IRREVOCABLE PROXY AND STOCK OPTION AGREEMENT
IRREVOCABLE PROXY AND STOCK OPTION AGREEMENT (this "Agreement"), dated as of
March 2, 1998, among Huhtamaki Oy, a corporation organized under the laws of
Finland ("Parent"), Seal Acquisition Corporation, a Delaware corporation and
wholly-owned subsidiary of Parent (the "Purchaser") and the other parties
signatory hereto (individually and collectively, the "Stockholder").
W I T N E S S E T H:
WHEREAS, Purchaser, Parent and Sealright Co. Inc., a Delaware corporation
(the "Company"), have entered into an Agreement and Plan of Merger (as such
agreement may be amended from time to time, the "Merger Agreement";
capitalized terms used and not defined herein have the respective meanings
assigned to them in the Merger Agreement) pursuant to which Purchaser will
be merged with and into the Company (the "Merger");
WHEREAS, the Stockholder owns, of record and beneficially, 4,455,115 shares
of common stock of the Company (together with all other shares of common stock
of the Company acquired or otherwise received by the Stockholder on or after
the date of this Agreement, the "Shares");
WHEREAS, in order to induce Purchaser and Parent to execute the Merger
Agreement, the Stockholder has agreed to grant to Purchaser the Proxy (as
hereinafter defined), the Option (as hereinafter defined) and the other rights
herein provided;
NOW THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, hereby agree
as follows:
1. Irrevocable Proxy.
(a) Grant of Proxy. The Stockholder hereby constitutes and appoints
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇, and each of them (the "Proxyholders"),
each with the power of substitution, as the lawful proxies for the Stockholder
to vote all of the Shares which the Stockholder is entitled to vote, for and
in the name, place and stead of the Stockholder, at any annual, special or
other meeting of the stockholders of the Company and at any adjournment
thereof, or pursuant to any consent in lieu of a meeting, at which meeting or
in connection with which consent action shall be taken (i) in favor of the
Merger, the execution and delivery by the Company of the Merger Agreement and
the approval of the terms thereof and each of the other actions contemplated
by the Merger Agreement and this Agreement and any actions required in
furtherance thereof and hereof; (ii) against any action or agreement that
would result in a breach in any respect of any covenant, representation or
warranty or any other obligation or agreement of the Company under the Merger
Agreement or this Agreement; and (iii) against the following actions (other
than the Merger and the transactions contemplated by the Merger Agreement):
(A) any extraordinary corporation transaction, such as a merger,
consolidation or other business combination involving the Company or its
subsidiaries; (B) a sale, lease or transfer of a material amount of assets
of the Company or its subsidiaries, or a reorganization, recapitalization,
dissolution or liquidation of the Company or its subsidiaries; (C)(1) any
change in a majority of the persons who constitute the board of directors
of the Company; (2) any change in the present capitalization of the Company
or any amendment of Company's Certificate of Incorporation or Bylaws;
(3) any other material change in the Company's corporate structure or
business; or (4) any other action involving the Company or its subsidiaries
which is intended, or could reasonably be expected, to impede, interfere
with, delay, postpone, or materially adversely affect the Merger and the
transactions contemplated by this Agreement and the Merger Agreement (the
"Proxy"). The Stockholder shall not enter into any agreement or
understanding the effect of which would be to violate the provisions and
agreements contained in this Section 1(a).
(b) Irrevocability of Proxy. The Proxy granted by the preceding
paragraph (a) is coupled with an interest and is therefore not revocable
by the Stockholder without the consent of Purchaser. Notwithstanding the
foregoing, such Proxy shall terminate upon the termination of this Agreement.
2. Option.
(a) Grant of Option. The Stockholder hereby grants to Purchaser an
irrevocable option (the "Option") to purchase the Shares in the manner and
at the purchase price set forth below.
