Exhibit 99.2
SETTLEMENT AGREEMENT
This Agreement (this "AGREEMENT") is made and entered into as of October
24, 2007, by and between Xxxxxx Xxxx Corporation (the "COMPANY"), and each of
the entities and natural persons listed on SCHEDULE A hereto (such entities and
natural persons and any Ramius Nominee that executes a joinder to this
Agreement, collectively, the "RAMIUS GROUP") (each of the Company and the Ramius
Group, a "PARTY" to this Agreement, and collectively, the "PARTIES").
RECITALS
A. The Ramius Group beneficially owns in the aggregate the number of
shares of the Company's outstanding common stock, par value $.001 per share (the
"COMMON STOCK"), set forth on SCHEDULE A;
B. Pursuant to a nomination letter duly submitted on October 5th in
accordance with the Company's Second Amended and Restated Bylaws (the
"NOMINATION LETTER"), Starboard Value and Opportunity Master Fund Ltd., a member
of the Ramius Group, has nominated a slate of three candidates for election to
the Board of Directors of the Company (the "BOARD") at the Company's next Annual
Meeting of Stockholders (including any adjournment or postponement thereof, the
"2007 ANNUAL MEETING"), which is currently scheduled to be held on December 5,
2007;
C. The Parties have agreed that Starboard Value and Opportunity Master
Fund Ltd. shall withdraw its Nomination Letter and that the Ramius Group will
not present any nominees or proposals at the 2007 Annual Meeting;
D. The Governance and Nominating Committee of the Board (the "NOMINATING
COMMITTEE") has reviewed the qualifications of Xxxxxxx Xxxxx and Xxxxxx
Xxxxxxxxxx (collectively, the "RAMIUS NOMINEES") to serve as members of the
Board and has conducted inquiries into their respective backgrounds, skills and
qualifications, including reviews of the Ramius Nominees' responses to
questionnaires, interviews of the Ramius Nominees and professional background
investigations of the Ramius Nominees; and the Nominating Committee has
evaluated the independence of the Ramius Nominees, the qualifications of Xxxxxxx
Xxxxx to serve as a member of the Nominating Committee of the Board and the
qualifications of Xxxxxx Xxxxxxxxxx to serve as a member of the Audit Committee;
E. The Nominating Committee has recommended to the entire Board that (i)
the Board nominate the Ramius Nominees for election to the Board at the 2007
Annual Meeting, (ii) the Board determine that the Ramius Nominees are
independent directors under the listing standards of The NASDAQ Stock Market
("NASDAQ"), and (iii) following their respective elections to the Board, Xxxxxxx
Xxxxx be appointed to the Nominating Committee of the Board and Xxxxxx
Xxxxxxxxxx be appointed to the Audit Committee.
F. The Board considered the recommendations of the Nominating Committee
and after conducting such reviews of the Ramius Nominees as it has deemed
appropriate, (i) has determined that neither Ramius Nominee has any relationship
with the Company (either directly or as a partner, equity holder or officer of
an organization that has a relationship with the Company) that would interfere
with his exercise of independent judgment in carrying out the responsibilities
of a member of the Board or any of its committees and that both Ramius Nominees
are independent directors as defined under the rules of NASDAQ, and (ii) has
determined that it is in the best interests of the stockholders of the Company
to nominate the Ramius Nominees for election to the Board at the 2007 Annual
Meeting, to serve for a term of three years expiring at the Company's 2010
Annual Meeting of Stockholders, in place of two current members of the Company's
Board to be determined by the Company's Board, and each of whose current terms
will expire at the 2007 Annual Meeting, and to recommend the Ramius Nominees for
election to the Board;
G. The Ramius Group has determined to vote its shares of Common Stock in
favor of the Ramius Nominees and one incumbent director whose current term of
office expires in 2007 nominated by the Board to be elected as members of the
Board at the 2007 Annual Meeting (such incumbent director, together with the
Ramius Nominees, the "2007 NOMINEES");
H. The Ramius Group has agreed to certain restrictions on its actions,
including restrictions relating to its acquisition of additional shares of
Common Stock, from the date here of until and including the earlier of the day
after the date of the Company's 2008 Annual Meeting of Stockholders (the "2008
ANNUAL MEETING") or the date that is thirty (30) days after the one-year
anniversary date of the 2007 Annual Meeting;
I. The Company and the Ramius Group desire, in connection with the
nomination of the Ramius Nominees to the Board, to make certain covenants and
agreements with one another pursuant to this Agreement.
NOW THEREFORE, in consideration of the covenants and premises set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto hereby agree as
follows:
1. Starboard Value and Opportunity Master Fund Ltd. hereby withdraws its
Nomination Letter.
