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EXHIBIT 99.2
FIRST AMENDMENT TO
AGREEMENT AND PLAN OF MERGER
THIS FIRST AMENDMENT (the "First Amendment") to that certain Agreement
and Plan of Merger, dated as of August 13, 1998 (the "Agreement") among ▇▇▇▇
Industries, Inc. ("Parent"), ▇▇▇▇▇▇▇▇ Acquisition Corp. ("Subsidiary"), Queen
Carpet Corporation ("Company") and ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ Family
Trust, ▇▇▇▇▇▇ ▇▇▇▇ Family Trust and ▇▇▇▇▇ ▇▇▇▇ Schejola Family Trust
(collectively, "Shareholders") is entered into as of the 6th day of October,
1998, by and among PARENT, SUBSIDIARY, COMPANY and the SHAREHOLDERS in
accordance with the provisions of the Agreement. Capitalized terms used but not
defined herein shall have the meanings ascribed to them in the Agreement.
WHEREAS, the Agreement contemplated that the Company would be merged
with and into the Subsidiary, with the Subsidiary being the Surviving
Corporation;
WHEREAS, the parties hereto wish to amend the Agreement to provide that
(i) the Company will be merged with and into Parent (instead of Subsidiary),
with Parent being the Surviving Corporation, (ii) the Note to be delivered at
Closing be substituted with shares of common capital stock of M Corp., and under
certain circumstances, a cash payment, and (iii) certain other provisions be
revised to reflect the current agreement of the Parties.
NOW, THEREFORE, in consideration of the foregoing, the agreements set
forth below and other good and valuable consideration, the receipt and
sufficiency of which is acknowledged, the parties agree as follows:
1. The Agreement is hereby amended as follows:
A. Section 2.1 shall be deleted in its entirety and the
following shall be inserted in lieu thereof:
2.1 Merger.
Subject to the terms and conditions of this
Agreement, at the Effective Time, Company shall be merged with
and into Parent in accordance with the provisions of Section
14-2-1101 et seq. of the GBCC and with the effect provided in
Section 14-2-1106 of the GBCC (the "Merger"). Parent shall be
the Surviving Corporation resulting from the Merger (the
"Surviving Corporation") and shall continue to be governed by
the laws of the State of Georgia. The Merger shall be
consummated pursuant to the terms of this Agreement, which has
been approved and adopted by the respective boards of
directors of Company, Parent and Subsidiary, and has been
approved by the Shareholders as all of the shareholders of
Company, as required by applicable law.
B. Section 3.1 shall be deleted in its entirety and the
following shall be inserted in lieu thereof:
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3.1 Charter.
The Articles of Incorporation of Parent in effect
immediately prior to the Effective Time shall be the Articles
of Incorporation of the Surviving Corporation until duly
amended or repealed.
C. The word "Subsidiary" shall be deleted and the word
"Parent" inserted in lieu thereof in each of the following:
1. RECITALS - third sentence
2. SECTION 1 (DEFINITIONS)
"Contemplated Transactions" - subparagraph (d)
3. SECTION 3.2 (Bylaws)
4. SECTION 3.3 (Directors and Officers)
5. SECTION 4.1 (Conversion of Company Common Stock)
Paragraph (c) (iii)
6. SECTION 4.9 (Taking of Necessary Action; Further
Actions)
7. SECTION 6.2(a) (Authority; No Conflict)
8. SECTION 12.4 (Indemnification and Payment of Damages
by Parent - Other Matters)
9. SECTION 13.3 (Section 1362(e)(3) Election)
D. The fifth sentence of the recitals shall be deleted
in its entirety and the following shall be inserted in lieu thereof:
This Agreement also provides for the employment of Executive
as Executive Vice President of the Parent and President of the
Queen Carpet Division of the Parent and the appointment of
Executive to the Board of Directors of Parent.
E. The last sentence of Section 3.3 shall be deleted in
its entirety and the following shall be inserted in lieu thereof:
The officers of the Company at the Effective Time shall become
divisional officers of the Queen Carpet Division of Parent
with the same titles (together with such additional or
different officers as Parent shall appoint from time to time),
provided that Executive shall be elected Executive Vice
President of Parent and President of the Queen Carpet Division
of Parent.
