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EXHIBIT 10.7
STOCKHOLDERS AGREEMENT
This STOCKHOLDERS AGREEMENT is dated as of June 16, 1997, by
and among Plainwell Holding Company, a Delaware corporation (the "Company"),
Citicorp Venture Capital, Ltd., a New York corporation ("CVC"), CCT II Partners,
L.P., a Delaware limited partnership ("CCT"), Xxxxxxx Xxxxxx (the "Investor"),
Larkspur Capital Corporation ("Larkspur"), Xxxxxxx X. New and any executives of
the Company and its Subsidiaries acquiring Common Stock (as defined below) from
the Company after the date hereof and executing a joinder hereto in the form
attached hereto as Exhibit A (collectively, the "Executives", and individually
as an "Executive"), and the persons set forth on the Individual Purchaser
Signature Page attached hereto (collectively referred to herein as the
"Individual Purchasers", and individually as an "Individual Purchaser"). CVC,
CCT, the Investor, Larkspur, the Individual Purchasers and each of the
Executives and their respective Permitted Transferees (as defined below) are
collectively referred to as the "Stockholders" and individually as a
"Stockholder".
CVC has purchased (i) shares of the Company's Class A Common
Stock, par value $.01 per share (the "Class A Common"), (ii) shares of the
Company's Class B Common Stock, par value $.01 per share (the "Class B Common"),
and (iii) stock purchase warrants to purchase shares of Class B Common (together
with all warrants issued in substitution or replacement therefor, the "CVC
Warrant"), pursuant to a CVC Securities Purchase Agreement, dated as of the date
hereof, by and between CVC and the Company (the "CVC Securities Purchase
Agreement").
Each Executive (other than Xxxxxxx X. New) will purchase
shares of the Company's Class B Common, pursuant to certain purchase agreements
(collectively, the "Executive Securities Purchase Agreements"), dated as of the
date hereof, by and between such Executive and the Company.
Xxxxxxx X. New has purchased shares of Class A Common and
shares of Class B Common pursuant to an Executive Stock Purchase Agreement,
dated as of the date hereof, by and between the Company and Xxxxxxx X. New.
CCT will purchase shares of Class A Common and shares of Class
B Common pursuant to a Securities Purchase Agreement by and between CVC and CCT
(the "CCT Purchase Agreement").
The Individual Purchasers have purchased shares of Class A
Common and shares of Class B Common pursuant to a Securities Purchase Agreement,
dated as of the date hereof, by and among the Company and the Individual
Purchasers (the "Securities Purchase Agreement").
The Investor has purchased shares of Class A Common and shares
of Class B Common pursuant to an Investor Stock Purchase Agreement, dated as of
the date hereof, by and between the Company and the Investor.
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Larkspur has purchased shares of Class B Common pursuant to a
Stock Purchase Agreement, dated as of the date hereof, by and between the
Company and Larkspur (the "Larkspur Agreement").
The Company and the Stockholders desire to enter into this
Agreement for the purposes, among others, of (i) establishing the composition of
the Company's Board (as defined below), (ii) assuring continuity in the
management and ownership of the Company and (iii) limiting the manner and terms
by which the Stockholder Shares (as defined below) may be transferred.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. Definitions. As used herein, the following terms shall have
the following meanings:
"Affiliate" shall mean, as to any Person, any other Person
which directly or indirectly controls, or is under common control with, or is
controlled by, such Person. As used in this definition, "control" (including,
with its correlative meanings, "controlled by" and "under common control with")
shall mean possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise).
"Approved Sale" means the sale of the Company, in a single
transaction or a series of related transactions, to a third party (which is not
an Affiliate of the Approving Stockholders) (a) pursuant to which such third
party proposes to acquire all or substantially all of the outstanding Common
Stock (whether by merger, consolidation, recapitalization, reorganization,
purchase of the outstanding Common Stock or otherwise) or all or substantially
all of the consolidated assets of the Company, (b) which has been approved by
the Board and holders of a majority of the outstanding CVC Stockholder Shares,
voting together as a single class (the "Approving Stockholders"), and (c)
pursuant to which all holders of Common Stock receive with respect thereto
(whether in such transaction or, with respect to an asset sale, upon a
subsequent liquidation) the same form and amount of consideration per share of
Common Stock or, if any holders are given an option as to the form and amount of
consideration to be received, all holders are given the same option.
"Board" means the Company's board of directors.
