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EXHIBIT 10.16
STANDSTILL AND VOTING AGREEMENT
This STANDSTILL AGREEMENT (this "Agreement") is made as of March 6,
2000 by and among ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, J. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ III, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 1995
Unitrust, the ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 1996 Unitrust, the ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 1997
Unitrust, the ▇▇▇▇▇ ▇. and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Foundation, the ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Irrevocable Trust, the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Irrevocable Trust, and the ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Irrevocable Trust (collectively, the "▇▇▇▇▇▇▇ Group") and RTW, Inc., a
Minnesota corporation (the "Company").
For good and valuable consideration, the receipt of which is hereby
acknowledged, each member of the ▇▇▇▇▇▇▇ Group and the Company agree as follows:
1. CERTAIN DEFINITIONS. Unless the context otherwise requires, the
following terms, for all purposes of this Agreement, shall have the meanings
specified in this Section 1:
"Affiliate" of any Person shall mean any Person that directly or
indirectly, through one or more intermediaries, controls or is controlled by or
is under common control with, such Person. For purposes of this Agreement, if
any member of the ▇▇▇▇▇▇▇ Group is part of a group with respect to holding or
voting RTW common stock and such group has or is obligated to report the
existence of such group under the Securities Exchange Act of 1934 on Schedule
13D, all other Persons who are members of such group shall be deemed an
Affiliate of the ▇▇▇▇▇▇▇ Group.
"Outstanding Voting Stock" shall mean the common stock of the Company
and any other securities convertible into Common Stock of the Company having the
power to vote in the election of directors of the Company then outstanding or
the power to vote on any other matters that properly come before the
shareholders of the Company.
"Person" shall mean any individual, partnership, joint venture,
corporation, trust or unincorporated organization, a group required to report
its existence on Schedule 13D under the Securities Exchange Act of 1934 due to
its ownership of 5% or more of Company Voting Stock, or any business entity or
governmental authority, in any case whether acting in an individual, fiduciary
or other capacity.
"Voting Power" shall mean the number of votes entitled to then be cast
by the holder of all of the Outstanding Voting Stock of the Company upon any
proposed action or election of directors of the Company.
"Voting Stock" shall mean the common stock of the Company outstanding,
assuming the exercise or conversion of all outstanding securities convertible
into or exercisable or exchangeable for common stock of the Company and further
assuming the issuance of all shares of common stock of the Company reserved for
issuance pursuant to stock options whether or not yet granted, and any other
securities issued by the Company having the power to vote in the
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election of directors or upon any other proposed action of the Company. When
this Agreement refers to Voting Stock held or voted by one or more members of
the ▇▇▇▇▇▇▇ Group such reference includes the shares of Voting Stock listed
under Column B of Schedule 1 hereto.
2. COVENANTS OF THE ▇▇▇▇▇▇▇ GROUP.
2.1. Standstill Provisions. For a period of two years following the
date of this Agreement, each member of the ▇▇▇▇▇▇▇ Group shall not (and shall
not permit any Affiliate to), directly or indirectly:
(a) acquire from other holders of Voting Stock or other
securities convertible into or exchangeable or exercisable for Voting
Stock, beneficial ownership of any Voting Stock, any securities
convertible into or exchangeable for Voting Stock, or any other right
to acquire Voting Stock (except, in any case, by way of stock
dividends, stock splits or other distributions made to holders of any
Voting Stock generally), or authorize or make a tender, exchange or
other offer which would result in such an acquisition, without the
prior written consent of the Company pursuant to approval by the Board
of Directors of the Company;
(b) deposit any shares of Voting Stock in a voting trust or
subject any Voting Stock to any arrangement or agreement with respect
to the voting of such Voting Stock if to do so would or could cause a
violation of any term of this Agreement;
(c) initiate, propose or solicit any change in the composition
of the Board of Directors or the number or terms of the directors
thereof or, except as required by law, make public statements with
respect thereto;
(d) initiate, propose or solicit any material change in the
business or corporate structure of the Company or to the Articles of
Incorporation or bylaws of the Company, or, except as required by law,
make public statements with respect thereto;
(e) solicit, or induce others to solicit, any "proxies" to
vote with respect to any securities issued by the Company or any of its
Affiliates, or become a "participant" or induce others to become a
"participant" in any solicitation of "proxies" to vote (as such terms
are used in Regulation 14A under the Securities Exchange Act of 1934)
securities issued by the Company or seek to advise or influence any
Person with respect to the voting of securities issued by Company;
(f) initiate, propose or solicit the acquisition, by purchase
or otherwise, from the Company or any other Person of securities issued
by the Company or assets of the Company or initiate, propose or solicit
any other form of restructuring, recapitalization, reorganization,
liquidation or similar transaction of the Company; or
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(g) otherwise act in any manner, whether by forming, joining
or participating with any Person or group, or aiding, advising,
encouraging, soliciting or assisting any other Person or group, whether
for the purpose of acquiring, holding, voting or disposing of Voting
Stock or accomplishing any of the foregoing (a) through (f) above,
including inviting, encouraging, soliciting or providing information to
assist the submission of any proposal for any of the foregoing.
