AGREEMENT
THIS
AGREEMENT (“Agreement”), dated as
of February 4, 2009, is made by and among White Electronic Designs Corporation,
an Indiana corporation (“WEDC”), Wynnefield
Partners Small Cap Value, L.P. (and its affiliates) (“Wynnefield
Partners”), Caiman Partners, L.P. (and its affiliates), Xxxx Capital
Management LLC (“Xxxx
Partners”) (“Xxxx Partners”, “Caiman Partners” with Wynnefield Partners,
each a “Shareholder
Party” and collectively, the “Shareholder Parties”)
and, solely with respect to Section 8(b) of this Agreement in each of their
respective capacities as shareholders, Xxxx X. Xxxxx, Xxxx X. Xxxxxxx, Xxxxxx X.
Xxxxxxx, Xxxxxx X. Toy and Xxxxxx X. Xxxxx. From time to time in this
Agreement, WEDC, the Shareholder Parties and the individuals specified in the
immediately preceding sentence are referred to individually as a “Party” and together
as the “Parties.”
WHEREAS,
the Shareholder Parties may be deemed to beneficially own shares of common stock
of WEDC (the “Common
Stock”) totaling, in the aggregate, 2,230,701 shares, or approximately
9.8% of the Common Stock issued and outstanding; and
WHEREAS,
WEDC and the Shareholder Parties have agreed that it is in their mutual
interests to enter into this Agreement.
NOW,
THEREFORE, in consideration of the premises and the representations, warranties,
and agreements contained herein, and other good and valuable consideration, the
Parties mutually agree as follows:
1.
Representations and Warranties of the Shareholder Parties. Each of the
Shareholder Parties represents and warrants to WEDC that (a) this Agreement
has been duly authorized, executed and delivered by such Shareholder Party, and
is a valid and binding obligation of such Shareholder Party, enforceable against
such Shareholder Party in accordance with its terms, except as enforcement
thereof may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or similar laws generally affecting the rights
of creditors and subject to general equity principles; (b) neither the
execution of this Agreement nor the consummation of any of the transactions
contemplated hereby nor the fulfillment of the terms hereof, in each case in
accordance with the terms hereof, will conflict with, result in a breach or
violation or imposition of any lien, charge or encumbrance upon any property or
assets of such Shareholder Party or any of its subsidiaries pursuant to any law,
any order of any court or other agency of government, the organizational
documents of such Shareholder Party as currently in effect, or the terms of any
indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument to
which such Shareholder Party is a party or bound or to which its or its property
or assets is subject; and (c) as of the date of this Agreement, the
Shareholder Parties may be deemed to beneficially own in the aggregate 2,230,701
shares of Common Stock.
2.
Representations and Warranties of WEDC. WEDC hereby represents and
warrants to the Shareholder Parties that (a) this Agreement has been duly
authorized, executed and delivered by WEDC, and is a valid and binding
obligation of WEDC, enforceable against WEDC in accordance with its terms,
except as enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or similar laws
generally affecting the rights of creditors and subject to general equity
principles; (b) neither the execution of this Agreement nor the
consummation of any of the transactions contemplated hereby nor the fulfillment
of the terms hereof, in each case in accordance with the terms hereof, will
conflict with, result in a breach or violation or imposition of any lien, charge
or encumbrance upon any property or assets of WEDC or any of its subsidiaries
pursuant to any law, any order of any court or other agency of government,
WEDC’s Restated Articles of Incorporation, Amended and Restated Bylaws, or the
terms of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition, covenant or
instrument to which WEDC is a party or bound or to which its property or assets
is subject nor trigger any “change of control” provisions in any agreement to
which WEDC is a party; and (c) the only proposals to be included in WEDC’s
definitive proxy statement for its 2009 annual shareholder meeting will be a
proposal for a slate of nominees to the Board of Directors of WEDC, the proposal
described in Section 5(a) of this Agreement and a proposal to approve WEDC’s
independent auditors.
3.
Directorships.
(a) Prior
to the time that WEDC mails its definitive proxy statement for its 2009 annual
shareholder meeting, but in any event no later than seven (7) days after
the date hereof, WEDC shall increase the size of its board of directors (the
“Board”) from
five (5) to seven (7) members. The Nominating and Corporate
Governance Committee of the Board (the “Nominating
Committee”) has in good faith, having reviewed and approved the
credentials of Messrs. Xxxxx Xxxx and Xxx Xxxxxxx in the exercise of its
fiduciary duties, concluded that each such candidate has business experience in
such areas as would reasonably be expected to enhance the Board, and determined,
consistent with WEDC’s guidelines relating to director qualifications and Board
composition, to immediately appoint Messrs. Xxxxx Xxxx and Xxx
Xxxxxxx to the Board (the “New Appointees”) to
fill the vacancy on the Board created by increasing its size to seven (7)
members, pending the Nominating Committee’s expected completion of background
checks of the New Appointees by February 6, 2009.
