<PAGE> 1
CUSIP No. 377339106 (Page 1 of 8 Pages)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(AMENDMENT NO. 3)
Gleason Corporation
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock
- --------------------------------------------------------------------------------
(Title of Class of Securities)
377339106
- --------------------------------------------------------------------------------
(CUSIP Number)
Ralph E. Harper, Secretary and Treasurer
Gleason Foundation
P.O. Box 22970
1000 University Avenue
Rochester, New York 14692-2970
(716) 241-4030
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
DECEMBER 8, 1999
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check
the following box: [ ]
<PAGE> 2
CUSIP No. 377339106 (Page 2 of 8 Pages)
<TABLE>
13D
================================================================================
<S> <C> <C> <C>
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
Gleason Foundation
ID NO. 16-6023235
================================================================================
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [x]
(b) [ ]
================================================================================
3 SEC USE ONLY
================================================================================
4 SOURCE OF FUNDS:
OO
================================================================================
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
================================================================================
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
================================================================================
NUMBER OF 7 SOLE VOTING POWER:
SHARES
BENEFICIALLY -0-
OWNED BY EACH ===========================================================
REPORTING
PERSON WITH 8 SHARED VOTING POWER:
1,197,346
===========================================================
9 SOLE DISPOSITIVE POWER:
-0-
===========================================================
10 SHARED DISPOSITIVE POWER:
1,197,346
================================================================================
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,416,527(1)
================================================================================
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [X]
================================================================================
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.7%
================================================================================
14 TYPE OF REPORTING PERSON
CO
================================================================================
</TABLE>
(1) The amount shown includes options, which are exercisable within the next 60
days, to purchase an aggregate of 56,750 shares.
<PAGE> 3
CUSIP No. 377339106 (Page 3 of 8 Pages)
ITEM 1. SECURITY AND ISSUER.
This Amendment No. 3 to Schedule 13D relates to the common stock, par
value $1.00 per share (the "Company Common Stock"), of Gleason
Corporation, a Delaware corporation (the "Company"), with principal
executive offices at 1000 University Avenue, Rochester, New York
14692-2970.
ITEM 2. IDENTITY AND BACKGROUND.
(a) The name of the person filing the statement is Gleason
Foundation (the "Foundation").
(b) The address of the Foundation is P.O. Box 22970, 1000 University
Avenue, Rochester, New York 14692-2970.
(c) The directors and executive officers of the Foundation are:
Edward C. Atwater, director, c/o Gleason Foundation, P.O.
Box 22970, 1000 University Avenue, Rochester, New York
14692-2970. Dr. Atwater is retired.
Tracy R. Gleason, President and director, c/o Gleason
Foundation, P.O. Box 22970, 1000 University Avenue, Rochester,
New York 14692-2970. Ms. Gleason is a community volunteer.
Ralph E. Harper, Secretary, Treasurer and director, c/o
Gleason Foundation, P.O. Box 22970, 1000 University Avenue,
Rochester, New York 14692-2970. Mr. Harper is retired.
Gary J. Kimmet, Vice President and director, c/o Gleason
Foundation, P.O. Box 22970, 1000 University Avenue, Rochester,
New York 14692-2970. Mr. Kimmet is employed by the Company
as Vice President - Worldwide Sales and Marketing.
Albert W. Moore, director, c/o Gleason Foundation, P.O. Box
22970, 1000 University Avenue, Rochester, New York 14692-2970.
Mr. Moore is retired.
(d) During the last five years, neither the Foundation nor any of
its directors or executive officers has been convicted in a
criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) During the last five years, neither the Foundation nor any of
its directors or executive officers has been a party to a civil
proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is
subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation
with respect to such laws.
(f) The Foundation is a New York not-for-profit corporation. All of
the directors and executive officers of the Foundation are U.S.
citizens.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The consideration for the Foundation's execution of the Foundation
Agreement (as hereinafter defined) is the various agreements contained
in the Foundation Agreement, as more fully described in Item 4 and Item
6 hereof.