(b) Exercise of Option. The Option may be exercised by Purchaser, in
whole or in part, at any time, or from time to time, after the occurrence
of any of the following events: (i) the Stockholder fails to vote or cause
to be voted all the Shares in favor of the Merger and the Merger Agreement
pursuant to Section 6 hereof; (ii) the Stockholder attempts to revoke
the Proxy or otherwise acts in violation of Section 1(a) hereof; (iii)
there occurs an Acquisition Proposal; or (iv) the Board of Directors
determines that a proposal to acquire the Company is a Superior Proposal
(as defined in the Merger Agreement). If Purchaser wishes to exercise the
Option, Purchaser shall send a written notice to the Stockholder specifying
the number of Shares to be purchased upon such exercise and a date (not
less than five nor more than sixty days from the date such notice is given,
which date shall be postponed as appropriate to obtain any necessary consents
or approvals or to allow termination of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvement Act of ▇▇▇▇ (▇▇▇ "▇▇▇ ▇▇▇") waiting period) for the closing
of such purchase (the "Option Closing"). Such Option Closing shall take
place at 10:00 A.M., local time, on the date specified in such notice at
the offices of ▇▇▇▇▇▇ ▇. ▇▇▇▇ Group, Inc., Twelve ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other place and time as the
parties may mutually agree. For purposes hereof, an "Acquisition Proposal"
shall occur when during the term of this Agreement, (x) any Person or
Persons make an offer to acquire any shares of the Company's common stock
at a price in excess of $14.43 per share, including the value of stock
of Flexible Company which is deemed to be $3.43 for each of the Shares,
either by means of a tender offer, an offer to merge or consolidate or any
other form of corporate reorganization, or (y) the Company or any of its
Representatives shall take any action to, directly or indirectly,
encourage, initiate or engage in discussions or negotiations with, or
provide any information to any Person or group of Persons, in violation of
the Merger Agreement, other than Purchaser, concerning any purchase of the
Company's common stock or any merger, consolidation or sale of substantial
assets or similar transaction involving the Company.
(c) Purchase Price. At the Option Closing, the Stockholder will
deliver to Purchaser a certificate or certificates representing the Shares
being purchased. Purchaser will purchase such Shares from the Stockholder
by delivering as consideration therefor he lesser of (i) the amount proposed
to be paid in connection with a Superior Proposal, and (ii) $14.43 per share
in cash in immediately available funds; provided, however, that if the
Flexible Shares are not distributed as part of the Redemption Consideration,
such price will be $11.00 plus the cash paid as part of the Redemption
Consideration. If Purchaser sells the Shares purchased from the Stockholder
after the occurrence of an Acquisition Proposal to the person making such
Acquisition Proposal, then Purchaser shall pay to the Stockholder one-half
of the amount of the aggregate net proceeds received by Purchaser in excess
of $14.43 per Share. If at any time the outstanding shares of the Company's
capital stock are changed into a different number of shares or a different
class by reason of any reclassification, recapitalization, split-up,
combination, exchange of shares or readjustment or if a stock dividend
thereon is declared with a record date prior to the termination of this
Agreement, then the number of shares of the Company's common stock subject
to the Option and the per share consideration to be paid by Purchaser upon
exercise of the Option shall be appropriately adjusted.
(d) HSR Filing. Purchaser and the Stockholder agree to file with the
Federal Trade Commission and the Antitrust Division of the United States
Department of Justice all required pre-merger notification and report forms
and other documents and exhibits required to be filed under the HSR Act to
permit the purchase contemplated by this Agreement.
3. Representations and Warranties of the Stockholder. The Stockholder
hereby represents and warrants to Parent and Purchaser as follows:
(a) Ownership of Shares. The Stockholder is the record and beneficial
owner of the number of Shares set forth opposite such Stockholder's name
on Schedule I hereto. On the date hereof, the Shares set forth opposite
such Stockholder's name on Schedule I hereto constitute all of the Shares
owned by such Stockholder, except those shares of the Company's common
stock received as Director compensation. The Stockholder has sole voting
power and sole power to issue instructions with respect to the matters set
forth in Sections 1, 2 and 6 hereof, sole power of disposition, sole power
of conversion, sole power to demand appraisal rights and sole power to
agree to all of the matters set forth in this Agreement, in each case with
respect to all of the Shares set forth opposite Stockholder's name on
Schedule I hereto, with no limitations, qualifications or restrictions on
such rights, subject to applicable securities laws and the terms of
this Agreement; provided, however, certain of the Shares are pledged to
secure loans as noted on Schedule I.
(b) Power; Binding Agreement. The Stockholder has the legal
capacity, power and authority to enter into and perform all of the
Stockholder's obligations under this Agreement. The execution, delivery
and performance of this Agreement by such Stockholder will not violate
any other agreement to which the Stockholder is a party including, without
limitation, any voting agreement, stockholders agreement or voting trust,
except as may be restricted under the Pledge Agreement described on
Schedule I. This Agreement has been duly and validly executed and delivered
by the Stockholder and constitutes a valid and binding agreement of such
Stockholder, enforceable against such Stockholder in accordance with its
terms. There is no beneficiary or holder of a voting trust certificate
or other interest of any trust of which the Stockholder is trustee whose
consent is required for the execution and delivery of this Agreement or
the consummation by the Stockholder of the transactions contemplated
hereby.
