<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 1)*
LUND INTERNATIONAL HOLDINGS, INC.
- --------------------------------------------------------------------------------
(Name of issuer)
Common Stock, par value $.10 per share
- --------------------------------------------------------------------------------
(Title of class of securities)
550 368 104
- --------------------------------------------------------------------------------
(CUSIP number)
Ira Kleinman
LIH Holdings, LLC
c/o Harvest Partners, Inc.
767 Third Avenue
New York, New York 10017
(212) 838-7776
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
With Copies To:
Philip H. Werner, Esq.
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, New York 10178
(212) 309-6000
November 25, 1997
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(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 which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box
[ ].
Check the following box if a fee is being paid with the statement [ ].
(A fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent of
the class of securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of five percent or less of
such class.) (See Rule 13d-7.)
NOTE: Six copies of this statement on Schedule 13-D, including all
exhibits, should be filed with the Securities and Exchange Commission. See Rule
13d-1(a) for other parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE> 2
CUSIP No. 550368104 13D Page 2 of Pages
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
LIH HOLDINGS, LLC EIN: 13-3961151
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7 SOLE VOTING POWER
NUMBER OF 0
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 1,686,893
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH 1,686,893
10 SHARED DISPOSITIVE POWER
1,686,893
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,686,893
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
38.4%
14 TYPE OF REPORTING PERSON*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 3
CUSIP NO. 550368104 13D PAGE 3 OF PAGES
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
LIH INVESTORS, L.P. EIN:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7 SOLE VOTING POWER
NUMBER OF 0
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 1,686,893
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH 1,686,893
10 SHARED DISPOSITIVE POWER
1,686,893
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,686,893
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
38.4%
14 TYPE OF REPORTING PERSON*
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 4
CUSIP NO. 550368104 13D PAGE 4 OF PAGES
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
LIH MANAGEMENT, L.P. EIN:
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7 SOLE VOTING POWER
NUMBER OF 0
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 1,686,893
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH 1,686,893
10 SHARED DISPOSITIVE POWER
1,686,893
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,686,893
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
38.4%
14 TYPE OF REPORTING PERSON*
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 5
CUSIP NO. 550368104 13D PAGE 5 OF PAGES
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
LIH INCORPORATED EIN: 13-3961151
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7 SOLE VOTING POWER
NUMBER OF 0
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 1,686,893
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH 1,686,893
10 SHARED DISPOSITIVE POWER
1,686,893
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,686,893
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
38.4%
14 TYPE OF REPORTING PERSON*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 6
This Amendment (the "First Amendment") to the Statement on
Schedule 13D originally filed on September 18, 1997 (the "Original Statement"),
amends Items 4 and 7 of the Original Statement. Capitalized terms used but not
defined herein shall have the respective meanings ascribed to them in the
Original Statement.
Item 4. Purposes of Transactions
Item 4 as set forth in the Original Statement is amended by
inserting the following language after the fifth paragraph thereof:
The Company has announced that it has entered into an
Investment Agreement, dated November 25, 1997, with LIH Holdings II, LLC, a
Delaware limited liability company ("LIH Holdings II")(1). The Investment
Agreement provides for the purchase by LIH Holdings II of 874,400 shares of
Common Stock and 1,493,398 shares of Series A Preferred Stock, par value $0.01
per share (the "Series A Preferred Stock"), for an aggregate purchase price of
$30,000,000. Under certain circumstances, the Series A Preferred Stock will
convert into a newly created series of non-voting common stock of the Company
(the "Class B-1 Common Stock") and, under certain circumstances, the Class B-1
Common Stock will convert into Common Stock. It is a condition to the
consummation of the transactions contemplated by the Investment Agreement that
the Governance Agreement be amended and restated (the "Amended and Restated
Governance Agreement"). LIH Holdings has entered into such Amended and Restated
Governance Agreement, which will become effective upon the closing of the
Investment Agreement.
Pursuant to the Amended and Restated Governance Agreement,
each of LIH Holdings and LIH Holdings II severally agree that until the
Standstill Termination Date it will not take any action or omit to take any
action to allow the aggregate number of voting securities of the Company
beneficially owned (as determined pursuant to Section 13d-3 of the Securities
Exchange Act of 1934, as amended) by LIH Holdings, LIH Holdings II and their
affiliates and associates to exceed 2,561,293 shares of Common Stock, which
number shall increase to include the number of shares of Common Stock into which
the Class B-1 Common Stock is convertible, once the Class B-1 Common Stock is
converted (as adjusted for stock dividends, splits, recombinations and the like)
(the "Permitted Shares") except for (i) the acquisition of voting securities
from the Company which has been approved by the vote of a majority of the
Company's Independent Directors; and (ii) the acquisition of voting securities
pursuant to a tender or exchange offer made by LIH Holdings or LIH Holdings II
for all voting securities not owned by it after a third party (other than the
Company) has made a bona fide tender or exchange offer to purchase 50% or more
of the Company's voting securities. In addition, until
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(1) Because it is intended that certain managers of LIH Holdings
will also be designated managers of LIH Holdings II, LIH
Holdings and LIH Holdings II may be deemed to be affiliates.