<PAGE> 4
CUSIP No. 377339106 (Page 4 of 8 Pages)
ITEM 4. PURPOSE OF TRANSACTION.
The Foundation is filing this Amendment No. 3 to Schedule 13D because it
has entered into an agreement with respect to a transaction by which
Torque Acquisition Co., L.L.C., a Delaware limited liability company
("Acquisition Company"), and James S. Gleason, certain parties related
to him, and certain other members of the management of the Company
(collectively, the "Acquisition Parties") propose to acquire all of
the outstanding shares of the Company Common Stock (the "Acquisition"),
excluding certain of the shares already owned by the Acquisition
Parties and by the Foundation. The Foundation is not an Acquisition
Party.
The Acquisition is proposed by Acquisition Company and the
Acquisition Parties to be accomplished through a two-step transaction
in which Acquisition Company and the Company will offer to purchase
outstanding shares of Company Common Stock for cash (the "Offer"),
followed by a merger (the "Merger") of the Company and a
wholly-owned subsidiary of Acquisition Company, in which the Company's
remaining stockholders would receive Merger consideration in cash.
Pursuant to that certain Foundation Agreement dated December 8, 1999,
between Acquisition Company and the Foundation (the "Foundation
Agreement"), the Foundation has agreed not to tender any of its shares
of Company Common Stock in the Offer, to vote all of its shares of
Company Common Stock in favor of the Merger, and to retain certain of
its shares following the Offer and the Merger. The terms of the
Foundation Agreement are more fully described in Item 6 hereof.
Item 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) and (b) (i) The Foundation beneficially owns 1,197,346 shares of
Company Common Stock, which represent 12.5% of the issued and
outstanding shares of the Company Common Stock as of November
30, 1999. By virtue of the Foundation Agreement, the Foundation
beneficially owns no shares with sole dispositive or voting
power, and 1,197,346 shares of Company Common Stock with shared
dispositive and voting power. Such shared dispositive and voting
power is shared with Acquisition Company, as more fully
described in Item 6 hereof.
(ii) Dr. Atwater beneficially owns 2,050 shares of
Company Common Stock, which represent 0.0 % of the issued and
outstanding shares of the Company Common Stock as of November
30, 1999. Dr. Atwater beneficially owns, with sole dispositive
and voting power, 1,200 shares of Company Common Stock. Dr.
Atwater owns no shares with shared voting or dispositive power.
(iii) Ms. Gleason beneficially owns 122,906 shares of
Company Common Stock, which represent 1.3% of the issued and
outstanding shares of the Company Common Stock as of November
30, 1999. Of these 122,906 shares, Ms. Gleason beneficially
owns 65,056 shares by virtue of her position as trustee under
the GST Exempt Trust for the benefit of James S. Gleason under
Article Third (E) of the Trust Under Agreement dated March 8,
1989, with Lawrence C. Gleason, and the Non Exempt Trust for
the benefit of James S. Gleason under Article Third (F) of the
Trust Under Agreement dated March 9, 1989, with Lawrence C.
Gleason (the "Trusts"). Ms. Gleason beneficially owns, with sole
dispositive and voting power, 122,906 shares of Company Common
Stock. Ms. Gleason owns no shares with shared voting or
dispositive power.
(iv) Mr. Harper beneficially owns 47,365 shares of
Company Common Stock, which represent 0.5 % of the issued and
outstanding shares of the Company Common Stock as of November
30, 1999. Mr. Harper beneficially owns, with sole dispositive
and voting power, 6,865 shares of Company Common Stock. Mr.
Harper owns no shares with shared voting or dispositive power.
In addition, he owns options, which are exercisable within the
next 60 days, to purchase 40,500 shares of Company Common Stock.
<PAGE> 5
CUSIP No. 377339106 (Page 5 of 8 Pages)
(v) Mr. Kimmet beneficially owns 31,696 shares of Company
Common Stock, which represent 0.3 % of the issued and outstanding
shares of the Company Common Stock as of November 30, 1999. Mr.
