<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) and AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
(Amendment No. 3)
Hilite Industries, Inc.
- -------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $0.01 per share
- -------------------------------------------------------------------------------
(Title of Class of Securities)
43153 10 1
- -------------------------------------------------------------------------------
(CUSIP Number)
Joseph W. Carreras
Hilite Holdings, LLC
Hilite Mergeco, Inc.
Terminal Square
50 Public Square
32nd Floor
Cleveland, Ohio 44113
(216) 771-6700
with a copy to:
Edward R. Mandell, Esq. Christopher M. Kelly, Esq.
Jordan A. Horvath, Esq. Patrick J. Leddy, Esq.
Parker Chapin Flattau & Klimpl, LLP Jones, Day, Reavis & Pogue
1211 Avenue of the Americas 901 Lakeside Avenue
New York, New York 10036 Cleveland, Ohio 44114
(212) 704-6000 (216) 586-3939
- -------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
June 1, 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 Rule 13d-1(e), Rule 13d- 1(f) or Rule
13d-1(g), check the following box. [ ]
Note. Schedules filed in paper format shall include a signed
original and five copies of the schedule, including all exhibits. See
Rule 13d-7(b) for other parties to whom copies are to be sent.
<PAGE> 2
<TABLE>
<CAPTION>
CUSIP NO. 43153 10 1 SCHEDULE 13D Page 2 of 19
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1 Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
Hilite Holdings, LLC
- -------------------------------------------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group* (a) [ X ]
(b) [ ]
- -------------------------------------------------------------------------------------------------------------------
3 SEC Use Only
- -------------------------------------------------------------------------------------------------------------------
4 Source of Funds*
Not applicable
- -------------------------------------------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization
State of Delaware
- -------------------------------------------------------------------------------------------------------------------
Number of 7 Sole Voting Power:
Shares Bene- --------------------------------------------------------------------------------------------------
ficially Owned 8 Shared Voting Power: 143,148 shares of common stock, par value of $0.01 per share**
by Each --------------------------------------------------------------------------------------------------
Reporting 9 Sole Dispositive Power:
Person With --------------------------------------------------------------------------------------------------
10 Shared Dispositive Power: 143,148 shares of common stock, par value of $0.01 per share**
--------------------------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person: 1,824,562 shares of common stock,
par value of $0.01 per share**
- -------------------------------------------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares* [ ]
- -------------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11): 7.6%**
- -------------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person*
OO
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
* SEE INSTRUCTIONS BEFORE FILLING OUT!
** See Item 5 below.
2
<PAGE> 3
<TABLE>
<CAPTION>
CUSIP NO. 43153 10 1 SCHEDULE 13D Page 3 of 19
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1 Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
Hilite Mergeco, Inc.
- -------------------------------------------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group* (a) [ X ]
(b) [ ]
- -------------------------------------------------------------------------------------------------------------------
3 SEC Use Only
- -------------------------------------------------------------------------------------------------------------------
4 Source of Funds*
Not applicable
- -------------------------------------------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization
State of Delaware
- -------------------------------------------------------------------------------------------------------------------
Number of 7 Sole Voting Power: None
Shares Bene- --------------------------------------------------------------------------------------------------
ficially Owned 8 Shared Voting Power: 143,148 shares of common stock, par value of $0.01 per share**
by Each --------------------------------------------------------------------------------------------------
Reporting 9 Sole Dispositive Power: None
Person With --------------------------------------------------------------------------------------------------
10 Shared Dispositive Power: 143,148 shares of common stock, par value of $0.01 per share**
--------------------------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person: 143,148 shares of common stock,
par value of $0.01 per share**
- -------------------------------------------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares* [ ]
- -------------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11): 7.6%**
- -------------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person*
CO
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
* SEE INSTRUCTIONS BEFORE FILLING OUT!
** See Item 5 below.
3
<PAGE> 4
<TABLE>
<CAPTION>
CUSIP NO. 43153 10 1 SCHEDULE 13D Page 4 of 19
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1 Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
James E. Lineberger, Jr. Trust
- -------------------------------------------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group* (a) [ X ]
(b) [ ]
- -------------------------------------------------------------------------------------------------------------------
3 SEC Use Only
- -------------------------------------------------------------------------------------------------------------------
4 Source of Funds*
Not applicable
- -------------------------------------------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization
State of Connecticut
- -------------------------------------------------------------------------------------------------------------------
Number of 7 Sole Voting Power: None
Shares Bene- --------------------------------------------------------------------------------------------------
ficially Owned 8 Shared Voting Power: 143,148 shares of common stock, par value of $0.01 per share**
by Each --------------------------------------------------------------------------------------------------
Reporting 9 Sole Dispositive Power: None
Person With --------------------------------------------------------------------------------------------------
10 Shared Dispositive Power: 143,148 shares of common stock, par value of $0.01 per share**
--------------------------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person: 143,148 shares of common stock,
par value of $0.01 per share**
- -------------------------------------------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares* [ ]
- -------------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11): 7.6%**
- -------------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person*
OO
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
* SEE INSTRUCTIONS BEFORE FILLING OUT!
** See Item 5 below.
4
<PAGE> 5
<TABLE>
<CAPTION>
CUSIP NO. 43153 10 1 SCHEDULE 13D Page 5 of 19
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1 Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
Geoffry S. Lineberger Trust
- -------------------------------------------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group* (a) [ X ]
(b) [ ]
- -------------------------------------------------------------------------------------------------------------------
3 SEC Use Only
- -------------------------------------------------------------------------------------------------------------------
4 Source of Funds*
Not applicable
- -------------------------------------------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization
State of Connecticut
- -------------------------------------------------------------------------------------------------------------------
Number of 7 Sole Voting Power: None
Shares Bene- --------------------------------------------------------------------------------------------------
ficially Owned 8 Shared Voting Power: 143,148 shares of common stock, par value of $0.01 per share**
by Each --------------------------------------------------------------------------------------------------
Reporting 9 Sole Dispositive Power: None
Person With --------------------------------------------------------------------------------------------------
10 Shared Dispositive Power: 143,148 shares of common stock, par value of $0.01 per share**
--------------------------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person: 143,148 shares of common stock,
par value of $0.01 per share**
- -------------------------------------------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares* [ ]
- -------------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11): 7.6%**
- -------------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person*
OO
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
* SEE INSTRUCTIONS BEFORE FILLING OUT!
** See Item 5 below.
5
<PAGE> 6
<TABLE>
<CAPTION>
CUSIP NO. 43153 10 1 SCHEDULE 13D Page 6 of 19
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1 Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
Christopher Lineberger, Jr. Trust
- -------------------------------------------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group* (a) [ X ]
(b) [ ]
- -------------------------------------------------------------------------------------------------------------------
3 SEC Use Only
- -------------------------------------------------------------------------------------------------------------------
4 Source of Funds*
Not applicable
- -------------------------------------------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization
State of Connecticut
- -------------------------------------------------------------------------------------------------------------------
Number of 7 Sole Voting Power: None
Shares Bene- --------------------------------------------------------------------------------------------------
ficially Owned 8 Shared Voting Power: 143,148 shares of common stock, par value of $0.01 per share**
by Each --------------------------------------------------------------------------------------------------
Reporting 9 Sole Dispositive Power: None
Person With --------------------------------------------------------------------------------------------------
10 Shared Dispositive Power: 143,148 shares of common stock, par value of $0.01 per share**
--------------------------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person: 143,148 shares of common stock,
par value of $0.01 per share**
- -------------------------------------------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares* [ ]
- -------------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11): 7.6%**
- -------------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person*
OO
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
* SEE INSTRUCTIONS BEFORE FILLING OUT!
** See Item 5 below.
6
<PAGE> 7
<TABLE>
<CAPTION>
CUSIP NO. 43153 10 1 SCHEDULE 13D Page 7 of 19
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1 Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
The Brady Family Limited Partnership
- -------------------------------------------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group* (a) [ X ]
(b) [ ]
- -------------------------------------------------------------------------------------------------------------------
3 SEC Use Only
- -------------------------------------------------------------------------------------------------------------------
4 Source of Funds*
Not applicable
- -------------------------------------------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization
State of Illinois
- -------------------------------------------------------------------------------------------------------------------
Number of 7 Sole Voting Power: None
Shares Bene- --------------------------------------------------------------------------------------------------
ficially Owned 8 Shared Voting Power: 143,148 shares of common stock, par value of $0.01 per share**
by Each --------------------------------------------------------------------------------------------------
Reporting 9 Sole Dispositive Power: None
Person With --------------------------------------------------------------------------------------------------
10 Shared Dispositive Power: 143,148 shares of common stock, par value of $0.01 per share**
--------------------------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person: 143,148 shares of common stock,
par value of $0.01 per share**
- -------------------------------------------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares* [ ]
- -------------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11): 7.6%**
- -------------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person*
OO
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
* SEE INSTRUCTIONS BEFORE FILLING OUT!