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the Standstill Termination Date, each of LIH Holdings and LIH Holdings II
severally agree that it will not (i) initiate, propose, make, or in any way
participate in, directly or indirectly, any "solicitation" of "proxies" to vote,
or seek to influence any person with respect to the voting of, any voting
securities, or become a "participant" in a "solicitation" or "election contest"
(as such terms are defined or used in Regulation 14A under the Exchange Act, as
in effect on the date of the Amended and Restated Governance Agreement), in any
election contest with respect to the election or removal of the Independent
Directors proposed in accordance with the Amended and Restated Governance
Agreement; or (ii) other than as contemplated by Section 1.01(a) of the Amended
and Restated Governance Agreement, solicit, offer or propose to any person any
form of merger with the Company, any tender or exchange offer for securities of
the Company, or any sale or liquidation of the Company's assets.
Pursuant to the Amended and Restated Governance Agreement, the
Company, LIH Holdings and LIH Holdings II agree that the Board of Directors
will consist of seven directors, including (i) one director designated by LIH
Holdings, (ii) one director designated by LIH Holdings II, (iii) four
Independent Directors and (iv) the Company's Chief Executive Officer. At any
time when LIH Holdings, LIH Holdings II and their respective affiliates and
associates own less than 50% of the shares of Common Stock purchased by LIH
Holdings on the closing date of the Stock Purchase Agreement, LIH Holdings will
lose its right to designate a director. The Amended and Restated Governance
Agreement provides that until the Standstill Termination Date, each of LIH
Holdings and LIH Holdings II will vote its securities of the Company for the
election of Independent Directors proposed by the Independent Director
Nominating Committee.
Pursuant to the Amended and Restated Governance Agreement, LIH
Holdings II assigns its rights to designate an LIH Holdings II representative
on the Board of Directors to Harvest Partners III, L.P., a Delaware limited
partnership ("HP III"), which will hold a majority of the membership interests
in LIH Holdings II. The Company also agrees, acting through its Board of
Directors in a manner consistent with its fiduciary obligations and the Amended
and Restated Governance Agreement, to grant to LIH Holdings II such additional
management rights as may be necessary to allow HP III to continue to qualify as
a "venture capital operating company" within the meaning of Section 2510.3-101
of the plan asset regulations promulgated by the United States Department of
Labor.
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The Amended and Restated Governance Agreement also provides
that until the first to occur of (i) the Standstill Termination Date, (ii) the
aggregate number of shares of Common Stock beneficially owned by LIH Holdings,
LIH Holdings II or any of their respective affiliates or associates is less
than 50% of the Permitted Shares, or (iii) the voting power in the general
election of directors of all voting securities then beneficially owned by LIH
Holdings, LIH Holdings II or any of their respective affiliates or associates
decreasing to 5% or less of the total combined voting power in the general
election of directors of all voting securities then outstanding, the Company
may not take identified corporate actions without the affirmation vote of a
majority of the Company's Board of Directors, which majority includes at least
one director designated by LIH Holdings II. These actions are: (i) any
amendment to the Certificate of Incorporation or By-Laws of the Company; (ii)
any reclassification, combination, split, subdivision, redemption, purchase or
other acquisition, directly or indirectly, of any debt or equity security of
the Company or any subsidiary; (iii) any sale, lease, transfer or other
disposition (other than in the ordinary course of business and other than to
the Company or another wholly-owned subsidiary), in one or more related
transactions, of the assets of the Company or any subsidiary the book value of
which assets exceeds 2% of the consolidated assets of the Company and its
subsidiaries; (iv) any merger, consolidation, liquidation or dissolution of the
Company or any subsidiary, other than with or into the Company or another
wholly-owned subsidiary; (v) any acquisition of any other business; (vi) any
investment by the Company or any subsidiary in or loans, advances or extensions
of credit by the Company or any subsidiary to, any Person (other than Excepted
Investments and Loans), which together with all such other investments, loans
and advances at the time owned by the Company and its subsidiaries (exclusive
of the Excepted Investments and Loans) would exceed an amount equal to 2% of
consolidated assets; (vii) any acquisition by the Company or any subsidiary of
assets, other than investment or loan assets, not in the ordinary course of
business; (viii) the issuance or sale of any capital stock of the Company or
any subsidiary, other than (a) issuances of capital stock of the Company
authorized for issuance pursuant to stock plans or agreements in effect at the
date of the original Governance Agreement, and (b) the issuance of shares of
capital stock of the Company or any subsidiary, in one or more related
transactions, the amount of which does not exceed at the date of issuance or
sale of such shares (or the date of issuance or grant of any related right to
acquire such shares) in excess of 2% of the outstanding shares of capital stock
of such class; (ix) any declaration or payment of any dividend or distribution
with respect to shares of the Company's capital stock; (x) any incurrence,
assumption or issuance by the Company or its subsidiaries of any indebtedness
for money borrowed, not in the ordinary course of business, if, immediately
after giving effect thereto and the application of proceeds therefrom, the
aggregate amount of such
<PAGE> 9
indebtedness of the Company and its subsidiaries would exceed $5,000,000 and
(xi) establishment of, or continued existence of, any committee of the Board of
Directors with the power to approve any of the foregoing.
The Amended and Restated Governance Agreement also provides
that the Company may not take any action with respect to a Stockholder
Interested Transaction (as defined below) unless such transaction has been
approved by a majority of the Independent Directors. A Stockholder Interested
Transaction is defined to mean any transaction with the Company, on the one
hand, and LIH Holdings, LIH Holdings II or any of their respective affiliates
or associates, on the other hand, or relating to the Amended and Restated
Governance Agreement, including without limitation, any amendment, modification
or waiver of the Amended and Restated Governance Agreement.
The foregoing description of the proposed Amended and Restated
Governance Agreement is qualified in its entirety by reference to such
agreement, a copy of which has been filed as an exhibit hereto.