"Common Stock" means, collectively, the Class A Common and the
Class B Common, and any other class of common stock of the Company and any other
class of securities of the Company which is not limited to a fixed sum or
percentage of par value or stated value in respect of the rights of the holders
thereof to participate in dividends and in the distribution of assets upon the
voluntary or involuntary liquidation, dissolution or winding up of the Company.
"CVC Stockholder Shares" means all Stockholder Shares issued
or issuable to CVC and its Affiliates.
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"Executive Shares" means Stockholder Shares owned by
Executives or their Permitted Transferees.
"Family Group" means, with respect to an individual
Stockholder, such Stockholder's spouse and descendants (whether natural or
adopted) and any trust solely for the benefit of such Stockholder and/or such
Stockholder's spouse, their respective ancestors and/or descendants (whether
natural or adopted).
"Other Stockholders" means, with respect to a Stockholder, all
Stockholders other than such Stockholder.
"Ownership Ratio" means, as to a Stockholder at the time of
determination, the percentage obtained by dividing the amount of shares of
Common Stock held by such Stockholder on a fully-diluted basis at such time by
the aggregate amount of shares of Common Stock outstanding on a fully-diluted
basis at such time.
"Person" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization or other business entity or a
governmental entity or any department, agency or political subdivision thereof.
"Plainwell" means Plainwell Paper Company, a Michigan
corporation and wholly owned subsidiary of the Company.
"Public Sale" means any sale of Stockholder Shares to the
public pursuant to an offering registered under the Securities Act or to the
public effected through a broker, dealer or market maker pursuant to the
provisions of Rule 144 under the Securities Act.
"Qualified Public Offering" means the sale, in an underwritten
public offering registered under the Securities Act, of shares of the Company's
Common Stock having an aggregate value of at least $25 million.
"Regulatory Problem" means any set of facts or circumstances
wherein it has been asserted by any governmental regulatory agency (or CVC or
any of its Affiliates believes that there is a substantial risk of such
assertion) that CVC is not entitled to hold, or exercise any significant right,
with respect to, the CVC Stockholder Shares.
"Securities Act" means the Securities Act of 1933, as amended
from time to time.
"Stockholder Shares" means (i) any Common Stock issued or
issuable to the Stockholders on the date hereof, including, without limitation,
any Common Stock acquired by, or issued or issuable to, the Stockholders upon
exercise of the CVC Warrant, (ii) any other equity securities of the Company
acquired by or issued or issuable to the Stockholders on the date hereof, and
(iii) any equity securities issued or issuable to the Stockholders directly or
indirectly with respect to the securities referred to in clauses (i) and (ii)
above by way of stock dividend or stock split in connection with a combination
of shares, recapitalization, merger, consolidation, or other
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reorganization. As to any particular shares constituting Stockholder Shares,
such shares will cease to be Stockholder Shares when they have been sold in a
Public Sale, an Approved Sale, or upon the consummation of a Qualified Public
Offering. For purposes of this Agreement, a Person will be deemed to be a holder
of Stockholder Shares whenever such Person has the right to acquire directly or
indirectly such Stockholder Shares (upon conversion or exercise in connection
with a transfer of securities or otherwise, but disregarding any restrictions or
limitations upon the exercise of such right), whether or not such acquisition
has actually been effected.
"Subsidiary" means, with respect to any Person, any
corporation, partnership, association or other business entity of which (i) if a
corporation, a majority of the total voting power of shares of stock entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries
of that Person or a combination thereof, or (ii) if a partnership, association
or other business entity, a majority of the partnership or other similar
ownership interest thereof is at the time owned or controlled, directly or
indirectly, by any Person or one or more Subsidiaries of that Person or a
combination thereof. For purposes hereof, a Person or Persons shall be deemed to
have a majority ownership interest in a partnership, association or other
business entity if such Person or Persons shall be allocated a majority of
partnership, association or other business entity gains or losses or shall be or
control the managing director or a general partner of such partnership,
association or other business entity.
"Transaction Documents" means the following agreements, all of
which are dated as of the date hereof, as amended from time to time: this
Agreement, the Registration Rights Agreement by and among the parties hereto,
the CVC Securities Purchase Agreement, the Executive Securities Purchase
Agreements, the Securities Purchase Agreement, the Stock Purchase Agreement, the
CVC Warrant, the Investor Stock Purchase Agreement, the CCT Purchase Agreement,
and the Larkspur Agreement.