2. The Board has agreed to nominate the Ramius Nominees to be elected as
members of the Board at the 2007 Annual Meeting to serve for a term of three
years expiring at the Company's 2010 Annual Meeting of Stockholders and will
recommend a vote "for" the Ramius Nominees at the 2007 Annual Meeting and
solicit proxies from all stockholders to vote all shares of Common Stock in
favor of the election to the Board of the Ramius Nominees. At the 2007 Annual
Meeting, the Ramius Group shall appear in person or by proxy and vote all shares
of Common Stock beneficially owned by it and its Affiliates in favor of the
election to the Board of the 2007 Nominees. The Ramius Group shall cause to be
executed proxies for the 2007 Nominees (in the form utilized by the Company to
solicit proxies for all stockholders) so as to vote all shares of Common Stock
beneficially owned by it and its Affiliates (as defined below) in favor of the
election to the Board of the 2007 Nominees. The Ramius Group shall not withdraw
or modify any such proxies.
By execution of this Agreement, each of the Ramius Nominees hereby
consents to be nominated for election to the Board at the 2007 Annual Meeting.
3. In accordance with Article IV of the Company's Second Amended and
Restated Bylaws (the "BYLAWS"), the Company shall take all action necessary in
furtherance of:
a. no later than seven (7) days following the election of the Ramius
Nominees to the Board, the appointment of (i) Xxxxxxx Xxxxx as a member of
the Nominating Committee of the Board, and (ii) Xxxxxx Xxxxxxxxxx as a
member of the Audit Committee of the Board;
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b. the establishment of a strategic planning committee of the Board
in connection with its strategic planning, and the appointment of Xxxxxxx
Xxxxx as a member of such committee; and
c. the appointment of Xxxxxxx Xxxxx as a member of any special
committee of the Board that may be established.
4. The Ramius Group and each member of the Ramius Group shall not (i)
nominate any person for election at the 2007 Annual Meeting or (ii) submit any
proposal for consideration at, or bring any other business before, the 2007
Annual Meeting, directly or indirectly. The Ramius Group shall not enter into
any agreement, understanding or arrangement with the purpose or effect to cause
or further any of the foregoing or otherwise engage in any activities with the
purpose or effect to cause or further any of the foregoing.
The Company acknowledges that the only matters that shall be presented for
consideration at the 2007 Annual Meeting include the election of the 2007
Nominees, an amendment to the Company's Fifth Amended and Restated Employee
Incentive Compensation Plan to increase by up to 350,000 the number of shares of
Common Stock authorized for issuance under it and the ratification of the
Company's independent registered public accounting firm.
5. From the date hereof through the 2007 Annual Meeting, each of the
Company, the Ramius Group and each member of the Ramius Group shall not directly
or indirectly engage in any activities in opposition to the election of the 2007
Nominees at the 2007 Annual Meeting and shall not enter into any agreement,
understanding or arrangement with the purpose or effect to cause or further any
of the foregoing.
6. The 2007 Annual Meeting shall be held on December 5, 2007 or within 30
days thereafter, at the time and place indicated in the notice of annual meeting
to be sent to the stockholders of the Company in connection with the 2007 Annual
Meeting.
7. For a period commencing with the date hereof and ending on the earlier
to occur of (i) the day after the date of the 2008 Annual Meeting or (ii) that
date that is thirty (30) days after the one-year anniversary date of the 2007
Annual Meeting (such period, the "STANDSTILL PERIOD"), neither the Ramius Group
(nor Xx. Xxxxxxxxxx, individually, if he is no longer a member of a Section
13(d) group with RCG Starboard Advisors, LLC and its Affiliates) nor any of its
members or any of their Affiliates shall, without the prior written consent of
the Board, specifically expressed in a written resolution adopted by a majority
vote of the entire Board:
a. acquire or agree to acquire, or publicly offer or propose to
acquire, directly or indirectly, by purchase or otherwise, any voting
securities or direct or indirect rights or options to acquire any voting
securities of the Company or any subsidiary thereof, or of any successor
to or person in control of the Company, such that, following any such
acquisition, the Ramius Group, including its Affiliates, would hold,
beneficially own or control in the aggregate in excess of 2,804,146 shares
of Common Stock (the "STANDSTILL LIMIT"); PROVIDED, HOWEVER, (i) in the
event that the share repurchase program (the "REPURCHASE PROGRAM")
announced by the Company on September 24, 2007 has not been completed
(which completion, for this purpose, shall mean that shares have been
purchased under the Repurchase Program for the maximum aggregate price for
which shares may be repurchased under the Repurchase Program and all such
shares shall have been canceled or shall be held in treasury) by the date
that is eight (8) months from the date hereof ("REPURCHASE DATE"), the
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Standstill Limit shall be that number of shares of Common Stock that is
equal to the greatest of (A) 2,804,146, (B) such number of shares of
Common Stock resulting from an increase in the Standstill Limit pursuant