(c) No Conflict. Except for filings and approvals under the HSR Act,
the antitrust laws or the securities laws, if applicable, and the Pledge
Agreement described on Schedule I, (A) no filing with, and no permit,
authorization, consent or approval of, any state or federal public body or
authority is necessary for the execution of this Agreement by such
Stockholder and the consummation by such Stockholder of the transactions
Contemplated hereby and (B) none of the execution and delivery of this
Agreement by such Stockholder, the consummation by such Stockholder of
the transactions contemplated hereby or compliance by such Stockholder
with any of the provisions hereof shall (1) conflict with or result in any
breach of any applicable organizational documents applicable to such
Stockholder, (2) result in a violation or breach of, or constitute (with or
without notice of lapse of time or both) a default (or give rise to any
third party right of termination, cancellation, material modification or
acceleration) under any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, license, contract, commitment,
arrangement, understanding, agreement or other instrument or obligation
of any kind to which such Stockholder is a party or by which such order,
writ, injunction, decree, judgment, order, statute, rule or regulation
applicable to such Stockholder or any of such Stockholder's properties or
assets.
(d) No Finder's Fees. Except as disclosed in the Merger Agreement,
no broker, investment banker, financial advisor or other person is entitled
to any broker's, finder's, financial advisor'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.
(e) No Encumbrances. The Stockholder's Shares and the certificates
representing such 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 and as noted on Schedule I.
(f) Reliance by Parent. The Stockholder understands and
acknowledges that Parent is entering into, and causing Purchaser to enter
into, the Merger Agreement in reliance upon the Stockholder's execution
and delivery of this Agreement.
4. Representations of Purchaser. Purchaser represents and warrants to
the Stockholder that: (i) such entity is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of
its incorporation with full corporate power and authority to execute and
deliver this Agreement to perform its obligations hereunder; (ii) the
execution and delivery of this Agreement by such entity and the performance
by it of its obligations hereunder have been duly authorized by all necessary
corporate action on the part of such entity: (iii) this Agreement constitutes
the legal, valid and binding obligation of such entity enforceable against
such entity in accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency and other similar laws affecting
creditors' rights generally or by general principles, of equity; and (iv)
any Shares acquired upon exercise of the Option will not be acquired by
Purchaser with a view to the public distribution thereof and will not be
transferred except pursuant to a transaction which complies with the Securities
Act of 1933, as amended, and applicable state securities laws.
5. Covenants of the Stockholder. The Stockholder covenants and agrees as
follows:
(a) No Solicitation. During the term of this Agreement, the
Stockholder shall not (and shall not permit its Representatives to), in its
capacity as such, directly or indirectly, initiate, solicit (including by way
of furnishing information), encourage or respond to or take any other action
knowingly to facilitate, any inquiries or the making of any proposal by
any person or entity (other than Parent or any affiliate of Parent) with
respect to the Company that constitutes or reasonably may be expected to
lead to, an Acquisition Proposal, or enter into or maintain or continue
discussions or negotiate with any person or entity in furtherance of such
inquiries or to obtain any Acquisition Proposal, or agree to or endorse
any Acquisition Proposal, or authorize or permit any Person or entity acting
on behalf of the Stockholder to do any of the foregoing; provided, however,
nothing in this Agreement shall prevent Stockholder or its representatives
from taking any action in conformity with fiduciary duties as permitted in
the Merger Agreement. If the Stockholder receives any inquiry or proposal
regarding any Acquisition Proposal, the Stockholder shall promptly inform
Parent of that inquiry or proposal and the details thereof.
(b) Restriction on Transfer, Proxies and Non-Interference. During the
term of this Agreement, the Stockholder shall not (and shall not permit the
Stockholder's Representatives to): (i) directly or indirectly, offer for
sale, sell, transfer, tender, pledge, encumber, assign or otherwise dispose
of, or enter into any contract, option or other arrangement or
understanding with respect to or consent to the offer for sale, transfer,
tender, pledge, encumbrance, assignment or other disposition of, any or all
of such Stockholder's Shares or any interest therein, except as may be
permitted or required under the Pledge Agreement described on Schedule I;
(ii) except as contemplated by this Agreement, grant any proxies or powers
of attorney, deposit any Shares into a voting trust or enter into a voting
agreement with respect to any Shares; or (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 the Stockholder's obligations under this
Agreement.
(c) Waiver of Appraisal Rights. The Stockholder hereby irrevocably
waives any rights of appraisal or rights to dissent from the Merger that
the Stockholder may have.
(d) Stop Transfer. The Stockholder agrees with, and covenants to,
Parent and Purchaser 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 Stockholder's Shares, unless
such transfer is made in compliance with this Agreement.
6. Approval of Merger. The Stockholder agrees that, if requested by the
Proxyholders, the Stockholder will vote or cause to be voted all the Shares
in favor of the Merger and the Merger Agreement (and the documents and
transactions related thereto) at any meeting of the shareholders of the
Company held for the purpose of approving the Merger Agreement and the
Merger.