Kimmet beneficially owns, with sole dispositive and voting power,
15,446 shares of Company Common Stock. Mr. Kimmet owns no shares
with shared voting or dispositive power. In addition, he owns
options, which are exercisable within the next 60 days, to
purchase 16,250 shares of Company Common Stock.
(vi) Mr. Moore beneficially owns 15,164 shares of Company
Common Stock, which represent 0.2 % of the issued and outstanding
shares of the Company Common Stock as of November 30, 1999. Mr.
Moore beneficially owns, with sole dispositive and voting power,
4,248 shares of Company Common Stock. Mr. Moore owns no shares
with shared voting or dispositive power.
(vii) By virtue of the Foundation Agreement, the Foundation
may be deemed to have formed a "group" (within the meaning of
Section 13(d)(3) of the Securities Exchange Act of 1934) with
Acquisition Company and, therefore, to have shared voting and
dispositive power over the shares of Company Common Stock
beneficially owned by Acquisition Company and by the Acquisition
Parties. Such shares amount to an additional 635,936.6 shares of
Company Common Stock, which represent 6.3% of the issued and
outstanding shares of the Company Common Stock as of November
30, 1999. (Such number of shares excludes the shares
beneficially owned by Mr. Kimmet, which are instead reported in
Item 5 (a) and (b) (v) hereof, and the shares beneficially owned
by the Trusts, which are instead reported in Item 5(a) and
(b)(iii) hereof.) However, the filing of this Amendment No. 3 to
Schedule 13D shall not be construed as an admission that the
Foundation or its directors and executive officers are, for
purposes of Section 13(d) or 13(g) of the Exchange Act, the
beneficial owners of any securities beneficially owned by
Acquisition Company or by the Acquisition Parties.
(c) There have been no transactions in Company Common Stock made
by the Foundation or any of its directors or executive
officers during the past 60 days.
The Foundation is advised that Acquisition Company and the
Acquisition Parties have reported their transactions in Company
Common Stock during the past 60 days in their Schedule 13D filed
on December 9, 1999.
(d) Except as has been reported in filings made by any of the
Company's stockholders under Section 13(d) or 13(g) of the
Securities Exchange Act of 1934, no other person is known to have
the right to receive or the power to direct the dividends from,
or the proceeds from the sale of, the shares described in Item 5
(a) and (b) (i) through (vi) hereof.
The Foundation is advised that Acquisition Company and the
Acquisition Parties have reported in their Schedule 13D filed
on December 9, 1999 whether any person is known to them to
have the right to receive or the power to direct the dividends
from, or the proceeds from the sale of, the shares described
in Item 5 (a) and (b) (vii) hereof.
<PAGE> 6
CUSIP No. 377339106 (Page 6 of 8 Pages)
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE REGISTRANT.
Under the terms of the Foundation Agreement, the Foundation has agreed
with Acquisition Company:
(i) not to tender any of its shares of Company Common Stock
pursuant to the Offer;
(ii) to vote all of its shares of Company Common Stock in favor of
the Merger;
(iii) not to transfer any of its Company Common Stock during the
term of the Foundation Agreement;
(iv) to retain 202,000 of its shares of Company Common Stock
following the Offer and the Merger;
(v) to have 60,000 of its shares of Company Common Stock converted
in the Merger into the right to receive, after consummation of
the Merger, shares of a new series of preferred stock and
warrants; and
(vi) to have its remaining 935,346 shares of Company Common Stock
(the "Remaining Shares") treated, at its election, in one of
the following ways:
(A) each Remaining Share would be converted in the Merger
into the right to receive the cash Merger
consideration; or
(B) up to 485,000 of the Remaining Shares would be
converted in the Merger into the right to receive,
after consummation of the Merger, shares of the new
series of preferred stock and warrants, and the rest
of the Remaining Shares would be converted in the
Merger into the right to receive the cash Merger
consideration.