(b) WEDC
agrees that the Board will take all actions necessary and appropriate
to:
(1)
nominate the New Appointees as directors of WEDC at WEDC’s 2009 annual
shareholder meeting (other than in the case of such person’s refusal to serve or
if such person has committed an act that would be grounds for removal from the
Board for cause, in which case the Shareholder Parties will have the right to
designate and substitute another person or persons, subject to prompt reasonable
evaluation and determination by the Nominating Committee in good faith after
exercising its fiduciary duties that such candidate has business experience in
such areas as would reasonably be expected to enhance the Board, consistent with
WEDC’s guidelines relating to director qualifications and Board composition),
together with the other persons included in WEDC’s slate of nominees for
director, with terms expiring at WEDC’s 2010 annual shareholder
meeting;
(2)
recommend, and reflect such recommendation in WEDC’s definitive
proxy statement in connection with WEDC’s 2009 annual shareholder meeting, that
the shareholders of WEDC vote to elect the New Appointees as directors of WEDC
at the 2009 annual shareholder meeting;
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(3) use
reasonable efforts consistent with the efforts used to obtain proxies for the
other candidates nominated by the Board to obtain proxies in favor of the
election of the New Appointees at the 2009 annual shareholder meeting;
and
(4)
ensure that, for all times that either of the New Appointees or any replacement
director appointed pursuant to Section 3(c) below, remains in office, one such
appointee will have the right, subject to compliance with applicable Securities
and Exchange Commission (the “SEC”)) and Nasdaq
corporate governance rules, to serve on all committees and sub-committees of the
Board (or any substitutes therefor), provided that the Board shall not be
obligated to appoint or designate either New Appointee as the chairman of any
such committee or sub-committee.
(c) WEDC
agrees that, during the term of this Agreement, if a New Appointee resigns or is
otherwise unable to serve as a director or is removed for cause as a director,
the Shareholder Parties will have the right to designate and substitute a person
or persons for appointment to the Board as a replacement director, subject to
evaluation and determination by the Nominating Committee using the standards
described in Section 3(b)(1);
provided that (1) the Board’s approval and appointment of the Shareholder
Parties’ replacement nominee shall not be unreasonably withheld or delayed and
(2) the Board shall not be required to approve more than one replacement at a
time for each Board position to which the Shareholder Parties are entitled
pursuant to Section
3(a).
(d) Each
of the New Appointees, upon appointment or election to the Board, will be
governed by the same protections and obligations regarding confidentiality,
conflicts of interests, fiduciary duties, trading and disclosure policies and
other governance guidelines, and shall have the same rights and benefits,
including (but not limited to) with respect to insurance, indemnification,
compensation and fees, as are generally applicable to any non-employee directors
of WEDC. WEDC represents, warrants and agrees that it does not have any current
policy nor will it adopt any policy requiring any director on the Board to
purchase or sell securities of WEDC pursuant to a 10b5-1 plan to be adopted by
any such director.
(e) WEDC
shall not, and shall cause the Board not to, take any action during the term of
this Agreement, to increase the number of members on the Board to more than
seven (7) directors; provided, however, that the Board may expand the number of
members on the Board to eight (8) solely in the event that the Board determines
that WEDC’s Chief Executive Officer should be appointed to the Board and, at
such time, there are seven members then serving on the Board.
(f) WEDC
agrees that it shall hold the 2009 annual meeting of WEDC shareholders as soon
as practicable, but in any event, no later than on or before May 15,
2009.
4. Strategic Review
Committee. WEDC
hereby confirms that the Board has formed a Strategic Review Committee. Such
committee shall, as promptly as practicable, approve and adopt a committee
charter that incorporates the provisions attached hereto as Exhibit
A. Any actions taken by the Board’s Strategic Review Committee
(and any successor
or other committee of the Board that performs a similar function), including any
committee approvals or recommendations to the full Board, shall require the
unanimous approval of all then serving members of such committee. For
purposes of clarity, at all times during the duration of this Agreement, Xx.
Xxxx, one of the New Appointees (or such other director designated by the
Shareholder Parties as provided for in Section 3(c) above)
shall be a member of the Strategic Review Committee.
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5. Charter
Documents.