2. Board of Directors.
(a) Until the provisions of this Section 2 cease to be
effective, to the extent permitted by law, each Stockholder shall vote all
voting securities of the Company over which such Stockholder has voting control,
and shall take all other necessary or desirable actions within such
Stockholder's control (whether in such Stockholder's capacity as a stockholder,
director, member of a board committee or officer of the Company or otherwise,
and including, without limitation, attendance at meetings in Person or by proxy
for purposes of obtaining a quorum and execution of written consents in lieu of
meetings), and the Company shall take all necessary and desirable actions within
its control (including, without limitation, calling special board and
stockholder meetings), so that:
(i) the authorized number of directors on the Board shall be
established and maintained at five, and will be designated as follows:
(A) Xxxxxxx X. New shall be a director of the
Company for so long as he is the duly
elected and acting Chief Executive Officer
of Plainwell, and thereafter such
directorship shall be held by the duly
elected
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Chief Executive Officer of Plainwell;
provided, that if there is not a duly
elected Chief Executive Officer of
Plainwell, such director shall be designated
by the holders of a majority of the Class A
Common;
(B) Xxxxxx X. Xxxxxxxxxx shall be a director of
the Company for so long as he is the duly
elected and acting Chief Financial Officer
of Plainwell, and thereafter such
directorship shall be held by the duly
elected Chief Financial Officer of
Plainwell; provided, that if there is not a
duly elected Chief Financial Officer of
Plainwell, such director shall be designated
by the holders of a majority of the Class A
Common;
(C) Two directors to be designated by the
holders of the majority of the CVC
Stockholder Shares (the "CVC Directors");
and
(D) One director to be designated by the holders
of a majority of the Class A Common (the
"Outside Director");
(ii) the composition of the board of directors of each of the
Company's Subsidiaries (a "Sub Board") shall be the same as that of the
Board;
(iii) the Board and each Sub Board shall create a Compensation
Committee, which shall consist of the two CVC Directors and the Outside
Director;
(iv) any committees of the Board or a Sub Board (other than
the Compensation Committee) shall be created only upon the approval of
the CVC Directors and a majority of the voting power of the Board and
the composition of each such committee (if any) shall consist of not
more than three Persons, at least one of which will be a CVC Director;
(v) any director shall be removed from the Board, a Sub Board
or any committee thereof (with or without cause) at the written request
of the Stockholder or Stockholders which have the right to designate
such a director hereunder, but only upon such written request and under
no other circumstances (in each case, determined on the basis of a vote
or consent of the Stockholders referred to in clause (i)(A), (i)(B),
(i)(C), or (i)(D) as the case may be); provided however that in no case
may the directors referred to in clauses (i)(A) and (i)(B) be removed
from the Board or Sub Board as long as such directors are duly elected
and acting in the offices set forth in clauses (i)(A) and (i)(B),
respectively;
(vi) in the event that any representative designated hereunder
for any reason ceases to serve as a member of the Board or a Sub Board
or any committee thereof during such representative's term of office,
the resulting vacancy on the Board or such Sub Board or committee shall
be filled by a representative designated by the Stockholders referred
to in clause (i)(A), (i)(B), (i)(C), or (i)(D), as the case may be.
(b) The Company shall pay the reasonable out-of-pocket
expenses incurred by each director in connection with attending the meetings of
the Board or any Sub Board and any
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committee thereof. In addition, the Company shall pay such additional
compensation to directors who are not employees of the Company or any of its
Subsidiaries as the Board so determines; provided, that no such additional
compensation shall be paid to directors who are employees of CVC or its
Affiliates or employees or Affiliates of any other stockholder of the Company.
(c) The provisions of this Section 2 shall terminate
automatically and be of no further force and effect upon a Qualified Public
Offering.
(d) If any party fails to designate a representative to
fill a directorship pursuant to the terms of this Section 2, the election of a
Person to such directorship shall be accomplished in accordance with the
Company's bylaws, certificate of incorporation, and applicable law; provided,
that such party may replace such Person as a director with a representative
pursuant to this Section 2. In the event that any provision of the Company's
bylaws or certificate of incorporation is inconsistent with any provision of
this Section 2, the Stockholders shall take such action as may be necessary to
amend any such provision in the Company's bylaws or certificate of incorporation
to remedy such inconsistency.
3. Conflicting Agreements. Each Stockholder (i) represents
that such Stockholder has not granted and is not a party to any proxy, voting
trust or other agreement which is inconsistent with or conflicts with the
provisions of this Agreement, and (ii) agrees that (x) no holder of Stockholder
Shares shall grant any proxy or become party to any voting trust or other
agreement which is inconsistent with or conflicts with the provisions of this
Agreement, and (y) any such grant shall be void.