The Foundation has granted an irrevocable proxy to Acquisition Company
to vote the Foundation's Company Common Stock in favor of the Merger.
The Foundation Agreement also provides for certain matters following
consummation of the Merger, including the Foundation's execution of a
Stockholders' Agreement with Acquisition Company and the Acquisition
Parties.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Foundation Agreement.
<PAGE> 7
CUSIP No. 377339106 (Page 7 of 8 Pages)
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
accurate.
Dated: December 10, 1999 Gleason Foundation
By: /s/ Ralph E. Harper
----------------------------
Ralph E. Harper
Secretary and Treasurer
<PAGE> 8
CUSIP No. 377339106 (Page 8 of 8 Pages)
EXHIBIT INDEX
NUMBER EXHIBIT
- ------ -------
1 Foundation Agreement
<PAGE> 9
EXHIBIT 1
FOUNDATION AGREEMENT
THIS FOUNDATION AGREEMENT, dated as of December 8, 1999 (this
"Agreement"), is by and between Torque Acquisition Co., L.L.C., a Delaware
limited liability company ("Acquisition Company"), and Gleason Foundation, a
private charitable foundation (the "Foundation").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Acquisition Company has previously presented to a Special
Committee of the Board of Directors of Gleason Corporation, a Delaware
corporation (the "Company"), a written proposal (the "Proposal") to acquire the
Company for cash at a price of $21.50 per share (which was subsequently
increased to $23 per share (the "Price per Share")) of common stock, par value
$1.00 per share, of the Company (the "Company Common Stock") pursuant to an
Agreement and Plan of Merger (the "Merger Agreement") to be entered into by and
among the Company, Acquisition Company and a wholly-owned subsidiary of
Acquisition Company ("Merger Subsidiary"), providing that, upon the terms and
subject to the conditions thereof, (i) the Company and Acquisition Company shall
jointly commence a cash tender offer (the "Offer") to purchase any and all
shares of Company Common Stock, and (ii) Merger Subsidiary shall merge with and
into the Company (the "Merger"), with the Company continuing as the surviving
corporation;
WHEREAS, as of the date hereof, the Foundation is the record and
beneficial owner of, and has the sole right to vote and dispose of, the number
of shares of Company Common Stock set forth on the signature page hereto (the
"Shares");
WHEREAS, Acquisition Company has provided to the Foundation copies
of the Proposal, a draft of the Merger Agreement, a form of Certificate of
Designation with respect to the Series A Preferred (as defined in the Merger
Agreement) and a term sheet setting forth the principal proposed terms of the
Warrants (as defined in the Merger Agreement);
WHEREAS, Acquisition Company has provided to the Foundation a copy
of the Stockholders' Agreement (as defined herein); and
WHEREAS, as an inducement and a condition to its entering into the
Merger Agreement and incurring the obligations set forth therein, Acquisition
Company wishes to obtain certain commitments from the Foundation with respect to
the Shares;
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements contained herein, the
parties hereto, intending to be legally bound hereby, agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF FOUNDATION. The Foundation
hereby represents, warrants and covenants to Acquisition Company as follows:
<PAGE> 10
(a) The Foundation is a legal entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization. The Foundation has all requisite power and
authority to execute and deliver this Agreement and perform its obligations
hereunder. The execution and delivery by the Foundation of this Agreement and
the performance by the Foundation of its obligations hereunder have been duly
and validly authorized by the Investment Committee of the Foundation, and no
other action on the part of the Foundation is necessary to authorize the
execution, delivery or performance by the Foundation of this Agreement or the
consummation by the Foundation of the transactions contemplated hereby.