Subject to the terms and provisions of the Amended and
Restated Governance Agreement, each of LIH Holdings, LIH Investors, LIH
Management and LIH, Inc. reserves the right to acquire, as it deems appropriate,
additional shares of Common Stock, through open market and privately negotiated
transactions, by tender offer or otherwise, and to seek control of the Company.
LIH Holdings also reserves the right to dispose of some or all of its shares of
Common Stock in the open market or in privately negotiated transactions with
third parties or otherwise.
LIH Holdings anticipates that, from time to time, it,
directly, through directors that it designates for election to the Board of
Directors or through affiliates or associates, including Harvest, may identify
to the Company businesses to be considered for acquisition by the Company that
are related or complementary to the Company's current lines of businesses. In
that connection, each of LIH Holdings also may propose, propose to arrange, or
identify to the Company sources of equity or debt financings.
Other than as set forth herein and in the Amended and Restated
Governance Agreement, none of LIH Holdings, LIH Investors, LIH Management or
LIH Inc. has any current plans or proposals which relate to or would result in
any of the results specified in paragraphs (a) through (j) of Item 4 of this
Statement.
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ITEM 7. MATERIALS TO BE FILED AS EXHIBITS
The following materials are filed as Exhibits to this Statement.
A. Information with respect to officers and directors of LIH
Holdings, LLC*
B. Information with respect to Partners of LIH Investors, L.P.*
C. Information with respect to Partners of LIH Management,
L.P.*
D. Information with respect to officers and directors of LIH
Incorporated.*
E. Stock Purchase Agreement dated September 9, 1997 by and
among LIH Holdings, LLC, Allan W. Lund, the Lund Family
Limited Partnership, the Lois and Allan Lund Family
Foundation and certain Lund Family Members.*
F. Governance Agreement dated September 9, 1997 between LIH
Holdings, LLC and Lund International Holdings, Inc.*
G. Services Agreement dated September 9, 1997 between Harvest
Partners, Inc. and Lund International Holdings, Inc.*
H. Amended and Restated Governance Agreement, dated as of
November 25, 1997, among LIH Holdings, LLC, LIH Holdings II,
LLC, Harvest Partners III, L.P. and Lund International
Holdings, Inc.
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* Previously filed
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SIGNATURE
After reasonable inquiry and to the best of the knowledge and
belief of each of the undersigned, each of the undersigned certifies that the
information set forth in this First Amendment with respect to the undersigned is
true, complete and correct and each of the undersigned agrees that this First
Amendment may be filed jointly.
Dated: November 26, 1997
LIH Holdings, LLC
By: /s/ Ira D. Kleinman
-----------------------------
Name: Ira D. Kleinman
Title: Manager
LIH Investors, L.P.
By: LIH Management, L.P.,
its General Partner
By: LIH Incorporated,
its General Partner
By: /s/ Harvey Mallement
-----------------------------
Name: Harvey Mallement
Title: President
LIH Management, L.P.
By: LIH Incorporated,
its General Partner
By: /s/ Harvey Mallement
-----------------------------
Name: Harvey Mallement
Title: President
LIH, Incorporated
By: /s/ Harvey Mallement
-----------------------------
Name: Harvey Mallement
Title: President
<PAGE> 12
EXHIBIT INDEX
A. Information with respect to officers and directors of LIH
Holdings, LLC*
B. Information with respect to Partners of LIH Investors, L.P.*
C. Information with respect to Partners of LIH Management,
L.P.*
D. Information with respect to officers and directors of LIH
Incorporated.*
E. Stock Purchase Agreement dated September 9, 1997 by and
among LIH Holdings, LLC, Allan W. Lund, the Lund Family
Limited Partnership, the Lois and Allan Lund Family
Foundation and certain Lund Family Members.*
F. Governance Agreement dated September 9, 1997 between LIH
Holdings, LLC and Lund International Holdings, Inc.*
G. Services Agreement dated September 9, 1997 between Harvest
Partners, Inc. and Lund International Holdings, Inc.*
H. Amended and Restated Governance Agreement, dated as of
November 25, 1997, among LIH Holdings, LLC, LIH Holdings II,
LLC, Harvest Partners III, L.P. and Lund International
Holdings, Inc.