to clause (ii) below, and (C) 24.9% of the outstanding shares of Common
Stock as of the Repurchase Date (the number of outstanding shares of
Common Stock as of the Repurchase Date shall be communicated by the
Company to Ramius Capital on behalf of the Ramius Group, within 2 business
days of the Repurchase Date), (ii) in the event between the date hereof
and the Repurchase Date the number of outstanding shares of Common Stock
(as reported by the Company) increases above 11,945,621 shares, the
Standstill Limit shall increase by a number of shares equal to 25% of the
number of outstanding shares of Common Stock in excess of 11,945,621
shares and any such increase as of the Repurchase Date shall survive the
Repurchase Date, (iii) in the event that, as of any date after the
Repurchase Date and prior to the termination hereof (any such date, a
"RESET DATE"), the Standstill Limit represents less than 23% of the
outstanding shares of Common Stock as a result of the issuance by the
Company after the Repurchase Date of a number of shares of Common Stock in
excess of the number of shares repurchased by, and/or forfeited to, the
Company after the Repurchase Date, then the Standstill Limit shall
increase to that number of shares of Common Stock that is equal to 24.9%
of the outstanding shares of Common Stock of the Company as of the
applicable Reset Date, (iv) for purposes of the Standstill Limit, any
shares of Common Stock (whether or not restricted) and options to purchase
shares of Common Stock issued or granted to Xx. Xxxxx in his capacity as a
director of the Company shall not be deemed to be held, beneficially owned
or controlled by the Ramius Group, and such shares shall not be deemed to
be outstanding shares of Common Stock, and (v) for purposes of the
Standstill Limit, any shares of Common Stock (whether or not restricted)
and options to purchase shares of Common Stock issued or granted to Xx.
Xxxxxxxxxx after the date hereof in his capacity as a director, and up to
10,000 shares of Common Stock otherwise acquired by Xx. Xxxxxxxxxx in his
individual capacity, shall not be deemed to be held, beneficially owned or
controlled by the Ramius Group, and such shares shall not be deemed to be
outstanding shares of Common Stock; PROVIDED, FURTHER, that nothing herein
shall limit the ability of any member of the Ramius Group to transfer any
voting securities of the Company or direct or indirect rights or options
to acquire any voting securities of the Company to any other member of the
Ramius Group; and PROVIDED, FURTHER, that Affiliates of the Ramius Group
that execute a joinder to this Agreement in a form reasonably acceptable
to the Company shall become members of the Ramius Group at the time of
such execution;
b. except as provided in Section 8 hereof or as otherwise expressly
provided in this Agreement, (i) initiate, propose, induce or attempt to
induce any other person to initiate any stockholder proposal, nominate any
person to be elected as a member of the Board or make any attempt to call
a special meeting of stockholders of the Company, (ii) submit any proposal
for consideration at, or bring any other business before, any meeting of
stockholders of the Company, or request that the Company include any
proposals or nominees for election as members of the Board in any Company
proxy statement, (iii) engage, or in any way participate, directly or
indirectly, in any "solicitation" (as such term is defined in Rule
14a-1(l) promulgated by the SEC under the Exchange Act) of proxies or
consents (whether or not relating to the election or removal of
directors), seek to advise, encourage or influence any Person with respect
to the voting of any Company securities (except in support of
Board-approved proposals), or (iv) otherwise communicate with the
Company's stockholders or others pursuant to Rule 14a-1(l)(2)(iv) under
the Exchange Act; PROVIDED, HOWEVER, that nothing herein shall limit the
ability of the Ramius Group to vote its voting securities on any matter
submitted to a vote of the stockholders of the Company or announce its
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opposition to any Board-approved proposals not supported by Xx. Xxxxx or
limit the ability of the Ramius Nominees to exercise their rights as
members of the Board while serving as members of the Board;
c. make any public announcement with respect to, or publicly offer
to effect, seek or propose (with or without conditions), any merger,
acquisition, consolidation, other business combination, restructuring,
recapitalization, tender offer, exchange offer or other extraordinary
transaction with or involving the Company or any of its subsidiaries or
any of its or their securities or assets; PROVIDED, HOWEVER, that nothing
herein shall limit the ability of the Ramius Group to issue any
communication contemplated by Rule 14a-1(l)(2)(iv) stating how they intend
to vote and the reasons therefor with respect to any extraordinary
transaction of any kind or nature between the Company and any third party
unaffiliated with the Ramius Group; PROVIDED FURTHER, that nothing
contained herein shall limit the ability of the Ramius Group to file an
amendment or amendments to its Schedule 13D regarding the Common Stock of
the Company as required by law or to make other securities or tax filings
as required by law so long as the Ramius Group does not enter into any
contract, arrangement, understanding or relationship (legal or otherwise)
with respect to the Company's voting securities, or otherwise take any
action, in violation of clauses (a)-(f) of Section 7 hereof;