(b) This Agreement has been duly and validly authorized, executed
and delivered by the Foundation and, assuming its due authorization, execution
and delivery by Acquisition Company, constitutes a valid, binding and
enforceable agreement of the Foundation; except that (i) such enforcement may be
subject to applicable bankruptcy, insolvency, reorganization or other similar
laws now or hereafter in effect affecting the rights of creditors generally, and
(ii) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
(c) The Foundation is the sole record holder and beneficial owner
(as defined in Rule 13d-3 under the Securities Exchange Act of 1933, as amended
(the "Exchange Act"), which meaning shall apply for all purposes of this
Agreement), of, and has good and marketable title to, all of the Shares, and
there exist no liens, claims, options, proxies, voting agreements, security
interests, charges or encumbrances of any nature (collectively, the "Liens")
affecting the Shares.
(d) Except for the Shares, the Foundation does not, directly or
indirectly, beneficially own or have any option, warrant or other right to
acquire any securities of the Company, nor is the Foundation a party to any
agreement (whether or not legally enforceable) relating to any securities of the
Company.
2. REPRESENTATIONS AND WARRANTIES OF ACQUISITION COMPANY.
Acquisition Company hereby represents, warrants and covenants to the Foundation
as follows:
(a) Acquisition Company is a limited liability company duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization. Acquisition Company has all
requisite power and authority to execute and deliver this Agreement and perform
its obligations hereunder. The execution and delivery by Acquisition Company of
this Agreement and the performance by Acquisition Company of its obligations
hereunder have been duly and validly authorized by the Board of Managers of
Acquisition Company, and no other action on the part of Acquisition Company is
necessary to authorize the execution, delivery or performance by Acquisition
Company of this Agreement or the consummation by Acquisition Company of the
transactions contemplated hereby.
<PAGE> 11
(b) This Agreement has been duly and validly executed and delivered
by Acquisition Company and, assuming its due authorization, execution and
delivery by the Foundation, constitutes a valid, binding and enforceable
agreement of Acquisition Company.
(c) Acquisition Company is a newly formed limited liability company
which has conducted no business other than in connection with the transactions
contemplated by the Merger Agreement. Acquisition Company, upon execution of the
Merger Agreement, will enter into a commitment letter with Bankers Trust Company
(the "Bank Commitment Letter") pursuant to which the Company shall obtain,
subject to the terms and conditions therein, funds which, together with the
funds received and to be received by Acquisition Company pursuant to the Unit
Purchase Agreement, between Acquisition Company and Vestar Capital Partners IV,
L.P. (the "Unit Purchase Agreement"), shall be sufficient to consummate the
transactions contemplated by the Merger Agreement. Acquisition Company will take
all other actions required to cause the Bank Commitment Letter to be effective,
and the Bank Commitment Letter, when executed, will be a valid and binding
commitment of Acquisition Company. Acquisition Company is not, as of the date
hereof, aware of any fact, occurrence or condition that makes any of the
assumptions or statements therein inaccurate in any material respect or that
would cause the commitment provided in the Bank Commitment Letter to be
terminated or ineffective or any of the conditions contained therein not to be
met.
3. NO TENDER OF SHARES. The Foundation hereby agrees not to tender
any of the Shares pursuant to the Offer.
4. VOTING OF SHARES. The Foundation hereby agrees that, during the
term of this Agreement, at any meeting (whether annual or special, and whether
or not an adjourned or postponed meeting) of the Company's stockholders, however
called, the Foundation shall vote (or cause to be voted) all of the Shares (i)
in favor of the Merger and the approval and adoption of the Merger Agreement and
(ii) against any non-governmental action or agreement that would impede,
interfere with, or prevent the Offer or the Merger. The Foundation shall not
enter into any agreement, arrangement or understanding with any individual,
corporation, partnership, joint venture, association, trust or other
non-governmental entity (a "Person") the effect of which would be inconsistent
with or violative of this Agreement.
5. IRREVOCABLE PROXY. Solely for the purpose of effecting the
provisions of Section 4 hereof, the Foundation hereby grants to and appoints
Acquisition Company and any designee of Acquisition Company, and each of them
individually, the Foundation's irrevocable (until the termination of this
Agreement) proxy and attorney-in-fact (with full power of substitution) to vote
the Shares as indicated in Section 4 hereof. The Foundation intends this proxy
to be irrevocable (until the termination of this Agreement) and coupled with an
interest, and hereby revokes any proxy previously granted by the Foundation with
respect to the Shares. No such designee of Acquisition Company or
attorney-in-fact shall be a disqualified person with respect to the Foundation
within the meaning of Section 4946 of the Code.
