EXHIBIT 10.1
SHAREHOLDERS AGREEMENT
FOR
HORIZON ORGANIC HOLDING CORPORATION
THIS AGREEMENT is made effective as of the 24th day of May, 1997, among
HORIZON ORGANIC HOLDING CORPORATION, a Delaware corporation, with its principal
office and place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Corporation") and the stockholders of the Corporation who
are signatories to this Agreement (individually, a "Shareholder" and
collectively, the "Shareholders").
RECITALS
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WHEREAS, the Shareholders, being the record holders of all of the
outstanding capital stock of the Corporation, deem it to be in their best
interests and in the best interests of the Corporation to provide consistent and
uniform management for the Corporation and, therefore, desire to enter into this
Agreement on the terms and conditions set forth herein; and
WHEREAS, the Shareholders also desire to restrict the sale, assignment,
transfer, encumbrance or other disposition of the shares of capital stock of the
Corporation, including shares of the Corporation that may be issued hereafter,
and to provide for certain rights and obligations in respect thereto as
hereinafter provided;
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
and understandings set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto hereby agree as follows:
1. Definitions. The terms "shares of stock of the corporation," "shares
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of Common Stock of the Corporation," or the like, as used in this Agreement
shall be deemed to refer to all shares of the Corporation's Common Stock, no par
value, owned by the Shareholders at the time of execution of this Agreement, any
shares of Common Stock hereafter issued in exchange therefor or by way of
reclassification of shares, merger, consolidation, reorganization,
recapitalization, or otherwise, and any additional shares of such Common Stock
issued to or acquired by the respective Shareholders by reason of dividends
paid, share distributions, exercise of warrants or options, increase in the
outstanding shares, purchase or otherwise.
2. Rights of First Refusal.
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a. The Shareholders agree that if any Shareholder desires to sell,
assign, transfer or otherwise dispose of any shares of the Common Stock of the
Corporation, then such Shareholder (the "Transferor") shall first deliver to the
Corporation a written notice (the "Notice") stating his desire to sell such
stock. If the value of the shares of the Common Stock to be sold, assigned or
transferred is $100,000.00 or greater, then the Notice shall also be sent to the
other Shareholders of the Corporation. The Notice must specify the amount of
such stock which he
desires to sell, and the price at which he is willing to sell such stock. For
purposes of this Agreement, the value of the stock being transferred shall be
the per share purchase price for the proposed transfer multiplied by the number
of shares of the Corporation's stock the Transferor desires to transfer, plus
the number of shares the Transferor has transferred in the ninety (90) days
preceding the date the Corporation receives the Notice.
b. Within fifteen (15) days after receipt of such Notice, the
Corporation may elect to purchase all or any portion of such stock. The
Corporation's election to purchase shares of stock to be sold by the Transferor
at the designated offering price shall be reflected in a written notice to the
Transferor during this fifteen (15) day period. Closing shall take place in the
manner prescribed in Section 2(d).
c. If the value of the Common Stock to be transferred is $100,000.00
or greater, and if the Corporation does not elect to purchase some portion of
such stock as provided in the preceding paragraph, within fifteen (15) days
after termination of the original fifteen (15) day period or after notice from
the Corporation of the number of shares it will not purchase, the Shareholders
who have received the Notice may elect to purchase such portion of such
remaining stock as the number of shares owned by them on the date of receipt of
the Notice shall bear to the total number of shares owned by all such other
Shareholders, excluding the Transferor. If any such Shareholder does not
purchase the proportionate number of shares to which he is entitled, the
remaining such Shareholders may purchase a pro rata portion of the shares not
purchased (the proportion to be based upon the shares owned by the remaining
such Shareholders who wish to purchase) at any time within fifteen (15) days
after the termination of the second fifteen (15) day period, or after notice
from such other Shareholders of the number of shares which they will not
purchase. A Shareholder's election to purchase shares of stock to be sold by the
Transferor at the designated offering price shall be reflected in a written
notice to the Transferor during the appropriate election period.
d. The closing of the purchase will take place on a date selected by
the Transferor and those purchasing shares not more than twenty (20) days after
the end of the latter election period. At the closing, the purchaser shall pay
in cash the purchase price of the stock to be purchased by the purchaser. If
shares of stock designated in the Notice are not the subject of an election to
purchase by the Corporation or a Shareholder, or if the Corporation or a
Shareholder has elected to purchase such stock and fails to do so within the
applicable period for such purchase, the Transferor may within ninety (90) days
after the end of the latter election period sell the stock which has not been
purchased to any person on the terms and at a price the same as set forth in the
Notice. Any such shares so sold shall be subject to the terms and conditions of
this Agreement.
e. The provisions of this Section 2 shall not apply to a bona fide
gift or transfer without consideration of any shares of the Corporation owned by
any Shareholder, or to the sale or transfer of shares to immediate family
members, trusts in which the beneficiaries are immediate family members or, with
the prior written consent of the Corporation, any successor entity of any
Shareholder.