d. (i) form, join or in any way participate in a "group" as defined
in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder, other than a "group"
that includes all or some lesser number of persons identified as members
of the Ramius Group, but does not include any other members who are not
currently identified as members of the Ramius Group, (ii) enter into any
negotiation, contract, arrangement, understanding or relationship (legal
or otherwise) with any third parties, other than members of the Ramius
Group solely with respect to the members of the Ramius Group, in
connection with any of the foregoing or with respect to the voting of any
voting securities of the Company, (iii) or otherwise deposit any voting
securities of the Company in any voting trust or subject any voting
securities of the Company to any arrangement or agreement with respect to
the voting of any voting securities of the Company, except as expressly
set forth in this Agreement;
e. publicly seek or publicly request permission to do any of the
foregoing or to amend or waive any provision of Section 7 hereof
(including any of clauses (a)-(f) hereof), or make any public announcement
with respect to any of the foregoing; or
f. take, or cause others to take, any actions inconsistent with
Section 7 hereof (including any of clauses (a)-(f) hereof).
8. a. Notwithstanding the foregoing, on and after the date that is 30 days
prior to the last date on which a stockholder of the Company may nominate, in
accordance with the applicable procedures set forth in the Company's Bylaws
(which pursuant to the Bylaws, as in effect as of the date of this Agreement, is
the date that is sixty (60) days prior to the meeting of stockholders at which a
member of the Board will be elected), a person for election as a member of the
Board at the 2008 Annual Meeting (such date, the "2008 NOMINATION DEADLINE
Date"), the Ramius Group shall not be prohibited from (i) nominating up to two
persons for election at the 2008 Annual Meeting to serve for a term of three
years expiring at the Company's 2011 Annual Meeting of Stockholders in
accordance with the Company's procedures set forth in its Bylaws for
stockholders to nominate persons for election to the Board, (ii) soliciting
proxies with respect to the voting securities of the Company with respect to
such nominees, or (iii) taking any actions in connection with the nomination of
persons in connection with the 2008 Annual Meeting, including requesting a
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stockholder list and related information, filing an amendment or amendments to
its Schedule 13D regarding the Common Stock of the Company as required by law or
taking any other action related to the solicitation of proxies or written
consents or making any public filings or announcements in furtherance thereof;
provided, however, in the event that either Xx. Xxxxx or Xx. Xxxxxxxxxx is no
longer a member of the Board at the time the Ramius Group nominates persons for
election in connection with the 2008 Annual Meeting, then the Ramius Group shall
be permitted to nominate up to three persons for election at the 2008 Annual
Meeting; provided further, in the event that the size of the Board is increased
beyond nine members, the Ramius Group shall be permitted to nominate a number of
persons for election at the 2008 Annual Meeting that is equal to the number of
directors up for election at the 2008 Annual Meeting.
a. The Company shall provide RCG Starboard Advisors, LLC, a Delaware
limited liability company ("RCG STARBOARD") notice (i) of the date of the 2008
Annual Meeting not less than 45 days prior to the 2008 Nomination Deadline Date,
and (ii) any amendment of the Company's Bylaws that changes the time period
during which or procedures by which a stockholder may, in accordance with the
applicable procedures set forth in the Company's Bylaws, nominate a person for
election as a member of the Board at an annual meeting of stockholders, within
not more than four (4) business days after such amendment (the "BYLAW AMENDMENT
NOTICE"). In the event that any such amendment of the Company's Bylaws results
in a deadline for either nomination of directors that is a date prior to the
date of receipt of the Bylaw Amendment Notice by RCG Starboard, then RCG
Starboard shall have ten (10) days from the date of its receipt of the Bylaw
Amendment Notice to nominate persons for election as members of the Board at the
2008 Annual Meeting.
9. Following the execution of this Agreement, the Company shall issue the
press release announcing the terms of this Agreement, in the form attached
hereto as EXHIBIT A (the "PRESS RELEASE"), and shall file a Current Report on
Form 8-K with the SEC disclosing the terms of this Agreement and attaching as
exhibits this Agreement and the Press Release. None of the Parties hereto will
make any other public statements (including in any filing with the SEC or any
other regulatory or governmental agency, including any stock exchange) that are
inconsistent with, or otherwise contrary to, the statements in the Press
Release. Neither the Ramius Group nor any of its members shall make any public
statements (including in any filing with the SEC or any other regulatory or
governmental agency, including any stock exchange), except that it may amend its
Schedule 13D regarding the Common Stock (as amended, the "SCHEDULE 13D") as
required by law and in a manner consistent with this Agreement and not
inconsistent with, or otherwise contrary to, the statements in the Press
Release.