<PAGE> 12
6. TREATMENT OF SHARES IN THE MERGER. (a) The Foundation hereby
agrees pursuant to the terms of the Merger Agreement that (i) 202,000 of the
Shares shall not be affected by, and shall remain outstanding and owned by the
Foundation following, the Merger, (ii) 60,000 of the Shares shall be converted
in the Merger into the right to receive the Series A Preferred/Warrant
Consideration (as defined in the Merger Agreement), and (iii) the remaining
Shares (collectively, the "Remaining Shares") shall be, depending on the
Foundation's election (the "Election") in accordance with Section 6(b) hereof,
treated in one of the following ways: (A) each Remaining Share shall be
converted in the Merger into the right to receive the Price Per Share in cash
(which shall not be less than $23.00), or (B) up to 485,000 of the Remaining
Shares shall each be converted in the Merger into the right to receive the
Series A Preferred/Warrant Consideration and the rest of the Remaining Shares
shall each be converted in the Merger into the right to receive the Price Per
Share in cash (which shall not be less than $23.00).
(b) Subject to Section 7 hereof, the Foundation shall make the
Election by a date specified by Acquisition Company in a written notice to the
Foundation, which date shall be no earlier than the later of (x) the tenth day
after the date of such notice and (y) the 20th business day prior to the date
that Acquisition Company intends to consummate the Merger (the "Election
Deadline"), by furnishing a written notice (the "Election Notice") to
Acquisition Company in accordance with Section 13(e) hereof, which Election
Notice shall state the Foundation's election with respect to the Remaining
Shares as set forth in Section 6(a) hereof. In the event that the Foundation
does not furnish its Election Notice by the Election Deadline, the Foundation
shall be deemed to have elected to receive the Price per Share with respect to
all of the Remaining Shares.
7. STOCKHOLDERS' AGREEMENT. (a) Subject to Section 7(b), the
Foundation shall enter into a Stockholders' Agreement (the "Stockholders'
Agreement") with the Company, Acquisition Company and the Stockholders in the
form of Exhibit 1 attached hereto on or prior to the consummation of the Merger.
(b) Acquisition Company hereby agrees to, and to use its reasonable
efforts to cause the other parties to agree to, (i) make all modifications to
the Stockholders' Agreement requested by the Foundation prior to January 31,
2000 which, upon advice of counsel to the Foundation, are reasonably required in
order to avoid application of any tax under Chapter 42 of the Internal Revenue
Code of 1986, as amended (the "Code"), which would not otherwise be incurred,
and (ii) entertain in good faith any reasonable requests made by the Foundation
prior to January 31, 2000 for other modifications to the Stockholders' Agreement
and to make all such other modifications as Acquisition Company and the other
parties shall reasonably deem appropriate, provided that, if Acquisition Company
determines in good faith that any such modification reduces its rights
thereunder or otherwise adversely affects it, then, unless the Foundation
withdraws its request for such modification, the Foundation shall not become a
party to the Stockholders' Agreement other than for purpose of Sections 12 and
15 thereof and such change shall not be made.
<PAGE> 13
8. RESTRICTIONS ON TRANSFER, OTHER PROXIES, ETC. (a) During the term
of this Agreement, except as otherwise provided herein, the Foundation shall
not, directly or indirectly, (i) sell, transfer, pledge, hypothecate, encumber,
assign or dispose of any Shares or the beneficial ownership thereof, or offer to
do any of the foregoing, (ii) grant any proxy or power of attorney, deposit any
Shares into a voting trust or enter into a voting agreement, understanding or
arrangement with respect to the Shares, (iii) enter into any contract, option or
other arrangement or undertaking with respect to the direct or indirect sale,
assignment or other disposition of or transfer of any interest in or the voting
of any shares of Company Common Stock or any other securities of the Company or
(iv) engage in any discussions or negotiations with any non-governmental Person
with respect to any of the foregoing.
