EXHIBIT 99(c)(2)
EXECUTION COPY
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SHAREHOLDER OPTION AGREEMENT
SHAREHOLDER OPTION AGREEMENT, dated as of October 21, 1999 (the
"Agreement"), among Sphere Corporation, a Wisconsin corporation ("Purchaser"),
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and the persons listed on Schedule I hereto (each a "Shareholder" and,
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collectively, the "Shareholders").
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R E C I T A L S:
WHEREAS, concurrently with the execution and delivery of this
Agreement, Purchaser, United Technologies Corporation, a Delaware corporation
("Parent"), and Xxxx Industries, Inc., a Wisconsin corporation (the "Company"),
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are entering into an Agreement and Plan of Merger (the "Merger Agreement"),
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which provides, among other things, for the acquisition of the Company by Parent
by means of a cash tender offer (the "Offer") by Purchaser for all outstanding
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shares of Common Stock, par value $0.001 per share, of the Company (the "Common
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Stock") and for the subsequent merger of Purchaser with the Company (the
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"Merger"), all on the terms and subject to the conditions set forth in the
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Merger Agreement;
WHEREAS, as an inducement and a condition to entering into the Merger
Agreement, Parent and Purchaser have required that the Shareholders agree, and
each Shareholder has agreed, to enter into this Agreement; and
WHEREAS, the Board of Directors of the Company has approved this
Agreement and the transactions contemplated hereby prior to the date hereof;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth herein, the parties hereto agree as follows:
1. Definitions. Terms used and not defined herein, but defined in
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the Merger Agreement, shall have the respective meanings ascribed to them in the
Merger Agreement.
2. Tender of Shares; Agreement to Sell.
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(a) In order to induce Parent and Purchaser to enter into the Merger
Agreement, each Shareholder hereby agrees to validly tender (or cause the record
owner of such shares to validly tender), and not to withdraw, pursuant to and in
accordance with the terms of the Offer, not later than the tenth business day
after commencement of the Offer, the number of shares of Common Stock set forth
opposite such Shareholder's name on Schedule I hereto (the "Existing Shares"
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and, together with any shares of Common Stock acquired by such Shareholder in
any capacity after the date hereof and prior to the termination of this
Agreement by means of purchase, dividend, distribution, exercise of options,
warrants or other rights to acquire Common Stock or in any other way, the
"Shares"), all of which are beneficially owned by Shareholder. If a Shareholder
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acquires beneficial ownership of Shares after the date hereof and prior to
termination of this Agreement, such Shareholder shall tender such Shares on such
tenth business day or, if later, on the second business day after such
acquisition.
(b) Purchaser shall be entitled to deduct and withhold from the
consideration otherwise payable hereunder to a holder of Shares such amounts as
are required to be withheld under the Internal Revenue Code of 1986, as amended
(the "Code"), or any applicable provision of state, local or foreign tax law, as
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specified in the Offer Documents. To the extent that amounts are so withheld by
Purchaser, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of the Shares in respect of which
such deduction and withholding was made by Purchaser.
(c) Each Shareholder hereby permits Parent and Purchaser to publish
and disclose in the Offer Documents and, if approval of the Company's
shareholders is required under applicable law, the Proxy Statement (including
all documents and schedules filed with the SEC), such Shareholder's identity and
ownership of the Shares and the nature of such Shareholder's commitments,
arrangements and understandings under this Agreement; provided that such
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Shareholder shall have a right to review and comment on such disclosure a
reasonable time before it is publicly disclosed.
3. Option. (a) In order to induce Parent and Purchaser to enter
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into the Merger Agreement, each Shareholder hereby grants to Purchaser an
irrevocable option (each, an "Option") to purchase the Shares beneficially owned
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by such Shareholder (the "Option Shares") at a price equal to $5.05 per Share.
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Each Option granted by a Shareholder may be exercised in whole at any time prior
to the termination of this Agreement and after (i) the occurrence of any event
as a result of which Parent is entitled to receive a Termination Fee under the
Merger Agreement or (ii) such time as such Shareholder shall have breached in
any material respect any of its agreements in Section 2(a), 4(a), 4(b) or 4(d).