2.2 Transferees. For a period of two years following the date of
this Agreement, the ▇▇▇▇▇▇▇ Group shall not sell, assign or transfer 5% or more
of the Outstanding Voting Stock to any Person (or any Affiliate of such Person)
in a transaction or a series of related transactions without such Person
purchasing such securities having agreed to and having become a party to this
Agreement with the Company.
3. VOTING OF STOCK. For a period of two years following the date of
this Agreement, all members of the ▇▇▇▇▇▇▇ Group (a) will vote all Voting Stock
they beneficially own "FOR" all proposals submitted by management or the Board
of Directors of the Company for approval or a vote by the shareholders of the
Company, including all nominations for the Board of Directors of the Company; or
(b) will vote all Voting Stock they beneficially own in the same proportion as
other shareholders of the Company on any matter brought to a vote of the
shareholders of the Company; or (c) will grant and deliver to the Chair of the
Special Committee or his designee or successor any and all conditional proxies
necessary to give effect to the obligations of the ▇▇▇▇▇▇▇ Group set forth in
this Section 3.
4. PROHIBITED TRANSFER. Any purchase which causes the ▇▇▇▇▇▇▇ Group to
be in violation of the terms of Section 2.2 above (a "Prohibited Transfer")
shall not be effected by the Company and shall be voidable at the option of the
Company by its giving written notice to the transferee and the ▇▇▇▇▇▇▇ Group.
5. LEGEND ON SHARE CERTIFICATES; SHARES NOT REQUIRING LEGEND.
5.1 Concurrent with the effective date of this Agreement, each member
of the ▇▇▇▇▇▇▇ Group shall be issued 90% of the number of shares of Voting Stock
opposite such member's name under Column B of Schedule 1 hereto on certificates
bearing the legend set forth in paragraph 5.2 below. At the effective date of
this Agreement the remaining ten percent of the Voting Stock of each ▇▇▇▇▇▇▇
Group member shall not be subject to the requirements of paragraph 5.2 and may
be issued either in certificated or uncertificated form, at the direction of the
respective ▇▇▇▇▇▇▇ Group members; such shares of Voting Stock shall be deemed
"Non-Legended Shares" as hereafter defined.
5.2 Unless otherwise expressly permitted in this Section 5, each
certificate representing shares of Voting Stock held by a member of the ▇▇▇▇▇▇▇
Group, including shares referred to on Schedule 1, hereto shall be endorsed by
the Company with a legend reading as follows:
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"THE SHARES EVIDENCED HEREBY ARE SUBJECT TO A STANDSTILL AND VOTING
AGREEMENT BY AND BETWEEN THE COMPANY AND THE HOLDER HEREOF (A COPY OF
WHICH MAY BE OBTAINED FROM THE COMPANY), AND NO TRANSFER OF THE SHARES
EVIDENCED HEREBY SHALL BE EFFECTIVE EXCEPT IN COMPLIANCE WITH THE TERMS
THEREOF."
