1
Exhibit 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 $.1O 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 ("AD!"),
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 Xx. Xxxxx 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;
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
2
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, 14w,
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 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.
3
(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
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, con'cession, 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
-10-
4
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.
(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 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.
5
(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 canceled 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 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
6
TAKE SUCH FURTHER ACTION AND HEREBY REVOKES ANY PROXY
PREVIOUSLY GRANTED BY STOCK HOLDER 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 Combination" 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 t%al 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,
7
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 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,
8
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
mutually 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 enforce 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 w or in equity. In addition, each of
the parties hereto (i) consents to submit such
9
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.
10
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/ XXXXX XXXXX
-----------------------------------
Name: Xxxxx X. Xxxxx
Title: Executive Vice President,
Corporate Development
Number of Subject Shares: Stockholder:
2,250,000 AMERICAN GREETINGS CORPORATION
By: /s/ XXXXX XXXXX
-----------------------------------
Name: Xxxxx Xxxxx
Title: Chairman and Chief Executive
Officer
Address: Xxx Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxx 00000
Number of Subject Shares: Stockholder:
411,786 /s/ XXXXXX XXXXX
----------------------------------------
Name: Xxxxxx Xxxxx
Address: 000 Xxxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