** See Item 5 below.
7
<PAGE> 8
<TABLE>
<CAPTION>
CUSIP NO. 43153 10 1 SCHEDULE 13D Page 8 of 19
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1 Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
Samuel M. Berry
- -------------------------------------------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group* (a) [ X ]
(b) [ ]
- -------------------------------------------------------------------------------------------------------------------
3 SEC Use Only
- -------------------------------------------------------------------------------------------------------------------
4 Source of Funds*
Not applicable
- -------------------------------------------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization
United States
- -------------------------------------------------------------------------------------------------------------------
Number of 7 Sole Voting Power: None
Shares Bene- --------------------------------------------------------------------------------------------------
ficially Owned 8 Shared Voting Power: 143,148 shares of common stock, par value of $0.01 per share**
by Each --------------------------------------------------------------------------------------------------
Reporting 9 Sole Dispositive Power: None
Person With --------------------------------------------------------------------------------------------------
10 Shared Dispositive Power: 143,148 shares of common stock, par value of $0.01 per share**
--------------------------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person: 143,148 shares of common stock,
par value of $0.01 per share**
- -------------------------------------------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares* [ ]
- -------------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11): 7.6%**
- -------------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person*
IN
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
* SEE INSTRUCTIONS BEFORE FILLING OUT!
** See Item 5 below.
8
<PAGE> 9
<TABLE>
<CAPTION>
CUSIP NO. 43153 10 1 SCHEDULE 13D Page 9 of 19
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1 Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
Chris A. Curto
- -------------------------------------------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group* (a) [ X ]
(b) [ ]
- -------------------------------------------------------------------------------------------------------------------
3 SEC Use Only
- -------------------------------------------------------------------------------------------------------------------
4 Source of Funds*
Not applicable
- -------------------------------------------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization
United States
- -------------------------------------------------------------------------------------------------------------------
Number of 7 Sole Voting Power: None
Shares Bene- --------------------------------------------------------------------------------------------------
ficially Owned 8 Shared Voting Power: 143,148 shares of common stock, par value of $0.01 per share**
by Each --------------------------------------------------------------------------------------------------
Reporting 9 Sole Dispositive Power: None
Person With --------------------------------------------------------------------------------------------------
10 Shared Dispositive Power: 143,148 shares of common stock, par value of $0.01 per share**
--------------------------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person: 143,148 shares of common stock,
par value of $0.01 per share**
- -------------------------------------------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares* [ ]
- -------------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11): 7.6%**
- -------------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person*
IN
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
* SEE INSTRUCTIONS BEFORE FILLING OUT!
** See Item 5 below.
9
<PAGE> 10
<TABLE>
<CAPTION>
CUSIP NO. 43153 10 1 SCHEDULE 13D Page 10 of 19
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1 Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
Arthur D. Johnson
- -------------------------------------------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group* (a) [ X ]
(b) [ ]
- -------------------------------------------------------------------------------------------------------------------
3 SEC Use Only
- -------------------------------------------------------------------------------------------------------------------
4 Source of Funds*
Not applicable
- -------------------------------------------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization
United States
- -------------------------------------------------------------------------------------------------------------------
Number of 7 Sole Voting Power: None
Shares Bene- --------------------------------------------------------------------------------------------------
ficially Owned 8 Shared Voting Power: 143,148 shares of common stock, par value of $0.01 per share**
by Each --------------------------------------------------------------------------------------------------
Reporting 9 Sole Dispositive Power: None
Person With --------------------------------------------------------------------------------------------------
10 Shared Dispositive Power: 143,148 shares of common stock, par value of $0.01 per share**
--------------------------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person: 143,148 shares of common stock,
par value of $0.01 per share**
- -------------------------------------------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares* [ ]
- -------------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11): 7.6%**
- -------------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person*
IN
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
* SEE INSTRUCTIONS BEFORE FILLING OUT!
** See Item 5 below.
10
<PAGE> 11
<TABLE>
<CAPTION>
CUSIP NO. 43153 10 1 SCHEDULE 13D Page 11 of 19
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1 Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
Ronald E. Reinke
- -------------------------------------------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group* (a) [ X ]
(b) [ ]
- -------------------------------------------------------------------------------------------------------------------
3 SEC Use Only
- -------------------------------------------------------------------------------------------------------------------
4 Source of Funds*
Not applicable
- -------------------------------------------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization
United States
- -------------------------------------------------------------------------------------------------------------------
Number of 7 Sole Voting Power: None
Shares Bene- --------------------------------------------------------------------------------------------------
ficially Owned 8 Shared Voting Power: 143,148 shares of common stock, par value of $0.01 per share**
by Each --------------------------------------------------------------------------------------------------
Reporting 9 Sole Dispositive Power: None
Person With --------------------------------------------------------------------------------------------------
10 Shared Dispositive Power: 143,148 shares of common stock, par value of $0.01 per share**
--------------------------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person: 143,148 shares of common stock,
par value of $0.01 per share**
- -------------------------------------------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares* [ ]
- -------------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11): 7.6%**
- -------------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person*
IN
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
* SEE INSTRUCTIONS BEFORE FILLING OUT!
** See Item 5 below.
11
<PAGE> 12
<TABLE>
<CAPTION>
CUSIP NO. 43153 10 1 SCHEDULE 13D Page 12 of 19
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1 Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
Donald M. Maher
- -------------------------------------------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group* (a) [ X ]
(b) [ ]
- -------------------------------------------------------------------------------------------------------------------
3 SEC Use Only
- -------------------------------------------------------------------------------------------------------------------
4 Source of Funds*
Not applicable
- -------------------------------------------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization
United States
- -------------------------------------------------------------------------------------------------------------------
Number of 7 Sole Voting Power: None
Shares Bene- --------------------------------------------------------------------------------------------------
ficially Owned 8 Shared Voting Power: 143,148 shares of common stock, par value of $0.01 per share**
by Each --------------------------------------------------------------------------------------------------
Reporting 9 Sole Dispositive Power: None
Person With --------------------------------------------------------------------------------------------------
10 Shared Dispositive Power: 143,148 shares of common stock, par value of $0.01 per share**
--------------------------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person: 143,148 shares of common stock,
par value of $0.01 per share**
- -------------------------------------------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares* [ ]
- -------------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11): 7.6%**
- -------------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person*
IN
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
* SEE INSTRUCTIONS BEFORE FILLING OUT!
** See Item 5 below.
12
<PAGE> 13
<TABLE>
<CAPTION>
CUSIP NO. 43153 10 1 SCHEDULE 13D Page 13 of 19
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1 Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
Willie Vercher
- -------------------------------------------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group* (a) [ X ]
(b) [ ]
- -------------------------------------------------------------------------------------------------------------------
3 SEC Use Only
- -------------------------------------------------------------------------------------------------------------------
4 Source of Funds*
Not applicable
- -------------------------------------------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization
United States
- -------------------------------------------------------------------------------------------------------------------
Number of 7 Sole Voting Power: None
Shares Bene- --------------------------------------------------------------------------------------------------
ficially Owned 8 Shared Voting Power: 143,148 shares of common stock, par value of $0.01 per share**
by Each --------------------------------------------------------------------------------------------------
Reporting 9 Sole Dispositive Power: None
Person With --------------------------------------------------------------------------------------------------
10 Shared Dispositive Power: 143,148 shares of common stock, par value of $0.01 per share**
--------------------------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person: 143,148 shares of common stock,
par value of $0.01 per share**
- -------------------------------------------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares* [ ]
- -------------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11): 7.6%**
- -------------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person*
IN
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
* SEE INSTRUCTIONS BEFORE FILLING OUT!