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F. Section 4.1(c)(i)(A) shall be deleted in its entirety
and the following shall be inserted in lieu thereof:
(A) The sum of $70,000,000 which shall be deemed
delivered by means of the delivery by Parent of 3.15 million
shares of the common capital stock ("M Corp. Stock") of The
Maxim Group, Inc. ("M Corp."), freely transferable under
applicable federal and state securities laws, and free of all
Encumbrances, except restrictions on transfer of the M Corp.
Stock at any time prior to December 31, 1998 under that
certain Stock Purchase Option from the Parent in favor of M
Corp., a copy of which is attached to this First Amendment as
EXHIBIT A (the "M Corp. Option); provided that in the event
the aggregate value of M Corp. Stock valued as of the Closing
Date is less than $70,000,000, based on the closing price of M
Corp. Stock on the Closing Date as reported by the Wall Street
Journal published on the next business day, then in addition
to the delivery of 3.15 million shares of M Corp. Stock, fifty
percent (50%) of the amount by which $70,000,000 exceeds such
aggregate value of M Corp. Stock shall be paid by Parent
within two (2) business days following such determination in
cash, by wire transfer or other immediately available funds;
plus
G. The last sentence of Section 4.1(c)(ii)(B) shall be
deleted.
H. Section 4.2(a)(ii) shall be amended to delete the
reference to "Subsidiary".
I. Section 4.2(b)(ii) shall be amended to delete the
words "Subsidiary and".
J. Section 5.13(l) is hereby amended by adding at the
beginning of the subsection "Except as disclosed in Schedule 5.13(l), . . ."
K. Section 5.13(m) is hereby amended by adding at the
beginning of the subsection "Except as disclosed in Schedule 5.13(m),"
L. Section 6.2(a) shall be deleted in its entirety and
the following shall be inserted in lieu thereof:
(a) This Agreement constitutes the legal, valid and
binding obligation of Parent and Subsidiary, enforceable
against Parent and Subsidiary in accordance with its terms.
Upon execution and delivery by Parent of the Certificate of
Merger, the Employment Agreement and the Real Property
Agreements (collectively, the "Parent's Closing Documents"),
the Parent's Closing Documents will constitute the legal,
valid and binding obligations of Parent, enforceable against
Parent in accordance with their respective terms. Parent and
Subsidiary have the absolute and unrestricted right, power and
authority to execute and deliver this Agreement and the
Parent's Closing Documents and to perform their obligations
under this Agreement and the Parent's Closing Documents.
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M. Section 7.7(a) shall be deleted in its entirety and
the following shall be inserted in lieu thereof:
(a) Subject to the provisions of the GBCC, Company shall
be entitled to make one or more distributions on Company
Common Stock to its Shareholders in an aggregate amount of
$131 million. Such distribution shall result in a reduction of
Merger Consideration as provided in Section 4.1(c) of this
Agreement. In addition, Company shall be entitled to make tax
distributions as contemplated by Section 4.1(c)(ii)(A) in the
amount of $18.625 million, which tax distribution shall not
result in a reduction of Merger Consideration as provided in
Section 4.1(c) of this Agreement.
2. With respect of the provisions of Section 4.1(c)(ii) of the
Agreement, the Parties acknowledge and agree as follows:
(A) With respect to the provisions of subparagraph
(ii)(A), the reduction in the Merger Consideration as of the
Closing Date for dividends and other distributions as
contemplated by such subparagraph is in the aggregate amount
of $131 million and the amount of dividends and distributions
for estimated Tax payments which do not reduce Merger
Consideration as contemplated by such paragraph is $18.625
million.
(B) With respect to special bonuses contemplated by
subparagraph (i)(B), the amount of special bonuses shall be
$24,200,000 which shall be paid by Parent following the
Effective Time, fifty percent (50%) in cash and fifty percent
(50%) in shares of Parent Common Stock valued as determined
pursuant to the Executive Incentive Agreements between the
Company and the individual recipients of the bonuses, the form
of which is set forth as Exhibit B attached to this First
Amendment (the "Executive Incentive Agreements"). Special
bonus payments shall be made net of any tax withholdings. It
is acknowledged that the Board of Directors of the Company
have designated the bonus pool of participants and has advised
Parent of such designations and delivered originals of such
Executive Incentive Agreements to Parent.
