Exhibit 10.9
STOCKHOLDERS' AGREEMENT dated
as of December 31, 1996, among CFP
GROUP, INC., a Delaware corporation
(the "Corporation"), and the
STOCKHOLDERS of the Corporation
identified on Annex I (each, a
"Stockholder" and, collectively,
the "Stockholders").
Each Stockholder owns or has been granted the right or option to
acquire that number of shares of Stock (as hereinafter defined) set forth
opposite such Stockholder's name on Annex I hereto. It is deemed to be in the
best interest of the Corporation and the Stockholders that provision be made for
the continuity and stability of the business and policies of the Corporation,
and, to that end, the Corporation and the Stockholders hereby set forth their
agreement with respect to the shares of Stock owned by them.
NOW, THEREFORE, in consideration of the premises and of the mutual
consents and obligations hereinafter set forth, the parties hereto hereby agree
as follows:
SECTION 1. Definitions. As used herein, the following terms shall
have the following respective meanings:
"AEP Stockholders" shall mean Atlantic Equity Partners, L.P., and
shall include any successor to, or assignee or transferee of, any AEP
Stockholder who shall agree in writing to be treated as an AEP Stockholder and
to be bound by the terms and to comply with the provisions of this Agreement.
"Affiliate" shall have the meaning ascribed to it in Rule 12(b)(2)
promulgated under the Securities Exchange Act of 1934, as amended.
"Cause" shall mean (A) as to any Management Investor who has entered
into an Employment Agreement with the Corporation or any of its Affiliates,
"cause" as defined therein or (B) in addition, as to all other Management
Investors, resignation or any of the following: (i) any deliberate or
intentional act or omission undertaken or omitted by such Management Investor
causing damage to the Corporation or any of its affiliates or any of their
respective properties, assets or business; (ii) any fraud, misappropriation or
embezzlement by such Management Investor involving properties, assets or funds
of the Corporation or any of its affiliates or a conviction of such Management
Investor, or pleading nolo contendere by such Management Investor, to any crime
or offense involving monies or other property of the Corporation or any of its
affiliates or any other felony offense for any crime of gross moral turpitude;
(iii) the
violation by such Management Investor of the provisions of any employment,
non-competition or confidentiality agreement with the Corporation or any of its
affiliates; (iv) such Management Investor's material breach of any agreement to
which he is a party with the Corporation or any of its affiliates; (v) any
usurpation by such Management Investor of a corporate opportunity of the
Corporation or any of its affiliates; (vi) such Management Investor's failure or
refusal to perform any of his material duties, responsibilities or obligations
as an employee of the Corporation; provided, however, that any action or
omission by such Management Investor taken in good faith and in the reasonable
belief that such action or omission was in the best interests of the Corporation
shall not constitute "Cause"; and provided further, however, that such
Management Investor shall be entitled to cure any action or inaction that
unintentionally violates clause (iii) hereof or any violation of clause (iv)
hereof, in each case within thirty (30) days of his receipt of written notice
thereof from the Corporation.
"Class A Nonvoting Common Stock" shall mean the shares of Class A
nonvoting common stock, $.01 par value, of the Corporation.
"Class A Voting Common Stock" shall mean the shares of Class A
voting common stock, $.01 par value, of the Corporation.
"Class B Nonvoting Common Stock" shall mean the shares of Class B
nonvoting common stock, $.01 par value, of the Corporation.
"Xxxxx" shall mean Xxxxx Xxxxx.
"Common Stock" shall mean (i) the shares of Class A Voting Common
Stock, (ii) the shares of Class A Nonvoting Common Stock and (iii) the shares of
Class B Nonvoting Common Stock.
"Control" shall have the meaning ascribed to it in Rule 12(b)(2)
promulgated under the Securities Exchange Act of 1934, amended.
"Event of Option" shall mean, with respect to an Investor, the
occurrence of one or more of the following events:
(a) such Investor shall be declared bankrupt or a receiver,
executor, administrator, guardian, legal committee or other legal
custodian of his or its property (including any Stock owned by such
Investor) shall be appointed; provided, however, that no appointment of
any executor or administrator of the property of an Investor who is an
individual, upon the death or disability of such Investor, shall be deemed
an Event of Option as to any Stock owned by such Investor until and unless
such executor or
-2-
administrator, or any successor thereof, shall have disposed of such Stock
other than by transferring it to a member or members of the Group of such
Investor, which member or members shall have agreed in writing, at the
time of such transfer, to be bound by and to comply with, to the same
extent as the Investor as a result of whose death such Stock was
distributed, all applicable provisions of this Agreement and to be a
member of such Investor's Group for all purposes under this Agreement; or
(b) a writ of attachment or levy shall prevent an Investor
from exercising his or its voting and other rights with respect to any
Stock, which writ or levy shall not be stayed or removed within 30 days
after such attachment.
An Event of Option shall be deemed to be continuing until the procedures set
forth in Section 5 with respect to the Stock affected thereby have been
exhausted.