** See Item 5 below.
13
<PAGE> 14
<TABLE>
<CAPTION>
CUSIP NO. 43153 10 1 SCHEDULE 13D Page 14 of 19
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1 Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
Dr. Krishnamurthy Sundararajan
- -------------------------------------------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group* (a) [ X ]
(b) [ ]
- -------------------------------------------------------------------------------------------------------------------
3 SEC Use Only
- -------------------------------------------------------------------------------------------------------------------
4 Source of Funds*
Not applicable
- -------------------------------------------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization
United States
- -------------------------------------------------------------------------------------------------------------------
Number of 7 Sole Voting Power: None
Shares Bene- --------------------------------------------------------------------------------------------------
ficially Owned 8 Shared Voting Power: 143,148 shares of common stock, par value of $0.01 per share**
by Each --------------------------------------------------------------------------------------------------
Reporting 9 Sole Dispositive Power: None
Person With --------------------------------------------------------------------------------------------------
10 Shared Dispositive Power: 143,148 shares of common stock, par value of $0.01 per share**
--------------------------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person: 143,148 shares of common stock,
par value of $0.01 per share**
- -------------------------------------------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares* [ ]
- -------------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11): 7.6%**
- -------------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person*
IN
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
* SEE INSTRUCTIONS BEFORE FILLING OUT!
** See Item 5 below.
14
<PAGE> 15
ITEM 1. SECURITY AND ISSUER
This Amendment No. 3 amends the Statement on Schedule 13D (the
"Schedule 13D") filed with the Securities and Exchange Commission (the
"Commission") on May 7, 1999 by Hilite Holdings, LLC ("Buyer") and
Amendments No. 1 and 2 to the Schedule 13D filed with the Commission by
Buyer, Hilite Mergeco, Inc. ("Merger Subsidiary"), and the James E.
Lineberger, Jr. Trust, the Geoffrey S. Lineberger Trust, the
Christopher Lineberger Trust, The Brady Family Limited Partnership,
Samuel M. Berry, Chris A. Curto, Arthur D. Johnson, Ronald E. Reinke,
Donald M. Maher, Willie Vercher and Dr. Krishnamurthy Sundararajan
(collectively, the "Continuing Stockholders") on May 20, 1999, and May
27, 1999, respectively.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Item 3 of the Schedule 13D is hereby amended and supplemented as
follows:
The source of funds for the Stock Purchase was the working capital of
Buyer. Additionally, prior to the expiration of the Offer, certain of
the Continuing Stockholders effected a cashless exercise of their
options to purchase Shares.
ITEM 4. IDENTITY AND BACKGROUND
Item 4 of the Schedule 13D is hereby amended and supplemented as
follows:
Pursuant to the Merger Agreement, the number of members on the Board of
Directors of the Company has been increased to seven. James E.
Lineberger, Ronald G. Assaf, James D. Gerson and John F. Creamer have
resigned as directors of the Company, and Joseph W. Carreras, Michael
B. Goldberg, Michael T. Kestner, John F. Kirby and Mary Lynn Putney
have been appointed as directors of the Company.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Item 5 of the Schedule 13D is hereby amended and supplemented as
follows:
The Company's all cash tender offer for all of its outstanding
shares of common stock, par value of $0.01 per share (the "Shares"),
expired at 9:00 a.m. New York City time on June 1, 1999. 4,371,141
Shares were validly tendered and not withdrawn pursuant to the Offer
(including 22,550 Shares tendered pursuant to guaranteed delivery
procedures) and were accepted for payment at a price of $14.25 per
Share. Immediately prior to the consummation of the Offer, the Company
sold 1,681,414 Shares to Buyer in the Stock Purchase. Following the
consummation of the Offer and the Stock Purchase, according to the
Company, as of the date hereof, there are 1,877,317 Shares outstanding
and warrants to purchase a total of 99,417 Shares.
The following table sets forth the number of Shares tendered
pursuant to the Offer by the Persons named below. All such Shares were
accepted for payment at a price of $14.25 per Share:
Name and Address of Person Number of Shares Tendered
--------------------------- -------------------------
James E. Lineberger, Jr. Trust 1,027,190
1120 Boston Post Road
Darien, CT 06820
15
<PAGE> 16
Geoffry S. Lineberger Trust 1,027,189
1120 Boston Post Road
Darien, CT 06820
Christopher Lineberger Trust 1,027,189
1120 Boston Post Road
Darien, CT 06820
The Brady Family Limited Partnership 351,125
2845 Parkwood Lane
Aurora, IL 60504
Samuel M. Berry 157,517
c/o Hilite Industries, Inc.
1671 S. Broadway
Carrollton, TX 75006
The following table sets forth, as of the date hereof, the beneficial
ownership of Shares of the following persons:
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership(1) Class
---------------- ----------------------- -----
<S> <C> <C>
Hilite Holdings, LLC
Terminal Tower
50 Public Square
32nd Floor
Cleveland, Ohio 44113 1,681,414 89.6%
James E. Lineberger, Jr. Trust
1120 Boston Post Road
Darien, CT 06820 29,240 1.6%
Geoffry S. Lineberger Trust
1120 Boston Post Road
Darien, CT 06820 29,240 1.6%
Christopher Lineberger Trust
1120 Boston Post Road
Darien, CT 06820 29,239 1.6%
Samuel M. Berry
c/o Hilite Industries, Inc.
1671 S. Broadway
Carrollton, TX 75006 21,053 1.1%
Arthur D. Johnson
c/o Hilite Industries, Inc.
1671 S. Broadway
Carrollton, TX 75006 9,035 *
Donald M. Maher
c/o Hilite Industries, Inc.
1671 S. Broadway
Carrollton, TX 75006 9,035 *
</TABLE>
16
<PAGE> 17
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership(1) Class
------------------ ----------------------- -----------
<S> <C> <C>
The Brady Family Limited Partnership
2845 Parkwood Lane
Aurora, IL 60504 7,018 *
Ronald E. Reinke
c/o Hilite Industries, Inc.
1671 S. Broadway
Carrollton, TX 75006 5,762 *
Chris A. Curto
c/o Hilite Industries, Inc.
1671 S. Broadway
Carrollton, TX 75006 2,759 *
Willie Vercher
c/o Hilite Industries, Inc.
1671 S. Broadway
Carrollton, TX 75006 455 *
Dr. Krishnamurthy Sundararajan
c/o Hilite Industries, Inc.
1671 S. Broadway
Carrollton, TX 75006 312 *
</TABLE>
- -------------------------
* Less than one percent
(1) Pursuant to the Stockholders Agreement, the Continuing Stockholders
have granted Buyer and Merger Subsidiary a proxy to vote the 143,148
Shares collectively owned by the Continuing Stockholders in favor of
the Merger. As a result of such proxy, Buyer, Merger Subsidiary and the
Continuing Stockholders, as a group, may be deemed to beneficially own
those 143,148 Shares.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
In connection with the consummation of the Offer and the Stock
Purchase, Buyer, the Continuing Stockholders and First Fidelity Capital, Inc.
and Magnetite Asset Investors L.L.C. (collectively, the "Warrant Holders")
entered into an Agreement Among Stockholders, dated as of June 1, 1999 (the
"Agreement Among Stockholders"). Pursuant to the Agreement Among Stockholders,
the parties agreed to, among other things, (i) restrict the transferability of
their respective Shares, (ii) provide for a right of first refusal to the
Company and subsequently to the other Stockholders in the event of any proposed
transfer of Shares, and (iii) provide certain co-sale, drag-along and
pre-emptive rights. The Agreement Among Stockholders also provides that the
Board of Directors of the Company will initially consist of five members: Joseph
W. Carreras, Michael T. Kestner and three representatives designated by certain
members of Buyer. In addition, the Agreement Among Stockholders provides for the
repurchase of Shares owned by members of management of the Company in certain
circumstances, including death, disability and termination of employment of such
individuals.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit A Agreement Among Stockholders, dated as of June 1, 1999, among
Hilite Holdings, LLC, First Fidelity Capital, Inc., Magnetite
Asset Investors, L.L.C. and the individual stockholders listed
on Exhibit I attached thereto.
17
<PAGE> 18
SIGNATURE
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 correct.
Date: June 8, 1999
HILITE HOLDINGS, LLC
/s/ JOSEPH W. CARRERAS
-----------------------------------------
By: Joseph W. Carreras
President
HILITE MERGECO, INC.