4. Restrictions on Transfer of Stockholder Shares.
(a) Tag Along Rights. Subject to Sections 4(c) and 4(d), at
least 15 days prior to any sale (other than a Public Sale), transfer,
assignment, pledge or other disposal (a "Transfer") of Stockholder Shares by a
Stockholder, the Stockholder making such a transfer (the "Transferring
Stockholder") shall deliver a written notice (the "Sale Notice") to the Company
and the Other Stockholders, specifying in reasonable detail the identity of the
prospective transferee(s) and the terms and conditions of the Transfer. The
Other Stockholders may elect to participate in the contemplated Transfer by
delivering written notice to the Transferring Stockholder within 10 days after
delivery of the Sale Notice. If any Other Stockholders have elected to
participate in such Transfer, each of the Transferring Stockholder and such
Other Stockholders shall be entitled to sell in the contemplated Transfer, at
the same price and on the same terms, a number of Stockholder Shares of any
class equal to the product of (i) the quotient determined by dividing the
percentage of Stockholder Shares owned by such Stockholder by the aggregate
percentage of Stockholder Shares owned by the Transferring Stockholder and the
Other Stockholders participating in such Transfer and (ii) the aggregate number
of Stockholder Shares to be sold in the contemplated Transfer. Each Stockholder
transferring Stockholder Shares pursuant to this Section 4(a) shall pay its pro
rata share (based on the number of Stockholder Shares to be sold) of the
expenses incurred by the Stockholders in connection with such transfer and shall
be obligated to join on a pro rata basis (based on the number of Stockholder
Shares to be sold) in any indemnification or other obligations that the
Transferring Stockholder agrees to provide in connection with such transfer
(other than any such obligations that relate specifically to a particular
Stockholder such as indemnification with respect
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to representations and warranties given by a Stockholder regarding such
Stockholder's title to and ownership of Stockholder Shares; provided, that no
Stockholder shall be obligated in connection with such Transfer to agree to
indemnify or hold harmless the transferees with respect to an amount in excess
of the net cash proceeds paid to such Stockholder in connection with such
Transfer).
(b) First Refusal Rights. Subject to Sections 4(c) and
4(d), at least 60 days prior to any Transfer of Stockholder Shares by any
Executive, or any of their Permitted Transferees (other than pursuant to an
Approved Sale), the Person making such Transfer (the "Offering Stockholder")
shall deliver a written notice (the "Transfer Notice") to the Company and CVC
specifying in reasonable detail the identity of the prospective transferee(s),
the number of shares proposed to be transferred, the proposed purchase price
(which shall be payable solely in cash) and the other terms and conditions of
the Transfer. The Company may elect to purchase all (but not less than all) of
the Stockholder Shares to be transferred, upon the same terms and conditions as
those set forth in the Transfer Notice, by delivering a written notice of such
election to the Offering Stockholder within 30 days after the Transfer Notice
has been delivered to the Company. If the Company has not elected to purchase
all of the Stockholder Shares to be transferred, CVC (or its designee) may elect
to purchase all (but not less than all) of the Stockholder Shares to be
transferred, upon the same terms and conditions as those set forth in the
Transfer Notice, by giving written notice of such election to the Offering
Stockholder within 30 days after the Transfer Notice has been given to CVC (the
"CVC Option Period"). If neither the Company nor CVC (or its designee) elects to
purchase all of the Stockholder Shares specified in the Transfer Notice, then
the Offering Stockholder may transfer the Stockholder Shares specified in the
Transfer Notice to the designated transferee at a price and on terms no more
favorable to the transferee(s) thereof than specified in the Transfer Notice
during the 60-day period immediately following the expiration of the CVC Option
Period. Any Stockholder Shares not transferred within such 60-day period will be
subject to the provisions of this Section 4(b) upon subsequent transfer.
(c) Permitted Transfers. The restrictions contained in this
Section 4 shall not apply with respect to any Transfer of Stockholder Shares by
any Stockholder (i) in the case of an individual Stockholder, pursuant to
applicable laws of descent and distribution or to any member of such
Stockholder's Family Group, (ii) in the case of Executive Shares, pursuant to a
redemption by the Company of such Executive Shares under the terms and
conditions of that certain Executive Employment and Stock Purchase Agreement by
and between the Company and such Stockholder, and (iii) in the case of CVC and
CCT, (A) among their Affiliates, employees and consultants, (B) to any employee,
prospective employee, director or prospective director of the Company or any
Affiliate of the Company, (C) to any former or prospective employee, director or
prospective director of CVC or any Affiliate of CVC, (D) to any Person in order
to resolve a Regulatory Problem or (E) to CVC (in the case of CCT) or CCT (in
the case of CVC); provided, that the restrictions contained in this Section 4
shall continue to be applicable to such Stockholder Shares after any such
Transfer; and provided further, that the transferees of such Stockholder Shares
shall have agreed in writing to be bound by the provisions of this Agreement
which affect the Stockholder Shares so transferred by executing a joinder in
substantially the form attached hereto as Exhibit A. All transferees permitted
under this Section 4(c) are collectively referred to herein as "Permitted
Transferees."