(a) WEDC
shall recommend to its shareholders and reflect in its definitive proxy
statement for its 2009 annual shareholder meeting that the shareholders approve
amendments to WEDC’s Restated Articles of Incorporation authorizing WEDC’s
shareholders representing a majority of WEDC’s outstanding shares of Common
Stock to amend WEDC’s Amended and Restated Bylaws (the “Bylaws”). In
addition, promptly following the execution of this Agreement, the Board shall
amend the Bylaws in order to (1) allow shareholders owning at least 30% of
WEDC’s outstanding shares of Common Stock to call a special meeting of
shareholders and (2) limit the number of directors constituting the entire Board
to no more than seven (7) directors; provided, however, that the Board may
expand the number of members on the Board to eight (8) solely in the event that
the Board determines that its Chief Executive Officer should be appointed to the
Board and, at such time, there are seven members then serving on the
Board.
(b) In
connection with the 2009 annual meeting of shareholders, the Board shall take
all actions necessary and appropriate to recommend that the shareholders of WEDC
vote to approve the proposal described in Section 5(a)
above.
(c) WEDC
shall use reasonable efforts consistent with the efforts used to obtain proxies
for the other proposals set forth in the proxy statement for the 2009 annual
meeting to obtain proxies in favor of approval of the proposal described in
Section
5(a).
6. Standstill
Restrictions.
Subject to applicable law, including Section 13(d) and (g) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”),
except as permitted pursuant to the terms of this Agreement, during the term of
this Agreement, the Shareholder Parties shall not, and shall cause their
respective officers, directors, employees, representatives and agents not to, in
any manner, directly or indirectly:
(a)
solicit (as such term is used in the proxy rules of the SEC) proxies or written
consents of shareholders, or conduct any nonbinding referendum with respect to
Common Stock, or make, or in any way participate in, any “solicitation” of any
“proxy” within the meaning of Rule 14a-1 promulgated by the SEC under the
Exchange Act to vote any shares of Common Stock with respect to any matter, or
become a “participant” in any “contested solicitation” for the election of
directors with respect to WEDC (as such terms are defined or used in the
Exchange Act and the rules promulgated thereunder), other than solicitations or
acting as a participant in support of all of WEDC’s nominees and proposal
described in Section
5(a) above;
(b)
purchase or cause to be purchased or otherwise acquire or agree to acquire
beneficial ownership (as determined under Rule 13d-3 promulgated under the
Exchange Act) of any Common Stock or other securities issued by WEDC, if in any
such case, immediately after the taking of such action, (1) Wynnefield Partners
would, in the aggregate, beneficially own more than 9.9% of the then outstanding
shares of Common Stock or (2) Xxxx Partners and Caiman Partners, L.P. (with its
affiliates) would, in the aggregate, collectively beneficially own more than
9.9% of the then outstanding shares of Common Stock;
(c) make
or be the proponent of any shareholder proposal, whether pursuant to
Rule 14a-8 of the Exchange Act or otherwise;
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(d) form,
join or in any way participate in any “group” (within the meaning of Section
13(d)(3) of the Exchange Act) with respect to the Common Stock (other than a
group comprised solely of the Shareholder Parties);
(e)
deposit any Common Stock in any voting trust or subject any Common Stock to any
arrangement or agreement with respect to the voting of any Common Stock, other
than any such voting trust, arrangement or agreement solely among the
Shareholder Parties;
(f)
execute any written consent as a shareholder with respect to WEDC or its Common
Stock, except as set forth herein;
(g)
otherwise act, alone or in concert with others, to (i) make any public
statement critical of WEDC, its directors or management or (ii) control or
seek to control the Board, other than through non-public communications with the
officers and directors of WEDC;
(h) seek,
alone or in concert with others, (i) to call a meeting of shareholders,
(ii) representation on the Board, except as specifically contemplated in
Sections 3(a), (b) and (c), or (iii) the removal of any member of the
Board, except as specifically contemplated in Section 3(b)(5);
(i) make
any proposal regarding any of the foregoing;
(j)
publicly disclose any request to amend, waive or terminate any provision of this
Agreement; or
(k) take
or seek to take, or cause or seek to cause others to take, directly or
indirectly, any action inconsistent with any of the foregoing.
Notwithstanding
anything contained herein to the contrary, any member of the Shareholder Parties
shall be entitled to:
(i) vote their shares in favor of the
election of the New Appointees at the 2009 WEDC annual meeting of shareholders
and in favor of the proposal described in Section 5(a) hereof;
(ii) vote their shares in accordance
with Section 8 of this Agreement;
(iii) propose a slate of nominees for
election as directors and/or a proposal for consideration or approval by
shareholders at the 2010 WEDC annual meeting or any special meeting of
shareholders called for such purpose (other than by the Shareholder Parties) in
order to comply with the advance notice provisions or other requirements of
WEDC’s Restated Articles of Incorporation or Bylaws and to take such other
actions with respect thereto as required to comply with the laws of the State of
Indiana and the United States of America, and the regulations
thereunder.