Certificates bearing the foregoing legend are herein referred to as "Legended
Shares." At any time after two years from the date of this Agreement the
foregoing legend shall, upon request by the holder, promptly be removed by the
Company (or by the transfer agent at the direction of the Company) from all
Legended Shares unless a material breach of this Agreement by such holder
occurred prior to the expiration of such two-year period.
5.3 Notwithstanding the provisions of paragraph 5.2, each member of the
▇▇▇▇▇▇▇ Group may hold in certificated form or in "street name" up to that
number of shares of Voting Stock opposite the respective ▇▇▇▇▇▇▇ Group member's
name presented in Column C of Schedule 1 hereto without such shares bearing the
restrictive legend set forth in paragraph 5.2 ("Non-Legended Shares"). The
number of shares of Voting Stock opposite each ▇▇▇▇▇▇▇ Group member's name
presented in Column C of Schedule 1 hereto shall for purposes of this paragraph
5.3 be the "Maximum Non-Legended Shares" for such person. After the date hereof,
if any ▇▇▇▇▇▇▇ Group member shall sell, transfer or otherwise convey some or all
the Non-Legended Shares beneficially owned by such person, at the request of
such person the Company shall direct its transfer agent to reissue Legended
Shares as Non-Legended Shares if such person and any broker dealer facilitating
such transaction shall provide evidence reasonably satisfactory to the Company
that (a) the Non-Legended Shares sold, transferred or otherwise conveyed by such
person were sold, transferred or conveyed in a transaction or transactions not
prohibited by this Agreement and (b) after reissuing the proposed number of
Legended Shares as Non-Legended Shares the total number of Non-Legended Shares
shall not exceed the Maximum Non-Legended Shares applicable to such person.
5.4 At any time after the date hereof, if any ▇▇▇▇▇▇▇ Group member
shall propose to sell, transfer or otherwise convey some or all the Legended
Shares beneficially owned by such person (each a "Proposed Transfer"), at the
request of such person the Company shall instruct its transfer agent to transfer
such Legended Shares to the transferee in the Proposed Transaction if within a
reasonable period of time prior to the date of the Proposed Transfer such
▇▇▇▇▇▇▇ Group member and any broker dealer facilitating such transaction shall
provide evidence reasonably satisfactory to the Company that the Proposed
Transfer is not prohibited by this Agreement.
5.5 Except as expressly provided in this Section 5, all shares of
Voting Stock which are Non-Legended Shares shall be subject to all terms and
conditions of this Agreement. Further, notwithstanding that Non-Legended Shares
may be held in "street name," each ▇▇▇▇▇▇▇ Group member holding such
Non-Legended Shares shall cooperate with management of the Company and direct
the broker dealer holding such shares in street name to cooperate with Company
management to assure that such ▇▇▇▇▇▇▇ Group member is complying with the
provisions of
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Section 3 of this Agreement.
6. COMMUNICATIONS WITH THE COMPANY. Each member of the ▇▇▇▇▇▇▇ Group
agrees to conduct all communications with regard to the business of the Company
only with the Chief Executive Officer of the Company and will discontinue all
communications with any other member of the management of the Company or any
other employee of the Company as such communications relate to the business of
the Company.
7. COOPERATION. The Company shall cooperate with each member of the
▇▇▇▇▇▇▇ Group to develop arrangements whereby shares subject to the provisions
of this Agreement may be deposited with a broker, dealer or other financial
institution to enable the ▇▇▇▇▇▇▇ Group members to sell and margin their shares
in a manner which does not violate the provisions of this Agreement. Further,
the Company shall cooperate with the ▇▇▇▇▇▇▇ Group members to promptly release
shares from the provisions of this Agreement if such shares are sold in bona
fide transactions not violating any provisions of this Agreement.
8. MISCELLANEOUS.
8.1. Governing Law; Jurisdiction. This Agreement shall be governed by
and construed and enforced in accordance with the internal laws of the State of
Minnesota, and shall be binding upon the parties hereto. The federal and state
courts within County of Hennepin in the State of Minnesota shall have exclusive
jurisdiction to adjudicate any dispute arising out of this Agreement.