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* Previously filed
<PAGE> 1
AMENDED AND RESTATED
GOVERNANCE AGREEMENT
This Amended and Restated Governance Agreement, dated as of November
25, 1997, among Lund International Holdings, Inc., a Delaware corporation (the
"Company"), LIH Holdings, LLC, a Delaware limited liability company ("LIH"), and
LIH Holdings II, LLC, a Delaware limited liability company ("LIH II"; LIH and
LIH II are referred to collectively herein as the "LIH Entities");
WITNESSETH:
WHEREAS, Allen W. Lund ("Lund") and LIH entered into a stock purchase
agreement (the "Stock Purchase Agreement"), dated September 9, 1997, pursuant to
which, among other things, subject to the terms and conditions to be contained
in the Stock Purchase Agreement, LIH acquired from Lund, his family and certain
entities related thereto, at the closing of such purchase and sale (the
"Closing"), Beneficial Ownership of shares of common stock, par value $.10 per
share, of the Company ("Common Stock"), aggregating 1,686,893 shares of Common
Stock (the "Shares"), constituting approximately 38.4% of the Common Stock
outstanding as of the date thereof; and
WHEREAS, Lund and LIH received Board approval of the acquisition of
Shares for purposes of Section 203 of the Delaware General Corporation Law; and
WHEREAS, as a condition to such approval, a special committee formed by
the Board and the Board required that certain arrangements be put in place
relating to the acquisition and disposition of securities of the Company by LIH
and related provisions concerning LIH's relationship with the Company,
negotiated the terms of that certain Governance Agreement,
<PAGE> 2
dated September 9, 1997 (the "Governance Agreement") and concluded that, subject
to execution and delivery of the Governance Agreement, would give its approval
under Section 203 of the Delaware General Corporation Law and implement the
arrangements contemplated by the Agreement; and
WHEREAS, the Company and LIH entered, executed and delivered the
Governance Agreement and the Governance Agreement has been in effect since
September 9, 1997; and
WHEREAS, pursuant to the provisions of Section 1.01(a)(i) of the
Governance Agreement, LIH or its Affiliates or Associates may acquire securities
from the Company, provided that such acquisition is approved by the affirmative
vote of a majority of the Independent Directors; and
WHEREAS, LIH II and the Company have entered into an Investment
Agreement of even date herewith (the "LIH II Investment Agreement"), providing
for the purchase from the Company by LIH II of 874,400 of the Company's Common
Stock, par value $.10 per share and 1,493,398 shares of the Company's Series A
Preferred Stock, par value $.01 per share (the "Preferred Shares"), which
Preferred Shares are convertible into shares of the Company's Class B-1 Common
Stock (collectively, the "LIH II Shares"); and
WHEREAS, as a condition to approval of the LIH II Investment Agreement
by the Independent Directors, the Independent Directors have required that the
Governance Agreement be amended and restated as set forth herein and executed by
the Company, LIH and LIH II; and
WHEREAS, the Company, LIH and LIH II desire to enter into this Amended
and Restated Governance Agreement;
2
<PAGE> 3
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein and intending to be legally bound
hereby, the Company, LIH and LIH II hereby agree as follows:
ARTICLE I
STANDSTILL AND VOTING
Section 1.01. Acquisition of Voting Securities.
(a) Until the Standstill Termination Date, each of LIH and LIH II
severally covenants and agrees that it will not take any action or omit to take
any action to allow the aggregate number of Voting Securities Beneficially Owned
by LIH, LIH II and their Affiliates and Associates to exceed the number of
Permitted Shares; provided that, (i) this Agreement shall not restrict any
acquisition of Voting Securities in a transaction directly with the Company and
approved in accordance with the provisions of Section 2.03(b) hereof (including,
without limitation, the acquisition of Voting Securities by any LIH Director or
any LIH II Director by reason of the grant of stock options by the Company to
all directors); and (ii) if a bona fide tender or exchange offer is made by any
Person (other than the Company, either of the LIH Entities or an Affiliate or
Associate of either of the LIH Entities, or any Person acting in concert with
either of the LIH Entities or any of their respective Affiliates or Associates,
and other than any acquisition or proposed acquisition of Voting Securities that
intentionally has been induced, in whole or in part and directly or indirectly
by an LIH Entity in order to permit the acquisition by an LIH Entity or its
Affiliates and Associates of Voting Securities under this paragraph (a)) to
purchase outstanding shares of Voting Securities representing 50% or more of the
Total Voting Power and such offer is not withdrawn or terminated prior to an LIH
Entity commencing a
3
<PAGE> 4
tender offer or exchange offer, then an LIH Entity may commence a tender or
exchange offer for all Voting Securities not owned by the LIH Entities or their
Affiliates and Associates, and this Agreement shall not prohibit the acquisition
of Voting Securities pursuant to such tender or exchange offer.
(b) Subject to the proviso in Section 1.01(a) hereof and any waiver or
approval in accordance with the provisions of Section 5.02(a) hereof, if at any
time the LIH Entities or their Affiliates and Associates Beneficially Own more
than the Permitted Shares, inadvertently or otherwise, then each LIH Entity
shall promptly take all action necessary to reduce the amount of Voting
Securities Beneficially Owned by such Persons to an amount not greater than the
Permitted Shares.
(c) Neither LIH Entity shall permit any of its Affiliates or Associates
to Beneficially Own any Voting Securities unless such Person becomes a signatory
to this Agreement and a party hereunder.
Section 1.02. Limited Restrictions on Transfer. Prior to the Standstill
Termination Date, no LIH Entity, nor any Affiliate or Associate thereof which
acquires Voting Securities in accordance with the terms of this Agreement, will
Transfer Beneficial Ownership of any Voting Securities to any of their
respective Affiliates or Associates unless each such Person becomes a signatory
to this Agreement and a party hereunder. Each LIH Entity agrees to inclusion of
the following legend on certificates representing the Shares and the LIH II
Shares:
The shares represented by this certificate and any transfer
thereof are subject to a restriction on transfer to any Affiliate or
Associate of the holder hereof as set forth in a Amended and Restated
Governance Agreement between the holder and the Company dated as of
November 25, 1997, a copy of which is on file at the principal
executive office of the Company.
4
<PAGE> 5
Such legend shall be placed on all certificates held by the LIH
Entities during the continuance of this Agreement.
Section 1.03. Voting. Until the Standstill Termination Date, all Voting
Securities Beneficially Owned by the LIH Entities or any Affiliate or Associate
thereof shall be voted in the election of directors, (a) in the case of election
of Independent Directors at the option of each LIH Entity, either (1) for the
election of the Independent Directors proposed by the specified committees in
accordance with Article II, or (2) in the same proportion as the votes cast by
other holders of Voting Securities, (b) in the case of LIH, for the LIH
Director, and (c) in the case of LIH II, for the LIH II Director.