"Fair Value Per Share" shall mean, as of any date of determination,
the fair value of each share of Stock, determined as provided herein, without
regard to any discount, including, without limitation, for the fact that such
share is nonvoting common stock, is held by a minority stockholder of the
Corporation, that there is no market for the Corporation's common stock or if
there were a public market for such common stock, such shares would be
"restricted" as defined under Rule 144 promulgated under the Securities Act of
1933. At any time that the Fair Value Per Share shall be required to be
determined hereunder, the Board of Directors of the Corporation (the "Board")
shall make a good faith determination (the "Board's Determination") of the fair
value of each share of Stock and provide to the Investor with respect to whose
Stock such determination is being made a written notice thereof, which notice
shall set forth supporting data in respect of such calculation (the
"Determination Notice"). The Investor shall have 30 days following his or its
receipt of the Determination Notice within which to deliver to the Corporation a
written notice (the "Objection Notice") of his or its objection, if any, to the
Board's Determination, which Objection Notice shall set forth the Investor's
good faith determination (the "Investor's Determination") of the fair value of
each share of Stock. The failure by the Investor to deliver the Objection Notice
within such 30-day period shall constitute the Investor's acceptance of the
Board's Determination as conclusive. In the event of the timely delivery of an
Objection Notice, the Corporation and the Investor shall attempt in good faith
to arrive at an agreement with respect to the Fair Value Per Share, which
agreement shall be set forth in writing within 30 days following delivery of the
Objection Notice. If the Corporation and the Investor are unable to reach an
agreement within such 30-day period, the matter shall
-3-
be referred for determination to a regionally or nationally recognized
investment banking or valuation firm (the "Valuer") reasonably acceptable to the
Corporation and the Investor. The Corporation and the Investor will cooperate
with each other in good faith to select such Valuer. The Valuer may select the
Board's Determination or the Investor's Determination as the Fair Value Per
Share or may select any other number or value. The Valuer's selection will be
(i) furnished to the Corporation and the Investor in writing and (ii) conclusive
and binding upon the Corporation and the Investor. The fees and expenses of the
Valuer shall be split equally by the Corporation and the Investor with respect
to whose Stock such determination relates.
"Xxxxx" shall mean Xxxxxx X. Xxxxx.
"Group" shall mean:
(a) in the case of any Stockholder who is an individual, (i)
such Stockholder, (ii) the siblings, spouse, lineal descendants, adopted
children, parents and grandparents of such Stockholder and (iii) any trust
for the benefit of any of the foregoing;
(b) in the case of any Stockholder which is a partnership, (i)
such partnership and any of its limited or general partners, (ii) any
corporation or other business organization to which such partnership shall
sell all or substantially all of its assets or with which it shall be
merged and (iii) in the case of any AEP Stockholders, any Affiliate of
such partnership; and
(c) in the case of any Stockholder which is a corporation, (i)
such Corporation and (ii) any stockholder controlling such corporation.
"Institutional Investor" shall mean and include any (i) federal or
state chartered bank or savings and loan institution or any subsidiary thereof
subject to Regulation Y promulgated by the Federal Reserve Board or which
qualifies as a Small Business Investment Company under applicable rules and
regulations, (ii) nationally recognized investment banking firm, (iii) insurance
company, (iv) public or private pension fund, (v) registered investment company
and (vi) foreign bank subject to the Bank Holding Company Act by virtue of the
International Banking Act.
"Investors" shall mean each of the signatories hereto identified
under the heading "Investors" on the signature pages hereof and any member of
the Group of such Investors who shall agree in writing to be treated as an
Investor and to be bound by the terms of and to comply with the provisions of
this Agreement.
-4-
"Majority in Interest of AEP Stockholders" shall mean, at any point
in time, AEP Stockholders owning, in the aggregate, more than 50% of the Stock
owned by all AEP Stockholders at such time.
"Management Investors" shall mean Xxxxxxx X. Xxxxxxxx, Xxxx X. Ek,
Gioia, Cohen, Xxxxx X. Xxxxx, Xxxxx Xxxxxx, Xxxx Xxxxx and Xxxxxx Xxxxxxxxxx.
"Option Agreements" shall mean the Stock Option Agreements between
each of the Management Investors and the Corporation relating to the granting of
options to purchase shares of Common Stock.
"Person" shall mean any individual, partnership, corporation, group,
trust or other legal entity.
"Proportionate Percentage" shall mean:
(a) for the purposes of Section 3, the pro rata percentage of
Stock being offered by a Selling Group pursuant to Section 3 that each AEP
Stockholder shall be entitled to purchase, which pro rata percentage, as
to each such AEP Stockholder, shall be the percentage figure which
expresses the ratio between the number of shares of Stock owned by such
AEP Stockholder and the aggregate number of shares of Stock owned by all
AEP Stockholders at the date of determination;
(b) for the purposes of Section 4.1, the pro rata percentage
of the number of shares of Stock to which a Section 4.1 Offer relates that
each Investor shall be entitled to Transfer to the Section 4.1 Offeror,
which pro rata percentage, as to each such Investor, shall be the
percentage figure which expresses the ratio between the number of shares
of Stock owned by such Investor and the aggregate number of shares of
Stock owned by all Investors and the Section 4.1 Offeree at the date of
determination; and
(c) for the purposes of Section 5, the pro rata percentage of
Stock subject to purchase pursuant to Section 5 that each AEP Stockholder
shall be entitled to purchase, which pro rata percentage, as to each such
AEP Stockholder, shall be the percentage figure which expresses the ratio
between the number of shares of Stock owned by such AEP Stockholder and
the aggregate number of shares of Stock owned by all AEP Stockholders at
the date of determination.
"Selling Group" shall mean an Investor or a member of the Group of
an Investor proposing to Transfer its Stock, or
-5-
which has delivered a notice of intention to Transfer, pursuant to Section 3
hereof.