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3. Rights of Co-Sale.
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a. In the event that the value of the shares to be transferred by
the Transferor is $100,000.00 or greater and the number of shares to be
transferred by the Transferor is three percent (3%) or greater than the
Corporation's then outstanding stock on a fully diluted basis, then the
provision of this Section 3 shall apply. In such event, the Transferor shall
also state in his Notice to the Corporation and the other Shareholders that the
co-sale rights under Section 3 of the Shareholders Agreement shall apply. It
shall be the responsibility of the Transferor to determine if this Section 3 is
applicable.
b. Within 30 days after receipt of the Notice delivered under
Section 2 above, each Shareholder may also notify the Transferor and the
Corporation (which notice may be included in the notice under Section 2(b)
above) whether it exercises its right of co-sale under the provisions of this
Section 3 in the event all of the offered stock is not purchased by the
Corporation or the Shareholders pursuant to the right of first refusal under
Section 2. If all of the offered stock is not purchased by the Corporation or
the Shareholders pursuant to the right of first refusal under the provisions of
Section 2, then the Transferor and the Shareholders who have so exercised their
right of co-sale shall be entitled to participate in the proposed sale or
transfer pro rata based on the respective numbers of shares held by the
Transferor and each Shareholder (but only to the extent a Shareholder owns, or
may obtain upon conversion, the securities which are the subject of the offer).
Any Shareholder who has notified the Corporation during such 30-day period that
the Shareholder elects to exercise its right of co-sale shall, in the event all
of the offered stock is not sold to the Shareholders pursuant to Section 2, be
obligated to sell its portion of the offered stock in accordance with the terms
of the offer, and the Transferor may only sell his portion of the offered stock.
c. In the event all of the offered stock is not purchased by the
Shareholders pursuant to Section 2(b), and none of the Shareholders exercise its
right of co-sale pursuant to this Section 3, the Transferor may consummate the
sale in accordance with the terms of the Notice and upon no more favorable
terms, provided that if the Transferor does not consummate the sale of the
offered stock in accordance with the terms of the Notice within 90 days after
the expiration of the last election period referred to in Section 2, the offered
stock may not be sold unless the provisions of this Section 3 are complied with
again in connection with such sale.
4. Preemptive Rights.
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a. The Corporation grants to each Shareholder the right of first
refusal to purchase, on a pro rata basis, all or any part of New Securities (as
defined below) which the Corporation may, from time to time, propose to issue
and sell. A pro rata share, for purposes of this Section, is the ratio that the
sum of the number of shares of capital stock then held by the Shareholder bears
to the sum of the total number of shares of capital stock then outstanding
(including shares issuable upon exercise of options and warrants exercisable
within 60 days of the date of the notice referenced in subsection (c) below).
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b. "New Securities" shall mean any capital stock of the Corporation,
whether now authorized or not, and any rights, options or warrants to purchase
such capital stock, and any securities of any type whatsoever that are, or may
become, convertible into such capital stock; provided, that "New Securities"
does not include: (i) securities offered pursuant to a Public Offering; (ii)
securities issued to directors, employees or consultants of the Corporation or
any subsidiary as compensation; provided, that the number of shares offered does
not exceed 10% of the then outstanding shares of the Corporation's common stock
on a fully diluted basis; (iii) securities issued in connection with any merger
with, or acquisition of substantially all of the assets of, or a controlling
interest in, any corporation or other entity; or (iv) shares of capital stock
issued in connection with any stock split, stock dividend or recapitalization by
the Corporation.
c. If the Corporation proposes to undertake an issuance of New
Securities, then it shall give the Shareholders written notice of its intention,
describing the type of New Securities, the price and the general terms upon
which the Corporation proposes to issue the same. The Shareholders shall be
given at least 21 days' prior written notice to agree to purchase all or any
part of such Shareholder's pro-rata share of such issuances of New Securities
for the price and upon the general terms specified in the notice by giving
written notice to the Corporation and stating therein the quantity of New
Securities to be purchased.
d. If the Shareholders fail to exercise in full their right of first
refusal within the applicable periods set forth in Section 4(c), then the
Corporation shall have 90 days thereafter to sell the New Securities respecting
which such Shareholders' rights were not exercised at a price and upon general
terms no more favorable to the purchaser thereof than specified in the
Corporation's notice. If the Corporation has not sold the New Securities within
such 90-day period, then the Corporation shall not thereafter issue or sell any
New Securities without first offering such securities to the Shareholders in the
manner provided above.
e. The Preemptive Right granted under this Section shall expire upon
the closing of the first public offering of securities of the Corporation to the
general public which is effected pursuant to a registration statement fried
with, and declared effective by, the Commission under the Securities Act.
