AGREEMENT
THIS AGREEMENT is made as of the 11th day of June, 2003, by and among
XXXXXX CO., INC., a Wisconsin corporation (the "Company"); XXXXX XXXXXXXX, LTD.,
an Illinois limited partnership ("Xxxxx Xxxxxxxx"); and the individuals
signatory below, each of whom is sometimes referred to herein by his or her last
name.
WHEREAS, Xxxxx Xxxxxxxx is the beneficial owner of approximately 29.6% of
the outstanding common stock of the Company; and
WHEREAS, management of the Company, on the one hand, and Xxxxx Xxxxxxxx, on
the other, have submitted to the shareholders of the Company, at the annual
meeting of shareholders held on June 6, 2003 (the "2003 Annual Meeting"),
different slates of director nominees for election to one-year terms; and
WHEREAS, the tabulation of the votes in the foregoing election remains in
doubt; and
WHEREAS, all the parties mutually agree that protracted uncertainty,
including the possibility of litigation, concerning the outcome of the election
of directors might cause substantial harm to the Company in its relations with
its customers, suppliers, competitors, employees and investors; and
WHEREAS, the undersigned individuals, in such capacities as they
respectively occupy as fiduciaries, proxies, and direct or indirect beneficial
owners of shares of the Company, believe that it is in the best interests of the
Company, its shareholders and other constituents that a board of directors of
the Company be seated that includes representatives of management and Xxxxx
Xxxxxxxx, and persons independent of both the Company and Xxxxx Xxxxxxxx.
NOW, THEREFORE, in consideration of the foregoing, and of the mutual
covenants contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by all parties, the
parties agree as follows:
1. Withdrawal and Resignation. Larsen, Roeper, Hampton, Sullivan, Xxxxxxxx
and Xxxxxxx hereby withdraw their names from nomination, and decline to serve as
directors of the Company, with the effect that the only remaining nominees on
either slate of director nominees shall consist of Bianchi, Hill, Kranz, Xxxxx
and Xxxxx. Larsen, Roeper, Hampton and Xxxxxxxx hereby additionally resign as
directors of the Company, effective at the Effective Time, as defined below.
2. Vote Count. The Company and Xxxxx Xxxxxxxx shall jointly instruct the
inspectors of election of the 2003 Annual Meeting to report the outcome of the
voting by counting each vote cast equally. Such vote count by the inspectors of
election shall give effect to Section 1 hereof, and votes cast in favor of the
six individuals withdrawing thereunder shall not be tabulated. Upon receipt of
the foregoing tabulation, certifying that Bianchi, Hill, Kranz, Xxxxx and Xxxxx
are the only remaining nominees and showing the vote totals for each, the
Company
shall promptly accept such tabulation as the official outcome of the election
and such board shall be seated; the time of such acceptance is sometimes
referred to herein as the "Effective Time."
3. Director Vacancies. Promptly after the Effective Time, Bianchi, Hill,
Kranz, Xxxxx and Xxxxx agree that they will elect Xxxxxxxx to fill one of the
vacancies on the board of directors. Bianchi, Hill, Kranz, Peart, Xxxxxxxx and
Xxxxx (collectively, the "New Board") further agree that they will promptly
produce a consensus written profile of a seventh director to fill the remaining
vacancy. Among the qualifications of the seventh director shall be independence
of both the Company and Xxxxx Xxxxxxxx. The New Board shall also agree on a
qualified search firm, similarly independent, to find candidates to fill the
remaining vacancy, and shall act as promptly as is prudent to fill such vacancy.
4. Committees. The persons constituting the New Board agree that all
current committees of the board of directors of the Company shall be dissolved;
and until further action by the New Board in its discretion, the following
committees shall be constituted as the only board committees: (a) an Audit
Committee consisting of Bianchi (as chairman), Xxxxx and Xxxxx; and (b) a
Compensation and Stock Option Committee consisting of Xxxxx, Xxxxx and Xxxxxxxx.
Until further or contrary action is taken by the board of directors in its
discretion, the responsibilities, authorities and charters of these committees
prior to this Agreement shall continue in effect.
5. Shareholder Rights Plan. The persons constituting the New Board agree
that they will promptly rescind the rights issued under the Xxxxxx Co., Inc.
Rights Agreement dated as of September 15, 1998, and take any and all other
action necessary to terminate such agreement.
6. Consent Resolution. In furtherance of the covenants contained in
Sections 3, 4 and 5, the persons constituting the New Board agree to execute and
deliver in counterparts, concurrently with or immediately following the
execution and delivery hereof, the Resolutions of Directors appended hereto as
Attachment A.
