Exhibit 99(c)(2)
STOCKHOLDERS AGREEMENT dated as of December 21, 1997 among MDC
COMMUNICATIONS CORPORATION, an Ontario corporation ("PARENT"), and the
undersigned holders (each a "STOCKHOLDER" and, collectively, the "STOCKHOLDERS")
of shares of common stock, par value $.10 per share (the "COMMON STOCK"), of
ARTISTIC GREETINGS INCORPORATED, a Delaware corporation (the "COMPANY").
WHEREAS, Parent, AGI Acquisition Co., a Delaware corporation and a
wholly owned subsidiary of Parent ("SUB"), and the Company, propose to enter
into an Agreement and Plan of Merger dated as of the date hereof (as the same
may be amended or supplemented, the "MERGER AGREEMENT"; capitalized terms used
but not defined herein shall have the meanings set forth in the Merger
Agreement) providing for the merger of Sub with and into the Company (the
"MERGER"), upon the terms and subject to the conditions set forth in the Merger
Agreement;
WHEREAS, concurrently with the execution of the Merger Agreement, the
Company and Artistic Direct Incorporated, a New York corporation ("ADI"),
propose to enter into an Asset Purchase Agreement dated as of the date hereof
(as the same may be amended or supplemented and together with any other asset
purchase agreement substantially in the form thereof and providing for the
payment of cash consideration of at least $9 million, the "ASSET PURCHASE
AGREEMENT") providing for ADI to purchase certain of the assets, and assume
certain of the liabilities, of the Company (the "ASSET PURCHASE");
WHEREAS, each Stockholder owns the number of shares of Common Stock
set forth opposite its or his name on the signature page of this Agreement (such
shares of Common Stock, the "EXISTING SHARES" and, together with any other
shares of capital stock of the Company acquired by such Stockholder after the
date hereof and during the term of this Agreement, and other than 40,000 shares
of Common Stock which ▇▇. ▇▇▇▇▇ has transferred, or may transfer, to one or more
charitable entities, being collectively referred to herein as the "SUBJECT
SHARES"); and
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, Parent has requested that each Stockholder enter into this Agreement;
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NOW, THEREFORE, to induce Parent to enter into, and in consideration
of its entering into, the Merger Agreement, and in consideration of the premises
and the representations, warranties and agreements contained herein, the parties
agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER. Each
Stockholder hereby, severally and not jointly, represents and warrants to Parent
as of the date hereof in respect of himself or itself as follows:
(a) AUTHORITY. The Stockholder has all requisite legal capacity,
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly authorized,
executed and delivered by the Stockholder and constitutes a valid and
binding obligation of the Stockholder enforceable in accordance with its
terms. The execution and delivery of this Agreement do not, and the
consummation of the transactions contemplated hereby and compliance with
the terms hereof will not, conflict with, or result in any violation of, or
default (with or without notice or lapse of time or both) under any
provision of, any trust agreement, organizational documents, standstill
agreement, loan or credit agreement, note, bond, mortgage, indenture, lease
or other agreement, instrument, permit, concession, franchise, license,
judgment, order, notice, decree, statute, law, ordinance, rule or
regulation applicable to the Stockholder or to the Stockholder's property
or assets. If the Stockholder is married and the Stockholder's Subject
Shares constitute community property or otherwise need spousal or other
approval to be legal, valid and binding, this Agreement has been duly
authorized, executed and delivered by, and constitutes a valid and binding
agreement of, the Stockholder's spouse, enforceable against such spouse in
accordance with its terms. No trust of which such Stockholder is a trustee
requires the consent of any beneficiary to the execution and delivery of
this Agreement or to the consummation of the transactions contemplated
hereby.