(d) Termination of Restrictions. The restrictions set forth
in this Section 4 shall continue with respect to each Stockholder Share until
the earlier of (i) the Transfer of such
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Stockholder Share in a Public Sale or an Approved Sale, or (ii) the consummation
of a Qualified Public Offering.
5. Sale of the Company.
(a) In the event of an Approved Sale, each Stockholder will
(i) consent to and raise no objections against the Approved Sale or the process
pursuant to which the Approved Sale was arranged, (ii) waive any dissenter's
rights and other similar rights, and (iii) if the Approved Sale is structured as
a sale of stock, each Stockholder will agree to sell its Stockholder Shares on
the terms and conditions of the Approved Sale. Each Stockholder will take all
necessary and desirable actions as directed by the Board and the Approving
Stockholders in connection with the consummation of any Approved Sale, including
without limitation executing the applicable purchase agreement and granting
identical indemnification rights (to the extent of the consideration received by
such Stockholder in connection with the Approved Sale). Each Stockholder
required to make indemnification payments in connection with any Approved Sale
shall have a right to recover from the Other Stockholders to the extent that the
amount required to be paid by such Stockholder was disproportionate to the
proportion of the total consideration received by all Stockholders, compared to
the consideration actually received by such Stockholder.
(b) If the Company or the holders of the Company's
securities enter into any negotiation or transaction for which Rule 506 (or any
similar rule then in effect) under the Securities Act may be available with
respect to such negotiation or transaction (including a merger, consolidation or
other reorganization), the Other Stockholders will, at the request of the
Company, appoint a purchaser representative (as such term is defined in Rule
501) reasonably acceptable to the Company. If any Other Stockholder appoints a
purchaser representative designated by the Company, the Company will pay the
fees of such purchaser representative, but if any Other Stockholder declines to
appoint the purchaser representative designated by the Company such holder will
appoint another purchaser representative (reasonably acceptable to the Company),
and such holder will be responsible for the fees of the purchaser representative
so appointed.
(c) All Stockholders will bear their pro rata share (based
upon the number of shares sold) of the reasonable costs of any sale of
Stockholder Shares pursuant to an Approved Sale to the extent such costs are
incurred for the benefit of all selling Stockholders and are not otherwise paid
by the Company or the acquiring party. Costs incurred by any Stockholder on its
own behalf will not be considered costs of the transaction hereunder.
(d) This Section 5 shall automatically terminate upon a
Qualified Public Offering.
6. Legend. In addition to any legend required by any other
Transaction Document, each certificate evidencing Stockholder Shares and each
certificate issued in exchange for or upon the transfer of any Stockholder
Shares (if such shares remain Stockholder Shares as defined herein after such
transfer) shall be stamped or otherwise imprinted with a legend in substantially
the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE
ORIGINALLY ISSUED ON JUNE __, 1997, AND HAVE
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NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE IS SUBJECT TO A STOCKHOLDERS AGREEMENT DATED AS OF
JUNE __, 1997, BY AND AMONG THE ISSUER OF SUCH SECURITIES (THE
"COMPANY") AND CERTAIN OF THE COMPANY'S STOCKHOLDERS. A COPY
OF SUCH STOCKHOLDERS AGREEMENT WILL BE FURNISHED WITHOUT
CHARGE BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN
REQUEST."
The Company shall imprint such legend on certificates evidencing Stockholder
Shares outstanding prior to the date hereof. The legend set forth above shall be
removed from the certificates evidencing any shares which cease to be
Stockholder Shares.
7. Transfers in Violation of Agreement. Any Transfer or
attempted Transfer of any Stockholder Shares in violation of any provision of
this Agreement shall be null and void, and the Company shall not record such
Transfer on its books or treat any purported transferee of such Stockholder
Shares as the owner of such shares for any purpose.
8. Transfer of Stockholder Shares.
(a) Stockholder Shares are transferable only pursuant to (i)
public offerings registered under the Securities Act, (ii) subject to the
provisions of Section 4 above, Rule 144 or Rule 144A (or any similar rule or
rules then in effect) of the Securities and Exchange Commission if such rule is
available, and (iii) subject to Section 4 or 5 and Section 8(b) below, any other
legally available means of Transfer.