/s/ JOSEPH W. CARRERAS
-----------------------------------------
By: Joseph W. Carreras
President
JAMES E. LINEBERGER, JR. TRUST
/s/ JAMES E. LINEBERGER, JR.
-----------------------------------------
By: James E. Lineberger, Jr.
Trustee
GEOFFRY S. LINEBERGER TRUST
/s/ JAMES E. LINEBERGER, JR.
-----------------------------------------
By: James E. Lineberger, Jr.
Trustee
CHRISTOPHER LINEBERGER TRUST
/s/ JAMES E. LINEBERGER, JR.
-----------------------------------------
By: James E. Lineberger, Jr.
Trustee
THE BRADY FAMILY LIMITED PARTNERSHIP
/s/ DANIEL W. BRADY
-----------------------------------------
By: Daniel W. Brady
General Partner
/s/ SAMUEL M. BERRY
-----------------------------------------
Samuel M. Berry
18
<PAGE> 19
/s/ CHRIS A. CURTO
--------------------------------------
Chris A. Curto
/s/ ARTHUR D. JOHNSON
--------------------------------------
Arthur D. Johnson
/s/ RONALD E. REINKE
--------------------------------------
Ronald E. Reinke
/s/ DONALD M. MAHER
--------------------------------------
Donald M. Maher
/s/ WILLIE VERCHER
--------------------------------------
Willie Vercher
/s/ DR. KRISHNAMURTHY SUNDARARAJAN
--------------------------------------
Dr. Krishnamurthy Sundararajan
19
<PAGE> 1
Exhibit A
AGREEMENT AMONG STOCKHOLDERS
BY AND AMONG
HILITE INDUSTRIES, INC.
AND ITS STOCKHOLDERS
Dated June 1, 1999
<PAGE> 2
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
<S> <C> <C>
SECTION 1. DEFINITIONS.....................................................................................1
SECTION 2. RESTRICTIONS ON TRANSFER........................................................................5
2.1 Restriction on Transfer.........................................................................5
2.2 Permitted Transfers.............................................................................5
2.3 Securities Law Restrictions.....................................................................6
2.4 Restrictions on Transfer........................................................................6
SECTION 3. RIGHT OF FIRST REFUSAL..........................................................................6
3.1 Intention to Sell...............................................................................6
3.2 Acceptance Period...............................................................................7
3.3 Failure of the Company to Exercise Its Option to Purchase.......................................7
3.4 Notice of Election to Purchase..................................................................7
3.5 Selling Stockholder's Rights Upon Failure to Exercise Right to Purchase
All Offered Shares..............................................................................7
3.6 Payment for Selling Stockholder's Offered Shares................................................8
3.7 Closing Date....................................................................................8
SECTION 4. RIGHT TO PARTICIPATE IN CO-SALE.................................................................9
4.1 Intention to Sell...............................................................................9
4.2 Acceptance Period...............................................................................9
4.3 Co-Sale of Shares...............................................................................9
4.4 Liability.......................................................................................9
4.5 Share Certificates; Disposition Proceeds........................................................9
4.6 Limitation on Right of Co-Sale By Management Group.............................................10
SECTION 5. OBLIGATION TO PARTICIPATE......................................................................10
5.1 Obligation to Participate......................................................................10
5.2 Satisfaction of Conditions.....................................................................10
5.3 Costs of Sale..................................................................................10
5.4 Certain Definitions............................................................................11
SECTION 6. PREEMPTIVE RIGHTS..............................................................................11
6.1 Eligible Offering..............................................................................11
6.2 Notice of Eligible Offering....................................................................11
6.3 Sale to Third Parties..........................................................................12
6.4 Exceptions to Issues of Securities.............................................................12
SECTION 7. MANAGEMENT AND OPERATION OF THE COMPANY........................................................12
7.1 Board of Directors.............................................................................12
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
SECTION 8. REPURCHASE OF MANAGEMENT GROUP SHARES.........................................................13
8.1 The Company's Repurchase of Management Group Shares............................................13
8.2 Exercise of Rights.............................................................................14
8.3 Exercise of "Put" Option.......................................................................15
8.4 Repurchase and Purchase Rights Binding on Transferees..........................................15
SECTION 9. COMPANY'S INABILITY TO SATISFY OBLIGATIONS...........................................................15
SECTION 10. REGULATORY REQUIREMENTS; CESSATION OF DIRECT
INVESTMENT PROGRAM. ..............................................................................15
SECTION 11. LEGEND ON SHARE CERTIFICATES........................................................................16
SECTION 12. DURATION OF AGREEMENT...............................................................................17
SECTION 13. REPRESENTATIONS AND WARRANTIES OF THE
STOCKHOLDERS......................................................................................17
SECTION 14. COVENANT OF HILITE HOLDINGS, LLC.....................................................................18
SECTION 15. REPORTS..............................................................................................18
SECTION 16. CONSENT TO JURISDICTION AND SERVICE OF PROCESS......................................................18
SECTION 17. INDIVIDUAL STOCKHOLDERS; COMMUNITY PROPERTY.........................................................19
SECTION 18. BENEFITS OF AGREEMENT...............................................................................19
SECTION 19. NOTICES.............................................................................................19
SECTION 20. GOVERNING LAW; CONSTRUCTION; VENUE..................................................................20
SECTION 21. MODIFICATION AND WAIVER.............................................................................20
SECTION 22. ENTIRE AGREEMENT....................................................................................20
SECTION 23. SEVERABILITY........................................................................................20
SECTION 24. REMEDIES............................................................................................20
SECTION 25. COUNTERPARTS........................................................................................21
</TABLE>
ii
<PAGE> 4
AGREEMENT AMONG STOCKHOLDERS
----------------------------
THIS AGREEMENT AMONG STOCKHOLDERS (this "Agreement"), dated as
of June 1, 1999, is entered into by and among HILITE INDUSTRIES, INC., a
Delaware corporation (the "Company"), First Fidelity Private Capital, Inc. (to
be renamed First Union Private Capital, Inc., "First Fidelity"), Magnetite Asset
Investors L.L.C. ("Magnetite") (First Fidelity and Magnetite collectively, the
"Warrant Holders"), and the stockholders listed on SCHEDULE I attached to this
Agreement and any other Person that becomes a stockholder of the Company after
the date of this Agreement (collectively with the Warrant Holders, the
"Stockholders").
RECITALS
--------
1. All of the issued and outstanding shares of Common Stock,
$.01 par value (the "Common Shares"), of the Company are held of record and
beneficially owned by the Stockholders as of the date of this Agreement as set
forth on SCHEDULE I attached to this Agreement.
2. Pursuant to an Investment Agreement, dated June 1, 1999, by
and between the Company and the Warrant Holders, the Company issued to the
Warrant Holders warrants (the "Warrants") to purchase Common Shares.
3. The Stockholders and the Company desire to provide for
stability of the ownership and operation of the Company and to promote
continuity in the Company's management and policies.
AGREEMENTS
----------
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and provisions set forth in this Agreement, the parties hereto
hereby agree as follows:
SECTION 1. DEFINITIONS
-----------
As used in this Agreement, the following terms have the
following respective meanings:
"AFFILIATE" means, with respect to any Person, any other
Person (other than the Company) that directly or indirectly controls, is
controlled by or is under common control with such Person.
"BOARD OF DIRECTORS" means the Board of Directors of the
Company.
<PAGE> 5
"CHANGE IN CONTROL AGREEMENT" means the Change in Control
Retention Bonus and Employment Agreement entered into by each Employee and the
Company.
"CLOSING" means the date on which the sale and purchase of a
Selling Stockholder's Shares is to be completed.
"COMPANY ACCEPTANCE PERIOD" means the ten (10) business days
from and after the date of receipt by the Company of a Notice of Intention to
Sell in which the Company has to give its written notice to the Selling
Stockholder whether or not the Company wishes to exercise its option to purchase
all of the Selling Stockholders' Shares at the price and on the terms set forth
in the Notice of Intention to Sell.
"CO-SALE NOTICE" means the written notice a Transferring
Stockholder must deliver to the Company, setting forth the number of Shares
intended to be sold by the Transferring Stockholder, the proposed purchase price
per share, the proposed purchaser and the address of such Person, and the other
terms and conditions of sale.