(b) THE SUBJECT SHARES. Such Stockholder is the record holder or
beneficial owner of the number of the Existing Shares as is set forth
opposite such Stockholder's name on the signature page hereto. On the date
hereof, the Existing Shares set forth opposite such Stockholder's
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name on the signature page hereto constitute all of the outstanding shares
of Common Stock owned of record or beneficially by such Stockholder. Such
Stockholder does not have record or beneficial ownership of any shares of
Common Stock not set forth on signature page hereto. Such Stockholder has
sole power of disposition with respect to all of the Existing Shares set
forth opposite such Stockholder's name on the signature page hereto and
sole voting power with respect to the matters set forth in Section 6 hereof
and sole power to demand dissenter's or appraisal rights, in each case with
respect to all of the Existing Shares set forth opposite such Stockholder's
name on the signature page hereto, with no restrictions on such rights,
subject to applicable federal securities laws and the terms of this
Agreement. Such Stockholder will have sole power of disposition with
respect to Subject Shares other than Existing Shares, if any, which become
beneficially owned by such Stockholder and will have sole voting power with
respect to the matters set forth in Section 3 hereof and sole power to
demand dissenter's or appraisal rights, in each case with respect to all
Subject Shares other than Existing Shares, if any, which become
beneficially owned by such Stockholder with no restrictions on such rights,
subject to applicable federal securities laws and the terms of this
Agreement.
(c) Such Stockholder's Subject Shares and the certificates
representing such Subject Shares are now and at all times during the term
hereof will be held by such Stockholder, or by a nominee or custodian for
the benefit of such Stockholder, free and clear of all liens, claims,
security interests, proxies, voting trusts or agreements, understandings or
arrangements or any other encumbrances whatsoever, except for any such
encumbrances or proxies arising hereunder.
(d) No broker, investment banker, financial adviser or other person
is entitled to any broker's, finder's, financial adviser's or other similar
fee or commission in connection with the transactions contemplated hereby
based upon arrangements made by or on behalf of such Stockholder in his or
her capacity as such.
(e) Such Stockholder understands and acknowledges that Parent and Sub
are entering into the Merger Agreement
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in reliance upon such Stockholder's execution and delivery of this
Agreement with Parent.
2. REPRESENTATIONS AND WARRANTIES OF PARENT. Parent hereby
represents and warrants to each Stockholder that Parent has all requisite
corporate power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by Parent, and the consummation of the transactions contemplated hereby, have
been duly authorized by all necessary corporate action on the part of Parent.
This Agreement has been duly executed and delivered by Parent and constitutes a
valid and binding obligation of Parent enforceable in accordance with its terms.
The execution and delivery of this Agreement do not, and the consummation of the
transactions contemplated hereby and compliance with the terms hereof will not,
conflict with, or result in any violation of, or default (with or without notice
or lapse of time or both) under any provision of, the certificate of
incorporation or by-laws of Parent, any trust agreement, loan or credit
agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise, license, judgment, order, notice,
decree, statute, law, ordinance, rule or regulation applicable to Parent or to
Parent's property or assets.
3. COVENANTS OF EACH STOCKHOLDER. From and after the date hereof
and until the termination of this Agreement in accordance with Section 8, each
Stockholder, severally and not jointly, agrees as follows:
(a) At any meeting of stockholders of the Company called to vote upon
the Merger, the Merger Agreement, the Asset Purchase or the Asset Purchase
Agreement or at any adjournment thereof or in any other circumstances upon
which a vote, consent or other approval with respect to the Merger, the
Merger Agreement, the Asset Purchase or the Asset Purchase Agreement is
sought, such Stockholder shall vote (or cause to be voted) the Subject
Shares in favor of the Merger and the Asset Purchase, the adoption by the
Company of the Merger Agreement and the Asset Purchase Agreement and the
approval of the terms thereof and each of the other transactions
contemplated by the Merger Agreement and the Asset Purchase Agreement.
