EXHIBIT (c)(3)
SHAREHOLDER AGREEMENT
AGREEMENT, dated as of September 18, 1999 between FCY Acquisition
Corporation, a California corporation ("Buyer"), and Xxxxxxx Xxxxx
("Shareholder").
WHEREAS, in order to induce Buyer to enter into an agreement and plan of
merger (as amended from time to time, the "Merger Agreement") with Furon
Company, a California corporation (the "Company"), Buyer has requested
Shareholder, and Shareholder has agreed, to enter into this Agreement.
WHEREAS, as of the date hereof, Shareholder is the holder of the shares of
capital stock of the Company (the "Shares") listed on the signature page hereof.
Capitalized terms used but not separately defined herein shall have the meanings
ascribed to them in the Merger Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
Agreement to Tender
Section 1.0. Agreement to Tender. Shareholder hereby irrevocably and
unconditionally agrees to validly tender (and not withdraw) or cause to be
validly tendered (and not withdrawn) pursuant to and in accordance with the
terms of the Offer all of the Shares that Shareholder owns as of the date hereof
as well as any additional Shares that Shareholder may own, whether acquired by
purchase, exercise of options or otherwise, at any time after the date hereof
(the "Shareholder Shares"). Within five business days after the commencement of
the Offer (or within five business days after any Shareholder Shares are
acquired during pendency of the Offer, if later), Shareholder shall deliver
(with respect to Shareholder Shares controlled by Shareholder) to the depositary
designated in the Offer (i) a letter of transmittal with respect to the
Shareholder Shares complying with the terms of the Offer, (ii) certificates
representing all of the Shareholder Shares and (iii) all other documents or
instruments required to be delivered pursuant to the terms of the Offer.
ARTICLE 2
Voting Agreement; Grant of Proxy
Section 2.01. Voting Agreement. (a) Until the earliest to occur of (x) the
consummation of the Merger, (y) the nine month anniversary of the date hereof
and (z) the termination of the Merger Agreement pursuant to Section 11.01(a),
11.01(b) or 11.01(d) thereof (the "Termination Date"), Shareholder hereby
irrevocably and unconditionally agrees to vote or cause to be voted all
Shareholder Shares that Shareholder is entitled to vote at the time of any vote
of the shareholders of the Company where such matters arise (i) in favor of the
approval and adoption of the Merger Agreement and in favor of the transactions
contemplated thereby, (ii) against any proposal or transaction which could
prevent or delay the consummation of the Transactions and (iii) against any (A)
Acquisition Proposal (other than the Merger), (B) corporate action the
consummation of which would frustrate the purposes, or prevent or delay the
consummation, of the Transactions or (C) other matter relating to, or in
connection with, any of the matters referred to in clause (A) and (B) above.
Nothing in this Article 2 shall limit or restrict Shareholder's ability to act
or vote in his capacity as an officer or director of the Company in any manner
he so chooses.
(b) If any shareholder vote in respect of the Merger Agreement or any of
the transactions contemplated by the Merger Agreement is taken by written
consent, the provisions of this Agreement imposing obligations in respect of or
in connection with any vote of shareholders shall apply mutatis mutandis to such
action by written consent.
Section 2.02. Proxy. Shareholder hereby revokes any and all previous
proxies granted with respect to the Shareholder Shares. By entering into this
Agreement, Shareholder hereby grants an irrevocable proxy, within the meaning of
Section 705 of the California General Corporation Law, and in accordance with
the provisions of Division 100 of the California Corporations Code appointing
Buyer as Shareholder's attorney-in-fact and proxy, with full power of
substitution, for and in Shareholder's name, to vote, express consent or
dissent, or otherwise to utilize such voting power in such manner and upon any
of the matters referred to in Section 2.01 above, as Buyer or its proxy or
substitute shall, in Buyer's sole discretion, deem proper with respect to the
Shareholder Shares. The proxy granted by Shareholder pursuant to this Article 2
is irrevocable and is granted in consideration of Buyer's entering into the
Merger Agreement and to secure the Shareholder's performance of his agreement
and duty to vote or cause to be voted (including by written consent) all of the
Shareholder Shares in favor of the Merger as set forth in Section 2.01 (a) and
(b) hereof and such irrevocable proxy shall remain in effect until the
Termination Date, notwithstanding the death or
2
incapacity of Shareholder; provided, however, that such proxy shall be revoked
on the Termination Date.
ARTICLE 3
Representations and Warranties of Shareholder
Shareholder represents and warrants to Buyer that:
Section 3.01. Valid Title. Shareholder is the beneficial owner of the
Shareholder Shares held by him on the date hereof with no restrictions on
Shareholder's voting rights or rights of disposition pertaining thereto, except
community property rights of Shareholder's spouse. Except as previously
disclosed to Buyer, none of the Shareholder Shares is subject to any voting
trust or other agreement or arrangement with respect to the voting of such
Shares (other than this Agreement).
Section 3.02. Binding Effect. This Agreement is the valid and binding
Agreement of Shareholder, enforceable against Shareholder in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
moratorium or other similar laws relating to creditors' rights generally.
Section 3.03. Total Shares. The number of Shares set forth on the
signature page hereto opposite the name of Shareholder are the only Shares owned
by Shareholder.
ARTICLE 4
Representations and Warranties of Buyer
Buyer represents and warrants to Shareholder:
Section 4.01. Corporate Power and Authority. Buyer has all requisite
corporate power and authority to enter into this Agreement and to perform its
obligations hereunder. The execution, delivery and performance by Buyer of this
Agreement and the consummation by Buyer of the transactions contemplated hereby
have been duly authorized by the board of directors of Buyer and no other
corporate action on the part of Buyer is necessary to authorize the execution,
delivery or performance by Buyer of this Agreement and the consummation by Buyer
of the transactions contemplated hereby. This Agreement has been duly
3
executed and delivered by Buyer and is a valid and binding Agreement of Buyer,
enforceable against it in accordance with its terms, except as enforcement may
be limited by bankruptcy, insolvency, moratorium or other similar laws relating
to creditors' rights generally.