10. The Company shall reimburse the Ramius Group for its reasonable,
documented out-of-pocket fees and expenses incurred (including legal expenses)
in connection with the Schedule 13D, matters related to the 2007 Annual Meeting
and the negotiation and execution of this Agreement, provided that such
reimbursement shall not exceed $37,500 in the aggregate.
11. The Ramius Group shall cause its Affiliates to comply with the terms
of this Agreement. Each member of the Ramius Group listed herein, on behalf of
himself or itself, as applicable, represents and warrants to the Company that
(a) as of the date hereof, the Ramius Group and each member of the Ramius Group
beneficially owns the number of shares of Common Stock as described opposite his
or its name on SCHEDULE A and SCHEDULE A includes all Affiliates of any members
of the Ramius Group that own any securities of the Company beneficially or of
record, (b) this Agreement has been duly and validly authorized, executed and
delivered by such member, and constitutes a valid and binding obligation and
agreement of such member, enforceable against such member in accordance with its
terms, (c) each signatory to this Agreement by any member of the Ramius Group
has the authority to execute the Agreement on behalf of himself and the
applicable member of the Ramius Group associated with that signatory's name, and
to bind such member of the Ramius Group to the terms hereof, (d) no member of
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the Ramius Group is party to any agreements regarding the voting of disposition
of shares of Common Stock, (e) the execution, delivery and performance of this
Agreement by each member of the Ramius Group does not and will not violate or
conflict with (i) any law, rule, regulation, order, judgment or decree
applicable to it, or (ii) result in any breach or violation of or constitute a
default (or an event which with notice or lapse of time or both could become a
default) under or pursuant to, or result in the loss of a material benefit
under, or give any right of termination, amendment, acceleration or cancellation
of, any organizational document, agreement, contract, commitment, understanding
or arrangement to which such member is a party or by which it is bound, and (f)
no consent, approval, authorization, license or clearance of, or filing or
registration with, or notification to, any court, legislative, executive or
regulatory authority or agency is required in order to permit any member of the
Ramius Group to perform such member's obligations under this Agreement, except
for such as have been obtained.
The Company represents and warrants to the Ramius Group that (a) the
Company has the corporate power and authority to execute the Agreement and to
bind it thereto, (b) this Agreement has been duly and validly authorized,
executed and delivered by the Company, constitutes a valid and binding
obligation and agreement of the Company, and is enforceable against the Company
in accordance with its terms, (c) the execution, delivery and performance of
this Agreement by the Company does not and will not violate or conflict with (i)
any law, rule, regulation, order, judgment or decree applicable to it, or (ii)
result in any breach or violation of or constitute a default (or an event which
with notice or lapse of time or both could become a default) under or pursuant
to, or result in the loss of a material benefit under, or give any right of
termination, amendment, acceleration or cancellation of, any organizational
document, agreement, contract, commitment, understanding or arrangement to which
the Company is a party or by which it is bound and (d) no consent, approval,
authorization, license or clearance of, or filing or registration with, or
notification to, any court, legislative, executive or regulatory authority or
agency is required in order to permit the Company to perform its obligations
under this Agreement, except for such as have been obtained.
12. This Agreement 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 amendment or other modification of this Agreement may
be made except in writing signed by an authorized representative of each of the
Company and RCG Starboard.
13. 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.
14. Each of the Ramius Group and the Company acknowledges and agrees that
irreparable injury to the other would occur in the event any its obligations
under this Agreement were not performed in accordance with the specific terms
hereof or it otherwise breached this Agreement 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
specific enforcement of (without the necessity of posting a bond or other
security or proving actual damages), and injunctive relief to prevent any
violation of (without the necessity of posting a bond or other security or
proving actual damages), the terms of this Agreement and the other Parties
hereto will not take action, directly or indirectly, in opposition to the Moving
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Party seeking such relief on the grounds that any other remedy or relief is
available at law or in equity. This Section 13 shall not in any way affect a
Party's right to exercise its rights at law.
15. Certain of the Parties have agreed to execute a confidentiality
agreement simultaneous with the execution of this Agreement regarding material
nonpublic information shared with the Ramius Group (the "CONFIDENTIALITY
Agreement"). Under the terms of the Confidentiality Agreement, the Company has
agreed that prior to the 2007 Annual Meeting it will not take any action that
the Board considers material without first advising a Ramius Nominee regarding
such action.