"Stock" shall mean (a) the presently issued and outstanding shares
of capital stock of the Corporation and any options or stock subscription
warrants exercisable therefor (which options and warrants shall be deemed to be
that number of outstanding shares of Stock for which they are exercisable), (b)
any additional shares of capital stock of the Corporation hereafter issued and
outstanding and (c) any shares of capital stock of the Corporation into which
such shares may be converted or for which they may be exchanged or exercised.
"Stockholders" shall mean those persons identified on Annex I and
shall include any other person who agrees in writing with the parties hereto to
be bound by and to comply with all applicable provisions of this Agreement as an
Investor or an AEP Stockholder hereunder.
"Termination of Relationship" shall mean, (i) the termination of the
employment by the Corporation of any Management Investor for any reason
whatsoever, including, but not limited to, termination by resignation, discharge
(with or without cause), retirement, disability or non-renewal of an employment
agreement between the Corporation or any of its successors and such Management
Investor for any reason whatsoever, including a termination of employment
pursuant to the terms of any employment agreement between the Corporation or any
of its successors and such Management Investor; (ii) in addition, in the case of
Xxxxx, the failure of Xxxxx or his Group to own, beneficially, all of the issued
and outstanding capital stock of The RDG Food Corp.; and (iii) in addition, in
the case of Xxxxx, the failure of Xxxxx or his Group to own, beneficially, all
of the issued and outstanding capital stock of Amjor Holdings, Inc.
"Termination Date" shall mean, as to a Management Investor, the
effective date of the Termination of Relationship of such Management Investor.
"Transfer", as to any shares of Stock, shall mean to sell, or in any
other way transfer, assign, pledge, distribute, encumber or otherwise dispose of
(including, without limitation, the foreclosure or other acquisition by any
lender with respect to any shares pledged to such lender by an Investor or
member of the Group thereof), such shares, either voluntarily or involuntarily
and with or without consideration.
SECTION 2. Limitations on Transfers of Stock; General. (a) The
restrictions on Transfer described in this Agreement shall apply to all shares
of Stock now owned or hereafter acquired by an Investor, including shares of
Stock acquired by reason of any Stock dividend or other distribution, additional
issue of shares of Stock and acquisition of outstanding shares of
-6-
Stock from another Person and such restrictions shall apply to any shares of
Stock obtained by an Investor upon exercise of any warrant or option or
conversion of any convertible share of Stock.
(b) No Investor or any member of the Group of an Investor may,
at any time during the term of this Agreement, Transfer (other than pursuant to
Section 4) any Stock (i) if such Transfer would violate any loan document to
which the Corporation or any of its subsidiaries is then a party or give the
lender thereunder the right to accelerate such loan or (ii) to any Person
engaged in, or an Affiliate of any Person engaged in, a business that competes
in any manner with the business conducted by the Corporation and its
subsidiaries. In addition, an Investor and each member of the Group of an
Investor shall not, at any time during the term of this Agreement, Transfer any
Stock except (i) by a Transfer in accordance with the provisions of Sections 3
and 4 of this Agreement, (ii) by a Transfer to the Corporation or an AEP
Stockholder in accordance with the provisions of Sections 5 or 6 of this
Agreement or (iii) by transfer to another member of the Group of such Investor
if the recipient of such Stock shall agree in writing with the other
Stockholders to be bound by and comply with all applicable provisions of this
Agreement as if the recipient were an Investor. The restrictions on Transfer
described in this Agreement shall be binding upon each Investor and each Person
(other than an AEP Stockholder) to which an Investor shall Transfer Stock, it
being a condition to any such Transfer that such transferee agree in writing to
be bound by and to comply with the provisions of this Agreement. Any Transfer of
Stock by any Investor or any member of the Group of such Investor that shall not
be in compliance with the provisions of this Agreement shall be void ab initio.
SECTION 3. Right of First Offer. Except as otherwise provided in
Section 2 or in any Employment Agreement with the Corporation (or any of its
Affiliates) to which such Investor is a party, each Investor and each member of
the Group of each Investor (other than any Investor who was a party to the
Stockholders' Agreement dated as of March 31, 1993 among CFP Holdings, Inc. and
the other signatories thereto) hereby agrees that he or it shall not Transfer
any Stock prior to the third anniversary of the date hereof and thereafter shall
only Transfer Stock in accordance with the following procedures:
(a) The Selling Group shall first deliver to the Corporation
and each AEP Stockholder a written notice (the "Section 3 Offer Notice"),
which shall be irrevocable for a period of 45 days after delivery thereof
(the "Section 3 Offer Period"), offering (the "Section 3 Offer") all of
the Stock proposed to be Transferred by the Selling Group at the purchase
price and on the terms specified therein (such Notice of
-7-
Offer shall include the foregoing information and all other relevant terms
of the proposed Transfer). The Corporation (or its designee) shall have
the right and option, for a period of 15 days after delivery of the
Section 3 Offer Notice, to accept all or any part (subject to Section
3(f)) of the Stock so offered at the purchase price and on the terms
stated in the Section 3 Offer Notice. Such acceptance shall be made by
delivering a written notice to the Selling Group and the AEP Stockholders
within said 15-day period.