3. Pursuant to Section 9.4(c) of the Agreement, Shareholders
shall deliver to Parent and M Corp. their written agreement as set forth in and
as part of the M Corp. Option, pursuant to which the Shareholders agree to
accept and be bound by all the terms and conditions of the M Corp. Option and
agree that all such terms and conditions shall be binding upon the Shareholders
and their successors, personal representatives and heirs to the same extent as
if the Shareholders had originally been a party to the M Corp. Option.
4. Except as modified by Paragraphs 1 and 2 of this First
Amendment, the Agreement shall remain in full force and effect.
5. This First Amendment shall be governed by the laws of the
State of Georgia without regard to conflicts of laws principles.
6. This First Amendment may be executed in counterparts and shall
be binding upon each party executing this or any counterpart.
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IN WITNESS WHEREOF, this First Amendment has been executed as of the
date and year first above written.
▇▇▇▇ INDUSTRIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Title: Vice President
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▇▇▇▇▇▇▇▇ ACQUISITION CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Title: Vice President
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QUEEN CARPET CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Title: Vice President Finance
-------------------------------------
/s/ ▇▇▇▇▇▇ ▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇ Schejola
--------------------------------------------
▇▇▇▇▇ ▇▇▇▇ SCHEJOLA
▇▇▇▇▇ ▇▇▇▇ FAMILY TRUST
By: /s/ ▇▇▇▇▇ ▇▇▇▇
----------------------------------------
▇▇▇▇▇ ▇▇▇▇, Trustee
▇▇▇▇▇▇ ▇▇▇▇ FAMILY TRUST
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
----------------------------------------
▇▇▇▇▇▇ ▇▇▇▇, Trustee
▇▇▇▇▇ ▇▇▇▇ SCHEJOLA FAMILY TRUST
By: /s/ ▇▇▇▇▇ ▇▇▇▇ Schejola
----------------------------------------
▇▇▇▇▇ ▇▇▇▇ Schejola, Trustee
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EXHIBIT A
STOCK PURCHASE OPTION
3,150,000 SHARES OF COMMON STOCK DATED OCTOBER 6, 1998
OF THE MAXIM GROUP, INC.
This certifies that, for value received, THE MAXIM GROUP, INC., a
Delaware corporation (the "Holder"), its successors and assigns, is entitled,
upon the due exercise hereof at any time during the period commencing on
October 6, 1998 and terminating at 5:00 E.S.T. on December 31, 1998, to
purchase from ▇▇▇▇ INDUSTRIES, INC., a Georgia corporation ("▇▇▇▇"), Three
Million One Hundred and Fifty Thousand (3,150,000) shares of Common Stock, par
value $.001 per share, of Maxim, such number of shares being subject to
adjustment upon the occurrence of the contingencies set forth in this Option.
The purchase price payable upon the exercise of this Option shall be $22.222
per share (hereinafter referred to as the "Exercise Price"), subject to
adjustment upon the occurrence of the contingencies set forth in this Option.
All references herein to "Maxim" shall mean The Maxim Group, Inc., a Delaware
corporation. Shares of Common Stock of Maxim that are subject to purchase upon
exercise of this Option are hereinafter referred to as the "Option Shares."
Section 1. Duration and Exercise of Option. This Option shall
expire on 5:00 p.m. Eastern Standard Time on December 31, 1998 (the "Expiration
Date"). After the Expiration Date, any unexercised portion of this Option will
be wholly void and of no value. This Option may be exercised by the Holder on
any business day beginning on October 6, 1998 and on or prior to the Expiration
Date. For purposes of this Option, the term "business day" means each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in New York, New York are authorized or obligated by law or
executive order to close.
Subject to the provisions of this Option, the Holder shall have the
right to purchase from ▇▇▇▇ (and ▇▇▇▇ shall as soon as practicable sell to such
Holder) Three Million One Hundred and Fifty Thousand (3,150,000) fully paid and
nonassessable Option Shares, including any shares of any class or series of
stock into which such shares may hereafter be changed and subject to the
adjustments contemplated by Section 3 hereof, at the Exercise Price, upon
surrender to ▇▇▇▇ of this Option, with the Form of Exercise attached thereto
duly filled in and executed by the Holder or its duly authorized agent and upon
payment of the Exercise Price in lawful money of the United States of America
in cash, or by wire transfer to ▇▇▇▇'▇ account (or the account of ▇▇▇▇'▇
successors, transferees or assigns) of immediately available funds. The number
of Shares, and the amount and type of securities or other property purchasable
upon exercise of this Option shall be subject to adjustment as provided in
Section 3.