"CO-SALE SHARES" means those Eligible Shares as to which an
Eligible Stockholder has exercised its co-sale rights pursuant to, and in
accordance with, the provisions of SECTION 4.
"DEBT" of any Person means: either (a) any liability of any
Person (i) for borrowed money (including the current portion thereof), or (ii)
under any reimbursement obligation relating to a letter of credit, bankers'
acceptance or note purchase facility, or (iii) evidenced by a bond, note,
debenture or similar instrument (including a purchase money obligation), or (iv)
for the payment of money relating to a lease that is required to be classified
as a capitalized lease obligation in accordance with United States generally
accepted accounting principles, or (v) for all or any part of the deferred
purchase price of property or services (other than trade payables), or (b) any
liability of others described in the preceding clause (a) that such Person has
guaranteed, that is recourse to such Person or any of its assets or that is
otherwise its legal liability or that is secured in whole or in part by the
assets of such Person.
"DISABILITY" means any Employee Stockholder that because of
accident, disability or physical or mental illness, is incapable of performing
his or her duties to the Company for (a) a continuous period of 180 days and
remains so incapable at the end of such 180-day period, or (b) periods amounting
in the aggregate to 180 days within any one period of 365 days and remains so
incapable at the end of such aggregate period of 180 days.
"EBITDA" means the Company's consolidated net income as
reflected in its consolidated financial statements for the relevant period,
excluding any extraordinary gains or losses, and increased by the amount
reflected in such financial statements as expenses incurred for interest, taxes,
depreciation, amortization of any intangible assets and financial or related
fees.
"ELIGIBLE STOCKHOLDER" means (a) any Stockholder other than a
Selling Stockholder, and (b) any Stockholder other than a Transferring
Stockholder.
2
<PAGE> 6
"ELIGIBLE STOCKHOLDER ACCEPTANCE PERIOD" means the ten (10)
business days from and after the date of receipt by an Eligible Stockholder from
the Company of the Notice of Intention to Sell in which such Eligible
Stockholder has to give written notice to the Company and the Selling
Stockholder whether or not such Eligible Stockholder wishes to exercise its
option to purchase any of the Offered Shares not purchased by the Company at the
price and on the terms set forth in the Notice of Intention to Sell.
"EMPLOYEE STOCKHOLDER" means a Stockholder who is a member of
the Management Group.
"EMPLOYEE STOCKHOLDER REPURCHASE EVENT" mean the death or
Disability of or the termination of employment of an Employee Stockholder.
"HILITE HOLDINGS" means Hilite Holdings, LLC, a Delaware
limited liability company.
"INITIAL PUBLIC OFFERING" means an initial underwritten
offering of the Shares pursuant to a registration statement filed under the
Securities Act of 1933, as amended.
"MANAGEMENT GROUP" means Stockholders identified on SCHEDULE I
as members of management of the Company and Stockholders who become members of
the management of the Company after the date of this Agreement other than Joseph
W. Carreras and Michael T.
Kestner.
"NOTICE OF INTENTION TO SELL" means the written notice a
Selling Stockholder must deliver to the Company under SECTION 3.1 setting forth
the number of Shares intended to be sold by the Selling Stockholder, the
proposed purchase price per Share, the proposed purchaser and the address of
such person, and the other terms and conditions of sale.
"PERSON" means any individual, corporation, partnership,
limited liability company, trust, unincorporated association or other entity.
"PROPORTIONATE PERCENTAGE" means with respect to any
transaction, the pro rata percentage of Shares that an Eligible Stockholder is
entitled to purchase pursuant to SECTION 3 or to sell pursuant to SECTION 4 or
the pro rata percentage of a transaction a Stockholder is entitled to
participate in pursuant to SECTION 14. Such pro rata percentage is the
percentage which expresses the ratio of the total number of Shares owned by an
Eligible Stockholder (assuming conversion of the Warrants) and the total number
of Shares owned by all Eligible Stockholders (assuming conversion of the
Warrants).
"SECURITIES ACT" means the Securities Act of 1933, as amended
form time to time.
"SELLING STOCKHOLDER" means any Stockholder who proposes to
Transfer all or any portion of his, her or its Shares, or any Stockholder who or
which has delivered a Notice of Intention to Sell with respect to all or any
portion of his, her or its Shares, pursuant to the provisions of SECTION 3.
3
<PAGE> 7
"SHARES" means (i) the Common Shares now outstanding or
outstanding after the date of this Agreement, (ii) any Common Shares issued or
issuable directly or indirectly upon exercise of the Warrants, (iii) any
securities into which any such shares may have been changed, converted or
exchanged, and any Common Shares issued or issuable with respect to the
securities referred to in clauses (i), (ii) and (iii) by way of stock dividend
or stock split or in connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization.
"STOCKHOLDER" includes each holder of Shares and Warrants
listed on SCHEDULE I attached to this Agreement (including the Warrant Holders),
and each other Person who becomes the record or beneficial owner of Shares or
Warrants.
"SUBORDINATED DEBT" means the Senior Subordinated Notes in the
aggregate principal amount of $15,000,000 issued to the Warrant Holders.
"TERMINATION FOR CAUSE" means the Company's termination of an
Employee Stockholder's employment with the Company for any of the following
reasons:
(i) an act of fraud, embezzlement or theft in connection
with the Employee Stockholder's duties or in the
course of his or her employment with the Company;
(ii) intentional wrongful damage to property of the
Company;
(iii) intentional wrongful disclosure of secret processes
or confidential information of the Company;
(iv) intentional breach of Section 7 of the Employee
Stockholder's Change in Control Agreement for so long
as such agreement is in effect; or
(v) a willful failure or refusal to follow the lawful and
proper directives of the Chief Executive Officer of
the Company (the "CEO") consistent with the Employee
Stockholder's position, after receipt by the Employee
Stockholder of written notice from the CEO specifying
in reasonable detail the alleged failure or refusal
and after a reasonable opportunity for the Employee
Stockholder to cure such alleged failure or refusal;
For purposes of this definition, no act or failure to act on the part of the
Employee Stockholder shall be deemed "intentional" if it was due primarily to an
error in judgment or negligence, but shall be deemed "intentional" only if done
or omitted to be done by the Employee Stockholder not in good faith and without
reasonable belief that his or her action or omission was in the best interest of
the Company. Notwithstanding the foregoing, the Employee Stockholder shall not
be deemed to have been terminated for "Cause" hereunder unless and until there
shall have been delivered to the Employee Stockholder a copy of a resolution
duly adopted by the affirmative vote of not less than three quarters of the
Board of Directors then in office at a meeting of the Board of Directors called
and held for such purpose, after reasonable notice to the Employee Stockholder
and an opportunity for the Employee Stockholder, together with his counsel (if
the Employee Stockholder chooses to have counsel present at such meeting), to be
heard before the Board of Directors, finding that, in the good faith opinion of
the Board of Directors, the
4
<PAGE> 8
Employee Stockholder had committed an act constituting "Cause" as herein defined
and specifying act constituting "Cause" as herein defined and specifying the
particulars thereof in detail. Nothing herein will limit the right of the
Employee Stockholder or his beneficiaries to contest the validity or propriety
of any such determination.
"TERMINATION WITHOUT CAUSE" means the Company's termination of
an Employee Stockholder's employment with the Company for any reason other than
by death or Disability or a Termination For Cause.
"TRANSFER" means sale, transfer, assignment, gift, pledge,
hypothecation, encumber, or other disposition, whether voluntary or involuntary
or by operation of law.
"TRANSFERRING STOCKHOLDER" means any Stockholder who has
delivered or is required to deliver a Co-Sale Notice with respect to all or any
portion of his, her or its Shares, pursuant to the provisions of SECTION 4.
"VOLUNTARY TERMINATION" means an Employee Stockholder's
termination of his or her employment with the Company.
"WARRANT HOLDERS" means the Warrant Holders, as defined in the
Preamble, and each other Person who becomes the record or beneficial owner of
the Warrants.
SECTION 2. RESTRICTIONS ON TRANSFER
- -----------------------------------
2.1 RESTRICTION ON TRANSFER. At no time during the term of
this Agreement may a Stockholder Transfer any Shares or Warrants or any interest
in Shares or Warrants except by a Transfer permitted in SECTIONS 3, 4, 5, or 8
or except as set forth in SECTION 2.2.