(b) If the Corporation (or its designee) shall fail to accept
all of the Stock offered for sale pursuant to, or shall reject in writing,
the Section 3 Offer (the Corporation being required to notify in writing
the Selling Group and the AEP Stockholders of its rejection or failure to
accept all of the Stock in such event), then, upon the earlier of the
expiration of such 15-day period or the receipt of such written notice of
rejection or failure to accept such offer by the Corporation, each AEP
Stockholder shall have the right and option, until the expiration of the
Section 3 Offer Period, (i) to accept all or any part of its Proportionate
Percentage of the Stock (subject to Section 3(f)) so offered and not
accepted by the Corporation (the "Refused Stock") at the purchase price
and on the terms stated in the Section 3 Offer Notice and (ii) to offer,
in any written notice of acceptance, to purchase any of such Refused Stock
not accepted by the other AEP Stockholders, in which case such Refused
Stock not accepted by the other AEP Stockholders shall be deemed to have
been offered to and accepted by the AEP Stockholders which exercised their
option under this clause (ii) pro rata in accordance with their respective
Proportionate Percentages (computed without including the AEP Stockholders
who have not exercised their option to purchase Stock under clause (ii) of
this subparagraph (b)), on the above-described terms and conditions. Such
acceptance shall be made by delivering a written notice to the Corporation
and the Selling Group prior to the expiration of the Section 3 Offer
Period.
(c) A notice of acceptance delivered by either the Corporation
or an AEP Stockholder pursuant to Section 3(a) or Section 3(b) shall be a
binding commitment to purchase the Stock referred to therein.
(d) Transfers of Stock under the terms of Sections 3(a) and
3(b) shall be made at the offices of the Corporation on a mutually
satisfactory business day within 30 days after the expiration of the
Section 3 Offer Period. Delivery of certificates or other
-8-
instruments evidencing such Stock duly endorsed for transfer shall be made
on such date against payment of the purchase price therefor.
(e) If effective acceptance shall not be received pursuant to
Sections 3(a) and 3(b) with respect to all Stock offered for Transfer
pursuant to the Section 3 Offer Notice, then the Selling Group may
Transfer all or any part of the Stock so offered and not so accepted at a
price not less than the price, and on terms not more favorable to the
purchaser thereof than the terms, stated in the Section 3 Offer Notice at
any time within 60 days after the expiration of the Section 3 Offer Period
to an Institutional Investor or to any other purchaser approved by a
Majority in Interest of the AEP Stockholders, such approval not to be
unreasonably withheld, conditioned or delayed. In the event that the Stock
is not Transferred by the Selling Group during such 60-day period, the
right of the Selling Group to Transfer such Stock shall expire and the
obligations of this Section 3 shall be reinstated.
(f) The Selling Group may specify in the Section 3 Offer
Notice that all or a minimum amount of Stock mentioned therein must be
Transferred, in which case any acceptance received pursuant to Sections
3(a) and 3(b) shall be deemed conditioned upon (i) receipt of written
notices of binding acceptance with respect to all or such stated amount of
Stock mentioned in such Section 3 Offer Notice and/or (ii) the Transfer of
the remaining Stock, if any, pursuant to Section 3(e).
(g) Anything contained herein to the contrary notwithstanding,
any purchaser of Stock pursuant to Section 3 who is not a Stockholder
shall agree in writing in advance with the parties hereto to be bound by
and comply with all applicable provisions of this Agreement and shall be
deemed to be an Investor for all purposes of this Agreement.
SECTION 4. Right of Co-Sale; Required Sale.
4.1. Right of Co-Sale; Consent to Transaction. (a) In the event that
any AEP Stockholder or any member of a Group of any AEP Stockholder
(hereinafter, the "Section 4.1 Offeree") receives a bona fide offer (the
"Section 4.1 Offer") from a third party that is not an Affiliate of such AEP
Stockholder (the "Section 4.1 Offeror") to purchase from such Section 4.1
Offeree that number of shares of Stock which, in any one transaction or in
several transactions during any 12-month period, constitutes in the aggregate
more than 50% of the total number of shares of Stock outstanding at such time,
for a specified price payable in
-9-
cash or otherwise and on specified terms and conditions, such Section 4.1
Offeree shall promptly forward a notice (the "Section 4.1 Notice") complying
with Section 4.1(b) to the Corporation, the Investors and the other AEP
Stockholders. The Section 4.1 Offeree shall not Transfer any Stock to the
Section 4.1 Offeror unless the terms of the Section 4.1 Offer are extended to
the Investors with respect to their Proportionate Percentage of the aggregate
number of shares of Stock to which the Section 4.1 Offer relates, whereupon each
such Investor shall be entitled to Transfer to the Section 4.1 Offeror pursuant
to the Section 4.1 Offer such Investor's Proportionate Percentage of the
aggregate number of shares of Stock to which the Section 4.1 Offer relates.
(b) The Section 4.1 Notice shall set forth (i) the number of
shares of Stock to which the Section 4.1 Offer relates and the name of the
Section 4.1 Offeree, (ii) the name and address of the Section 4.1 Offeror, (iii)
the proposed amount and type of consideration (including, if the consideration
consists in whole or in part of non-cash consideration, such information
available to the Section 4.1 Offeree as may be reasonably necessary for the
Investors to analyze properly the economic value and investment risk of such
non-cash consideration) and the terms and conditions of payment offered by the
Section 4.1 Offeror and (iv) that the Section 4.1 Offeror has been informed of
the co-sale rights provided for in this Section 4.1 and has agreed to purchase
Stock in accordance with the terms of this Section 4.1. Each Investor shall have
a period of 15 days to deliver a written notice (the "Section 4.1 Acceptance")