Subject to Section 3, (i) upon such surrender of this Option and
payment of the Exercise Price on or prior to the Expiration Date, ▇▇▇▇ shall
deliver or cause to be delivered to the Holder certificates or other
appropriate instruments for any other securities, and such other property
issuable upon the exercise of this Option, in such name or names as the Holder
shall designate on the Form of Exercise attached thereto; and (ii) such Option
Shares, securities and other property shall be deemed to have been transferred
to, and any person so designated therein shall be deemed to have become, the
holder of record
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of such Option Shares, securities or property as of the date of the surrender
of this Option and payment of the Exercise Price.
This Option shall be exercisable, at the election of the Holder, in
whole but not in part.
Section 2. Transfers and Exchanges. With the prior written consent
of ▇▇▇▇ or its successors, transferees or assigns, which consent will not be
unreasonably withheld, this Option shall be transferable by the Holder, in
whole or in part, upon surrender of this Option at the office of ▇▇▇▇, together
with (i) a written assignment of this Option, duly executed by the Holder
thereof or his duly authorized agent, and (ii) funds required to pay any
transfer, documentary, stamp or other taxes or government charges payable in
connection with such transfer and any other amounts required pursuant to this
Option. Upon such surrender and payment, ▇▇▇▇ shall deliver a new Option, in
the name of the assignee and in the permissible denomination or denominations
specified in such instrument of assignment. If less than all of the Options are
being transferred, ▇▇▇▇ shall deliver a new Option to the Holder for the
portion of this Option not being transferred. ▇▇▇▇ shall cancel the Option
surrendered.
If this Option at any time becomes mutilated, lost, stolen or
destroyed, ▇▇▇▇ will issue in exchange and substitution for and upon
cancellation of the mutilated Option, or in lieu of and in substitution for the
Option lost, stolen or destroyed, a new Option of like tenor and representing
an equivalent Option, but only upon receipt of evidence satisfactory to ▇▇▇▇ of
such loss, theft or destruction of such Option and indemnity reasonably
satisfactory to ▇▇▇▇.
Section 3. Adjustment of Exercise Price and Number of Shares
Purchasable Hereunder. The Exercise Price and the number of Option Shares
purchasable upon the exercise of the Option are subject to adjustment from time
to time upon the occurrence of the events enumerated in this Section 3.
(a) In case Maxim shall at any time after the date of this
Option (i) declare a dividend on the Common Stock payable in shares of its
capital stock (whether shares of Common Stock or of capital stock of any other
class), (ii) subdivide the outstanding Common Stock, (iii) combine the
outstanding Common Stock into a smaller number of shares or (iv) issue any
shares of its capital stock in a reclassification of the Common Stock
(including any such reclassification in connection with a consolidation or
merger in which Maxim is the continuing corporation), the Exercise Price in
effect at the time of the record date for such dividend or of the effective
date of such subdivision, combination or reclassification, shall be
proportionately adjusted so that the Holder of the Option exercised after such
time shall be entitled to receive the aggregate number and kind of shares of
capital stock which, if such Option had been exercised immediately prior to
such date, it would have owned upon such exercise and been entitled to receive
by virtue of such dividend, subdivision, combination or reclassification. Such
adjustment shall be made successively whenever any event listed above shall
occur.
(b) No adjustment in the Exercise Price shall be required
unless such adjustment would require an increase or decrease of at least five
cents ($.05) in such price; provided, however, that any adjustments which by
reason of this Section 3(b) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment.
(c) In the event that at any time, as a result of an
adjustment made pursuant to Section 3(a) the Holder shall become entitled to
receive any shares of capital stock of Maxim other than
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shares of Common Stock, thereafter the number of such other shares so receivable
upon exercise of the Option shall be subject to adjustment from time to time in
a manner and on terms as nearly equivalent as practicable to the provisions
with respect to the Common Stock purchasable pursuant to this Option.