7. Actions
by the Shareholder Parties.
(a) At
WEDC’s 2009 annual shareholder meeting, the Shareholder Parties shall vote, and
cause their respective officers, directors, employees and agents to vote, all of
the shares of Common Stock beneficially owned by him or them for each of WEDC’s
nominees for election to the Board, for the ratification of the appointment of
WEDC’s independent auditors and for approval of the proposal described in Section 5(a)
hereof.
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(b) Upon
the execution of this Agreement by the Parties and appointment of the New
Appointees as directors of WEDC, the Shareholder Parties shall terminate the
pending proxy contest with respect to the election of directors at WEDC’s 2009
annual shareholder meeting, as described in the preliminary proxy statement
filed with the SEC on Schedule 14A under the Exchange Act on January 9,
2009.
(c) Upon
the execution of this Agreement by the Parties and appointment of the New
Appointees as directors of WEDC, no further action will be taken by the
Shareholder Parties with respect to the letter from the Shareholder Parties,
dated December 18, 2008, as filed with the SEC on Schedule 14A under the
Exchange Act on December 22, 2008, (the “December Letter”),
and such December Letter will be stayed, except that the Shareholder Parties may
notify the SEC that they are withdrawing their preliminary proxy statement as a
result of this Agreement and file a Schedule 13D/A disclosing the execution of
this Agreement and terminating their status as a group (which notice and filing
shall not make any statements or disclosures that conflict with the terms of
this Agreement).
(d) Upon
appointment of the New Appointees as directors of WEDC, the December Letter
will, without any further action necessary on the part of any person, be
automatically and irrevocably withdrawn.
8. Voting of
Shares.
(a) From
the date hereof until the termination of this Agreement in accordance with
Section 9, the Shareholder Parties shall, and shall cause their respective
officers, directors, employees, representatives and agents to, vote any shares
of Common Stock beneficially owned by them in connection with any matter or
proposal submitted to a vote of WEDC's shareholders in their discretion either
(1) as recommended by the Board or (2) proportionately in accordance with the
votes of all other shareholders of WEDC who have voted with respect to such
matter or proposal (excluding shares beneficially owned, or deemed to be
beneficially owned, by the Shareholder Parties or by members of the Board for
purposes of determining such “at large” vote).
(b) From
the date hereof until the termination of this Agreement in accordance with
Section 9, each member of the Board (other than the New Appointees and their
successors, who shall be governed by Section 8(a)) shall
vote any shares of Common Stock beneficially owned by him in connection with any
matter or proposal submitted to a vote of WEDC's shareholders in his discretion
either (1) as recommended by the Board or (2) proportionately in accordance with
the votes of all other shareholders of WEDC who have voted with respect to such
matter or proposal (excluding shares beneficially owned, or deemed to be
beneficially owned, by the Shareholder Parties or by members of the Board for
purposes of determining such “at large” vote).
9.
Termination.
This Agreement shall terminate and the obligations of the Parties under
this Agreement shall cease:
(a) at
the option of WEDC, upon the earliest of (i) a material breach by any
Shareholder Party of any obligation hereunder which has not been cured within
14 days after receiving notice of such breach from WEDC, (ii) the
Shareholder Parties having, in the aggregate, beneficial ownership of less than
five percent of the outstanding shares of Common Stock; (iii) any person
becoming the beneficial owner of more than 50% of WEDC’s voting stock, including
by merger, acquisition, tender offer, exchange offer or other type of business
combination; or (iv) any person publicly announcing their intent to become the
beneficial owner of more than 50% of WEDC’s voting stock, including any merger,
acquisition, tender offer, exchange offer or other type of business
combination;
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(b) at
the option of the Shareholder Parties, upon the earliest of (i) a material
breach by WEDC of any obligation hereunder which has not been cured within
14 days after receiving notice of such breach from the Shareholder Parties
or (ii) (A) the public announcement by WEDC of its intention to enter into
a definitive agreement to transfer all or substantially all of the assets of
WEDC or more than 50% of the voting power of WEDC, whether by merger,
acquisition, tender offer, exchange offer or other type of business combination
or (B) any person (other than the Shareholder Parties) publicly announcing
their intent to become the beneficial owner of more than 50% of WEDC’s voting
stock, including any merger, acquisition, tender offer, exchange offer or other
type of business combination;
(c) on
the second business day preceding the date of WEDC’s 2010 annual shareholder
meeting (the “Termination
Date”);
(d) on
the day that a former member of the Shareholder Parties submits a slate for
election as directors or a public proposal for consideration by WEDC’s
shareholders at WEDC’s 2010 annual shareholder meeting (which date shall be no
earlier than seven (7) days prior to the last date on which a WEDC shareholder
may validly submit a proposal, other than pursuant to Rule 14a-8
under the Exchange Act, for consideration at WEDC’s 2010 annual
shareholder meeting, which date shall be disclosed in WEDC’s Definitive Proxy
Statement on Schedule 14A for its 2009 annual shareholder meeting);
(e) on
the day that the Board of WEDC publicly announces its nominees for election as
directors at WEDC’s 2010 annual shareholder meeting, which do not include both
New Appointees, or their successors as determined by the Shareholder Parties;
or
(f) at
any time, upon the written consent of all of the Parties.