16. Each member of the Ramius Group hereby irrevocably appoints RCG
Starboard Advisors, LLC as such member's attorney-in-fact and representative
(the "RAMIUS REPRESENTATIVE"), in such member's place and stead, to do any and
all things and to execute any and all agreements, instruments and other
documents and any amendments, modifications and waivers hereto and thereto and
to give and receive any and all notices or instructions in connection with this
Agreement and the transactions contemplated hereby and thereby. The Company
shall be entitled to rely, as being binding on each member of the Ramius Group,
upon any action taken by the Ramius Representative or upon any document, notice,
instruction or other writing given or executed by the Ramius Representative.
Each member of the Ramius Group acknowledges and agrees that each agreement,
covenant or other obligation of the Ramius Group hereunder shall be binding on
such member of the Ramius Group.
17. 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, or determines that it
does not have, jurisdiction over a particular matter, any state or federal court
within the State of Delaware). Each of the Parties hereto hereby irrevocably
submits with regard to any such action or proceeding for itself and in respect
of its property, generally and unconditionally, to the personal jurisdiction of
the aforesaid courts and agrees that it will not bring any action relating to
this Agreement in any court other than the aforesaid courts. Each of the parties
hereto hereby irrevocably waives, and agrees not to assert in any action or
proceeding with respect to this Agreement, (i) any claim that it is not
personally subject to the jurisdiction of the above-named courts for any reason,
(ii) any claim that it or its property is exempt or immune from jurisdiction of
any such court or from any legal process commenced in such courts (whether
through service of notice, attachment prior to judgment, attachment in aid of
execution of judgment, execution of judgment or otherwise) and (iii) to the
fullest extent permitted by applicable legal requirements, any claim that (A)
the suit, action or proceeding in such court is brought in an inconvenient
forum, (B) the venue of such suit, action or proceeding is improper or (C) this
Agreement, or the subject mater hereof, may not be enforced in or by such
courts.
18. This Agreement and any amendments hereto may be executed and delivered
in one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original, but
all of which taken together shall constitute one and the same agreement, and
shall become effective when counterparts have been signed by each party hereto
and delivered to the other parties hereto, it being understood that all parties
need not sign the same counterpart. In the event that any signature to this
Agreement or any amendment hereto is delivered by facsimile transmission or by
e-mail delivery of a ".pdf" format data file, such signature shall create a
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valid and binding obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such facsimile or
".pdf" signature page were an original thereof. At the request of any party each
other party shall promptly re-execute an original form of this Agreement or any
amendment hereto and deliver the same to the other party. No party hereto shall
raise the use of a facsimile machine or e-mail delivery of a ".pdf" format data
file to deliver a signature to this Agreement or any amendment hereto or the
fact that such signature was transmitted or communicated through the use of a
facsimile machine or e-mail delivery of a ".pdf" format data file as a defense
to the formation or enforceability of a contract, and each party hereto forever
waives any such defense.
19. Any notices, consents, determinations, waivers or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one (1) Business Day after deposit
with a nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers
for such communications shall be:
If to the Company:
Xxxxxx Xxxx Corporation
000 Xxxxxxxxxxxx Xxxxx
Xxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx
Facsimile: 000-000-0000
With a copy to:
Xxxxxx Xxxxxx Xxxxxxxx LLP
000 X. Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx Xxxxxxx, Esq. and Xxxx X. Xxxx, Esq.
Facsimile: 312-902-1061
If to the Ramius Group or any member of the Ramius Group:
RCG Starboard Advisors, LLC
c/o Ramius Capital Group, L.L.C.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxx
Facsimile: 000-000-0000
With a copy to:
Xxxxxx Xxxxxxxx Frome Xxxxxxxxxx & Xxxxxxx LLP
Park Avenue Tower
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx, Esq.
Facsimile: (000) 000-0000
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20. This Agreement shall be binding upon and inure to the benefit of the
Parties and their respective successors and assigns. No Party shall assign this
Agreement or any rights or obligations hereunder without, with respect to any
member of the Ramius Group, the prior written consent of the Company, and with
respect to the Company, the prior written consent of RCG Starboard.
21. The language used in this Agreement will be deemed to be the language
chosen by the parties to express their mutual intent, and no rules of strict
construction will be applied against any party. Unless the context otherwise
requires, (a) all references to Sections or Schedules are to Sections or
Schedules contained in or attached to this Agreement, (b) words in the singular
or plural include the singular and plural and pronouns stated in either the
masculine, the feminine or neuter gender shall include the masculine, feminine
and neuter, and (c) the use of the word "including" in this Agreement shall be
by way of example rather than limitation.
[ THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK ]
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the day and year first above written.