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(b) At any meeting of stockholders of the Company or at any
adjournment thereof or in any other circumstances upon which the
Stockholder's vote, consent or other approval is sought, the Stockholder
shall vote (or cause to be voted) the Subject Shares against (i) any merger
agreement or merger (other than the Merger Agreement and the Merger),
consolidation, combination, sale of a material amount of assets (other than
the Asset Purchase Agreement and the Asset Purchase), reorganization,
recapitalization, dissolution, liquidation or winding-up of or by the
Company or any other takeover proposal (collectively, "TAKEOVER PROPOSAL"),
(ii) any action or agreement that would result in a breach of any covenant,
representation or warranty or any other obligation or agreement of the
Company under the Merger Agreement, the Asset Purchase Agreement or this
Agreement or (iii) (x) any material amendment of the Company's certificate
of incorporation or by-laws, (y) any change in a majority of the persons
who constitute the Board of Directors of the Company or (z) any other
proposal or transaction involving the Company, which is intended or could
reasonably be expected to impede, frustrate, prevent, delay or nullify (A)
the ability of the Company to consummate the Merger or the Asset Purchase
or (B) any of the transactions contemplated by this Agreement, the Asset
Purchase Agreement or the Merger Agreement. The Stockholder further agrees
not to commit or agree to take any action inconsistent with the foregoing.
(c) Each Stockholder, severally and not jointly, agrees not to (i)
offer to sell, sell, transfer, encumber, pledge, assign or otherwise
dispose of (including by gift) (collectively, "TRANSFER"), or enter into
any contract, option or other arrangement with respect to or consent to the
Transfer of, the Subject Shares or any interest therein to any person other
than pursuant to the terms of the Merger, (ii) except as contemplated
hereby, grant any proxies or powers of attorney with respect to the Subject
Shares, deposit any Subject Shares into a voting trust or enter into any
voting arrangement with respect to the Subject Shares, or any interest in
the foregoing, except with Parent or Sub, (iii) take any action that would
make any representation or warranty of such Stockholder contained herein
untrue or incorrect or have the effect of preventing or disabling the
Stockholder from performing such
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Stockholder's obligations under this Agreement or (iv) commit or agree to
take any of the foregoing actions.
(d) Each Stockholder hereby irrevocably waives any rights of
appraisal or rights to dissent from the Merger that the Stockholder may
have.
(e) Each Stockholder agrees with, and covenants to, Parent that the
Stockholder shall not request that the Company register the transfer
(book-entry or otherwise) of any certificate or uncertificated interest
representing any of the Subject Shares, unless such transfer is made in
compliance with this Agreement. In the event of a stock dividend or
distribution, or any change in the Common Stock by reason of any stock
dividend or distribution, or any change in the Common Stock by reason of
any stock dividend, split-up, recapitalization, combination, exchange of
shares or the like, the term "Subject Shares" shall be deemed to refer to
and include the Subject Shares as well as all such stock dividends and
distributions and any shares into which or for which any or all of the
Subject Shares may be changed or exchanged and the Purchase Price (as
defined herein) shall be accordingly adjusted. Each Stockholder shall be
entitled to receive any cash dividend paid by the Company during the term
of this Agreement until the Subject Shares are cancelled in the Merger or
purchased hereunder.
(f) Each Stockholder, severally and not jointly, shall not, nor shall
it authorize or permit any partner, officer, director or employee of, or
any investment banker, attorney or other advisor or representative of, such
Stockholder to, directly or indirectly, (i) solicit, initiate or encourage
the submission of any Takeover Proposal or (ii) participate in any
discussions, conversations, negotiations or other communications regarding,
or furnish to any person any information with respect to, or otherwise
cooperate in any way, assist or participate in, facilitate or encourage any
effort or attempt by any other person or entity, to seek to do any of the
foregoing or take any other action to facilitate any inquiries or the
making of any proposal that constitutes, or is likely to lead to, any
Takeover Proposal; provided, however, that the foregoing shall not restrict
a Stockholder who is also a director of the Company from taking actions in
such
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Stockholder's capacity as a director to the extent and in the circumstances
permitted by Section 4.02 of the Merger Agreement. Each Stockholder, in
its capacity as such, will immediately cease and cause to be terminated any
existing activities, discussions or negotiations with any parties conducted
heretofore with respect to any of the foregoing.