(d) Upon each adjustment of the Exercise Price as a result
of the calculations made in Section 3(a), the Option outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Exercise Price, that number of Option Shares
(calculated to the nearest hundredth) obtained by (A) multiplying the number of
Option Shares purchasable upon exercise of the Option immediately prior to such
adjustment of the number of Option Shares by the Exercise Price in effect
immediately prior to such adjustment of the Exercise Price and (B) dividing the
product so obtained by the Exercise Price in effect immediately after such
adjustment of the Exercise Price.
(e) In case of any capital reorganization of Maxim, or of
any reclassification of the Common Stock (other than a change in par value, or
from par value to no par value, or as a result of subdivision or combination),
or in case of the consolidation of Maxim with or the merger of Maxim with any
other corporation or association (other than a consolidation or merger in which
(i) Maxim is the continuing corporation and (ii) the holders of Maxim's Common
Stock immediately prior to such merger or consolidation continue as holders of
Common Stock after such merger or consolidation) or of the sale of the
properties and assets of Maxim as, or substantially as, an entirety to any
other corporation or association, the Option shall after such reorganization,
reclassification, consolidation, merger or sale be exercisable, upon the terms
and conditions specified herein, for the number of shares of stock or other
securities or property to which a holder of the number of Option Shares
purchasable (at the time of such reorganization, reclassification,
consolidation, merger or sale) upon exercise of such Option would have been
entitled upon such reorganization, reclassification, consolidation, merger or
sale; and in any such case, if necessary, the provisions set forth in this
Section 3 with respect to the rights and interests thereafter of the holder of
the Option shall be appropriately adjusted so as to be applicable, as nearly as
may reasonably be, to any shares of stock or other securities or property
thereafter deliverable on the exercise of the Option. The subdivision or
combination of shares of Common Stock at any time outstanding into a greater or
lesser number of shares shall not be deemed to be a reclassification of the
Common Stock for the purposes of this Section 3(e).
Section 4. No Rights as Stockholders. Nothing contained in this
Option shall be construed as conferring upon the Holder the right to vote,
receive dividends or to be deemed for any purpose the holder of Option Shares
or of any other securities of Maxim that may at any time be issuable on the
exercise of this Option, nor shall anything contained herein be construed to
confer upon the Holder, as such, any of the rights of a stockholder of Maxim or
any right to vote on matters submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action (whether upon any
recapitalization, issue of stock, reclassification of stock, change of par
value, consolidation, merger, conveyance, or, without limitation, otherwise),
or to receive notice of meetings, or to receive subscription rights or
otherwise, until this Option shall have been exercised as provided herein.
Section 5. Representations, Warranties and Covenants. (a) ▇▇▇▇
represents, warrants and agrees with the Holder that:
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(i) ▇▇▇▇ is a corporation duly organized, validly
existing and in good standing under the laws of the its state of incorporation.
▇▇▇▇ has all requisite corporate power and authority to carry out and perform
its obligations under this Option.
(ii) This Option has been duly authorized, executed
and delivered by ▇▇▇▇ and constitutes the valid and binding obligation of ▇▇▇▇
enforceable in accordance with its terms subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.
(iii) No consent, approval, authorization or order
of any court or governmental agency or body is required to be obtained by ▇▇▇▇
for the sale and issuance of this Option or the sale and issuance of the Option
Shares issuable upon exercise of this Option. Upon exercise of this Option by a
Holder thereof, good and valid title to the Option Shares shall be delivered to
such holder free and clear of all liens, encumbrances, equities or claims and
such shares will be fully paid and nonassessable.
(b) ▇▇▇▇ agrees that it will not, without the prior written
consent of Maxim, directly or indirectly, offer, sell, exchange, pledge,
hypothecate, encumber, transfer, assign or otherwise dispose of (collectively,
a "transfer") any Option Shares on or before the Expiration Date. Any attempt
to transfer or encumber any Option Shares other than in accordance with the
terms of this Option shall be null and void and neither Maxim nor any transfer
agent of such securities shall give any effect to such attempted transfer or
encumbrance in its stock records.