Section 1.04. Further Restrictions on Conduct.
(a) Unless waived or approved in advance in accordance with Section
5.02(b) hereof, each of LIH and LIH II severally covenants and agrees that until
the Standstill Termination Date, neither it nor any of its Affiliates or
Associates shall:
(i) initiate, propose, make, or in any way participate in,
directly or indirectly, any "solicitation" of "proxies" to vote, or
seek to influence any Person with respect to the voting of, any Voting
Securities, or become a "participant" in a "solicitation" or "election
contest" (as such terms are defined or used in Regulation 14A under the
Exchange Act, as in effect on the date hereof), in any election contest
with respect to the election or removal of the Independent Directors
proposed by the specified committees in accordance with Article II;
(ii) other than as contemplated by Section 1.01(a) solicit,
offer, seek or propose to any other Person (including without
limitation the Company) any form of
5
<PAGE> 6
merger with, tender or exchange offer for securities of, sale or
liquidation of assets of, or similar business combination transaction
with or involving the Company or its Affiliates or Associates;
provided. however, the foregoing shall not restrict any such action
relating to a merger or similar business combination with the purpose
and effect of the Company or its Affiliates and Associates acquiring
the business, voting securities or assets of another Person; or
(iii) take any other action inconsistent with the foregoing.
Section 1.05. Reports. Until the Standstill Termination Date, each of
LIH and LIH II shall deliver to the Company, promptly after any acquisition or
Transfer of Voting Securities, an accurate written report specifying the amount
and class of Voting Securities acquired or Transferred in such transaction and
the amount of each class of Voting Securities owned by it or any of its
Affiliates or Associates after giving effect to such transaction, provided,
however, that no such report need be delivered with respect to any such
acquisition or Transfer of Voting Securities by LIH or LIH II that is reported
in a statement on Schedule 13D filed with the Commission and delivered to the
Company by LIH or LIH II or any of their respective Affiliates or Associates in
accordance with Section 13(d) of the Exchange Act and the rules thereunder. The
Company shall be entitled to rely on such reports and statements on Schedule 13D
for all purposes of this Agreement.
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ARTICLE II
BOARD OF DIRECTORS
Section 2.01. Initial Composition of Board of Directors.
(a) The number of directors comprising the Board of Directors shall be
seven.
(b) As of the date hereof, the Board of Directors shall consist of the
LIH Director set forth on Exhibit 1 hereto, the LIH II Director set forth on
Exhibit I hereto and the Company Director, two Independent Directors, the Third
Independent Director and the Fourth Independent Director, all as set forth on
Exhibit 2 hereto.
Section 2.02 Proportional Representation.
(a) Until the Standstill Termination Date, except as indicated in
paragraph (b) below, the Company and each LIH Entity shall use their respective
best efforts to cause the composition of the Board to continue to reflect, or to
fully implement, the proportionate representation of the LIH Director, the LIH
II Director, Company Director and Independent Directors set forth in Section
2.01. At each annual meeting of stockholders following the Closing at which the
term of any Independent Director is to expire, unless such annual meeting shall
be scheduled to occur after the Standstill Termination Date, or at any time that
a vacancy of an Independent Director on the Board of Directors is to be filled,
the identity of such Independent Director to stand for election to the Board of
Directors or to fill the vacancy on the Board, as the case may be, shall be
determined in the following manner:
(i) If the term of any Third Independent Director expires or
such position on the Board becomes vacant, the Third Independent
Director Nominating Committee shall
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<PAGE> 8
propose to the Board of Directors a person to serve as the Third
Independent Director on the slate to be recommended by the Board of
Directors or to fill such vacancy.
(ii) If the term of any Independent Director (excluding the
Fourth Independent Director) expires or such position on the Board
becomes vacant, the Independent Director Nominating Committee shall
propose to the Board of Directors a person to serve as an Independent
Director on the slate to be recommended by the Board of Directors or to
fill such vacancy.
(iii) If the term of the Fourth Independent Director expires
or such position on the Board becomes vacant, the Fourth Independent
Director Nominating Committee shall propose to the Board of Directors a
person to serve as the Fourth Independent Director on the slate to be
recommended by the Board of Directors or to fill such vacancy.
(iv) The Board of Directors shall recommend to stockholders
the Independent Directors proposed in accordance with the foregoing
provisions and include such Independent Directors on their slate of
directors or, in the case of any vacancy elect such Independent
Directors to the Board, unless the Board determines that to do so would
constitute a breach of its fiduciary obligations to the Company's
stockholders.
(b) All rights of LIH and obligations of the Company relative to LIH's
designation of representatives on the Board of Directors (including the LIH, LIH
II, Company and Independent Directors) shall terminate if, at the date of
determination, the aggregate number of shares of Common Stock Beneficially Owned
by the LIH Entities and any Affiliate or Associate thereof which is a signatory
to this Agreement is less than 50% of the number of Shares acquired by LIH at
the Closing pursuant to the Stock Purchase Agreement (as adjusted for stock
dividends,
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<PAGE> 9
splits, recombinations and the like). All rights of the LIH Entities and
obligations of the Company relative to the designation of representatives on the
Board of Directors (including LIH, LIH II, Company and Independent Directors)
shall terminate if at any time Stockholder Voting Power shall be 5% or less of
Total Voting Power. In such event, references in Section 2.02(i) and (iii) to
the Third Independent Director Nominating Committee and Fourth Independent
Director Nominating Committee shall be deemed references to the Independent
Director Nominating Committee.