In the event that any Person (other than Purchaser or any of its affiliates or
any Shareholder or any of its affiliates) acquires a majority of the outstanding
Shares, prior to the termination of this Agreement, in a tender offer or
exchange offer by such Person to acquire, or a merger involving the acquisition
of, all outstanding Shares at a consideration per Share in excess of $5.05 , the
exercise price for the Option Shares shall be increased by 50% of the amount of
such excess. If an Option has been exercised and the Option Shares acquired
from a Shareholder by Purchaser prior to such an acquisition, Purchaser shall,
within ten days following such date, pay to such Shareholder an amount in cash
equal to the amount of such excess multiplied by the number of such Option
Shares. If the consideration in such tender or exchange offer or merger
includes securities, such securities shall be deemed to have a value equal to
the amount that would actually have been received in an orderly sale of such
securities commencing on the first business day following actual receipt of such
securities, in the written opinion of an investment banking firm of national
reputation selected by Purchaser and reasonably satisfactory to the Shareholder.
(b) Each Option that becomes exercisable under Section 3(a) shall
remain exercisable until the later of (i) the date that is 90 days after the
date such Option becomes exercisable and (ii) the date that is ten days after
the date that all waiting periods under the HSR Act required for the purchase of
the Shares upon such exercise shall have expired or been terminated; provided,
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that if at the expiration of such period there shall be in effect any injunction
or other order issued by any Governmental Entity prohibiting the exercise of
such Option, the exercise period shall be extended until ten days after the date
that no such injunction or order is in effect. In the event that Purchaser
wishes to exercise an Option, Purchaser shall send a written notice to the
applicable Shareholder identifying the place and date (not less than
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two (2) nor more than ten (10) business days from the date of the notice) for
the closing of such purchase.
4. Additional Agreements.
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(a) Each Shareholder shall, at any meeting of the shareholders of the
Company, however called, or in connection with any written consent of the
shareholders of the Company, vote (or cause to be voted) all Shares then held of
record or beneficially owned by such Shareholder, (i) in favor of the Merger,
the execution and delivery by the Company of the Merger Agreement and the
Company Option Agreement and the approval of the terms thereof and each of the
other actions contemplated by the Merger Agreement, the Company Option Agreement
and this Agreement and any actions required in furtherance thereof and hereof
and (ii) against any proposal relating to an Acquisition Proposal and against
any action or agreement that would impede, frustrate, prevent or nullify this
Agreement, or 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 the Company Option Agreement or which would result in any of the
conditions set forth in Exhibit A to the Merger Agreement or set forth in
Article VII of the Merger Agreement not being fulfilled.
(b) Each Shareholder hereby covenants and agrees that, except as
contemplated by this Agreement and the Merger Agreement, it shall not (i) offer
to transfer (which term shall include, without limitation, any sale, tender,
gift, pledge, assignment or other disposition), transfer or consent to any
transfer of, any or all of the Shares beneficially owned by such Shareholder or
any interest therein without the prior written consent of Purchaser, such
consent not to be unreasonably withheld in the case of a gift or similar estate
planning transaction (it being understood that Purchaser may decline to consent
to any such transfer if the Person acquiring such Shares does not agree to take
such Shares subject to the terms of this Agreement), (ii) enter into any
contract, option or other agreement or understanding with respect to any
transfer of any or all of such Shares or any interest therein, (iii) grant any
proxy, power-of-attorney or other authorization or consent in or with respect to
such Shares, (iv) deposit such Shares into a voting trust or enter into a voting
agreement or arrangement with respect to such Shares or (v) take any other
action that would make any representation or warranty of such Shareholder
contained herein untrue or incorrect in any material respect or in any way
restrict, limit or interfere in any material respect with the performance of its
obligations hereunder or the transactions contemplated hereby or by the Merger
Agreement or the Company Option Agreement.
(c) Each Shareholder hereby irrevocably grants to, and appoints,
Purchaser and any designee of Purchaser, and each of them individually, such
Shareholder's proxy and attorney-in-fact (with full power of substitution), for
and in the name, place and stead of such Shareholder, to vote the Shares
beneficially owned by such Shareholder, or grant a consent or approval in
respect of such Shares, in the manner specified in Section 4(a). Each
Shareholder represents that any proxies heretofore given in respect of Shares
beneficially owned by such Shareholder are not irrevocable and that any such
proxies are hereby revoked. Each Shareholder hereby affirms that the
irrevocable proxy set forth in this Section 4(c) is given in connection with the
execution of the Merger Agreement and that such irrevocable proxy is given to
secure the performance of the duties of such Shareholder under this Agreement.