Notwithstanding the foregoing and any provisions in that certain
Shareholder's Agreement, dated August 9, 1998, by and between ▇▇▇▇ and Maxim,
Maxim hereby consents to the transfer of the Option Shares to those
shareholders of Queen Carpet Corporation set forth on the signature page of
this Option (the "Queen Shareholders"); provided that each of the Queen
Shareholders, on or prior to any such transfer, executes this Option. By their
execution of this Option, each of the Queen Shareholders agrees that upon any
such transfer to them of the Option Shares, they shall each be bound by all the
terms and conditions of this Option applicable to ▇▇▇▇, and that all such terms
and conditions shall be binding upon the Queen Shareholders and their
successors, personal representatives and heirs to the same extent as if the
Queen Shareholders had originally been grantors of this Option to the Holder.
Upon any such transfer of the Option Shares by ▇▇▇▇, ▇▇▇▇ shall cease to have
any rights under this Option.
(c) Maxim has been advised by the Securities and Exchange
Commission (the "SEC") that the Registration Statement on Form S-3 filed by
Maxim with the with respect to the Option Shares (SEC Registration No.
333-62975) was declared effective by the SEC on October 2, 1998.
Section 6. Legends. (a) Upon the execution of this Option, in addition
to any other legend which is required under the Securities Act of 1933, as
amended, and certain state securities laws, all certificates representing the
Option Shares shall be endorsed as follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
THE PROVISIONS OF A STOCK PURCHASE OPTION DATED AS OF OCTOBER
6, 1998, BETWEEN THE COMPANY AND THE REGISTERED HOLDER OF
THIS
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CERTIFICATE AND, EXCEPT AS SET FORTH IN SUCH AGREEMENT,
MAY NOT BE TRANSFERRED OR SOLD PRIOR TO 5:00 P.M. EASTERN
STANDARD TIME ON DECEMBER 31, 1998. A COPY OF THE ABOVE
REFERENCED OPTION IS ON FILE AT THE PRINCIPAL OFFICE OF THE
COMPANY.
Upon the execution of this Option, ▇▇▇▇ shall promptly deliver the Option
Shares to Maxim so that the legend set forth above may be affixed thereto.
(b) Upon the Expiration Date, the holder of any certificate
representing the Option Shares shall be entitled to receive from Maxim, without
expense, upon delivery to Maxim of the existing certificate representing such
Option Shares, a new certificate not bearing the restrictive legend set forth
in this Section 6.
Section 7. Notices. All instructions, notices and other
communications to be given to any party hereto shall be in writing and shall be
personally delivered or sent by first class or certified mail, postage prepaid
and return receipt requested, and shall be deemed to be given for purposes of
this Option on the day when delivered to the intended party at its address
specified below:
(a) If to ▇▇▇▇:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President
or such other address as ▇▇▇▇ may designate from time to time by written notice
to the Holder.
(b) If to the Holder:
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President
or such other address as the Holder may designate from time to time by written
notice to ▇▇▇▇.
(c) If to the Queen Shareholders:
c/o ▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
or such other address as the Queen Shareholders may designate from time to time
by written notice to the Holder.
Section 8. Supplements and Amendments. This Option may be amended
and supplemented in writing signed by ▇▇▇▇ or its successors or assigns and the
Holder.
Section 9. Successors. This Option shall be binding upon and inure
to the benefit of the respective successors and permitted assigns hereunder of
▇▇▇▇ or any Holder.
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Section 10. Termination. This Option shall terminate at the close of
business on the Expiration Date. Notwithstanding the foregoing, this Option
will terminate on any earlier date when this Option has been exercised.
Section 11. Governing Law. This Option shall be governed by and
construed in accordance with the laws of the State of Georgia.
Section 12. Benefits of this Agreement. Nothing in this Option shall
be construed to give to any person or corporation other than ▇▇▇▇ and the
Holder of this Option any legal or equitable right, remedy or claim under this
Option, and this Option shall be for the sole and exclusive benefit of ▇▇▇▇ and
the Holder hereof.
Section 13. Severability. If any provision of this Option is held to
be illegal, invalid or unenforceable under present or future laws effective
during the term hereof, such provision shall be fully severable; this Option
shall be construed and enforced as if such illegal, invalid or unenforceable
provision had never comprised a part hereof; and the remaining provisions of
this Option shall remain in full force and effect and shall not be affected by
the illegal, invalid or unenforceable provision or its severance from this
Option. Furthermore, in lieu of such illegal, invalid or unenforceable
provision there shall be added automatically as a part of this Option a
provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible and be legal, valid and enforceable.