(b) In connection with the Transfer of any Stockholder
Shares other than a Transfer described in clause (i) or (ii) of Section 8(a)
above, the holder thereof shall deliver written notice to the Company describing
in reasonable detail the Transfer or proposed Transfer, together with an opinion
of counsel reasonably acceptable to the Company to the effect that such Transfer
of Stockholder Shares may be effected without registration of such Stockholder
Shares under the Securities Act. In addition, if the holder of the Stockholder
Shares delivers to the Company an opinion of counsel that no subsequent Transfer
of such Stockholder Shares shall require registration under the Securities Act,
the Company shall promptly upon such contemplated Transfer deliver new
certificates for such Stockholder Shares which do not bear the legend set forth
in Section 6 above. If the Company is not required to deliver new certificates
for such Stockholder Shares not bearing such legend, the holder thereof shall
not consummate a Transfer of the same until the prospective transferee has
confirmed to the Company in writing its agreement to be bound by the conditions
contained in this Section 8 and Section 6 above.
(c) Upon the request of a holder of Stockholder Shares, the
Company shall promptly supply to such Person or its prospective transferees all
information regarding the Company required to be delivered in connection with a
Transfer pursuant to Rule 144A (or any similar rule or rules then in effect) of
the Securities and Exchange Commission.
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(d) Upon the request of any holder of Stockholder Shares,
the Company shall remove the legend set forth in Section 6 above from the
certificates for such holder's Stockholder Shares; provided, that such
Stockholder Shares are eligible for sale pursuant to Rule 144(k) (or any similar
rule or rules then in effect) of the Securities and Exchange Commission.
9. Pre-emptive Rights. If the Company issues any shares of
Common Stock (other than shares of Common Stock issuable upon exercise of the
CVC Warrant and upon exercise of incentive stock options to be issued to certain
members of management of the Company) or any securities containing options or
rights to acquire any shares of Common Stock or any securities convertible or
exchangeable for Common Stock in each case, after the date hereof to CVC or any
Affiliate of CVC, the Company will offer to sell to each Other Stockholder a
number of such securities ("Offered Shares") so that the Ownership Ratio
immediately after the issuance of such securities for each Stockholder would be
equal to the Ownership Ratio for such Stockholder immediately prior to such
issuance of securities. The Company shall give each Stockholder at least 30 days
prior written notice of any proposed issuance, which notice shall disclose in
reasonable detail the proposed terms and conditions of such issuance (the
"Issuance Notice"). Each Stockholder will be entitled to purchase such
securities at the same price, on the same terms, and at the same time as the
securities are issued by delivery of written notice to the Company of such
election within 15 days after delivery of the Issuance Notice (the "Election
Notice"); provided, that if more than one type of security was issued, each
Stockholder shall, if it exercises its rights pursuant to this Section 9,
purchase such securities in the same ratio as issued. If any of the Stockholders
have elected to purchase any Offered Shares, the sale of such shares shall be
consummated as soon as practical (but in any event within 10 days) after the
delivery of the Election Notice. In the event that any Stockholder elects to
purchase Offered Shares, at such Stockholder's request (which request shall be
included in the Election Notice), the Company shall issue to such Stockholders,
in lieu of the securities constituting Offered Shares, nonvoting securities
which shall otherwise be identical in all respects to such securities
constituting Offered Shares, except that it (i) shall be nonvoting, (ii) shall
be convertible into a voting security (including the securities constituting
Offered Shares) on such terms as are requested by such Stockholder in light of
the applicable regulatory considerations then prevailing, and (iii) may not, at
Stockholder's request, be a common equity security. In the event any Stockholder
elects not to exercise its rights pursuant to this Section 9, no other
Stockholder shall have the right to purchase the securities offered to such
Stockholder.
10. Termination. This Agreement will automatically terminate
and be of no further force or effect immediately after the earlier of the
consummation of (i) an Approved Sale or (ii) a Qualified Public Offering.
11. Amendment and Waiver. Except as otherwise provided
herein, no modification, amendment or waiver of any provision of this Agreement
shall be effective against the Company or the Stockholders unless such
modification, amendment or waiver is approved in writing by the Company or the
holders of not less than 51% of the Stockholder Shares, respectively; provided,
that no such modification, amendment or waiver which adversely and prejudicially
affects an Executive or the Executives vis-a-vis all Other Stockholders shall be
effective against such Executive or Executives without the prior written consent
of the holders of not less than 51% of the Executive Shares. For the avoidance
of doubt, adding another party to this Agreement by execution of a joinder in
the form of Exhibit A and pursuant to the provisions of Section 4(c) above
without
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amending or modifying any material provision of this Agreement is not an action
which, in and of itself, affects any Stockholder adversely and prejudicially
vis-a-vis Other Stockholders. The failure of any party to enforce any of the
provisions of this Agreement shall in no way be construed as a waiver of such
provisions and shall not affect the right of such party thereafter to enforce
each and every provision of this Agreement in accordance with its terms.
12. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if 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 shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
13. Entire Agreement. Except as otherwise expressly set
forth herein, this document and the other Transaction Documents embody the
complete agreement and understanding among the parties hereto with respect to
the subject matter hereof and supersede and preempt any prior understandings,
agreements or representations by or among the parties, written or oral, which
may have related to the subject matter hereof in any way.
14. Successors and Assigns. Except as otherwise provided
herein, this Agreement shall bind and inure to the benefit of and be enforceable
by the Company and its successors and assigns and the Stockholders and any
subsequent holders of Stockholder Shares and the respective successors and
assigns of each of them, so long as they hold Stockholder Shares.
15. Counterparts. This Agreement may be executed in separate
counterparts each of which shall be an original and all of which taken together
shall constitute one and the same agreement.
16. Remedies. The parties hereto shall be entitled to
enforce their rights under this Agreement specifically to recover damages by
reason of any breach of any provision of this Agreement and to exercise all
other rights existing in their favor. The parties hereto agree and acknowledge
that money damages may not be an adequate remedy for any breach of the
provisions of this Agreement and that the Company, CVC and any Executive may in
his, hers, or its sole discretion apply to any court of law or equity of
competent jurisdiction for specific performance and/or injunctive relief
(without posting a bond or other security) in order to enforce or prevent any
violation of the provisions of this Agreement.
17. Notices. All notices, demands or other communications to
be given or delivered under or by reason of the provisions of this Agreement
will be in writing and will be deemed to have been given when delivered
personally, mailed by certified or registered mail, return receipt requested and
postage prepaid, or sent via a nationally recognized overnight courier, or sent
via facsimile to the recipient accompanied by a certified or registered mailing.
Such notices, demands and other communications will be sent to the address
indicated below:
-11-
12
To the Company:
Plainwell Holding Company
c/x Xxxxxxx Plainwell Paper Company
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer
Telecopy No.: (000) 000-0000
With copies (which shall not constitute notice) to:
Citicorp Venture Capital, Ltd.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxx
Telecopy No.: (000) 000-0000
Xxxxxxxx & Xxxxx
Citicorp Center
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxx X. Xxxxx, Esq.
Telecopy No.: (000) 000-0000
Xxxxxxx & Xxxx, S.C.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
Telecopy No.: (000) 000-0000
To CVC:
Citicorp Venture Capital, Ltd.
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxx
Telecopy No.: (000) 000-0000
-12-
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With a copy (which shall not constitute notice) to:
Xxxxxxxx & Xxxxx
Citicorp Center
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxx X. Xxxxx, Esq.
Telecopy No.: (000) 000-0000
To CCT:
CCT II Partners, L.P.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxx
Telecopier: (000) 000-0000
With a copy (which shall not constitute notice) to:
Xxxxxxxx & Xxxxx
Citicorp Center
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxx X. Xxxxx, Esq.
Telecopy No.: (000) 000-0000
To Larkspur:
Larkspur Capital Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
Telecopy No.: (000) 000-0000
To the Investor:
Xxxxxxx Xxxxxx
c/o Xxxxx River Corp.
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
To any of the Executives:
c/x Xxxxxxx Plainwell Paper Company
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
-13-
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Attention: [EXECUTIVE'S NAME]
Telecopy No.: (000) 000-0000
With a copy (which shall not constitute notice) to:
Xxxxxxx & Xxxx, S.C.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
Telecopy No.: (000) 000-0000
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party.
18. GOVERNING LAW. THE CORPORATE LAW OF DELAWARE SHALL
GOVERN ALL ISSUES CONCERNING THE RELATIVE RIGHTS OF THE COMPANY AND ITS
STOCKHOLDERS. ALL OTHER QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY AND
INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE
STATE OF NEW YORK OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF
THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.