(c) Other than as set forth in paragraph (b) above, the Company shall
cause each of the LIH Director and the LIH II Director designated by LIH and LIH
II, respectively, to be included in the slate of nominees recommended by the
Board of Directors to the Company's stockholders for election as directors at
each annual meeting of the stockholders of the Company and shall use all
reasonable efforts to cause the election of each such LIH Director and LIH II
Director, including soliciting proxies in favor of the election of such persons,
or, in the case of any vacancy affecting any LIH Director or LIH II Director,
elect to the Board an LIH Director designated by LIH or an LIH II Director
designated by LIH II, unless the Board of Directors determines that to do so
would constitute a breach of its fiduciary obligations to the Company's
stockholders.
Section 2.03. Voting
(a) Until the first to occur of (i) the Standstill Termination Date,
(ii) the aggregate number of shares of Common Stock Beneficially Owned by the
LIH Entities and any Affiliate or Associate thereof which is a signatory to this
Agreement decreasing to less than 50% of the number of Permitted Shares, or
(iii) the Stockholder Voting Power decreasing to 5% or less of
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<PAGE> 10
Total Voting Power, except in the case of a Stockholder Interested Transaction
(as defined below), the Company shall not take any action described in Exhibit 3
hereto without the affirmative vote of a majority of the entire Board of
Directors, which majority includes the LIH II Director.
(b) The Company shall not take any action relating to a Stockholder
Interested Transaction, unless such Stockholder Interested Transaction has been
approved by the affirmative vote of a majority of the Independent Directors.
Each of LIH and LIH II severally agrees that it shall not, and shall not take
any action which would cause the Company or its Board of Directors to, enter
into or participate in any Stockholder Interested Transaction which has not been
approved by the affirmative vote of a majority of the Independent Directors. If
requested by a majority of the Independent Directors, each of LIH and LIH II
severally agrees to cause the LIH Director or the LIH II Director, as the case
may be, not to vote upon or consent to any Stockholder Interested Transaction,
but such directors may be counted for purposes of any quorum necessary to such
action. "Stockholder Interested Transaction" shall mean any transaction with or
involving an LIH Entity, its respective Affiliates or Associates or relating to
this Agreement, including, without limitation, any amendment, modification or
waiver hereof or thereof.
Section 2.04 Assignment of Certain Rights. LIH II hereby assigns to
Harvest Partners III, L.P., a Delaware limited partnership ("HP III"), all of
its rights under this Agreement relative to (i) LIH II's designation of an LIH
II representative on the Board of Directors, and (ii) any management rights to
which it may be entitled pursuant to Section 2.05 below. The Company hereby
expressly consents to such assignment and agrees that all of its obligations
with
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<PAGE> 11
respect to such designation and management rights shall be enforceable
against the Company by HP III. HP III hereby expressly agrees to be bound by the
provisions of this Agreement and that this Agreement is enforceable against it.
Section 2.05 Venture Capital Operating Company Status. In the event
that (i) at any time LIH II is not entitled to designate at least one member for
election to the Board of Directors, or (ii) the United States Department of
Labor through formal or informal rules, regulations or interpretations provides,
or it is otherwise established through governmental or court action, that such
representation does not constitute the exercise of management rights of the kind
necessary to enable HP III to continue to qualify as a "venture capital
operating company" within the meaning of Section 2510.3-101 of the plan asset
regulations promulgated by the United States Department of Labor (a "VCOC"),
then the Company shall, acting through its Board of Directors in a manner
consistent with its fiduciary obligations and consistent with the terms hereof,
grant to LIH II such management rights as the Company shall determine, the
exercise of which would (after taking into account the assignment pursuant to
Section 2.04 above), in the opinion of counsel to the HP III, enable HP III to
continue to qualify as a VCOC.
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<PAGE> 12
ARTICLE III
REPRESENTATIONS AND WARRANTS
Section 3.01 Representations and Warranties of the Company. The Company
represents and warrants to each LIH Entity that (a) the Company is a corporation
duly incorporated, validly existing and in good standing under the laws of the
state of Delaware and has the corporate power and authority to enter into this
Agreement and to carry out its obligations hereunder, (b) the execution and
delivery of this Agreement by the Company and the consummation by the Company of
the transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company and no other corporate proceedings
on the part of the Company are necessary to authorize this Agreement or any of
the transactions contemplated hereby, and (c) this Agreement has been duly
executed and delivered by the Company and constitutes a valid and binding
obligation of the Company, and, assuming this Agreement constitutes a valid and
binding obligation of each LIH Entity, is enforceable against the Company in
accordance with its terms.
Section 3.02. Representations and Warranties of the LIH Entities. Each
of LIH and LIH II severally represents and warrants to the Company that (a) it
is a limited liability company duly organized, validly existing and in good
standing under the laws of the state of Delaware and has the corporate power and
authority to enter into this Agreement and to carry out its obligations
hereunder, (b) the execution and delivery of this Agreement by such LIH Entity
and the consummation by such LIH Entity of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part of such
LIH Entity and no other
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<PAGE> 13
corporate proceedings on the part of such LIH Entity are necessary to authorize
this Agreement or any of the transactions contemplated hereby, and (c) this
Agreement has been duly executed and delivered by such LIH Entity and
constitutes a valid and binding obligation of such LIH Entity, and, assuming
this Agreement constitutes a valid and binding obligation of the Company, is
enforceable against such LIH Entity in accordance with its terms.