8.2. Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successor and assigns of the parties hereto.
8.3. Entire Agreement. This Agreement, together with the Escrow
Agreement and that certain Letter Agreement dated February 2, 2000, constitute
the full and entire understanding and agreement among the parties with regard to
the subject matter hereof and thereof. Neither this Agreement nor any provision
hereof may be amended, changed, waived, discharged or terminated other than by a
written instrument signed by the party against whom enforcement of any such
amendment, change, waiver, discharge or termination is sought.
8.4. Specific Enforcement. Each member of the ▇▇▇▇▇▇▇ Group
acknowledges and agrees that the breach of this Agreement would cause
irreparable damage to the Company and that the Company may not have an adequate
remedy at law. Accordingly, in the event of a breach of this Agreement by any
one or more members of the ▇▇▇▇▇▇▇ Group, the Company, in addition and
supplementary to any other rights and remedies existing in its favor, may apply
to any court of law or equity of competent jurisdiction for specific performance
and/or injunctive or other relief in order to enforce or prevent any violation
of the provisions hereof. Such remedies shall, however, be cumulative and not
exclusive and shall be in addition to any other remedies which
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the Company may have under this Agreement.
8.5. Notices, etc. All notices and other communications required or
permitted hereunder shall be effective upon receipt and shall be in writing and
may be delivered in person, by telecopy, electronic mail, express delivery
service or U.S. mail, in which event it may be mailed by first-class, certified
or registered, postage prepaid, addressed, to the party to be notified, at the
respective addresses set forth below, or at such other address which may
hereinafter be designated in writing:
(a) If to the ▇▇▇▇▇▇▇ Group, to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(b) If to the Company, to:
RTW, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
8.6. Binding Obligation. This Agreement shall be a binding obligation
on each ▇▇▇▇▇▇▇ Group member signing this Agreement notwithstanding that one or
more other ▇▇▇▇▇▇▇ Group members have not signed this Agreement.
8.7. Severability. If any provision of this Agreement shall be
judicially determined to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
8.8. Titles and Subtitles. The titles of the sections of this Agreement
are for convenience of reference only and in no way define, limit, extend or
describe the scope of this Agreement or the intent of any of its provisions.
8.9. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
8.10. Delays or Omissions. It is agreed that no delay or omission to
exercise any right, power or remedy accruing to any party upon any breach or
default of any other party under this Agreement shall impair any such right,
power or remedy, nor shall it be construed to be a waiver of any such breach or
default, or any acquiescence therein, or of any similar breach or default
thereafter occurring; nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter
occurring. It is further agreed that any waiver, permit, consent or approval of
any kind or character of any breach or default under this
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Agreement, or any waiver of any provisions or conditions of this Agreement must
be in writing and shall be effective only to the extent specifically set forth
in writing, and that all remedies, either under this Agreement, by law or
otherwise, shall be cumulative and not alternative.
8.11. Payment of Fees and Expenses. Each party shall be responsible for
paying its own fees, costs and expenses in connection with this Agreement and
the transactions herein contemplated.
8.12. Section References. Unless otherwise stated, any reference
contained herein to a Section or subsection refers to the provisions of this
Agreement.
8.13 Representation of Signatories. Each of the undersigned signatories
of entities which are parties hereto hereby agree that they are authorized to
sign for and bind such entity under this Agreement.
The remainder of this page is intentionally left blank.
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IN WITNESS WHEREOF, the parties have caused this Standstill and Voting
Agreement to be duly executed and delivered as of the day and year first written
above.
RTW, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Its: Chief Financial Officer
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/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ , on behalf of the
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/s/ J. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ III ▇▇▇▇▇ ▇. and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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J. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ III
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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, on behalf of the
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/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Irrevocable Trust
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ , on behalf of the
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Irrevocable Trust
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ , on behalf of the
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Irrevocable Trust
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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, on behalf of the
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 1995 Unitrust
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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, on behalf of the
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 1996 Unitrust
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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, on behalf of the
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 1997 Unitrust
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