19. WAIVER OF JURY TRIAL. THE COMPANY AND EACH
SECURITYHOLDER HEREBY WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY
JURY IN ANY LITIGATION IN ANY COURT WITH RESPECT TO, IN CONNECTION WITH, OR
ARISING OUT OF THIS AGREEMENT OR THE VALIDITY, PROTECTION, INTERPRETATION OR
ENFORCEMENT THEREOF. THE COMPANY AND EACH SECURITYHOLDER AGREE THAT THIS SECTION
IS A SPECIFIC AND MATERIAL ASPECT OF THIS AGREEMENT AND WOULD NOT ENTER INTO
THIS AGREEMENT IF THIS SECTION WERE NOT PART OF THIS AGREEMENT.
20. Time is of the Essence. Each of the parties to this
Agreement hereby agrees that time is of the essence in the performance of this
Agreement and with respect to all duties and periods specified herein.
21. Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
* * * * *
-14-
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IN WITNESS WHEREOF, the parties hereto have executed this
Stockholders Agreement as of the date first above written.
PLAINWELL HOLDING COMPANY
By:
-------------------------------------
Name:
Title:
CITICORP VENTURE CAPITAL, LTD.
By:
-------------------------------------
Name:
Title:
CCT II PARTNERS, L.P.
By: CCT I Corporation
Its: General Partner
By:
-------------------------------------
Name:
Title:
XXXXXXX X. NEW
----------------------------------------
XXXXXXX XXXXXX
----------------------------------------
16
INDIVIDUAL PURCHASERS
SIGNATURE PAGE FOR
STOCKHOLDERS AGREEMENT
XXXXXXX XXXXXX ALCHEMY, L.P.
By:
--------------------------------- ---------------------------------
Name:
Title:
XXXXX X. XXXXXX XXXX X. XXXXX
--------------------------------- ------------------------------------
NATASHA PARTNERSHIP XXXXX XXXX
By:
----------------------------- ------------------------------------
Name:
Title:
XXXXXX XXXXXXXXX
---------------------------------
17
SIGNATURE PAGE FOR
STOCKHOLDERS AGREEMENT
LARKSPUR CAPITAL CORPORATION
By:
-----------------------------------
Name:
-----------------------------------
Title:
----------------------------------
18
EXHIBIT A
FORM OF JOINDER TO
STOCKHOLDERS AGREEMENT
THIS JOINDER to the Stockholders Agreement, dated as of June
__, 1997 by and among Plainwell Holding Company, a Delaware corporation (the
"Company"), and certain stockholders of the Company (the "Agreement"), is made
and entered into as of _________ by and between the Company and
_________________ ("Holder"). Capitalized terms used herein but not otherwise
defined shall have the meanings set forth in the Agreement.
WHEREAS, Holder has acquired certain shares of Common Stock
("Holder Stock"), and the Agreement and the Company requires Holder, as a holder
of Common Stock, to become a party to the Agreement, and Holder agrees to do so
in accordance with the terms hereof.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties to this Joinder hereby
agree as follows:
1. Agreement to be Bound. Holder hereby agrees that upon
execution of this Joinder, it shall become a party to the Agreement and shall be
fully bound by, and subject to, all of the covenants, terms and conditions of
the Agreement as though an original party thereto and shall be deemed a
Stockholder [AND AN EXECUTIVE] for all purposes thereof. In addition, Holder
hereby agrees that all Common Stock held by Holder shall be deemed Stockholder
Shares for all purposes of the Agreement
2. Successors and Assigns. Except as otherwise provided
herein, this Joinder shall bind and inure to the benefit of and be enforceable
by the Company and its successors and assigns and Holder and any subsequent
holders of Holder Stock and the respective successors and assigns of each of
them, so long as they hold any shares of Holder Stock.
3. Counterparts. This Joinder may be executed in separate
counterparts each of which shall be an original and all of which taken together
shall constitute one and the same agreement.
4. Notices. For purposes of Section 17 of the Agreement, all
notices, demands or other communications to the Holder shall be directed to:
[Name]
[Address]
[Facsimile Number]
5. GOVERNING LAW. THE CORPORATE LAW OF DELAWARE SHALL GOVERN
ALL ISSUES CONCERNING THE RELATIVE RIGHTS OF THE COMPANY AND ITS STOCKHOLDERS.
ALL OTHER QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY AND INTERPRETATION OF
THIS JOINDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE DOMESTIC
LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING
A-1
19
EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE
STATE OF NEW YORK OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF
THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.
6. DESCRIPTIVE HEADINGS. The descriptive headings of this
Joinder are inserted for convenience only and do not constitute a part of this
Joinder.
* * * * *
A-2
20
IN WITNESS WHEREOF, the parties hereto have executed this
Joinder as of the date first above written.
PLAINWELL HOLDING COMPANY
By:
----------------------------------
Name:
Title:
[HOLDER]
By:
----------------------------------