Section 14. Specific Performance. ▇▇▇▇ stipulates that the remedies
at law available to a Holder, or to a holder of Common Stock of Maxim issued
pursuant to the exercise of this Option, in the event of any default or
threatened default by ▇▇▇▇ in the performance of or compliance with any of the
terms of this Option are not and will not be adequate. Therefore, ▇▇▇▇ agrees
that the terms of this Option may be specifically enforced by a decree for the
specific performance of any agreement or obligation contained herein or by an
injunction prohibiting violation of any of the terms hereof or otherwise.
Section 15. Headings. The section and subsection headings herein are
for convenience only and shall not affect the construction hereof.
Section 16. Counterparts. This Option may be executed in any number
of counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
-6-
12
IN WITNESS WHEREOF, ▇▇▇▇ has caused this Option to be duly executed as
of the day and year first above written.
▇▇▇▇ INDUSTRIES, INC.
By:
----------------------------------------
Name:
---------------------------------------
Title:
-------------------------------------
ACCEPTED AND AGREED to
this 6th day of October, 1998
THE MAXIM GROUP, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
[Signatures continued on next page.]
-7-
13
ACCEPTED AND AGREED to
this 6th day of October, 1998
"QUEEN SHAREHOLDERS"
----------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------------------
▇▇▇▇▇ ▇▇▇▇ Schejola
▇▇▇▇▇▇ ▇. ▇▇▇▇ FAMILY TRUST
By:
-------------------------------------------
Name:
--------------------------------------
Title:
-----------------------------------
▇▇▇▇▇ ▇▇▇▇ SCHEJOLA FAMILY TRUST
By:
-------------------------------------------
Name:
--------------------------------------
Title:
-----------------------------------
▇▇▇▇▇ ▇▇▇▇ FAMILY TRUST
By:
-------------------------------------------
Name:
--------------------------------------
Title:
-----------------------------------
-8-
14
FORM OF EXERCISE
[Form to be executed upon exercise of Option]
The undersigned holder of the within Option hereby (1) purchases
__________shares of Common Stock of The Maxim Group, Inc. which the undersigned
is entitled to purchase under the terms of the within Option, (2) makes the
Exercise Price payment therefor called for by the within Option, and (3)
directs that the shares issuable upon exercise of said Option be issued as
follows:
-------------------------------
(Name)
-------------------------------
(Address)
Signature:
---------------------
Dated:
---------------------------
-9-
15
EXHIBIT B
EXECUTIVE INCENTIVE AGREEMENT
THIS AGREEMENT (this "Agreement") is entered into and executed on the
day and date noted on the last page hereof by and between QUEEN CARPET
CORPORATION, a Georgia corporation (the "Company"), and _______________________
(the "Executive"), a resident of the State of ________________________.
W I T N E S S E T H:
WHEREAS, the Company has entered into an Agreement and Plan of Merger,
dated August 13, 1998 as amended by a First Amendment to Agreement and Plan of
Merger to be dated as of the Closing Date (the "Merger Agreement"), pursuant to
which the Company shall be acquired by ▇▇▇▇ Industries, Inc., a Georgia
corporation ("▇▇▇▇"), through the merger of the Company with and into ▇▇▇▇ or
▇▇▇▇▇▇▇▇ Acquisition Corp., a wholly-owned subsidiary of ▇▇▇▇; and
WHEREAS, the Company desires to retain the Executive's services, which
are highly valued and important to the operations of the Company, until the
closing of the transactions contemplated under the Merger Agreement (the
"Closing"), and also desires to retain the Executive's services to assist in
effectuating the Closing and ensuring that the Closing actually occurs;
WHEREAS, in order to retain the Executive's services and assistance
during this process and to provide additional compensation to Executive for his
past service to the Company, the Company desires to provide the Executive
certain retention incentives; and
WHEREAS, pursuant to Section 4.1(c)(ii)(B) of the Merger Agreement,
the Incentive Amount (as defined below) payable hereunder will be paid 50% in
▇▇▇▇ Common Stock ("▇▇▇▇ Stock") and 50% in cash;
NOW, THEREFORE, the parties hereto agree as follows:
1. Incentive Amount. In consideration for the Executive remaining an
employee of the Company through the Closing and to provide additional
compensation to Executive for his past service to the Company, if the Executive
remains employed by the Company through and until the Closing,, then, upon the
completion of the Closing, the Company shall pay to Executive within five (5)
business days immediately following the Closing, a single lump sum payment in
the amount of ___________________________________________________ dollars
($_________________________) (the "Incentive Amount"), payable 50% in cash and
50% in ▇▇▇▇ Stock. The number of shares of ▇▇▇▇ Stock paid shall be determined
based upon the closing price of a share of ▇▇▇▇ Stock on the New York Stock
Exchange, Inc. on the date of the Closing, as reported by the Wall Street
Journal, published on the next business day after the date of the Closing.