(g) THE STOCKHOLDER HEREBY GRANTS TO, AND APPOINTS SUB AND ANY
DESIGNEE OF SUB, EACH OF THEM INDIVIDUALLY, STOCKHOLDER'S IRREVOCABLE
(UNTIL THE TERMINATION OF THIS AGREEMENT) PROXY AND ATTORNEY-IN-FACT WITH
FULL POWER OF SUBSTITUTION) TO VOTE THE SUBJECT SHARES OF STOCKHOLDER AS
INDICATED IN SECTION 3(A) AND 3(B) ABOVE. THE STOCKHOLDER INTENDS THIS
PROXY TO BE IRREVOCABLE (UNTIL THE TERMINATION OF THIS AGREEMENT) AND
COUPLED WITH AN INTEREST AND WILL TAKE SUCH FURTHER ACTION AND HEREBY
REVOKES ANY PROXY PREVIOUSLY GRANTED BY STOCKHOLDER WITH RESPECT TO SUCH
STOCKHOLDER'S SUBJECT SHARES.
4. FURTHER AGREEMENTS OF STOCKHOLDERS. If, after termination of this
Agreement pursuant to Section 7 hereof, Stockholder receives any cash or
non-cash consideration in respect of the Subject Shares in connection with a
Third Party Business Combination (as defined below) during the period commencing
on the date of such termination and ending on the first anniversary thereof (the
"SALE PERIOD"), Stockholder shall promptly pay over to Parent one half of the
excess, if any, of such consideration over the product of the Merger
Consideration and the number of Subject Shares with respect to which such
consideration is received by such Stockholder in connection with such Third
Party Business Combination (the "EXCESS CONSIDERATION"); PROVIDED that, (i) if
the consideration received by such Stockholder shall be securities listed on a
national securities exchange or traded on the NASDAQ National Market ("NASDAQ"),
the per share value of such consideration shall be equal to the closing price
per share listed on such national securities exchange or NASDAQ on the date such
transaction is consummated and (ii) if the consideration received by such
Stockholder shall be in a form other than securities, the per share value shall
be determined in good faith as of the date such transaction is consummated by
Parent and the Stockholders, or, if Parent and the Stockholders cannot reach
agreement, by a nationally recognized investment banking firm reasonably
acceptable to the parties. The term "THIRD PARTY BUSINESS COMBI-
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NATION" of the Company means the occurrence of any of the following events: (A)
the Company is acquired by merger or otherwise by any person or group, including
Parent or any affiliate thereof (a "THIRD PARTY"); (B) the Company enters into
an agreement with a Third Party which contemplates the acquisition of 20% or
more of the total assets of the Company; (C) the Company or Parent enters into a
merger or other agreement with a Third Party which contemplates the acquisition
of more than 20% of the outstanding shares of the Company's capital stock; or
(D) a Third Party acquires more than 20% of the total assets of the Company. If
during the Sale Period, any Stockholder Transfers his or its Subject Shares to
any other person (other than in connection with a Third Party Business
Combination described above) and such other person receives any consideration
for any Subject Shares in connection with a Third Party Business Combination
within the Sale Period, such Stockholder shall continue to be bound by the
provisions of this Section 4 with respect to the payment to Parent of the Excess
Consideration as if such Stockholder received such consideration for the Subject
Shares in such Third Party Business Combination.
5. FURTHER ASSURANCES. The Stockholder will, from time to time,
execute and deliver, or cause to be executed and delivered, such additional or
further consents, documents and other instruments as Parent may reasonably
request for the purpose of effectively carrying out the transactions
contemplated by this Agreement.
6. ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
without the prior written consent of the other parties, except that Parent may
assign, in its sole discretion, any or all of its rights, interests and
obligations hereunder to any direct or indirect wholly owned subsidiary of
Parent. Subject to the preceding sentence, this Agreement will be binding upon,
inure to the benefit of and be enforceable by the parties and their respective
successors and assigns.