2.2 PERMITTED TRANSFERS. A Stockholder may Transfer Shares or
Warrants as follows:
(a) To an Affiliate or, in the case of a Stockholder
that is a partnership, to its partners or to the general
partners of such partners or, in the case of a Stockholder
that is a limited liability company, to its members or, in the
case of a Stockholder that is a trust, to its beneficiaries;
(b) In the case of a Stockholder who is an
individual, to the spouse or lineal descendants of such
Stockholder including, without limitation, Transfers by
bequest or device, or to a trust or trusts for the benefit of
any of the foregoing;
(c) In the case of a Transfer of Warrants by the
Warrant Holders, to the purchaser of at least 20% of the
Subordinated Debt; or
(d) To related trusts, other entities or family
members undertaken for estate planning purposes.
PROVIDED, HOWEVER, that any above-described transferee or distributee of Shares
or Warrants permitted under SECTION 2.1 or SECTION 2.2 must (i) have agreed in
writing with the parties to this
5
<PAGE> 9
Agreement prior to the consummation of such Transfer to be bound by and to
comply with all applicable provisions of this Agreement including, without
limitation, the provisions contained in SECTIONS 7 and 8, and (ii) be deemed to
be a Stockholder or Warrant Holders, as the case may be, for purposes of this
Agreement. Any Transfer of Shares or Warrants that is not made strictly in
accordance with the provisions of this Agreement will be null and void, and the
Company will not recognize any such Transfer or the purported transferee as a
holder of Shares or Warrants.
2.3 SECURITIES LAW RESTRICTIONS. Notwithstanding any other
provision in this Agreement, but subject to the express written waiver by the
Company in the exercise of its good faith and reasonable judgment, no
Stockholder may Transfer any Shares or Warrants without the registration of the
Transfer of such Shares or Warrants under the Securities Act or until the
Company has received such legal opinions or other evidence that such Transfer is
exempt from the registration requirements under the Securities Act and
applicable state securities laws as the Company reasonably deems appropriate in
light of the facts and circumstances relating to such proposed Transfer,
together with such representations, warranties and indemnifications from the
transferor and the transferee as the Company reasonably deems appropriate to
confirm the accuracy of the facts and circumstances that are the basis for any
such opinion or other assurances and to reasonably protect the Company and the
other Stockholders from any liability resulting from any such Transfer.
2.4 RESTRICTIONS ON TRANSFER. Notwithstanding the foregoing
provisions of this SECTION 2 and SECTION 3 to the contrary, no Stockholder has
the right to sell (a) any Offered Shares pursuant to a Notice of Intention to
Sell if such Stockholder did not at the time of giving such Notice of Intention
to Sell have a good faith belief that such purchaser would purchase all of the
Offered Shares, at the price and on the terms contained in the Notice of
Intention to Sell or (b) without the written consent of the Board of Directors,
any Shares or Warrants to any direct competitor or customer of the Company or
any shareholder, officer, director or other Affiliate of any direct competitor
or customer of the Company. Nothing in this SECTION 2.4 shall be interpreted to
prohibit a Stockholder from selling Shares to a shareholder of any direct
competitor or customer of the Company if such shareholder's only interest in the
direct competitor or customer is holding securities listed on a national
securities exchange or securities regularly quoted in an over-the-counter market
by one or more members of the National Association of Securities Dealers or
similar organization and provided further that such shareholder owns less than
one percent of the total outstanding voting securities of such entity.
SECTION 3. RIGHT OF FIRST REFUSAL
- ---------------------------------
3.1 INTENTION TO SELL. If a Stockholder wishes to Transfer all
or any portion of the Shares owned by such Stockholder (such Shares, the
"Offered Shares") to a bona fide third party who is not an Affiliate of such
Stockholder (other than a Transfer pursuant to SECTIONS 2.2, 5 and 8), such
Selling Stockholder promptly shall deliver to the Company and other Stockholders
a Notice of Intention to Sell.
3.2 ACCEPTANCE PERIOD. Upon receipt of a Notice of Intention
to Sell and for the duration of the Company Acceptance Period, the Company will
have the right and option to elect to purchase all (but not less than all) of
such Offered Shares at the purchase price and on the terms stated in the Notice
of Intention to Sell. On or before the expiration of the Company
6
<PAGE> 10
Acceptance Period, the Company may give the Selling Stockholder written notice
of the Company's intention to exercise its rights to purchase such Offered
Shares.
3.3 FAILURE OF THE COMPANY TO EXERCISE ITS OPTION TO PURCHASE.
If the Company fails to elect to purchase all of the Offered Shares in
accordance with the provisions of SECTIONS 3.1 and 3.2, the Company shall
promptly, and in any event within three (3) business days after the end of the
Company Acceptance Period, deliver to each Eligible Stockholder a copy of the
Notice of Intention to Sell and a statement indicating the number of Offered
Shares available for purchase by the Eligible Stockholders, whereupon each
Eligible Stockholder will have the right and option to elect to purchase up to
its Proportionate Percentage of such Offered Shares, at the purchase price and
on the terms stated in the Notice of Intention to Sell, such election to be made
by giving written notice to the Company and the Selling Stockholder within the
Eligible Stockholder Acceptance Period.
3.4 NOTICE OF ELECTION TO PURCHASE. If any Eligible
Stockholder fails to elect to purchase on a timely basis, or elects in writing
not to purchase, all of such Proportionate Percentage of the remaining Offered
Shares pursuant to SECTION 3.3, then, within three (3) business days after the
earlier to occur of (a) the expiration of the Eligible Stockholder Acceptance
Period or (b) receipt by the Company of either written notices of election or
non- election from each Eligible Stockholder, the Company shall given written
notice to those Eligible Stockholders, if any, that have accepted such offer
with respect to all of their Proportionate Percentages of such remaining Offered
Shares, setting forth the number of Offered Shares remaining available for
purchase pursuant to the Notice of Intention to Sell, and each such Eligible
Stockholder will then have the right and option to, within five (5) business
days after receiving notice from the Company, elect to purchase (i) all of such
Offered Shares so remaining available (if there is only one electing Eligible
Stockholder) or (ii) up to its Proportionate Percentage of such Offered Shares
so remaining available (if there is more than one electing Eligible Stockholder)
(PROVIDED, HOWEVER, that in determining each such electing Eligible
Stockholder's Proportionate Percentage for this provision, the denominator of
the Proportionate Percentage ratio described in the definition of Proportionate
Percentage includes ONLY Shares held by Eligible Stockholders electing to
purchase their full Proportionate Percentage of the Offered Shares under SECTION
3.3), or (iii) such Offered Shares so remaining available in such other
proportions as such Eligible Stockholders may mutually agree, at the purchase
price and on the terms stated in the Notice of Intention to Sell. The Company
promptly shall notify the Selling Stockholder in writing of each notice of
election received from Eligible Stockholders.
3.5 SELLING STOCKHOLDER'S RIGHTS UPON FAILURE TO EXERCISE
RIGHT TO PURCHASE ALL OFFERED SHARES. If acceptances have not been received by
the Selling Stockholder with respect to all of the Offered Shares under SECTIONS
3.1, 3.2, 3.3 AND 3.4, then the Selling Stockholder may, subject to SECTION 4,
sell all (but not less than all) of the Offered Shares to the purchaser
specified in the Notice of Intention to Sell at the price and upon the terms set
forth in the Notice of Intention to Sell, at any time within thirty (30)
business days after the last date on which any Eligible Stockholder will be
entitled to make any election pursuant to the provisions of this SECTION 3. The
purchaser specified in the Notice of Intention to Sell must, prior to
consummating the purchase of the Offered Shares, agree in writing to become a
party to, and to be bound by the provisions of, this Agreement, and the Company
will not recognize any Transfer to such purchaser of Offered Shares until such
agreement has been executed and delivered to the Company. If the Offered Shares
are not sold by the Selling Stockholder during such thirty (30)
7
<PAGE> 11
business-day period, the right of the Selling Stockholder to sell such Offered
Shares will expire and such remaining Offered Shares again will be subject to
the restrictions contained in this Agreement and will not then be Transferred
except in compliance with this Agreement.