7. Shareholder Vote on Restoration. Attachment B hereto constitutes a
notice from Xxxxx Xxxxxxxx to the Company pursuant to subsection (4) of Section
180.1150 of the Wisconsin Business Corporation Law (the "Wisconsin Control Share
Voting Statute"). The Company acknowledges receipt of such notice and stipulates
that such notice is in compliance with the requirements set forth in such
subsection. Attachment C hereto constitutes a form of shareholder resolution for
the purpose of restoring to the shares owned by Xxxxx Xxxxxxxx (if such
restoration is necessary) the full voting power of such shares, without
application of the Wisconsin Control Share Voting Statute. The parties agree
that (a) such notice and proposed resolution shall not constitute a concession
by Xxxxx Xxxxxxxx that the Wisconsin Control Share Voting Statute should be
construed to reduce the voting power of shares held by Xxxxx Xxxxxxxx, in the
absence of such resolution, (b) such resolution shall be placed before the
shareholders of the Company at the next annual or special meeting of
shareholders to be held; and (c) all parties will cooperate in recommending
adoption of the resolution by the shareholders at such meeting; provided,
however, that the Company shall not be required to engage proxy solicitors for
such purpose. (Notwithstanding clause (b) of the preceding sentence, if Xxxxx
Xxxxxxxx should determine, in its sole discretion, that it would prefer to have
the shareholder meeting for purposes
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of adopting Attachment C at an earlier date than the next annual or special
meeting of shareholders to be convened for some other purpose, then it may
re-serve the Attachment B notice and a special meeting shall be called in
accordance with subsection (5) of the Wisconsin Control Share Voting Statute;
provided, however, that Xxxxx Xxxxxxxx hereby agrees in such case to pay, or
reimburse the Company for, all the Company's out-of-pocket expenses of
conducting such meeting including without limitation the costs of printing and
mailing notices and proxies, the fees and expenses of the Company's transfer
agent, and legal fees and disbursements directly related to such special meeting
of shareholders.) If at any time pending the adoption of Attachment C by the
Company's shareholders the board of directors shall acquire the power by its own
act to effect the restoration of voting power unimpaired by the Wisconsin
Control Share Voting Statute, the New Board hereby agrees that it will promptly
exercise such power with respect to the Company shares owned by Xxxxx Xxxxxxxx,
in which case the resolution set forth as Attachment C shall not be proposed to
the shareholders. The Company and the New Board agree that pending the action
described above in this Section 7, unless ordered to do so by a court of
competent jurisdiction in a matter brought by a third party having standing, the
Company will not assert, in any matter brought to a vote of shareholders of the
Company, that the restrictions of the Wisconsin Control Share Voting Statute
apply to the shares of Company stock beneficially owned by Xxxxx Xxxxxxxx.
8. Expenses. The Company hereby agrees to reimburse Xxxxx Xxxxxxxx for its
documented out-of-pocket expenses incurred in conducting the proxy contest,
including without limitation legal fees, proxy solicitation fees and expenses,
and printing and mailing expenses, subject to a maximum of $200,000.00 in the
aggregate.
9. Public Disclosure. The Company and Xxxxx Xxxxxxxx agree that it is in
the best interests of the Company that public disclosure and discussion of the
outcome of the 2003 Annual Meeting emphasize the consensual nature of the terms
of this Agreement. Each of the Company and Xxxxx Xxxxxxxx therefore agrees to
provide to the other, in advance of release or filing (unless applicable law
requires otherwise), a copy of any written release, statement or filing with
respect to the matters dealt with herein, and to consider any revisions timely
suggested by the other party.
10. Mutual Waiver and Release. This Agreement is intended to constitute a
composition of all controversies among the parties relating to the 2003 Annual
Meeting. Each of the Company and Xxxxx Xxxxxxxx hereby waives any claims or
causes of action against the other or its affiliates relating to or arising out
of the 2003 Annual Meeting, the solicitation of proxies with respect thereto,
and the election of directors of the Company which occurred at such meeting.
11. General.
(a) Entire Agreement. This Agreement constitutes the entire agreement among
the parties with respect to the matters described herein. No party has made or
relied upon any representation, warranty or covenant not contained herein.
(b) Governing Law. This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of Wisconsin.
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(c) Injunctive Relief. The parties agree that money damages would not be a
sufficient remedy for any breach of the covenants contained in this Agreement,
and that a non-breaching party will be entitled to injunctive relief, specific
performance or any other appropriate equitable remedies for any such breach.
Such remedies shall not be exclusive, but shall be in addition to all other
remedies available at law or in equity. In addition, the non-breaching party or
parties will be entitled to payment of its or their legal fees and
disbursements, court costs and other expenses of enforcing, defending or
otherwise protecting its or their interests hereunder.
(d) Capacities. Each individual signatory enters into this Agreement in
every capacity which he or she occupies in relation to the matters provided for
herein, including, without limitation, as individuals; as directors of Xxxxxx,
prior to or after the Effective Time; as director nominees; as proxies to act at
the 2003 Annual Meeting; as affiliates in any other manner of the Company or
Xxxxx Xxxxxxxx; and as direct or indirect beneficial owners of shares of Company
stock.
(e) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
XXXXXX CO., INC. XXXXX XXXXXXXX, LTD.
By: /s/ Xxxxx X. Xxxxx By: /s/ Xxxxxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxx, President Xxxxxxxx X. Xxxxxxxx
/s/ Xxxxxxxx X. Xxxxxxx /s/ J. Xxxxxx Xxxxx
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Xxxxxxxx X. Xxxxxxx J. Xxxxxx Xxxxx
/s/ Xxxxxx X. Xxxxxxx /s/ Xxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxxx Xxxxx X. Xxxxxx
/s/ Xxxxxxxx Xxxxxxxxx Xxxxxxx /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxxxx Xxxxxxxxx Xxxxxxx Xxxxxx X. Xxxxxxxx
/s/ Xxxxx X. Xxxx /s/ Xxxxxxxx X. Xxxxxxxx
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Xxxxx X. Xxxx Xxxxxxxx X. Xxxxxxxx
/s/ Xxxx X. Xxxxx /s/ Xxxxx X. Xxxxxxxx
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Xxxx X. Xxxxx Xxxxx X. Xxxxxxxx
/s/ Xxxxx X. Xxxxxx /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxxx Xxxxx X. Xxxxx
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