Executive and the Company understand that no amount shall be payable to the
Executive pursuant to this Agreement in the event that the Closing is never
completed and effectuated or the Merger Agreement is terminated.
2. Payment of Incentive Amount. The Incentive Amount payable under
this Agreement to the Executive shall be paid subject to and reduced by any
applicable federal, state and/or local income and/or payroll tax withholding
and reporting requirements. If for any reason the entire amount payable under
this Agreement is not paid in full when due, then interest, at a per annum rate
equal to the then "prime rate" of interest as reported in the Wall Street
Journal on the day of Closing, plus _________________ percent (_________%),
shall accrue with respect to any such unpaid amounts until such amounts are
paid to the Executive.
16
3. Miscellaneous.
A. EXECUTIVE AGREES TO HOLD THE TERMS OF THIS AGREEMENT,
INCLUDING THE INCENTIVE AMOUNT, CONFIDENTIAL, AND NOT TO DISCLOSE THE TERMS OF
THIS AGREEMENT TO ANY PERSON, FIRM OR CORPORATION THAT IS NOT A PARTY TO THIS
AGREEMENT, EXCEPT (I) WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY, (II) TO
EXECUTIVE'S ATTORNEYS, ACCOUNTANTS AND FINANCIAL ADVISORS FOR THE PURPOSE OF
THEIR RENDERING SERVICES TO EXECUTIVE WITH RESPECT TO THIS AGREEMENT OR THE
INCENTIVE AMOUNT, OR (III) AS MAY OTHERWISE BE REQUIRED BY LAW. EXECUTIVE SHALL
REQUIRE THAT HIS ATTORNEYS, ACCOUNTANTS AND FINANCIAL ADVISORS HOLD THE TERMS
OF THIS AGREEMENT, INCLUDING THE INCENTIVE AMOUNT, CONFIDENTIAL, AND NOT TO
DISCLOSE THE TERMS OF THIS AGREEMENT TO ANY PERSON, FIRM OR CORPORATION THAT IS
NOT A PARTY TO THIS AGREEMENT EXCEPT AS EXPRESSLY SET FORTH HEREIN.
B. The parties agree that any dispute regarding the terms and
provisions of this Agreement shall be subject to venue in the State of Georgia
and shall be governed by the laws of the State of Georgia.
C. The terms, conditions, and obligations of this Agreement shall
inure to the benefit of and be binding upon the parties hereto and the
respective successors and assigns thereof.
D. This Agreement shall terminate on December 31, 1999, unless
extended by written mutual agreement by the parties provided, however, that
Section 3.A. hereof shall survive indefinitely. This Agreement may be amended
or terminated only by a written instrument executed by each party hereto.
E. This Agreement sets forth the entire agreement between the
parties with respect to the subject matter contained herein and supersedes all
prior agreements, arrangements or other communications, whether oral or
written.
F. The terms and provisions of this Agreement shall not require
the Company to consummate the Closing, to pursue any particular transaction or
structure of transaction, or to achieve any particular result or price in any
transaction that the Company chooses to pursue.
IN WITNESS WHEREOF, the parties hereto affixed their signatures as of
the ________ day of September, 1998.
COMPANY:
QUEEN CARPET CORPORATION
By:
---------------------------------
Title:
------------------------------
EXECUTIVE:
-------------------------------------
Name:
--------------------------------