10. Public
Announcement. WEDC and the Shareholder Parties shall promptly disclose
the existence of this Agreement after its execution pursuant to a joint press
release that is mutually acceptable to the parties, including the terms of this
Agreement and also shall include a statement to the effect that the compensation
committee of the Board shall examine and consider the use of performance-based
criteria with respect to future equity awards and grants. Subject to applicable
law, none of the Parties shall disclose the existence of this Agreement until
the joint press release is issued. The Parties agree that, while this
Agreement remains in effect, each Party shall refrain from any disparagement,
defamation, libel, or slander with respect to any other Party or its affiliates
or from publicly criticizing such other Party or its affiliates.
11.
Nonpublic Information.
(a) In
connection with discussions between the Shareholder Parties and their
representatives and WEDC and its representatives, or otherwise during the term
of this Agreement, the Shareholder Parties or their representatives
have obtained information about WEDC or its securities that is confidential.
Each of the Shareholder Parties agrees, as set forth below, to treat
confidentially any such information (whether oral or written, provided that all
written information shall have been identified as confidential) furnished to or
otherwise obtained by such Shareholder Party or his or its representatives from
WEDC or on its behalf together with those portions of analyses, summaries, notes
or other documents prepared by a Shareholder Party or any of their
representatives which contain or otherwise reflect such information (herein
collectively referred to as the “Confidential
Information”). Each Shareholder Party agrees that, except with WEDC’s
prior written consent, neither such party nor such party’s representatives will
disclose any Confidential Information to any other person or use any of the
Confidential Information for any purpose other than on WEDC’s behalf. For
purposes of this Agreement, the phrase “Confidential Information” shall not
include information which (i) becomes lawfully available to the public
other than as a result of a disclosure by a Shareholder Party or his or its
representatives, (ii) was lawfully available to the Shareholder Parties on
a nonconfidential basis prior to its disclosure to the Shareholder Parties or
their representatives by WEDC or on its behalf or (iii) lawfully becomes
available to the Shareholder Parties on a nonconfidential basis from a source
other than WEDC or WEDC’s representatives or agents, provided that such source
is not bound by a confidentiality agreement with WEDC of which the Shareholder
Parties have been made aware. WEDC has no obligation to furnish Confidential
Information to the Shareholder Parties or their representatives by virtue of
this Agreement. In the event that any member of the Shareholder
Parties is requested pursuant to,
or required by, law, regulation, legal process or regulatory or civil authority
to disclose any portion of the Confidential Information, the Shareholder
Parties shall give prompt notice to WEDC, to the extent such notice is legally
permissible. The Shareholder Parties shall use all commercially
reasonable efforts to limit the scope of such required disclosure, and the
Shareholder Parties shall be permitted to disclose, without any liability to
WEDC, only that portion of the Confidential Information which the Shareholder
Parties’ counsel advises that the Shareholder Parties are legally required to
disclose.
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(b) WEDC
has been advised by the Shareholder Group that, upon execution of the Agreement,
and filing an appropriate Schedule 13D/A with the SEC, the Shareholder Parties
shall dissolve their group. Accordingly, Wynnefield Partners and its
affiliates shall not be entitled to nor do they expect to receive any
Confidential Information. However, in connection with this Agreement and the
ongoing relationship of Caiman Partners and Xxxx Capital Management LLC (and
their affiliates) with WEDC, there may be instances in which material nonpublic
information concerning WEDC will be divulged to them by WEDC or its
representatives or agents. Caiman Partners and Xxxx Capital Management LLC
expressly acknowledge, on behalf of themselves and their representatives and
agents, that federal and state securities laws prohibit any person who
misappropriates material nonpublic information about a company from purchasing
or selling securities of such company, or from communicating such information to
any other person under circumstances in which it is reasonably foreseeable that
such person is likely to purchase or sell such securities.