to the Section 4.1 Offeree evidencing such Investor's acceptance of the Section
4.1 Offer.
4.2. Required Sale. Anything contained herein to the contrary
notwithstanding, if at any time a Majority in Interest of AEP Stockholders shall
approve (i) a proposal from a Person that is not an Affiliate of any AEP
Stockholder (the "Buyer") for the Transfer, directly or indirectly, of all of
the Stock of the Corporation to the Buyer, (ii) the merger or consolidation of
the Corporation with or into another Person that is not an Affiliate of an AEP
Stockholder in which the Stockholders will receive cash or securities of any
other Person for their shares or (iii) the sale by the Corporation or its
subsidiaries of all or substantially all of their assets to a Person which is
not an Affiliate of an AEP Stockholder, in each of the above cases for a
specified price payable in cash or otherwise and on specified terms and
conditions (a "Sale Proposal"), then such AEP Stockholders (or their designated
representative) may deliver a notice (a "Required Sale Notice") with respect to
such Sale Proposal to each other Stockholder (as well as each other holder of
any shares of Stock) stating that a Majority in Interest of AEP Stockholders
have approved or propose to effect the Sale Proposal and providing the identity
of Persons involved in such Sale Proposal and the terms thereof. Each such
Stockholder and the members of the Group thereof, upon receipt of a Required
Sale
-10-
Notice, shall be obligated, which obligation shall be enforceable by the
Majority in Interest of AEP Stockholders (or their designee), to either sell
their Stock and participate in the transaction (a "Required Sale") contemplated
by the Sale Proposal or vote their shares of Stock in favor of such Sale
Proposal at any meeting of Stockholders called to vote on or approve such Sale
Proposal, and to otherwise take all necessary action to cause the Corporation
and the Stockholders to consummate such Required Sale, in each case for a
purchase price per share of Common Stock and on other terms and conditions not
less favorable to such Stockholders than shall apply in such Required Sale to
any AEP Stockholder or any member of the Group of any AEP Stockholder. Any such
Required Sale Notice may be rescinded by such AEP Stockholders by delivering
written notice thereof to all of the Stockholders.
SECTION 5. Event of Option. (a) If an Event of Option shall occur as
to any Investor, such Investor shall promptly notify the Corporation of such
occurrence. In the event the Corporation shall receive any such notice or become
aware of the occurrence of any Event of Option, the Corporation shall promptly
notify each AEP Stockholder of the occurrence of any Event of Option. The
Corporation and each AEP Stockholder shall have the right and option to give
such Investor, or his or its representatives or assigns, as the case may be,
notice of his or its election to have the Fair Value Per Share determined with
respect to all of the Stock held by such Investor. The Corporation shall cause
such determination of the Fair Value Per Share to be made as soon as is
practicable and shall promptly notify each AEP Stockholder electing to have the
Fair Value Per Share determined of such Fair Value Per Share (and the
Corporation shall forward to each such AEP Stockholder supporting documentation
showing the calculation of such Fair Value Per Share). Upon the determination of
such Fair Value Per Share (i) first, the Corporation and (ii) second, each AEP
Stockholder shall have the right and option to purchase from the Investor as to
which such Event of Option has occurred, or his or its representatives or
assigns, as the case may be, for cash, at the Fair Value Per Share, all Stock
owned by the Investor as to which an Event of Option has occurred. Each AEP
Stockholder shall have the right hereunder to purchase his or its Proportionate
Percentage of the Stock held by the Investor as to which such Event of Option
has occurred which Stock has not been accepted for purchase by the Corporation.
The Corporation shall exercise its option hereunder by delivering a written
notice to the Investor as to which an Event of Option has occurred during the
30-day period following the determination of the Fair Value Per Share evidencing
its election to purchase Stock hereunder and indicating the number of shares of
Stock it elects to purchase. A copy of such notice shall be delivered to each
AEP Stockholder. If the Corporation elects not to purchase all Stock available
for purchase hereunder, each AEP Stockholder may then exercise its right to
purchase its Proportionate Percentage of any remaining
-11-
Stock by delivering to the Corporation, within 30 days of its receipt of the
Corporation's notice, a written notice of its election to purchase Stock
hereunder (each such notice, a "Section 5 Notice"), whereupon the Corporation
shall forthwith transmit such Section 5 Notice to the Investor as to which such
Event of Option has occurred, its representatives or assigns, as the case may
be, but failure of the Corporation so to transmit any such Section 5 Notice
shall in no way invalidate such Section 5 Notice. In addition, the AEP
Stockholders delivering such Section 5 Notice shall have the further right and
option to purchase (the intention to exercise such option to be included in such
Section 5 Notice) all or part of such Stock not purchased by the other AEP
Stockholders, in which case such Stock not accepted by the other AEP
Stockholders shall be deemed to have been offered to and accepted by the AEP
Stockholders which exercised their Proportionate Percentages (but calculated
without including the AEP Stockholders who have not exercised their right to
purchase more than their Proportionate Percentage of such Stock), and on the
above-described terms and conditions.
(b) Sales of Stock effected under the terms of Section 5(a)
shall be made at the offices of the Corporation on a mutually acceptable
business day within 30 days after the expiration of the last applicable period
referred to in Section 5(a). Delivery of certificates or other instruments
evidencing such Stock duly endorsed for transfer shall be made on such date
against payment of the purchase price therefor.