3.6 PAYMENT FOR SELLING STOCKHOLDER'S OFFERED SHARES. Payment
by the Company or the Eligible Stockholders for the Selling Stockholder's
Offered Shares will be made by wire transfer or certified check, payable to the
order of the Selling Stockholder (or the Selling Stockholder's legal
representative, as the case may be), against delivery to the party purchasing
such Offered Shares of (a) a certificate or instrument representing the Offered
Shares so sold, duly endorsed for transfer to the purchasing party or
accompanied by a stock transfer power duly endorsed for transfer, with all
requisite stock transfer taxes paid and stamps affixed and (b) written
representations and warranties of the transferor to the effect that: (i) such
Person is the record and beneficial owner of the Shares being purchased and
sold, has good and marketable title to such Shares and the absolute right to
transfer the same to the purchaser, and the same, upon transfer to the
purchaser, will be free and clear of all claims, liens, pledges, restrictions
(other than restrictions imposed by this Agreement and restrictions under
federal and state securities laws) or encumbrances of any nature whatsoever;
(ii) such Person has full power and capacity to perform the terms of this
Agreement relating to such purchase and sale; and (iii) any consent or approval
of any governmental authority, court or third person necessary to permit the
Transfer of the Shares has been obtained.
3.7 CLOSING DATE. The Closing of the sale and delivery of
Offered Shares being purchased and sold pursuant to this SECTION 3 to the
Company or the Eligible Stockholders, and payment for such Offered Shares, will
be held at the Company's office or other agreed upon location at a time
designated by the Company as follows:
(a) If the Company has elected to purchase all of the Offered
Shares, on the tenth (10th) business day after the date on which the
Selling Stockholder receives notification of the Company's intention to
so purchase; or
(b) In all other cases, on the tenth (10th) business day after
the last day upon which Eligible Stockholders can elect to purchase
Offered Shares pursuant to this SECTION 3.
8
<PAGE> 12
SECTION 4. RIGHT TO PARTICIPATE IN CO-SALE
-------------------------------
4.1 INTENTION TO SELL. If any Stockholder proposes to Transfer
all or any portion of the Shares owned by such Stockholder to a bona fide third
party who is not an Affiliate of such Stockholder (other than in a manner
contemplated by Sections 2.2, 5, or 8), then such Stockholder shall give a
Co-Sale Notice to the Company setting forth the terms and conditions of such
proposed transaction. The Co-Sale Notice will be provided concurrently with or
as part of the Notice of Intention to Sell as required under SECTION 3. Upon
receipt of the Co- Sale Notice, the Company shall promptly provide a copy of the
Co-Sale Notice to each Eligible Stockholder as of the date of the Company's
receipt of such Co-Sale Notice.
4.2 ACCEPTANCE PERIOD. Except as set forth in SECTION 4.6,
each Eligible Stockholder has the right, exercisable upon written notice to the
Company and the Transferring Stockholder within twenty (20) business days after
receipt by such Eligible Stockholder of the Co-Sale Notice, to participate in
the proposed disposition of Shares with respect to those Shares as to which
rights of the Company and the Eligible Stockholders pursuant to SECTION 3 of
this Agreement have not been exercised (the "Eligible Shares") on the terms and
conditions set forth in the Co-Sale Notice. Each Eligible Stockholder may
participate in such transaction in an amount equal to the product of (a) the
number of Shares then owned by such Eligible Stockholder and (b) a fraction, the
numerator of which is the number of Eligible Shares to be sold by the
Transferring Stockholder and the denominator of which is the number of Shares
then owned by the Transferring Stockholder.
4.3 CO-SALE OF SHARES. If the proposed purchaser does not
agree to purchase the Co-Sale Shares in accordance with this SECTION 4, then the
Transferring Stockholder and each Eligible Stockholder participating in such
sale will reduce the number of Shares it proposes to dispose of in the
transaction pro rata until the number of Shares to be disposed of equals the
number of Shares the proposed purchaser has agreed to purchase. The terms and
conditions of sale of each Co-Sale Share will be the same as the terms and
conditions of the sale to the proposed purchaser.
4.4 LIABILITY. The consummation of a disposition contemplated
by a Co-Sale Notice will be subject to the sole discretion of the Transferring
Stockholder, and such Transferring Stockholder will have no liability whatsoever
to any Eligible Stockholder participating in such disposition other than to
obtain for such Eligible Stockholder the same terms and conditions as those
obtained by such Stockholder or Stockholders, as set forth in the Co-Sale Notice
or any amendment thereof communicated in the manner provided for in this SECTION
4; PROVIDED that in no event shall the liability of any Stockholder for
indemnification or otherwise in connection with any such sale exceed the net
proceeds received by such Stockholder.
4.5 SHARE CERTIFICATES; DISPOSITION PROCEEDS. Each Eligible
Stockholder participating in the proposed disposition of Shares in accordance
with the provisions of this SECTION 4 shall deliver to the Company, as agent for
the Eligible Stockholder for delivery to the proposed purchaser, one or more
certificates, properly endorsed for transfer, with all stock transfer taxes paid
and stamps affixed, which represent the number of Shares that such Eligible
Stockholder elects to sell pursuant to this SECTION 4. The Company then shall
deliver such certificate or certificates to the purchaser on behalf of such
Eligible Stockholder in
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consummation of the disposition of Shares pursuant to the terms and provisions
specified in this SECTION 4 and, then, the Company promptly shall remit to such
Eligible Stockholder that portion of the proceeds of disposition to which such
Eligible Stockholder is entitled by reason of its or his participation.
4.6 LIMITATION ON RIGHT OF CO-SALE BY MANAGEMENT GROUP.
Notwithstanding the provisions of this SECTION 4 to the contrary, no Employee
Stockholder nor any successor or assignee of Shares held by that Employee
Stockholder has any of the rights and privileges set forth in SECTIONS 4.1
through 4.5 if there is a Termination For Cause.
SECTION 5. OBLIGATION TO PARTICIPATE
-------------------------
5.1 OBLIGATION TO PARTICIPATE. If a majority of the
disinterested members of the Board of Directors and the holders of a majority of
the Shares then outstanding approve a Sale of the Company (an "Approved Sale"),
the Stockholders will, subject to Section 5.2, (i) consent to, vote for and
raise no objections against the Approved Sale or the process pursuant to which
the Approved Sale was arranged, (ii) waive any dissenter's or appraisal rights
and similar rights with respect thereto, and (iii) if the Approved Sale is
structured as a sale of stock, agree to sell all of their Shares on the terms
and conditions approved by the Board of Directors or the holders of a majority
of the Shares then outstanding. The Stockholders will take all necessary and
desirable actions in connection with the consummation of any Approved Sale
including, if such Approved Sale is structured as a sale of assets, actions
necessary to cause the orderly liquidation of the Company following the
liquidation, the making of the same representations, warranties, covenants and
undertakings (to the extent applicable to any such Stockholder in his, her or
its capacity as a Stockholder of the Company) to the prospective transferee(s)
in such Approved Sale as the holders of a majority of the Shares then
outstanding.
5.2 SATISFACTION OF CONDITIONS. The obligations of the holders
of Shares with respect to an Approved Sale are subject to the satisfaction of
the following conditions: (i) upon the consummation of the Approved Sale, all of
the holders of Common Stock shall receive the same form and amount of
consideration per share of Common Stock, or if any holders of Common Stock are
given an option as to the form and amount of consideration to be received, all
holders shall be given the same option; and (ii) in connection with the Approved
Sale all holders of Shares representing then currently exercisable rights to
acquire shares of Common Stock shall only be permitted to either (A) exercise
such rights prior to the consummation of the Approved Sale and participate in
such sale as holders of Common Stock or (B) upon the consummation of the
Approved Sale, receive in exchange for such rights consideration equal to the
amount determined by multiplying (1) the same amount of consideration per share
of Common Stock received by the holders of Common Stock in connection with the
Approved Sale less the exercise price (if any) per share of Common Stock of such
rights to acquire Common Stock by (2) the number of shares of Common Stock
represented by such then currently exercisable rights.
5.3 COSTS OF SALE. The Stockholders will bear their pro rata
share (based upon the number of Shares sold) of the costs of any sale of Shares
pursuant to an Approved Sale to the extent such costs are incurred for the
benefit of all holders of the Shares and are not otherwise paid by the Company
or the acquiring party and shall be obligated to join on a pro rata basis (based
on the number of Shares (assuming conversion of the Warrants) held by such
holder) in any indemnification or other obligations that a majority of the
holders agree to provide in
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connection with such Approved Sale (other than any such obligations that relate
specifically to a holder of Shares such as indemnification with respect to
representations and warranties given by a holder regarding such holder's title
to and ownership of Shares); provided that all indemnity obligations of each
Stockholder will be capped at the amount of proceeds received by such
Stockholder in an Approved Sale. Costs incurred by the Stockholders on their own
behalf will not be considered costs of the Approved Sale.