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<PAGE> 14
ARTICLE IV
DEFINITIONS
For purposes of this Agreement, the following terms shall have the
following meanings:
Section 4.01. "Affiliate" or "Associate" shall mean an affiliate or
associate of a person, as such terms are defined in Section 203 of the Delaware
General Corporation Law; provided, however, that LIH shall not be deemed an
"Affiliate" of LIH II and LIH II shall not be deemed an "Affiliate" of LIH for
the purposes of LIH or LIH II, as the case may be, causing any of the
"Affiliates" to take or refrain from taking any action under this Agreement.
Section 4.02. "Beneficially Own" or "Beneficial Ownership" with respect
to any securities shall mean having "beneficial ownership" of such securities
(as determined pursuant to Rule 13d-3 under the Exchange Act), including
pursuant to any agreement, arrangement or understanding, whether or not in
writing.
Section 4.03. "Closing" shall have the meaning specified in the
recitals to this Agreement.
Section 4.04. "Commission " shall mean the Securities and Exchange
Commission.
Section 4.05. "Company Director" shall mean the Company's Chief
Executive Officer.
Section 4.06. "Exchange Act" shall mean the Securities Exchange Act of
1934.
Section 4.07. "Fourth Independent Director" shall mean the Independent
Director nominated in accordance with the provisions of Section 2.02(a)(iii).
Section 4.08. "Fourth Independent Director Nominating Committee" shall
mean a committee of three directors, comprised of two Independent Directors
other than the Third
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Independent Director and the LIH II Director. Any action of the Fourth
Independent Director Nominating Committee shall be unanimous.
Section 4.09. "Independent Director" shall mean any person who is a
director of the Company and who is independent of and otherwise unaffiliated
with either of the LIH Entities, the Company or their respective Affiliates or
Associates (other than as a director, or holder with Beneficial Ownership of
less than 5% of the Voting Securities, of the Company), and shall not be an
officer or an employee, agent, consultant or advisor (financial, legal or other)
of either of the LIH Entities, the Company or their respective Affiliates or
Associates, or any person who shall have served in any such capacity within the
three-year period immediately preceding the date such determination is made.
Section 4.10. "Independent Director Nominating Committee" shall mean a
committee composed of the Independent Directors, other than the Third
Independent Director.
Section 4.11. "Permitted Shares" shall mean 2,561,293 shares of Voting
Common Stock of the Company which number shall increase to include the number of
shares of Common Stock into which the Class B-1 Common Stock is convertible,
once the Class B-1 Common Stock is converted (as adjusted for stock dividends,
splits, recombinations and the like).
Section 4.12. "Person" shall mean any individual, partnership, joint
venture, corporation, trust, unincorporated organization, government or
department or agency of a government.
Section 4.13. "Standstill Termination Date" shall mean September 9,
2000.
Section 4.14. "LIH Director" shall mean any person designated by LIH.
Section 4.15. "LIH II Director" shall mean any person designated by LIH
II.
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<PAGE> 16
Section 4.16. "Stockholder Interested Transaction" shall have the
meaning set forth in Section 2.03(b).
Section 4.17. "Stockholder Voting Power" at any time shall mean the
aggregate voting power in the general election of directors of all Voting
Securities then Beneficially Owned by the LIH Entities and their respective
Affiliates and Associates which are signatories to this Agreement.
Section 4.18. "Subsidiary" shall mean, as to any Person, any
corporation at least a majority of the shares of stock of which having general
voting power under ordinary circumstances to elect a majority of the Board of
Directors of such corporation (irrespective of whether or not at the time stock
of any other class or classes shall have or might have voting power by reason of
the happening of any contingency) is, at the time as of which the determination
is being made, owned by such Person, or one or more of its Subsidiaries or by
such Person and one or more of its Subsidiaries.
Section 4.19. "Third Independent Director" shall mean the Independent
Director nominated in accordance with the provisions of Section 2.02(a)(i).
Section 4.20. "Third Independent Director Nominating Committee" shall
mean a committee of three directors, comprised of the LIH Director, the LIH II
Director, and one Independent Director, other than the Third Independent
Director. Any action of the Third Independent Director Nominating Committee
shall be unanimous.
Section 4.21. "Total Voting Power" at any time shall mean the total
combined voting power in the general election of directors of all the Voting
Securities then outstanding.
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Section 4.22. "Transfer" shall mean any sale, transfer, pledge,
encumbrance or other disposition, and to "Transfer" shall mean to self,
transfer, pledge, encumber or otherwise dispose of.
Section 4.23. "Voting Securities" shall mean at any time shares of any
class of capital stock of the Company which are then entitled to vote generally
in the election of directors.
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ARTICLE V
MISCELLANEOUS
Section 5.01. Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including telecopy) and shall be
given,
if to LIH to: LIH Holdings, LLC
c/o Harvest Partners, Inc.
767 Third Avenue
New York, NY 10017
Telecopier: 212-593-0734
Attention: Ira D. Kleinman, General Partner
with a copy to: Reid & Priest LLP
40 West 57th Street
New York, NY 10019
Telecopier: 212-603-2001
Attention: Leonard Gubar, Esq.
if to LIH II to: LIH Holdings II, LLC
c/o Harvest Partners, Inc.
767 Third Avenue
New York, NY 10017
Telecopier: 212-593-0734
Attention: Ira D. Kleinman, General Partner
with a copy to: Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, NY 10178
Attention: James Mercandante
if to the Company, to: Lund International Holdings, Inc.