(b) During the term of this Agreement, the Foundation shall not
acquire any shares of Company Common Stock or other securities of the Company
(other than those contemplated by Section 6 hereof) without the prior written
consent of Acquisition Company.
9. FOUNDATION GOVERNANCE. Until Acquisition Company owns less than
the Preferred Minimum Threshold and the Acquisition Company Second Minimum Share
Amount (each such term as defined in Section 18 of the Stockholders' Agreement),
the Foundation (i) shall use reasonable efforts to not permit the composition of
the Board of the Directors of the Foundation to consist of any employee of the
Company or its subsidiaries or any member of the immediate family of such
employee who lives within 500 miles of such employee (collectively, the "Company
Employee Group") unless 50% or more of the members of the Board of Directors of
the Foundation are not members of the Company Employee Group; (ii) shall not
permit any employee of the Company or its subsidiaries or any member of the
immediate family of such employee to be a member of the Investment Committee of
the Foundation; and (iii) shall cause any and all decisions with respect to the
Foundation's investment in the Company to be determined by the Investment
Committee of the Foundation.
10. CERTAIN OWNERSHIP REQUIREMENTS. Following the Merger, the
Foundation agrees that so long as it owns any shares of Company Common Stock
(whether voting or non-voting), at least 80,000 shares of such Company Common
Stock, or such lesser number of shares as the Foundation owns, shall be voting
Common Stock. Such number of shares shall be appropriately adjusted for stock
splits, stock dividends and similar changes.
11. FURTHER ASSURANCES. From time to time, at the request of the
other party hereto and without further consideration, each party hereto shall
execute and deliver such additional documents and take all such further lawful
action as may be necessary or desirable to consummate and make effective, in the
most expeditious manner practicable, the transactions contemplated by this
Agreement.
12. TERMINATION. This Agreement, and all rights, interests and
obligations of the parties hereunder, shall terminate (a) if the Offer shall
expire without Acquisition Company or the Company accepting for payment or
purchasing any shares of Company Common Stock
<PAGE> 14
pursuant to the Offer, or (b) if the Merger Agreement is terminated in
accordance with its terms, or (c) (except for Sections 9, 10, 11, and 13) upon
consummation of the Merger.
13. MISCELLANEOUS.
(a) This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes all
other prior agreements and understandings, both written and oral, between the
parties hereto with respect to the subject matter hereof.
(b) Except as otherwise provided in this Agreement, all fees and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such fees and expenses.
(c) This Agreement and all of the provisions hereof shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors, personal or legal representatives, executors, administrators, heirs,
distributees, devisees, legatees and permitted assigns, but neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any party hereto (whether by operation of law or otherwise) without
the prior written consent of the other party hereto; provided, that Acquisition
Company may assign its rights, interests and obligations hereunder to any
permitted assignee of Acquisition Company's rights, interests and obligations
under the Merger Agreement. Nothing in this Agreement, express or implied, is
intended to or shall confer upon any other Person any rights, benefits or
remedies of any nature whatsoever under or by reason of this Agreement.
(d) This Agreement may not be amended, changed, supplemented, or
otherwise modified or terminated (except as otherwise provided in Section 12
hereof), except upon the execution and delivery of a written agreement executed
by each of the parties hereto. Any party hereto may waive compliance by the
other party hereto with any representation, agreement or condition otherwise
required to be complied with by such other party hereunder, but any such waiver
shall be effective only if in writing executed by the waiving party.
(e) All notices and other communications hereunder must be in
writing and are to be given (and shall be deemed to have been duly given upon
receipt) by delivery in person, by telecopy, or by registered or certified mail,
postage prepaid, return receipt requested, addressed as follows:
If to Acquisition Company:
c/o Vestar Capital Partners IV, L.P.