SECTION 6. Right to Repurchase Stock. (a) In the event of a
Termination of Relationship of a Management Investor, the Corporation or its
designee shall have the right (but not the obligation, except as may be provided
in any Employment Agreement between such Management Investor and the Corporation
or any of its Affiliates) to repurchase from such Management Investor (or The
RDG Food Corp., in the case of Xxxxx, and Amjor Holdings, Inc., in the case of
Xxxxx) and the members of the Group thereof, all or any part of any Stock owned
by them. For purposes of this Section 6, any Management Investor (or, in the
case of Xxxxx and Xxxxx, The RDG Food Corp. and Amjor Holdings, Inc., as the
case may be) to whom a Termination of Relationship applies is referred to as the
"Terminated Investor".
(b) The repurchase right of the Corporation or its designee
under this Section 6 may be exercised by written notice (a "Repurchase Notice"),
specifying the number of shares of Stock to be repurchased, and given to the
Terminated Investor within 90 days of the Termination Date (except in the case
of a Termination of Relationship due to resignation or, in the case of a
Management Investor who has entered into an Employment Agreement with the
Corporation, a "Voluntary Termination" as defined therein, in which case such
Repurchase Notice shall be given within 18 months of the Termination Date) or,
in the event the Repurchase Notice states an intention to purchase options to
-12-
purchase Common Stock, within 90 days (or 18 months, as applicable) of the date
upon which the Terminated Investor either exercises or fails to exercise such
options pursuant to the terms of the Option Agreement to which the Terminated
Investor is a party (or, if the Corporation shall not have assigned its rights
under this Section 6 and shall be legally prevented from making such repurchase
during such 90-day (or 18-month, as applicable) period, then such Repurchase
Notice may be delivered by the Corporation within 90 days (or 18 months, as
applicable) after the date on which it shall be legally permitted to make such
repurchase). Upon the delivery of a Repurchase Notice to the Terminated
Investor, the Terminated Investor shall be obligated to sell or cause to be sold
to the Corporation or its designee the Stock specified in such Repurchase
Notice.
(c) The price per share of Stock to be paid under this Section
6 and the form of payment shall be determined as follows:
(i) if the Termination of Relationship arose out of a
termination for Cause, then, the repurchase price to be paid per share of
Stock shall be the lesser of (A) the price paid by such Terminated
Investor for the Stock repurchased and (B) Fair Value Per Share (net of
the exercise price, in the case of Stock consisting of options that have
vested and are exercisable in accordance with the terms of the option
agreement pursuant to which such options were granted);
(ii) if the Termination of Relationship occurred for any
reason other than as set forth in (i) above, then, the repurchase price to
be paid per share of Stock shall be the greater of (A) the price paid by
such Terminated Investor for the Stock repurchased and (B) Fair Value Per
Share as of the Termination Date (net of the exercise price, in the case
of Stock consisting of options that have vested in accordance with the
terms of the option agreement pursuant to which such options were
granted); and
(iii) the repurchase price to be paid under this Section 6
shall be paid by delivery of a subordinated promissory note in the form
attached hereto as Exhibit A, which note (x) shall have a three year term,
with 10% of the principal being paid on the first and second anniversaries
of the date thereof and the balance being paid on the third anniversary,
(y) shall bear interest at a fluctuating rate per annum announced by
NationsBank, N.A. from time to time as its prime rate and (z) shall
otherwise contain such terms and provisions as may be required by the
Corporation's lenders.
-13-
To the extent that any provision in this Section 6(c) is not consistent with the
terms and conditions of the put rights contained in a Management Investor's
Employment Agreement, the terms of this Section 6(c) shall be deemed modified to
conform to the terms and conditions of the put rights set forth in such
Employment Agreement to the extent such terms are more favorable to the
Management Investor than those contained herein.
(d) Repurchases of Stock under the terms of this Section 6
shall be made at the offices of the Corporation or its designee on a mutually
satisfactory business day within 30 days after the final determination of the
repurchase price as described above. Delivery of certificates or other
instruments evidencing such Stock duly endorsed for transfer and free and clear
of all liens, claims and other encumbrances (other than those encumbrances
hereunder) shall be made on such date against payment of the purchase price
therefor or delivery of the promissory note, as the case may be.
(e) Anything contained herein to the contrary notwithstanding,
the repurchase right of the Corporation set forth in this Section 6 shall
terminate and be of no further force or effect simultaneously with the
consummation by the Corporation of the initial public offering of shares of its
capital stock.
SECTION 7. Election of Directors. (a) At each annual meeting of the
Stockholders, and at each special meeting of the Stockholders called for the
purpose of electing directors of the Corporation, and at any time at which the
Stockholders shall have the right to, or shall, vote for or consent in writing
to the election of directors of the Corporation, then, and in each event, the
Stockholders shall vote all shares of Stock owned by them (to the extent the
holder of such shares is entitled to vote thereon) for the election of a Board
consisting of at least nine directors, designated in the following manner:
(i) one director shall be Xxxxxxxx, for so long as he shall be an
employee of the Corporation and he shall own Stock;
(ii) one director shall be Xxxx X. Ek, for so long as he shall be an
employee of the Corporation and he shall own Stock;
(iii) one director shall be Xxxxx, for so long as he shall be an
employee of the Corporation and he shall own Stock (either directly or
through The RDG Food Corp.);
(iv) one director shall be Xxxxx, for so long as he shall be an
employee of the Corporation and he shall own Stock (either directly or
through Amjor Holdings, Inc.); and
-14-
(v) the remaining directors shall be designated by a Majority in
Interest of AEP Stockholders.