XXXXXX XXXX CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chief Executive Officer,
President, Secretary
PARCHE, LLC RCG STARBOARD ADVISORS, LLC
By: RCG Starboard Advisors, LLC, By: Ramius Capital Group, L.L.C.,
its managing member its sole member
STARBOARD VALUE AND OPPORTUNITY MASTER RAMIUS CAPITAL GROUP, L.L.C.
FUND LTD. By: C4S & Co., L.L.C.,
By: RCG Starboard Advisors, LLC, as managing member
its investment manager
C4S & CO., L.L.C.
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Authorized Signatory
/s/ Xxxxxxx X. Xxxxxxx /s/ Xxxxx X. Xxxx
------------------------------------- -------------------------------------
XXXXXXX X. XXXXXXX XXXXX X. XXXX
Individually and as attorney-in-fact
for Xxxxx X. Xxxxx, Xxxxxx X. Xxxxx
and Xxxxxx X. Xxxxxxx
/s/ Xxxxxxx X. Xxxxx
-------------------------------------
XXXXXXX X. XXXXX
Individually and as attorney-in-fact
for Xxxxxx Xxxxxxxxxx
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By: Starboard Value and Opportunity Master Fund Ltd.
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Authorized Signatory
By: Parche, LLC
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Authorized Signatory
By: RCG Enterprise, Ltd
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Authorized Signatory
By: RCG Starboard Advisors, LLC
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Authorized Signatory
By: Ramius Capital Group, L.L.C.
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Authorized Signatory
By: C4S & CO., L.L.C.
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Authorized Signatory
12
SCHEDULE A
THE RAMIUS GROUP
Parche, LLC 397,720
Starboard Value and 2,088,020
Opportunity Master Fund Ltd.
RGC Starboard Advisors, LLC 2,485,740
Ramius Capital Group, L.L.C. 2,485,740
C4S & CO., LLC 2,485,740
RCG Enterprise, Ltd 0
Xxxxx X. Xxxxx 2,485,740
Xxxxxx X. Xxxxx 2,485,740
Xxxxxxx X. Xxxxxxx 2,485,740
Xxxxxx X. Xxxxxxx 2,485,740
Xxxxxx Xxxxxxxxxx 0
Xxxxx X. Xxxx 0
Xxxxxxx X. Xxxxx 0
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EXHIBIT A
PRESS RELEASE
CONTACT:
Xxxxxx X. Xxxxxxxx
President and Chief Executive Officer
(000) 000-0000
XXXXXX XXXX REACHES AGREEMENT WITH RAMIUS ON NEW BOARD NOMINEES
XXXXXXX XXXXX AND XXXXXX XXXXXXXXXX TO BE NOMINATED;
RAMIUS WITHDRAWS PROXY NOMINATIONS
EXTON, OCTOBER 24, 2007 -- Xxxxxx Xxxx Corporation (NASDAQ: KNSY) announced
today that it has reached agreement with Ramius Capital Group, L.L.C. ("Ramius")
and its affiliates (collectively, the "Ramius Group") regarding the nomination
of candidates for election to the Company's Board of Directors at its 2007
Annual Meeting. Starboard Value and Opportunity Master Fund Ltd., one of Ramius'
affiliates, had nominated three individuals for election to the Board at the
2007 Annual Meeting. The Ramius Group collectively holds approximately 20.8% of
the Company's outstanding shares.
The Xxxxxx Xxxx Board of Directors has determined that it is in the best
interests of the stockholders of the Company to nominate Xxxxxxx Xxxxx and
Xxxxxx Xxxxxxxxxx, who were originally nominated by Starboard Value and
Opportunity Master Fund Ltd., for election to the Xxxxxx Xxxx Board at the
Company's annual meeting of stockholders on December 5, 2007. The Board has
nominated Xx. Xxxxx and Xx. Xxxxxxxxxx for election as directors and agreed to
recommend a vote "for" Xx. Xxxxx and Xx. Xxxxxxxxxx. Following their election,
Xx. Xxxxxxxxxx will be appointed as a member of the Audit Committee of the Board
and Xx. Xxxxx will be appointed as a member of the Governance and Nominating
Committee of the Board and a member of a Strategic Planning Committee of the
Board that the Company has agreed to establish pursuant to the terms of the
agreement. The Board has also nominated for re-election Mr. Xxxxxx Xxxx, whose
current term expires at the 2007 Annual Meeting.
In announcing the agreement, Xx. Xxxxxx Xxxxxxxx, president and chief executive
officer of Xxxxxx Xxxx, said, "We are very pleased that we were able to reach an
agreement with the Ramius Group, our largest stockholder. We welcome Xxxx and
Xxxxxx to our board."