ARTICLE 5
Covenants of Shareholder
Shareholder hereby covenants and agrees that:
Section 5.01. No Proxies for or Encumbrances on Shareholder Shares. Except
pursuant to the terms of this Agreement, prior to the Termination Date
Shareholder shall not, without the prior written consent of Buyer, directly or
indirectly, (i) grant any proxies or enter into any voting trust or other
agreement or arrangement with respect to the voting of any Shareholder Shares or
(ii) sell, assign, transfer, encumber or otherwise dispose of, or enter into any
contract, option or other arrangement or understanding with respect to the
direct or indirect sale, assignment, transfer, encumbrance or other disposition
of, any Shares during the term of this Agreement. Shareholder shall not seek or
solicit any such sale, assignment, transfer, encumbrance or other disposition or
any such contract, option or other arrangement or assignment or understanding
and agrees to notify Buyer promptly and to provide all details requested by
Buyer if Shareholder shall be approached or solicited, directly or indirectly,
by any person with respect to any of the foregoing.
Section 5.02. Appraisal Rights. Shareholder agrees not to exercise any
rights (including, without limitation, under Chapter 13 of the California
General Corporation Law) to demand appraisal of any Shares which may arise with
respect to the Merger.
Section 5.03. Further Action. Shareholder intends this proxy to be
irrevocable and will take such further action and execute such other instruments
as may be necessary to effectuate the intent of this proxy, including, without
limitation, filing written notice of this irrevocable proxy with the secretary
of the Company or permitting Buyer, as his attorney-in-fact, to file a copy of
this Agreement with the secretary of the Company.
Section 5.04. Legend. At the request of Buyer, Shareholder agrees to
stamp, print or type on the face of his certificates evidencing the Shares the
following legend:
4
"THE VOTING, SALE, ASSIGNMENT, TRANSFER, PLEDGE, HYPOTHECATION OR OTHER
ENCUMBRANCE OR DISPOSITION OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS
SUBJECT TO A SHAREHOLDER'S AGREEMENT DATED AS OF 18TH DAY OF SEPTEMBER, 1999 BY
AND BETWEEN FCY ACQUISITION CORPORATION AND THE RECORD OWNER HEREOF, COPIES OF
WHICH ARE ON FILE AT THE OFFICES OF FCY ACQUISITION CORPORATION."
ARTICLE 6
Miscellaneous
Section 6.01. Expenses. All costs and expenses incurred in connection with
this Agreement shall be paid by the party incurring such cost or expense.
Section 6.02. Additional Agreements. Subject to the terms and conditions
of this Agreement, each of the parties hereto agrees to use all reasonable
efforts to take, or cause to be taken, all action and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations and which may be required under any agreements, contracts,
commitments, instruments, understandings, arrangements or restrictions of any
kind to which such party is a party or by which such party is governed or bound,
to consummate and make effective the transactions contemplated by this
Agreement, to obtain all necessary waivers, consents and approvals and effect
all necessary registrations and filings, responses to requests for additional
information related to such filings, and submission of information requested by
governmental authorities, and to rectify any event or circumstances which could
impede consummation of the transactions contemplated hereby.
Section 6.03. Specific Performance. The parties hereto agree that Buyer
would be irreparable damaged if for any reason Shareholder failed to perform any
of his obligations under this Agreement, and that Buyer would not have an
adequate remedy at law for money damages in such event. Accordingly, Buyer shall
be entitled to specific performance and injunctive and other equitable relief to
enforce the performance of this Agreement by Shareholder. This provision is
without prejudice to any other rights that Buyer may have against Shareholder
for any failure to perform his obligations under this Agreement.
Section 6.04. Notices. All notices, requests, claims, demands and other
communications hereunder shall be deemed to have been duly given when
5
delivered in person, by cable, telegram or telex, or by registered or certified
mail (postage prepaid, return receipt requested) to such party at its address
set forth on the signature page hereto.
Section 6.05. Amendments. This Agreement may not be modified, amended,
altered or supplemented, except upon the execution and delivery of a written
agreement executed by the parties hereto.
Section 6.06. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of the other parties hereto; provided further that Buyer may
assign its rights and obligations to any affiliate of Buyer without any such
consent.
Section 6.07. Governing Law. This Agreement shall construed in accordance
with and governed by the law of the State of California without giving effect to
the principles of conflicts of laws thereof.
Section 6.08. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
6
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
FCY ACQUISITION CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chairman and Chief Executive Officer
/s/ J. Xxxxxxx Xxxxx
-------------------------------------
Shares Owned J. XXXXXXX XXXXX
219,065/1/
----------
4,633/2/
----------
18,003/3/
----------
2,253/4/
Agreed and Acknowledged
/s/ Xxxxxx X. Xxxxx
------------------------------------
XXXXXX X. XXXXX
---------------------------
/1/ Owned by the Xxxxx Living Trust dated March 17, 1995, the sole trustees
of which are J. Xxxxxxx Xxxxx and Xxxxxx X. Xxxxx.
/2/ Shares in employee stock purchase plan account and are subject to the
restrictions and requirements of such plan.
/3/ Shares in 401(K) account and are subject to the restrictions and
requirements of such plan.
/4/ Shares in ESOP account and are subject to the restrictions and
requirements of such plan.