(b) The Corporation and the Stockholders shall use its and
their best efforts (including any action required to amend the Certificate of
Incorporation or By-laws of the Corporation) to cause the size of the Board to
consist of nine directors (or such other number as a Majority in Interest of AEP
Stockholders shall determine) and to provide that, notwithstanding any
vacancies, any corporate action taken by the Board of the Corporation must be
approved by at least five directors (or such larger number as shall constitute a
majority of the Board).
SECTION 8. Legend on Stock Certificates. Each
certificate representing shares of Stock shall bear a legend
containing the following words:
"THE SALE, TRANSFER, ASSIGNMENT, PLEDGE, OR ENCUMBRANCE OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE AND THE RIGHTS OF THE HOLDER OF SUCH
SECURITIES IN RESPECT OF THE ELECTION OF DIRECTORS ARE SUBJECT TO THE
TERMS AND CONDITIONS OF A STOCKHOLDERS' AGREEMENT DATED AS OF DECEMBER __,
1996, AMONG CFP GROUP, INC. AND CERTAIN HOLDERS OF THE OUTSTANDING CAPITAL
STOCK OF SUCH CORPORATION. COPIES OF SUCH AGREEMENT MAY BE OBTAINED AT NO
COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE
TO THE SECRETARY OF CFP GROUP, INC."
SECTION 9. Additional Shares of Stock; Etc. In the event additional
shares of Stock are issued by the Corporation to a Stockholder at any time
during the term of this Agreement, either directly or upon the exercise or
exchange of securities of the Corporation exercisable for or exchangeable into
shares of Stock, such additional shares of Stock shall, as a condition to such
issuance, become subject to the terms and provisions of this Agreement.
SECTION 10. Duration of Agreement; Compliance. The rights and
obligations of each Stockholder under this Agreement shall terminate as to such
Stockholder upon the earliest to occur of (a) the Transfer of all Stock owned by
such Stockholder, (b) the twentieth anniversary of the date hereof, (c) a sale
of all or substantially all of the stock of the Company in a single transaction
or (d) the Company's consummation of an initial public offering of its Common
Stock which results in net proceeds to the Company of at least $100,000,000.
Each of the Stockholders agrees to take such actions as shall be reasonably
necessary to carry out the terms of this Agreement.
-15-
SECTION 11. Severability; Governing Law. If any provision of this
Agreement shall be determined to be illegal and unenforceable by any court of
law, the remaining provisions shall be severable and enforceable in accordance
with their terms. This Agreement shall be governed by and construed and enforced
in accordance with the laws of the State of New York (without regard to
principles of conflicts of laws), except to the extent that this Agreement
relates to the internal laws of the Corporation, which shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware.
SECTION 12. Successors and Assigns. This Agreement shall bind and
inure to the benefit of the parties and their respective successors and assigns,
transferees, legal representatives and heirs.
SECTION 13. Notices. All notices, requests, consents and other
communications hereunder to any party shall be deemed to be sufficient if
contained in a written instrument delivered in person or by telecopy or sent by
nationally-recognized overnight courier or first class registered or certified
mail, return receipt requested, postage prepaid, addressed to such party at the
address set forth below or at such other address as may hereafter be designated
in writing by such party to the other parties:
(a) if to the Corporation, to:
CFP Group, Inc.
0000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
Attention: President
Telecopier: (000) 000-0000
Telephone: (000) 000-0000;
with copies to:
First Atlantic Capital, Ltd.
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxx
Telecopier: (000) 000-0000
Telephone: (000) 000-0000;
X'Xxxxxxxx Graev & Karabell, LLP
00 Xxxxxxxxxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxx, Esq.
Telecopier: (000) 000-0000
Telephone: (000) 000-0000;
-16-
(b) if to the AEP Stockholders, to:
Atlantic Equity Partners, L.P.
X.X. Xxx 000
Elizabethan Square, 4th Floor
Grand Cayman, Cayman Islands
British West Indies
Attention: Xx. Xxxx X. Xxxxxx
Telecopier: (000) 000-0000
Telephone: (000) 000-0000; and
(c) if to the Investors, to their respective
addresses set forth on Annex I hereto.
All such notices, requests, consents and other communications shall be deemed to
have been delivered and received (i) in the case of personal delivery or
delivery by telecopy, on the date of such delivery, (ii) in the case of dispatch
by nationally-recognized overnight courier, on the next business day following
such dispatch and (iii) in the case of mailing, on the third business day after
the posting thereof.
SECTION 14. Modification. Except as otherwise provided herein,
neither this Agreement nor any provisions hereof can be modified, changed,
discharged or terminated except by an instrument in writing signed by (i) the
Corporation, (ii) the holders of at least 75% of the Stock then held by the
Investors and (iii) AEP Stockholders holding at least 75% of the Stock then held
by all AEP Stockholders; provided, however, that no modification or amendment
shall be effective to reduce the percentage of the shares of Stock the consent
of the holders of which is required under this Section 14 nor shall any
modification or amendment discriminate against any Stockholder or impair,
diminish or adversely affect the rights of such Stockholder (unless the rights
of all Stockholders are similarly impaired, diminished or adversely affected)
without the consent of such Stockholder.
SECTION 15. Headings. The headings of the sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed to
be a part of this Agreement.
SECTION 16. Entire Agreement. This Agreement, the Subscription
Agreement and the other writings referred to herein or therein contain the
entire agreement among the parties hereto with respect to the subject matter
hereof and supersede all prior agreements and understandings with respect
thereto.