911 Lund Boulevard
Anoka, MN 55303
Attention: William J. McMahon,
Chief Executive Officer
with a copy to: Leonard, Street and Deinard
150 South Fifth Street
Suite 2300
Minneapolis, MN 55402
Attention: Mark Weitz, Esq.
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or such address or telecopy number as such party may hereafter specify for the
purpose by notice to the other parties hereto. Each such notice, request or
other communication shall be effective when delivered personally, telegraphed or
telecopied, or, if mailed, five business days after the date of the mailing.
Section 5.02. Amendments; No Waivers.
(a) Any provision of this Agreement may be amended or waived if, and
only if, such amendment or waiver is in writing and signed, in the case of an
amendment, by the Stockholder and the Company, or in the case of a waiver, by
the party against whom the waiver is to be effective. No amendment or waiver by
the Company shall be effective unless approved by a majority of the Independent
Directors.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
Section 5.03. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns; provided, however, that no party
may assign this Agreement without the other party's prior written consent.
Section 5.04. Governing Law. This Agreement shall be construed in
accordance with and governed by the internal laws of the State of Delaware.
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Section 5.05. Counterparts; Effectiveness. This Agreement may be signed
in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have received
counterparts thereof signed by the other party hereto.
Section 5.06. Specific Performance. The Company and LIH and LIH II each
acknowledge and agree that the parties' respective remedies at law for a breach
or threatened breach of any of the provisions of this Agreement would be
inadequate and, in recognition of that fact, agrees that, in the event of a
breach or threatened breach by the Company or an LIH Entity of the provisions of
this Agreement, in addition to any remedies at law, each LIH Entity and the
Company, respectively, without posting any bond shall be entitled to obtain
equitable relief in the form of specific performance, a temporary restraining
order, a temporary or permanent injunction or any other equitable remedy which
may then be available.
Section 5.07. Termination. This Agreement shall terminate on the
Standstill Termination Date.
Section 5.08. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated. provided that
the parties hereto shall negotiate in good faith to attempt to place the parties
in the same position as they would have been in had such provision not been held
to be invalid, void or unenforceable.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first referred to above.
LUND INTERNATIONAL HOLDINGS, INC.
By /s/ William J. McMahon
---------------------------------------
Its
--------------------------------
LIH HOLDINGS, LLC
By /s/ Ira Kleinman
---------------------------------------
Its
--------------------------------
LIH HOLDINGS II, LLC
By /s/ Ira Kleinman
---------------------------------------
Its
--------------------------------
ACCEPTED AND AGREED
(as to Sections 2.04 and 2.05)
HARVEST PARTNERS III, L.P.
By Harvest Associates III, LLC
By /s/ Ira Kleinman
----------------------------
Name Ira Kleinman
Authorized Person
<PAGE> 22
Exhibit 1
LIH DIRECTOR
Ira Kleinman
LIH II DIRECTOR
Harvey Wertheim
<PAGE> 23
Exhibit 2
INDEPENDENT DIRECTORS
Robert Schoeberl
David Dovenberg
THIRD INDEPENDENT DIRECTOR
Dennis Vollmershausen
FOURTH INDEPENDENT DIRECTOR
Lawrence Day
<PAGE> 24
Exhibit 3
1. Any amendment to the Certificate of Incorporation or By-Laws of the
Company;
2. any reclassification, combination, split, subdivision, redemption,
purchase or other acquisition, directly or indirectly, of any debt or
equity security of the Company or any Subsidiary;
3. any sale, lease, transfer or other disposition (other than in the
ordinary course of business and other than to the Company or another
wholly owned Subsidiary), in one or more related transactions, of the
assets of the Company or any Subsidiary the book value of which assets
exceeds 2% of consolidated assets of the Company and its Subsidiaries;
4. any merger, consolidation, liquidation or dissolution of the Company or
any Subsidiary, other than with or into the Company or another wholly
owned Subsidiary;
5. any acquisition of any other business;
6. any investment by the Company or any Subsidiary in or loans, advances
or extensions of credit by the Company or any Subsidiary to, any Person
(other than (i) the Company or a Subsidiary, (ii) short term
investments in the ordinary course of business, or (iii) loans, or
advances to customers, officers, employees and suppliers in the
ordinary course of business (collectively the "Excepted Investments and
Loans")), which together with all such other investments, loans and
advances at the time owned by the Company and its Subsidiaries
(exclusive of the Excepted Investments and Loans) would exceed an
amount equal to 2% of consolidated assets;
7. any acquisition by the Company or any Subsidiary of assets, other than
investment or loan assets, not in the ordinary course of business;
8. issue or sell any capital stock of the Company or any Subsidiary, other
than (i) issuance of capital stock of the Company authorized for
issuance pursuant to stock plans or agreements in effect at the date
hereof, and (ii) issuance of shares of capital stock of the Company or
any Subsidiary, in one or more related transactions, the amount of
which does not exceed at the date of issuance or sale of such shares
(or the date of issuance or grant of any related right to acquire such
shares) in excess of 2% of the outstanding shares of capital stock of
such class;
9. any declaration or payment of any dividend or distribution with respect
to shares of the Company's capital stock; and
<PAGE> 25
10. any incurrence, assumption or issuance by the Company or its
Subsidiaries of any indebtedness for money borrowed, not in the
ordinary course of business, if, immediately after giving effect
thereto and the application of proceeds therefrom the aggregate amount
of such indebtedness of the Company and its Subsidiaries would exceed
$5,000,000.
11. establishment of, or continued existence of, any committee of the Board
of Directors with the power to approve any of the foregoing.