Each Shareholder hereby
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further affirms that the irrevocable proxy is coupled with an interest and may
under no circumstances be revoked. Each Shareholder hereby ratifies and confirms
all that such irrevocable proxy may lawfully do or cause to be done by virtue
hereof. Without limiting the generality of the foregoing, such irrevocable proxy
is executed and intended to be irrevocable in accordance with the provisions of
Section 180.0722 of the WBCL.
(d) Subject to Section 8, each Shareholder hereby agrees that such
Shareholder shall not, directly or indirectly, encourage, solicit, initiate or
participate in any way in any discussions or negotiations with, or provide any
information to, or afford any access to the properties, books or records of the
Company or any of its Subsidiaries to, or otherwise take any other action to
assist or facilitate, any Person or group (other than Parent or Purchaser or any
affiliate or associate of Parent or Purchaser) concerning any Acquisition
Proposal. Upon execution of this Agreement, each Shareholder will immediately
cease any existing activities, discussions or negotiations conducted heretofore
with respect to any Acquisition Proposal. Each Shareholder will immediately
communicate to Purchaser the terms of any Acquisition Proposal (or any
discussion, negotiation or inquiry with respect thereto) and the identity of the
Person making such Proposal or inquiry which it may receive.
(e) Subject to the terms and conditions of this Agreement, each of the
parties hereto agrees to use all reasonable efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, all things necessary, proper
or advisable under applicable laws to consummate and make effective the
transactions contemplated by this Agreement. Each party shall promptly consult
with the other and provide any necessary information and material with respect
to all filings made by such party with any Governmental Entity in connection
with this Agreement and the transactions contemplated hereby.
(f) Each Shareholder hereby waives any rights of appraisal or rights
to dissent from the Merger that it may have.
5. Representations and Warranties of each Shareholder. Each
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Shareholder hereby represents and warrants, severally and not jointly, to
Purchaser as follows:
(a) Such Shareholder is the record and beneficial owner of the
Existing Shares set forth opposite its name on Schedule I. Such Existing Shares
constitute all of the Shares owned of record or beneficially owned by such
Shareholder on the date hereof. Such Shareholder has sole voting power and sole
power to issue instructions with respect to the matters set forth in Sections 2,
3 and 4 hereof, sole power of disposition, sole power to demand and waive
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 such Existing Shares with no
limitations, qualifications or restrictions on such rights, subject to
applicable securities laws and the terms of this Agreement.
(b) Such Shareholder has the power and authority to enter into and
perform all of such Shareholder's obligations under this Agreement. This
Agreement has been duly and validly executed and delivered by such Shareholder
and constitutes a legal, valid and binding agreement of such Shareholder,
enforceable against such Shareholder in accordance with its terms. There is no
beneficiary or holder of a voting trust certificate or other interest of any
trust
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of which such Shareholder is a trustee, or any party to any other agreement or
arrangement, whose consent is required for the execution and delivery of this
Agreement or the consummation by such Shareholder of the transactions
contemplated hereby.
(c) Except for filings under the HSR Act and the Exchange Act (i) no
filing with, and no permit, authorization, consent or approval of, any
Governmental Entity is necessary for the execution and delivery of this
Agreement by such Shareholder, the consummation by such Shareholder of the
transactions contemplated hereby and the compliance by such Shareholder with the
provisions hereof and (ii) none of the execution and delivery of this Agreement
by such Shareholder, the consummation by such Shareholder of the transactions
contemplated hereby or compliance by such Shareholder with any of the provisions
hereof, except in cases in which any conflict, breach, default or violation
described below would not interfere with the ability of such Shareholder to
perform such Shareholder's obligations hereunder, shall (A) conflict with or
result in any breach of any organizational documents applicable to such
Shareholder, (B) result in a violation or breach of, or constitute (with or
without notice or lapse of time or both) a default (or give rise to any third
party right of termination, cancellation, modification or acceleration) under,
any of the terms, conditions or provisions of any note, loan agreement, bond,
mortgage, indenture, license, contract, commitment, arrangement, understanding,
agreement or other instrument or obligation of any kind, including, without
limitation, any voting agreement, proxy arrangement, pledge agreement,
shareholders agreement or voting trust, to which such Shareholder is a party or
by which it or any of its properties or assets may be bound or (C) violate any
order, writ, injunction, decree, judgment, order, statute, rule or regulation
applicable to such Shareholder or any of its properties or assets.