SECTION 17. Counterparts. This Agreement may be executed in any
number of counterparts, and each such counterpart hereof shall be deemed to be
an original instrument, but all such counterparts together shall constitute but
one agreement.
-17-
SECTION 18. Distributions. The Stockholders acknowledge that under
ARTICLE FOUR, Section B.2 of the Corporation's Amended and Restated Certificate
of Incorporation ("Certificate") the outstanding shares of the Class B Nonvoting
Common Stock have no right to participate in the Class A Dividend Amount, as
defined in the Certificate. The parties agree that the Class A Dividend Amount
shall not be paid in stock or other securities of a direct or indirect
subsidiary of the Corporation unless such distribution is approved by the
affirmative vote of holders representing at least 75% of the outstanding shares
of the Class B Nonvoting Common Stock as of the date of this Agreement, voting
as a class. Nothing in this Section 18 is intended to limit the power of the
Corporation, or impose any requirement of additional shareholder approval, in
connection with the sale or other disposition of any direct or indirect
subsidiary.
* * * *
-18-
IN WITNESS WHEREOF, the parties hereto have executed this
Stockholders' Agreement on the date first above written.
CFP GROUP, INC.
By:______________________________
Name:
Title:
ATLANTIC EQUITY PARTNERS, L.P.
By: Atlantic Equity Associates, L.P.,
its General Partner
By: Buaron Capital Corporation,
Managing General Partner
By:______________________________
Name: Xxxxxxx Xxxxxx
Title: President
INVESTORS:
CFP ASSOCIATES
By:______________________________
Name:
Title:
NATIONSCREDIT COMMERCIAL
CORPORATION
By:______________________________
Name:
Title:
THE RDG FOOD CORP.
By:______________________________
Name:
Title:
AMJOR HOLDINGS, INC.
By:______________________________
Name:
Title:
___________________________________
XXXXXXX X. XXXXXXXX
___________________________________
XXXXXX XXXX-XXXXX
___________________________________
XXXXXX X. XXXXXXXXX
___________________________________
XXXXXX X. XXXXXXXX
X. X. XXXXXXXX PROFIT SHARING TRUST
By:______________________________
Name:
Title:
___________________________________
XXXX X. EK
___________________________________
XXXXX XXXXX
___________________________________
XXXXX XXXXXX
___________________________________
XXXX XXXXX
___________________________________
XXXXXX XXXXXXXXXX
ANNEX I
Shares of Class A
Class A Voting Shares of Nonvoting Nonvoting
Stockholders Common Stock Common Stock Options
------------ ------------ ------------ -------
Class A Class B
-------------------
Atlantic Equity Partners, L.P. 14,705
X.X. Xxx 000
Elizabethan Square
0xx Xxxxx
Xxxxx Xxxxxx, Xxxxxx Xxxxxxx
Xxxxxxx Xxxx Indies
Telecopier: (000) 000-0000
Attention: Xxxx X. Xxxxxx
CFP Associates 589
c/o W.P. Xxxxx & Co.
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
NationsCredit Commercial Corporation 3,949
Xxx Xxxxxxxxxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Telecopier: (000) 000-0000
The RDG Food Corp. 1,081
000 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Amjor Holdings, Inc. 1,081
0 Xxxx Xxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
with a copy to:
Xxxx X. Xxxxxxxxx, Esq.
Xxxxxxxx Ronon Xxxxxxx
& Young, LLP
0000 Xxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Xxxxxxx X. Xxxxxxxx 645 3,445
The Westford
00000 Xxxxxxxx Xxxxxxxxx, #000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telecopier: (000) 000-0000
Shares of Class A
Class A Voting Shares of Nonvoting Nonvoting
Stockholders Common Stock Common Stock Options
------------ ------------ ------------ -------
Class A Class B
-------------------
Xxxxxx X. Xxxxxxxx 150
c/o Xxxxxxx X. Xxxxxxxx
The Westford
00000 Xxxxxxxx Xxxxxxxxx, #000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telecopier: (000) 000-0000
X. X. Xxxxxxxx Profit Sharing Trust 70
c/o Xxxxxxx X. Xxxxxxxx
The Westford
00000 Xxxxxxxx Xxxxxxxxx, #000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telecopier: (000) 000-0000
Xxxx X. Ek 131 1,379
c/o CFP Holdings, Inc.
0000 Xxxx Xxxxxxx Xxxxxxxxx
X.X. Xxx 0000
Xxxxxxxxxx, XX 00000
Telecopier: (000) 000-0000
Xxxxx Xxxxx 288
c/o QF Acquisition Corp.
0000 Xxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
Telecopier: (000) 000-0000
Xxxxx Xxxxxx 168
c/o QF Acquisition Corp.
0000 Xxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
Telecopier: (000) 000-0000
Xxxx Xxxxx 86
c/o QF Acquisition Corp.
0000 Xxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
Telecopier: (000) 000-0000
Xxxxxx Xxxxxxxxxx 178
c/o QF Acquisition Corp.
0000 Xxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
Telecopier: (000) 000-0000
Shares of Class A
Class A Voting Shares of Nonvoting Nonvoting
Stockholders Common Stock Common Stock Options
------------ ------------ ------------ -------
Class A Class B
-------------------
Xxxxxx Xxxx-Xxxxx 433
c/o The Trenwith Group
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Telecopier: (000) 000-0000
Xxxxxx X. Xxxxxxxxx 432
c/o The Trenwith Group
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Telecopier: (000) 000-0000