7. Further Assurance and Adjustments. The Stockholder shall, upon the
reasonable request of Purchaser, execute and deliver any additional documents
necessary or desirable to effect any of the terms and provisions of this
Agreement. If at any time the Shares are changed into a different number
of Shares or a different class by reason of any reclassification,
recapitalization, split-up, combination, exchange of Shares or readjustment
of the Company's capital stock or if a stock dividend thereon is declared
with a record date prior to the termination of this Agreement, then the
number of Shares subject to the Proxy granted hereby and the voting rights
to be exercised upon exercise thereof shall be appropriately adjusted.
8. Specific Performance. The parties hereto agree that if for any
reason the Stockholder failed to perform any of the Stockholder's obligations
under this Agreement, Purchaser would be irreparably damaged and money damages
would not constitute an adequate remedy. Accordingly, Purchaser shall be
entitled to specific performance and injunctive and other equitable relief
to enforce the performance of such obligations by the Stockholder. This
provision is without prejudice to any other rights Purchaser may have against
the Stockholder for failure to perform any of the Stockholder's obligations
under this Agreement.
9. Term. This Agreement shall commence on the date hereof and the Option
shall end on the earlier of (i) ninety (90) days following the termination
of Merger Agreement in accordance with its terms or (ii) the Effective Time
(as defined in the Merger Agreement), except that, if the Effective Time
occurs, the obligations under Section 5(c) hereof shall terminate on the
first anniversary of the Effective Time. The Proxy shall terminate upon
termination of the Merger Agreement in accordance with its terms.
10. Binding Agreement. All authority and rights herein conferred or
agreed to be conferred by the Stockholder shall survive the death or
incapacity of the Stockholder. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective heirs, personal
representatives, successors and assigns.
11. Notices. All notices, requests, consents and other communications
hereunder shall be in writing and shall be hand delivered, delivered by
courier with receipt acknowledged or mailed first class, certified mail, with
postage prepaid, as follows:
If to Parent or Purchaser, to:
▇/▇ ▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇
With a copy to:
White & Case
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
If to the Stockholder, to:
G. ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇ Group, Inc.
Twelve ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
12. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to
the principles of conflicts of law thereof.
13. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original and all of which, taken together, shall
constitute one instrument.
14. Severability. In case any provision in this Agreement shall be held
invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions hereof will not in any way be affected or impaired
thereby, unless the provisions held invalid shall substantially impair the
benefits of the remaining portions of this Agreement.
15. Entire Agreement. This Agreement and the Merger Agreement constitute
the entire agreement between the parties with respect to the subject matter
hereof and supersede all other prior agreement and understandings, both
written and oral, between the parties with respect to the subject matter
hereof.
16. Amendments, Waivers, Etc. This Agreement may not be amended, changed,
supplemented, waived or otherwise modified or terminated, except upon the
execution and delivery of a written agreement executed by the relevant parties
with respect to any one or more Stockholders hereto provided that Schedule
I hereto may be supplemented by Purchaser or Parent by adding the name and
other relevant information concerning any shareholder of the Company who
agrees to be bound by the terms of this Agreement without the agreement of
any other party hereto, and thereafter such added shareholder shall be treated
as a Stockholder for all purposes of this Agreement.
17. No Waiver. The failure of any party hereto to exercise any right,
power or remedy provided under this Agreement or otherwise available in
respect hereof at law or in equity, or to insist upon compliance by any other
party hereto with its obligations hereunder, and any custom or practice
of the parties at variance with the terms hereof shall not constitute a
right, power or remedy or to demand such compliance.
18. Descriptive Headings. The descriptive headings used herein are
inserted for convenience of reference only and are not intended to be part
to or to affect the meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, Parent, Purchaser and each Stockholder have caused
this Agreement to be duly executed as of the day and year first written above.
HUHTAMAKI OY ▇▇▇▇▇▇ ▇. ▇▇▇▇ GROUP, INC.
/s/ ▇▇▇▇ ▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President Title: President
HUHTAMAKI OY THE G. ▇▇▇▇▇▇▇ ▇▇▇▇
REVOCABLE TRUST dated
2/28/89, as amended 12/8/94
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇ /s/ G. ▇▇▇▇▇▇▇ ▇▇▇▇
Name: Juha Saloen Name: G. ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Vice President Administration Title: Trustee
SEAL ACQUISITION CORPORATION THE ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
TRUST dated July 9, 1996
/s/ ▇▇▇▇ ▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President Title: Trustee
SCHEDULE I
Name of Stockholder Number of Shares
▇▇▇▇▇▇ ▇. ▇▇▇▇ Group, Inc. 3,412,500
The G. ▇▇▇▇▇▇▇ ▇▇▇▇ Revocable Trust
dated 2/28/89, as amended 12/8/94 742,615
The ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Trust dated
July 9, 1996 300,000(1)
4,455,115
___________________
(1) These shares are pledged to NationsBank to secure certain
loans pursuant to a Pledge Agreement.