(d) Except as permitted by this Agreement, the Existing Shares
beneficially owned by such Shareholder and the certificates representing such
shares are now, and at all times during the term hereof will be, held by such
Shareholder, or by a nominee or custodian for the benefit of such Shareholder,
free and clear of all liens, proxies, voting trusts or agreements,
understandings or arrangements or any other rights whatsoever, except for any
such liens or proxies arising hereunder. The transfer by such Shareholder of
the Shares to Purchaser in the Offer or hereunder shall pass to and
unconditionally vest in Purchaser good and valid title to all Shares, free and
clear of all liens, proxies, voting trusts or agreements, understandings or
arrangements or any other rights whatsoever.
(e) 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 Shareholder.
6. Stop Transfer. Each Shareholder shall request that the Company
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not register the transfer (book-entry or otherwise) of any certificate or
uncertificated interest representing any of the Shares beneficially owned by
such Shareholder, unless such transfer is made in compliance with this
Agreement.
7. Termination. This Agreement shall terminate with respect to any
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Shareholder upon the earliest of (a) the Effective Time, (b) April 30, 2000 or,
if the Option is exercisable at
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April 30, 2000, such later date as the Option shall no longer be exercisable in
accordance with Section 3(b) and (c) the termination of the Merger Agreement
(unless, in the case of this clause (c), Parent is or may be entitled to receive
a Termination Fee under the Merger Agreement following such termination or prior
to such termination such Shareholder has breached in any material respect
Section 2(a), 4(a), 4(b) or 4(d)).
8. No Limitation. Notwithstanding any other provision hereof,
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nothing in this Agreement shall be construed to prohibit a Shareholder, or any
officer or affiliate of a Shareholder who is or has designated a member of the
Board of Directors of the Company, from taking any action solely in his or her
capacity as a member of the Board of Directors of the Company or from exercising
his or her fiduciary duties as a member of such Board of Directors to the extent
specifically permitted by the Merger Agreement.
9. Miscellaneous. (a) This Agreement constitutes the entire
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agreement between the parties with respect to the subject matter hereof and
supersede all other prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof.
(b) This Agreement shall not be assigned by operation of law or
otherwise without the prior written consent of each Shareholder (in the case of
any assignment by Purchaser) or Purchaser (in the case of an assignment by a
Shareholder), provided that Purchaser may assign its rights and obligations
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hereunder to Parent or any direct or indirect Subsidiary of Parent, but no such
assignment shall relieve Purchaser of its obligations hereunder.
(c) Without limiting any other rights Purchaser may have hereunder in
respect of any transfer of Shares, each Shareholder agrees that this Agreement
and the obligations hereunder shall attach to the Shares beneficially owned by
such Shareholder and shall be binding upon any Person to which legal or
beneficial ownership of such Shares shall pass, whether by operation of law or
otherwise, including, without limitation, such Shareholder's heirs, guardians,
administrators or successors.
(d) This Agreement may not be amended, changed, supplemented or
otherwise modified with respect to a Shareholder except by an instrument in
writing signed on behalf of such Shareholder and Purchaser.
(e) All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be given (and shall be deemed to have
been duly received if given) by hand delivery or by facsimile transmission with
confirmation of receipt, as follows:
If to a Shareholder:
At the addresses and facsimile numbers set forth on Schedule I
hereto.
With a copy to:
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Xxxxxxx & Xxxxx LLP
000 X. Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxxxx
Facsimile: 414-271-3552
If to Parent or Purchaser:
United Technologies Corporation
United Technologies Building
0 Xxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: General Counsel
Facsimile No.: 000-000-0000
With a Copy to:
Cleary, Gottlieb, Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxxxx X. Xxxxxx
Facsimile No.: (000) 000-0000
or to such other address or facsimile number as the person to whom notice is
given may have previously furnished to the others in writing in the manner set
forth above.
(f) Whenever possible, each provision or portion of any provision of
this Agreement will be interpreted in such manner as to be effective and valid
under applicable law but if any provision or portion of any provision of this
Agreement is held to be invalid, illegal or unenforceable in any respect under
any applicable law or rule in any jurisdiction such invalidity, illegality or
unenforceability will not affect any other provision or portion of any provision
in such jurisdiction, and this Agreement will be reformed, construed and
enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision or portion of any provision had never been contained herein.