12.
Releases.
(a) The
Shareholder Parties hereby agree for the benefit of WEDC, and each controlling
person, officer, director, stockholder, agent, affiliate, employee, partner,
attorney, heir, assign, executor, administrator, predecessor and successor, past
and present, of WEDC (WEDC and each such person being a “WEDC Released
Person”) as follows:
(i) The
Shareholder Parties, for themselves and for their members, officers, directors,
assigns, agents and successors, past and present, hereby agree and confirm that,
effective from and after the date of this Agreement, they hereby acknowledge
full and complete satisfaction of, and covenant not to xxx, and forever fully
release and discharge each WEDC Released Person of, and hold each WEDC Released
Person harmless from, any and all rights, claims, warranties, demands, debts,
obligations, liabilities, costs, attorneys’ fees, expenses, suits, losses and
causes of action of any nature whatsoever, whether known or unknown, suspected
or unsuspected (collectively, “Claims”) that the
Shareholder Parties may have against the WEDC Released Persons, in each case
with respect to facts and circumstances occurring any time or period of time on
or prior to the date of the execution of this Agreement (including the future
effects of such transactions, occurrences, conditions, acts or
omissions).
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(ii) The
undersigned understand and agree that the Claims released by the Shareholder
Parties above include not only those Claims presently known but also include all
unknown or unanticipated claims, rights, demands, actions, obligations,
liabilities, and causes of action of every kind and character that would
otherwise come within the scope of the Claims as described above. The
Shareholder Parties understand that they may hereafter discover facts different
from or in addition to what they now believe to be true, which if known, could
have materially affected this Release of Claims, but they nevertheless waive any
claims or rights based on different or additional facts.
(b) The
Shareholder Parties agree that so long as any New Appointee (or any other
director designated by the Shareholder Parties as provided for in Section 3(c) above)
is a member of the Board, (i) no member of the Shareholder Parties shall,
without the consent of WEDC, instigate, solicit, assist, intervene in, or
otherwise voluntarily participate in any litigation or arbitration in which WEDC
or any of its officers or directors are named as parties; provided that the
foregoing shall not prevent Shareholder Party from responding to a validly
issued legal process and (ii) the Shareholder Parties agree to give WEDC at
least five business days notice of the receipt of any legal process requesting
information regarding WEDC or any of its officers or directors, to the extent
that such notice is legally permissible.
(c) WEDC
hereby agrees for the benefit of the Shareholder Parties, and each controlling
person, officer, director, stockholder, agent, affiliate, employee, partner,
attorney, heir, assign, executor, administrator, predecessor and successor, past
and present, thereof, as well as each New Appointee and any other director
designated by the Shareholder Parties as provided for in Section 3(c) above
(the Shareholder Parties and each such person being a “Shareholder Released Person”) as
follows:
(i) WEDC,
for itself and for its affiliates, officers, directors, assigns, agents and
successors, past and present, hereby agrees and confirms that, effective from
and after the date of this Agreement, it hereby acknowledges full and complete
satisfaction of, and covenants not to xxx, and forever fully releases and
discharges each Shareholder Released Person of, and holds each Shareholder
Released Person harmless from, any and all Claims of any nature whatsoever,
whether known or unknown, suspected or unsuspected, that WEDC may have against
the Shareholder Released Persons, in each case with respect to facts and
circumstances occurring any time or period of time on or prior to the date of
the execution of this Agreement (including the future effects of such
transactions, occurrences, conditions, acts or omissions).
(ii) The
undersigned understand and agree that the Claims released by WEDC above include
not only those Claims presently known but also include all unknown or
unanticipated claims, rights, demands, actions, obligations, liabilities, and
causes of action of every kind and character that would otherwise come within
the scope of the Claims as described above. WEDC understands that it may
hereafter discover facts different from or in addition to what it now believes
to be true, which if known, could have materially affected this Release of
Claims, but it nevertheless waives any claims or rights based on different or
additional facts.
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(d) Notwithstanding the foregoing, the
releases in Sections 11(a), 11(b) and 11(c) do not extend to claims that the
releasing party does not know or suspect to exist in its favor at the time of
executing the release, which, if known by it, must have materially affected its
settlement with the non-releasing party.
