropes and Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: X. Xxxxxxxx Malt, Esq.
If to Buyer, to it at:
c/o Oak Industries, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxx III
with a copy to:
c/o Oak Industries, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxx X. Xxxxx, Esq.
If to the Company, to it at:
c/o Oak Industries, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxx III
with a copy to:
c/o Oak Industries, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxx X. Xxxxx, Esq.
If to a Management Stockholder, to him at the address set forth in the stock
record book of the Company.
with a copy to:
Xxxxxxx and Xxxxx
Xxx Xxxx Xxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, XX 00000-0000
Attention: P. Xxxxxx Xxxx, Esq.
Notice to the holder of record of any shares of capital stock shall be deemed
to be notice to the holder of such shares for all purposes hereof.
Binding Effect, etc. This Agreement constitutes the entire agreement of the
parties with respect to its subject matter, supersedes all prior or
contemporaneous oral or written agreements or discussions with respect to such
subject matter, and shall be binding upon and inure to the benefit of the
parties hereto and their respective Stockholders Estate, successors and
assigns, as the case may be.
Gender and Number. With respect to words used in this Agreement, the singular
form shall include the plural form, the neuter gender shall include the
feminine or masculine gender, and vice versa, as the context requires.
Descriptive Headings. The descriptive headings of this Agreement are for
convenience of reference only, are not to be considered a part hereof and
shall not be construed to define or limit any of the terms or provisions
hereof.
Counterparts. This Agreement may be executed in multiple counterparts, each
of which shall be deemed an original, but all of which taken together shall
constitute one instrument.
Severability. If in any judicial proceedings a court shall refuse to enforce
any provision of this Agreement, then such unenforceable provision shall be
deemed eliminated from this Agreement for the purpose of such proceedings to
the extent necessary to permit the remaining provisions to be enforced. To
the full extent, however, that the provisions of any applicable law may be
waived, they are hereby waived to the end that this Agreement be deemed to be
valid and binding agreement enforceable in accordance with its terms, and in
the event that any provision hereof shall be found to be invalid or
unenforceable, such provision shall be construed by limiting it so as to be
valid and enforceable to the maximum extent consistent with and possible under
applicable law.
Governing Law. This Agreement shall be construed under and its validity
determined by the domestic substantive laws of The Commonwealth of
Massachusetts without giving effect to any choice or conflict of laws
provision or rule that would cause the application of the domestic substantive
laws of any other jurisdiction.
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement under
seal as of the day and year first above written.
XXXXXXX ENGINEERING ACQUISITION CO., INC.
By:________________________________
Title:
CONNECTOR HOLDING COMPANY
By:________________________________
Title:
CONNECTOR ACQUISITION COMPANY
By:________________________________
Title:
OAK INDUSTRIES INC.
By:________________________________
Title:
INVESTORS:
TYLER CAPITAL FUND, L.P.
By: Xxxx Venture Capital, a
California Limited Partnership,
its general partner
By:________________________________
Title:
TYLER MASSACHUSETTS, L.P.
By: Xxxx Venture Capital, a
California Limited Partnership,
its general partner
By:________________________________
Title:
TYLER INTERNATIONAL, L.P.-II
By: Xxxx Venture Capital, a
California Limited Partnership,
its general partner
By:________________________________
Title:
BCIP ASSOCIATES
By: Xxxx Venture Capital, a
California Limited Partnership,
its general partner
By:________________________________
Title:
BCIP TRUST ASSOCIATES, L.P.
By: Xxxx Venture Capital, a
California Limited Partnership,
its general partner
By:________________________________
Title:
MANAGEMENT STOCKHOLDERS:
___________________________________
Xxxxxx X. Xxxxx, individually
Xxxxxxxxx Family Trust
dated December 27, 1989
By:________________________________
, Trustee
___________________________________
Xxxxxx X. Xxxxxxxx, individually
___________________________________
Xxxxxx X. Xxxxxxx, individually
JCWKAG8.BC