7. TERMINATION. Except for Stockholder's obligations pursuant to
Section 4, this Agreement shall terminate, and no party shall have any rights or
obligations hereunder and this Agreement shall become null and void and have no
further effect upon the earliest of (a) the Effective Time, and (b) the date on
which the Merger Agreement is terminated pursuant to Section
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6.01 thereof. Nothing in this Section 7 shall relieve any party of liability
for breach of this Agreement.
8. COSTS AND EXPENSES. All costs and expenses incurred in connection
with this Agreement and the consummation of the transactions contemplated hereby
shall be paid by the party incurring such expenses.
9. GENERAL PROVISIONS.
(a) AMENDMENTS. This Agreement may not be amended except by an
instrument in writing signed by each of the parties hereto.
(b) NOTICE. All notices and other communications hereunder shall be
in writing and shall be deemed given if delivered personally or sent by
overnight courier (providing proof of delivery) to Parent in accordance
with Section 9.03 of the Merger Agreement and to each Stockholder at its or
his set forth on the signature page of this Agreement (or at such other
address for a party as shall be specified by like notice).
(c) INTERPRETATION. When a reference is made in this Agreement to
Sections, such reference shall be to a Section to this Agreement unless
otherwise indicated. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Wherever the words "include", "includes"
or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation".
(d) SEVERABILITY. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law, or
public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in
any manner materially adverse to any party. Upon such determination that
any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in a mu-
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tually acceptable manner in order that the transactions contemplated hereby
may be consummated as originally contemplated to the fullest extent
possible.
(e) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement,
and shall become effective when one or more of the counterparts have been
signed by each of the parties and delivered to the other party, it being
understood that each party need not sign the same counterpart.
(f) ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES. This Agreement
(including the documents and instruments referred to herein) (i)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to
the subject matter hereof and (ii) is not intended to confer upon any
Person other than the parties hereto any rights or remedies hereunder.
(g) GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware regardless
of the laws that might otherwise govern under applicable principles of
conflicts of law thereof.
10. STOCKHOLDER CAPACITY. No person executing this Agreement who is
or becomes during the term hereof a director or officer of the Company makes any
agreement or understanding herein in his capacity as such director or officer.
The Stockholder signs solely in his capacity as the record holder or beneficial
owner of, or the trustee of a trust whose beneficiaries are the beneficial
owners of, such Stockholder's Subject Shares and nothing herein shall limit or
affect any actions taken by a Stockholder in his capacity as an officer or
director of the Company to the extent specifically permitted by the Merger
Agreement.
11. ENFORCEMENT. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached.
It is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to en-
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force specifically the terms and provisions of this Agreement in any court of
the United States located in the State of Delaware or in a Delaware state court,
this being in addition to any other remedy to which they are entitled at law or
in equity. In addition, each of the parties hereto (i) consents to submit such
party to the personal jurisdiction of any Federal court located in the State of
Delaware or any Delaware state court in the event any dispute arises out of this
Agreement or any of the transactions contemplated hereby, (ii) agrees that such
party will not attempt to deny or defeat such personal jurisdiction by motion or
other request for leave from any such court; (iii) agrees that such party will
not bring any action relating to this Agreement or the transactions contemplated
hereby in any court other than a Federal court sitting in the state of Delaware
or a Delaware state court and (iv) waives any right to trial by jury with
respect to any claim or proceeding related to or arising out of this Agreement
or any of the transactions contemplated hereby. All rights, powers and remedies
provided under this Agreement or otherwise available in respect hereof at law or
in equity shall be cumulative and not alternative, and the exercise of any
thereof by any party shall not preclude the simultaneous or later exercise of
any other such right, power or remedy by such party.
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IN WITNESS WHEREOF, Parent has caused this Agreement to be signed by
its officer thereunto duly authorized and each Stockholder has signed this
Agreement, all as of the date first written above.
MDC COMMUNICATIONS CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President,
Corporate Development
Number of Subject Shares: STOCKHOLDER:
2,250,000 AMERICAN GREETINGS CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Chairman and Chief
Executive Officer
Address: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Number of Subject Shares: STOCKHOLDER:
411,786 /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Address: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