Xx. Xxxxx is a partner of Ramius Capital Group, L.L.C., a member of the Ramius
Group. Xx. Xxxxxxxxxx, is the Chairman and Chief Executive Officer of Winchester
Capital Partners, a private transatlantic investment bank. Xx. Xxxxx also serves
as a director of S1 Corporation, and Xx. Xxxxxxxxxx also serves as a director of
Bramdean PLC.
Ramius partner Xxxxxxx X. Xxxxx said, "We are delighted to have brought this
situation to an amicable conclusion and look forward to working constructively
with the Company and its Board to continue to create additional value for the
stockholders of the Company."
In connection with the agreement, the Ramius Group has agreed to withdraw its
previous nomination of Xx. Xxxxx, Xx. Xxxxxxxxxx and Xx. Xxxxx Xxxx. In addition
to Xx. Xxxxx and Xx. Xxxxxxxxxx, the Ramius Group also agreed to vote in favor
of the Company's other director nominee, Xxxxxx Xxxx, for re-election to the
Board at the 2007 Annual Meeting.
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In addition, the Ramius Group has agreed to limit the number of additional
Xxxxxx Xxxx shares it may acquire prior to the Company's 2008 Annual Meeting and
has agreed to refrain from submitting shareholder proposals, conducting proxy
solicitation activities or taking certain other actions until the 2008 meeting,
except that the Ramius Group may nominate up to two individuals for election to
the Board at the 2008 meeting and engage in proxy solicitation activities
related to those nominations.
The Company also announced that after 23 years of service on the Xxxxxx Xxxx
Board of Directors, Mr. Xxxx Xxxx has decided to retire from the Board,
effective as of the date of the 2007 Annual Meeting, the end of his current
three-year term. Xx. Xxxx, who will continue in his role as the Company's VP of
new technology, will become a board member emeritus, in honor of his role as
founder of the company and as a tribute to his many years of service on the
board.
"As a board member, John's vision for creating a medical device company that
develops innovative cost-effective products for helping patients has defined the
company that we have become today. We are thankful for his contributions and
pleased that he has elected to remain in his role as VP of New Technology where
he can continue to create and develop new products for the company," commented
Xx. Xxxxxxxx.
In addition, Xx. Xxx Xxxxxxxxx, the chairman of the Company's Audit Committee,
will not seek re-election to the Board of Directors following his current
three-year term, which ends as of the 2007 Annual Meeting. "On behalf of the
Board of Directors, we wish to thank both Xxxx and Xxx for their contributions
over the past years. We greatly appreciate their service to the Company,"
commented Xx. Xxxxxx Xxxxxx, Chairman of the Board.
ABOUT XXXXXX XXXX CORPORATION
Xxxxxx Xxxx Corporation is a leading medical technology company providing
innovative solutions and technologies for a wide range of medical procedures.
The Company provides an extensive range of products into multiple medical
markets, primarily in the endovascular, sports medicine and spine markets. Many
of the products are based on the Company's significant expertise in the design,
development, manufacturing and processing of absorbable biomaterials, which has
led to partnerships to commercialize technologies. Xxxxxx Xxxx has also
commercialized a series of innovative products through its own direct
endovascular sales force. The Company is known as a pioneer in the field of
arterial puncture closure, as the inventor and developer of the Angio-Seal(TM)
Vascular Closure Device, which is licensed to St. Jude Medical, Inc.
ABOUT RAMIUS CAPITAL GROUP, L.L.C.
Ramius Capital Group is a registered investment advisor that manages assets of
approximately $9.6 billion in a variety of alternative investment strategies.
Ramius Capital Group is headquartered in New York with offices located in
London, Tokyo, Hong Kong, Munich, and Vienna.
CAUTIONARY NOTE FOR FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements that reflect the
Company's current expectations about its prospects and opportunities. The
Company has tried to identify these forward looking statements by using words
such as "expect," "anticipate," "estimate," "plan," "will," "forecast,"
"believe," or similar expressions, but these words are not the exclusive means
for identifying such statements. The Company cautions that a number of risks,
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uncertainties, and other important factors could cause the Company's actual
results to differ materially from those in the forward-looking statements
including, without limitation, the Company's success in launching its
endovascular products into the marketplace, the Company's dependence on three
major customers (St. Jude Medical, Arthrex and Orthovita) and their success in
selling Xxxxxx Xxxx related products in the marketplace, the impact of product
recalls and other manufacturing issues, and competition from other technologies,
among other important risks. For a more detailed discussion of these and other
factors, please see the Company's SEC filings, including the disclosure under
"Risk Factors" in those filings. Except as expressly required by the federal
securities laws, the Company undertakes no obligation to update or revise any
forward-looking statements, whether as a result of new information, changed
circumstances or future events or for any other reason.
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