(e) The
Parties intend that the foregoing release be broad with respect to the matter
released, provided, however, this release of Claims shall not include claims to
enforce the terms of this Agreement; and provided further that nothing in the
foregoing release shall be deemed or construed, now or hereafter, as limiting in
any manner any right of indemnification inuring to the benefit of any director
or former director of WEDC arising under its Restated Articles of Incorporation,
the Bylaws or otherwise.
13.
Remedies.
(a) Each
of the Parties acknowledges and agrees that a breach or threatened breach by any
Party may give rise to irreparable injury inadequately compensable in damages,
and accordingly each Party shall be entitled to injunctive relief to prevent a
breach of the provisions hereof and to enforce specifically the terms and
provisions hereof in any state or federal court having jurisdiction, in addition
to any other remedy to which such aggrieved Party may be entitled to at law or
in equity.
(b) In
the event a Party institutes any legal action to enforce such Party’s rights
under, or recover damages for breach of, this Agreement, the prevailing party or
parties in such action shall be entitled to recover from the other party or
parties all costs and expenses, including but not limited to reasonable
attorneys’ fees, court costs, witness fees, disbursements and any other expenses
of litigation or negotiation incurred by such prevailing party or
parties.
14.
Notices. Any
notice or other communication required or permitted to be given under this
Agreement will be sufficient if it is in writing, sent to the applicable address
set forth below (or as otherwise specified by a Party by notice to the other
Parties in accordance with this Section 14) and delivered personally, mailed by
certified or registered first-class mail or sent by recognized overnight
courier, postage prepaid, and will be deemed given (a) when so delivered
personally, (b) if mailed by certified or registered first-class mail,
three business days after the date of mailing, or (c) if sent by recognized
overnight courier, one day after the date of sending.
If to
WEDC:
White
Electronic Designs Corporation
0000 X.
Xxxxxxxxxx Xxxxx
Xxxxxxx,
Xxxxxxx 00000
Attention:
Xxxxx Xxxxx, Chief Financial Officer (Interim Office of the
President)
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
with a
copy (which shall not constitute notice to WEDC) to:
-00-
Xxxxxx
Xxxxxxx Xxxxxxxx & Xxxxxx
Professional
Corporation
000 Xxxx
Xxxx Xxxx
Xxxx
Xxxx, Xxxxxxxxxx 00000
Attention:
|
Xxxxx
X. Xxxxxx
|
Xxxxxxx
X. Xxxxxxxxxxx
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
and
Xxxxx
& Xxxxxx, L.L.P.
One
Arizona Center
000 X.
Xxx Xxxxx Xxxxxx
Xxxxxxx,
Xxxxxxx 00000
Attention:
|
Xxx
X. Xxxxx
|
Franc Del
Fosse
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
If to
Wynnefield Partners:
Wynnefield
Partners Small Cap Value, L.P.
000
Xxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxxx Xxxx
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
with a
copy (which shall not constitute notice to Wynnefield Partners) to:
Xxxx
Xxxxxxx PC
0000
Xxxxxx xx xxx Xxxxxxxx, 00xx
Xx.
Xxx Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxxxx Xxxxxxx
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
If to
Caiman Partners
Xxxx Capital
Management, LLC
0000
Xxxxxxx Xxxxx
Xxxxxxxxxx,
Xxxxxxx 00000
Attention:
Xxxxx Xxxx
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
-11-
with a
copy (which shall not constitute notice to Caiman Partners) to:
Xxxx Moss
Kline & Xxxxx LLP
0 Xxxxxxx
Xxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxxxx 00000
Attention:
Xxxxx X. Xxxx
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
15. Entire
Agreement. This
Agreement constitutes the entire agreement between the Parties pertaining to the
subject matter hereof and supersedes all prior and contemporaneous agreements,
understandings, negotiations and discussions of the Parties in connection with
the subject matter hereof.
16. Counterparts;
Facsimile. This
Agreement may be executed in any number of counterparts and by the Parties in
separate counterparts, and signature pages may be delivered by facsimile, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
17.
Headings. The
headings in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof.
18. Governing
Law. This
Agreement shall be governed by and construed and enforced in accordance with the
laws of the State of Indiana, without regard to choice of law principles that
would compel the application of the laws of any other jurisdiction.
19.
Severability. In
the event one or more of the provisions of this Agreement should, for any
reason, be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions
of this Agreement, and this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein.
20. Successors
and Assigns.
This Agreement shall not be assignable by any of the Parties. This
Agreement, however, shall be binding on successors of the Parties.
21.
Amendments. This
Agreement may not be modified, amended, altered or supplemented except upon the
execution and delivery of a written agreement executed by all of the
Parties.