245 Park Avenue
41st Floor
New York, New York 10167-4098
Telecopy: (212) 808-4922
Attention: Sander M. Levy
<PAGE> 15
Copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Telecopy: (212) 735-2000
Attention: Blaine V. Fogg, Esq.
If after January 14, 2000, to:
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
Telecopy: (212) 735-2000
Attention: Blaine V. Fogg, Esq.
If to the Foundation:
Gleason Foundation
1000 University Avenue
P.O. Box 22970
Rochester, New York 14692-2970
Telecopy: (716) 241-4099
Attention: Ralph E. Harper
Copy to:
Harter, Secrest & Emery LLP
700 Midtown Tower
Rochester, New York 14604-2070
Telecopy: (716) 232-2152
Attention: Susan Mascette Brandt, Esq.
or to such other address as any party hereto may have previously furnished to
the other party hereto in writing in accordance herewith.
(f) Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without affecting the
validity or enforceability of the remaining provisions hereof. Any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. If any provision
of this Agreement is so
<PAGE> 16
broad as to be unenforceable, the provision shall be interpreted to be only so
broad as is enforceable. For purposes of this Section 13(f), the term
"prohibited" includes any act or failure to act subject to tax under Sections
4941, 4943, 4944 or 4945 of the Code.
(g) Each of the parties hereto acknowledges and agrees that in the
event of any breach of this Agreement, the non-breaching party would be
irreparably harmed and could not be made whole by monetary damages. It is
accordingly agreed that the parties hereto (i) shall waive, in any action for
specific performance, the defense of adequacy of a remedy at law and (ii) shall
be entitled, in addition to any other remedy to which they may be entitled at
law or in equity, to compel specific performance of this Agreement.
(h) All rights, powers and remedies provided under this Agreement or
otherwise available in respect hereof at law or in equity shall be cumulative
and not alternative, and the exercise of any thereof by any party hereto shall
not preclude the simultaneous or later exercise of any other such right, power
or remedy by such party. The failure of any party hereto to exercise any right,
power or remedy provided under this Agreement or otherwise available in respect
hereof at law or in equity, or to insist upon compliance by the other party
hereto with its obligations hereunder, and any custom or practice of the parties
hereto at variance with the terms hereof, shall not constitute a waiver by such
party of its right to exercise any such or other right, power or remedy or to
demand such compliance.
(i) This Agreement shall be governed and construed in accordance
with the laws of the State of Delaware, without giving effect to the principles
of conflicts of law thereof or of any other jurisdiction.
(j) The descriptive headings used herein are inserted for
convenience of reference only and are not intended to be part of or to affect
the meaning or interpretation of this Agreement. "Include," "includes," and
"including" shall be deemed to be followed by "without limitation" whether or
not they are in fact followed by such words or words of like import.
(k) This Agreement may be executed in counterparts, each of which
shall be deemed to be an original, but all of which, taken together, shall
constitute one and the same instrument.
(1) In advance of filing with the Securities and Exchange
Commission or any other governmental entity any document pertaining to the
Merger or the transactions contemplated hereby which includes information about
the Foundation, Acquisition Company will give the Foundation a reasonable period
of prior review of such document.
<PAGE> 17
IN WITNESS WHEREOF, Acquisition Company and the Foundation have
caused this Agreement to be duly executed as of the day and year first above
written.
TORQUE ACQUISITION CO., L.L.C.
By: /s/ SANDER M. LEVY
------------------------------------
Name: Sander M. Levy
Title: President
GLEASON FOUNDATION
By: /s/ RALPH E. HARPER
------------------------------------
Name: Ralph E. Harper
Title: Secretary
Shares: 1,197,346
---------
<PAGE> 18
INDEX TO EXHIBITS TO FOUNDATION AGREEMENT
* EXHIBIT 1 - STOCKHOLDERS' AGREEMENT
* OMITTED EXHIBIT
UPON WRITTEN REQUEST, THE REGISTRANT WILL PROVIDE A COPY OF THE REFERENCED
OMITTED EXHIBIT.