(g) 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.
(h) The failure of any party hereto to exercise any rights, 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 waiver by such party of its right
to exercise any such or other right, power or remedy or to demand such
compliance.
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(i) This Agreement shall be binding upon and inure solely to the
benefit of each party hereto, and nothing in this Agreement, express or implied,
is intended to confer upon any other Person any rights or remedies of any nature
whatsoever under or by reason of this Agreement.
(j) This Agreement shall be governed and construed in accordance with
the laws of the State of New York.
(k) 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 New York state court located in the Borough of
Manhattan, City of New York or any Federal court located in such Borough, this
being in addition to any other remedy to which they are entitled at law or in
equity. In addition, each of the parties hereto (A) consents to submit itself
to the personal jurisdiction of any New York state court located in the Borough
of Manhattan, City of New York or any Federal court located in such Borough in
the event any dispute arises out of this Agreement or any transaction
contemplated by this Agreement, (B) agrees that it will not attempt to deny or
defeat such personal jurisdiction by motion or other request for leave from any
such court and (C) agrees that it will not bring any action relating to this
Agreement or any transaction contemplated by this Agreement in any court other
than any such court. The parties irrevocably and unconditionally waive any
objection to the laying of venue of any action, suit or proceeding arising out
of this Agreement or the transactions contemplated hereby in the courts of the
State of New York located in the Borough of Manhattan, City of New York or in
any Federal court located in such Borough, and hereby further irrevocably and
unconditionally waive and agree not to plead or claim in any such court that any
such action, suit or proceeding brought in any such court has been brought in an
inconvenient forum.
(l) The descriptive headings used herein are inserted for convenience
of reference only and are not intended to be part of or to affect the meaning or
interpretation of this Agreement.
(m) This Agreement may be executed in counterparts (by fax or
otherwise), each of which shall be deemed to be an original, but all of which,
taken together, shall constitute one and the same agreement.
(n) Except as otherwise provide herein, each party shall pay its, his
or her own expenses incurred in connection with this Agreement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, Purchaser and the Shareholders have caused this
Agreement to be duly executed in multiple counterparts as of the day and year
first above written.
SPHERE CORPORATION
By: /S/ XXX XXXXXXX
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Name: Xxx Xxxxxxx
Title: President and Director
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IN WITNESS WHEREOF, Purchaser and the Shareholders have caused this
Agreement to be duly executed in multiple counterparts as of the day and year
first above written.
/s/ XXXXX X. XXXX
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Xxxxx X. Xxxx
/s/ XXXXXX X. XXXXXXXX
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Xxxxxx X. Xxxxxxxx
/s/ XXXXXXX X. XXXXX
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Xxxxxxx X. Xxxxx
/s/ XXXXXXX X. XXXX
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Xxxxxxx X. Xxxx
/s/ XXXXXX X. X'XXXXXX
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Xxxxxx X. X'Xxxxxx
/s/ XXXXXXX X. RUHLAM
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Xxxxxxx X. Xxxxxxx
/s/ XXXX X. XXXXXXX
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Xxxx X. Xxxxxxx
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SCHEDULE I
NAME, FACSIMILE NUMBER AND NUMBER OF SHARES OF COMMON STOCK
ADDRESS OF SHAREHOLDER BENEFICIALLY OWNED
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Xxxxx X. Xxxx 4,727,742
c/x Xxxx Industries, Inc.
0000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Facsimile: 000-000-0000
Xxxxxx X. Xxxxxxxx 355,300
Xxxxxxx & Xxxxx LLP
000 X. Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Facsimile: 414-271-3552
Xxxxxxx X. Xxxxx 60,000
c/x Xxxx Industries, Inc.
0000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Facsimile: 000-000-0000
Xxxxxxx X. Xxxx 381,184
c/x Xxxx Industries, Inc.
0000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Facsimile: 000-000-0000
Xxxxxx X. X'Xxxxxx 70,000
c/x Xxxx Industries, Inc.
0000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Facsimile: 000-000-0000
Xxxxxxx X. Xxxxxxx 318,000
c/x Xxxx Industries, Inc.
0000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Facsimile: 000-000-0000
Xxxx X. Xxxxxxxx 176,970
c/x Xxxx Industries, Inc.
0000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000 ---------
Facsimile: 000-000-0000 6,088,723