22. Further
Action. Each
Party agrees to execute such additional reasonable documents, and to do and
perform such reasonable acts and things necessary or proper to effectuate or
further evidence the terms and provisions of this Agreement.
23. Waiver of
Jury Trial.
Each of the Parties
hereby irrevocably waives all right to trial by jury and any action, proceeding
or counterclaim (whether based on contract, tort or otherwise) arising out of or
relating to this Agreement or the actions of any Party hereto in negotiation,
administration, performance or enforcement hereof.
-12-
24. Expenses.
Contemporaneously with the execution of this Agreement, following receipt
of reasonably satisfactory documentation thereof (which shall for purposes of
legal fees, require only a statement from the attorneys representing the
Shareholder Parties as to the total fees and expenses charged by such attorneys,
and that such fees and expenses are the customary fees and expenses charged by
such attorneys for matters of this type, and they were reasonably and
necessarily incurred), WEDC will reimburse the Shareholder Parties for their
documented out-of-pocket fees and expenses actually and reasonably incurred in
connection with their activities relating to the matters described in this
Agreement through the date of the execution and performance of this Agreement,
provided such reimbursement shall not exceed $250,000 in the aggregate, and the
Shareholder Parties hereby agree that such payment shall be in full satisfaction
of any claims or rights it may have for fees, expenses or costs related to the
matters described in this Agreement.
[Signatures
are on the following page.]
-13-
IN
WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year
first above written.
White
Electronic Designs Corporation
|
Wynnefield
Partners Small Cap Value, L.P.,
|
|||||||
By:
|
/s/
Xxxxx X. Xxxxx
|
By:
|
Wynnefield
Capital Management LLC
|
|||||
Its:
|
General
Partner
|
|||||||
By
|
/s/
Xxxxxx Xxxx
|
|||||||
Name:
|
Xxxxx
X. Xxxxx
|
Name:
|
Xxxxxx
Xxxx
|
|||||
Title:
|
Co-Managing
Member
|
|||||||
Title:
|
Vice
President/Chief Financial Officer
|
Caiman
Partners, L.P
|
||||||
By:
|
Caiman
Capital GP, L.P.
|
|||||
Its:
|
General
Partner
|
|||||
By:
|
Caiman
Capital Management LLC,
|
|||||
Its:
|
Managing
General Partner
|
|||||
By:
|
/s/
Xxxxx Xxxx
|
|||||
Name:
|
Xxxxx
Xxxx
|
|||||
Title:
|
Managing
Member
|
|||||
Xxxx
Capital Management LLC
|
||||||
By:
|
||||||
Its:
|
||||||
By:
|
/s/
Xxxxx Xxxx
|
|||||
Name:
|
Xxxxx
Xxxx
|
|||||
Title:
|
Manager
|
IN
WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year
first above written.
Xxxx
X. Xxxxxxx, a shareholder
|
Xxxx
X. Xxxxx, a shareholder
|
|||||||
/s/
Xxxx X. Xxxxxxx
|
/s/
Xxxx X. Xxxxx
|
|||||||
Xxxxxx
X. Xxxxxxx, a shareholder
|
Xxxxxx
X. Toy, a shareholder
|
|||||||
/s/
Xxxxxx X. Xxxxxxx
|
/s/
Xxxxxx X. Toy
|
|||||||
Xxxxxx
X. Xxxxx, a shareholder
|
||||||||
/s/
Xxxxxx X. Xxxxx
|
EXHIBIT
A
Principles
to be incorporated into Strategic Review Committee Charter
Purpose: The
committee shall be responsible for developing, reviewing, evaluating and
recommending to the Board all strategic alternatives available to
WEDC. The committee may convene meetings from time to time in its
discretion.
Membership: The
committee shall consist of three members of the Board, all of whom shall meet
the Nasdaq definition of independence.
Governance:
|
§
|
Until
the termination of the Agreement, all three members of the committee are
required to constitute a quorum and all decisions and recommendations of
the committee must be unanimous
|
|
§
|
The
committee shall document its proceedings in written minutes, as the
committee deems appropriate
|
|
§
|
Until
the termination of the Agreement, any amendment of the Charter shall
require the unanimous approval of the Committee
members.
|
Committee
Resources
|
§
|
The
committee shall have the resources and authority appropriate to discharge
its duties and responsibilities, including the authority to select,
retain, terminate, and approve the fees and other retention terms of
independent counsel, experts or advisors, as it deems
appropriate.
|
|
§
|
The
committee members shall be reimbursed for all of their reasonable out of
pocket expenses, and shall be entitled to receive such fees and
compensation as may be determined by the
Board.
|