Notwithstanding anything in this Section 4 to the contrary, no Shareholder shall
have preemptive rights if the offer or sale of New Securities would prevent the
Corporation from selling its securities under any federal or state securities
law exemption.
5. Composition of Board of Directors. The Shareholders agree that one
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member of the Board shall be the nominee of the Shareholders listed on Exhibit A
to this Agreement (the "New Investors"); provided, that the initial nominee and
any future nominee to the Board chosen by the New Investors must be approved by
the Corporation's directors elected by the other Shareholders. The Shareholders
agree to vote their shares of the Corporation (whether now owned or hereafter
acquired) to implement the provisions of this Section 5. The Corporation further
agrees that future holders of shares of the Corporation's Common Stock
(including, without limitation, employees and others who may obtain said shares
through exercise of stock options and warrants) shall be required to enter into
an agreement to the effect that they will vote their shares to implement the
provisions of this Section 5.
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6. Restrictive Legend. Each certificate representing shares of Common
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Stock shall be marked on its reverse side as follows:
"The shares of stock represented by this Certificate are
subject to all the terms of a Shareholder Agreement dated as
of May _____, 1997, between the Company and the owner of the
shares represented by this Certificate and certain other
Shareholders, a copy of which is on file at the office of
the Company. Such Agreement, among other things, limits the
right of the owner to transfer, pledge or encumber the
Shares represented hereby and provides that in certain
circumstances all or any part of the Shares represented
hereby may be purchased by the Company or the Shareholders
at a purchase price computed according to the provisions of
this Agreement."
7. Noncompliance. Any transfer, sale, assignment of other disposal by a
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Shareholder of common stock in a manner which does not comply strictly with the
terms and conditions hereof, including sending Notice in the proper form and to
the proper parties, shall be void ab initio.
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8. Pledge; Assignment. No Shareholder may assign or pledge any of his
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shares of stock to secure any debt or other obligation without the prior written
consent of the Corporation.
9. Transferees Subject to Agreement. Each transferee of shares of Common
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Stock of the corporation shall agree in writing to the terms and conditions of
this Agreement prior to the transfer to him of a certificate representing shares
of Common Stock of the Corporation and such certificate representing shares of
Common Stock of the Corporation shall bear the restrictive legend set forth in
Section 6 hereof.
10. Implementation of Agreement. A duly authorized officer of the
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Corporation and the Shareholders, shall make, execute and deliver any documents
necessary to carry out this Agreement. This Agreement shall be binding upon the
Corporation and the Shareholders, their heirs, legal representatives, successors
and assigns. This Agreement shall be executed in counterparts, with counterpart
signature pages, each of which shall be enforceable against the party actually
executing such counterparts, and all of which together shall constitute one
instrument.
11. Amendment of Agreement. This Agreement may be altered or amended by a
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writing signed by the Corporation and by Shareholders holding shares
representing not less than seventy-five percent (75%) of the combined voting
power of all shares held by all Shareholders, provided, however, that no such
amendment shall materially and adversely affect the rights of any Shareholder
unless all Shareholders are treated equally. A new party can be added to this
Agreement as a Shareholder upon the signature of that party and the Corporation
only.
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12. Termination of Agreement. This Agreement shall terminate (i) ten (10)
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years from the date hereof (unless extended by the Shareholders holding shares
representing not less than seventy-five percent (75 %) of the combined voting
power of all shares held by all Shareholders), or (ii) at such time as the stock
of the Corporation shall become publicly traded, whichever shall first occur.
Upon termination of this Agreement, the Secretary of the Corporation shall, upon
tender of the certificates of shares of Common Stock of the Corporation, delete
the legend endorsed thereon pursuant to Section 6.
13. Notice. Any and all notices or acceptances to be given hereunder,
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including notices exercising options granted hereunder, may be given by personal
delivery thereof or by registered mail, enclosed in a duly postpaid envelope and
addressed to the post office address of the person to receive such notice as
last appearing upon the records of the Corporation, and if no such address
appears on such records, then to the last known post office address of such
person and upon mailing such notice as aforesaid, the same shall be deemed to
have been duly given, irrespective of the receipt thereof.
14. Colorado Law Governs. This Agreement shall be subject to and governed
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by the laws of the State of Colorado, irrespective of the fact that one or more
of the parties is or may become a resident of a different state.
15. Prior Agreements Superseded. This Agreement constitutes the full and
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entire understanding and agreement between the parties with regard to the
subject hereof and thereof and supersedes all prior Shareholders agreements with
regard to such subject.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
duly executed as of the date first above written.
THE CORPORATION:
HORIZON ORGANIC HOLDING CORPORATION,
a Delaware corporation
By:
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Barnet ▇. ▇▇▇▇▇▇▇▇, President
[COUNTERPART SIGNATURES TO FOLLOW]
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SHAREHOLDER SIGNATURE PAGE
AGREED TO AND ACCEPTED:
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