5.4 CERTAIN DEFINITIONS. For purposes of this SECTION 5, the
terms set forth in this Agreement shall have the following meaning:
"INDEPENDENT THIRD PARTY" means any Person or Persons
who, immediately prior to the contemplated transaction, (i)
are not employees or Affiliates of the Company, (ii) do not
own, directly or indirectly, in excess of five percent (5%) of
the Shares, on a fully diluted basis, (iii) who are not
controlling, controlled by or under common control with any
such five percent (5%) owner of the Company's Shares and (iv)
who are not the spouse or descendant (by birth or adoption) of
any Person described in clauses (i), (ii) or (iii) above.
"SALE OF THE COMPANY" means the sale of the Company
pursuant to which any Independent Third Party or affiliated
group of Independent Third Parties acquires (a) all or
substantially all of the capital stock of the Company (whether
by merger, consolidation or sale or transfer of the Company's
capital stock) or (b) all or substantially all of the
Company's assets determined on a consolidated basis.
SECTION 6. PREEMPTIVE RIGHTS
-----------------
6.1 ELIGIBLE OFFERING. Except as otherwise provided in SECTION
6.4, the Company hereby grants to each of the Stockholders the right to purchase
a portion of any future offering (an "Eligible Offering") of any Shares or any
other equity securities of the Company or of any security convertible into or
exchangeable for or carrying rights, warrants or options to purchase any Shares
or any other equity securities of the Company or, to the extent such Stockholder
(or, in the case of any Stockholder that is not an individual, its Affiliates)
is eligible to purchase such securities pursuant to such offering under federal
and state securities laws, any "Units" comprised of (i) debt securities of the
Company and (ii) any security convertible into or exchangeable for or carrying
rights, warrants or options to purchase any Shares or any other equity
securities of the Company which bears the same ratio to the aggregate amount of
securities covered by such Eligible Offering as the number of Shares (assuming
the exercise of the Warrants) owned by such Stockholder bears to the total
number of Shares owned (assuming the exercise of the Warrants), on a fully
diluted basis, by all Stockholders at the time. In no event shall the Company be
required to change the type or terms of any offering in order for any
Stockholder to become eligible to participate in such offering pursuant to this
Section 6.1.
6.2 NOTICE OF ELIGIBLE OFFERING. Before issuing any securities
pursuant to an Eligible Offering, the Company shall give written notice thereof
to each Stockholder. Such
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<PAGE> 15
notice must specify the security or securities the Company proposes to issue and
the consideration that the Company intends to receive for such security or
securities being issued. For a period of ten (10) business days following the
delivery of such notice, each Stockholder will be entitled, by written notice to
the Company, to elect to purchase up to the portion of the securities being sold
in the Eligible Offering calculated in accordance with SECTION 6.1; provided,
however, that if two (2) or more securities are proposed to be sold as a "unit"
in an Eligible Offering, any such election must relate to such unit of
securities. If any such offer is accepted by a Stockholder or Stockholders, the
Company shall sell to such Stockholder or Stockholders, and such Stockholder or
Stockholders shall purchase from the Company, for the consideration and on the
terms set forth in the Company's notice of such Eligible Offering, the number of
securities that such Stockholder or Stockholders have elected to purchase. The
Company then may sell the remainder of the securities to be sold in the Eligible
Offering, if any, pursuant to the provisions set forth in SECTION 6.3.
6.3 SALE TO THIRD PARTIES. If elections to exercise the rights
pursuant to SECTION 6.1 are not made with respect to any securities included in
an Eligible Offering within the ten (10) business day period described in
SECTION 6.2, or if there remain securities to be sold after the sale of
securities to the Stockholder or Stockholders as set forth in SECTION 6.2, then
the Company may issue such securities to third persons, but only for a
consideration of the type and not less than that set forth in the Company's
notice and only within a period of sixty (60) business days thereafter.
6.4 EXCEPTIONS TO ISSUES OF SECURITIES. Notwithstanding any
other provision in this Agreement to the contrary, no Stockholder has any
preemptive right to purchase any of the following securities issued by the
Company:
(a) Shares issued upon conversion of the Warrants;
(b) Securities issued to the acquiree or its shareholders or
members in connection with any merger, consolidation or acquisition by
the Company; PROVIDED that the Company is the survivor of such merger
or consolidation or is the acquiror and no Person who is a Stockholder
or an Affiliate of the Company becomes a beneficial owner of any
securities issued in such transaction;
(c) Securities issued in an Initial Public Offering; and
(d) Securities issued pursuant to an option plan of the
Company which is approved by the disinterested members of the Board of
Directors; provided that such option plan does not exceed 3% of the
fully diluted equity of the Company on the date of this Agreement
(appropriately adjusted to reflect any stock dividend, stock split,
combination of shares, recapitalization or other similar event
affecting the number of outstanding Shares).
SECTION 7. MANAGEMENT AND OPERATION OF THE COMPANY
---------------------------------------
7.1 BOARD OF DIRECTORS.
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(a) Each Stockholder shall vote or grant written consents with
respect to all of its respective Shares and any other voting securities
of the Company over which such Stockholder has voting control and shall
take all other reasonable or necessary actions within such
Stockholder's control (including, without limitation, calling special
meetings of the Board of Directors or Stockholders), so that:
(i) the Board of Directors will initially consist of five
(5) members;
(ii) the following persons will be elected and reelected
as members of the Board of Directors:
(A) Joseph W. Carreras and Michael T. Kestner;
(B) one (1) representative designated by
Citicorp Venture Capital or its Affiliate;
(C) one (1) representative designated by Key
Equity Capital or its Affiliate; and
(D) one (1) representative designated by Kelso &
Company, L.P. or its Affiliate.
(iii) In the event any representative designated pursuant
to clauses (ii)(B), (C) or (D) above for any reason
ceases to serve as the member of the Board of
Directors during his term, the resulting vacancy
shall be filled by a representative designated as
provided in clauses (ii)(B), (C) or (D) above, as
applicable. In the event Hilite Holdings is
dissolved, then either Mr. Carreras or Mr. Kestner
(but not both) may be replaced by a majority of the
members of the Board of Directors elected pursuant to
clauses (ii) (B), (C), and (D) above. In the event
either Mr. Carreras or Mr. Kestner cease to serve as
a member of the Board of Directors for any reason
other than the dissolution of Hilite Holdings, the
remaining member may select a member to fill the
resulting vacancy. In the event both Mr. Carreras and
Mr. Kestner cease to serve as members of the Board of
Directors and Hilite Holdings is not dissolved, then
Carreras, Kestner Investors, L.L.C. shall elect one
member and the four members shall, by a majority
vote, elect the fifth member.
(b) The Company will pay the reasonable out-of-pocket expenses
incurred by each director in connection with attending meetings of the
Board of Directors (and any committee of the Board of Directors).
SECTION 8. REPURCHASE OF MANAGEMENT GROUP SHARES
-------------------------------------
8.1 THE COMPANY'S REPURCHASE OF MANAGEMENT GROUP SHARES.
Shares held by an Employee Stockholder or any successor or transferee pursuant
to SECTION 2.2 (the "Employee Stockholder Shares") are subject to repurchase
upon the occurrence of an Employee Stockholder Repurchase Event as follows:
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<PAGE> 17
(i) Upon the death or Disability of an Employee
Stockholder, the Employee Stockholder and his
successors and transferees pursuant to SECTION 2.2
shall have a "put" option to require the Company to
purchase all of the Employee Stockholder Shares at a
price per Employee Stockholder Share equal to the
amount determined by multiplying EBITDA for the four
full fiscal quarters immediately preceding the
delivery of the Employee Stockholder Repurchase
Notice times 5.8 and adding all cash and cash
equivalents and then subtracting all Debt (including
any accrued interest and, if applicable, any
prepayment penalties on such Debt) then outstanding,
with the result then being divided by the aggregate
number of Shares (assuming conversion of all
convertible securities) then outstanding (the
"Formula Price"). The Employee Stockholder's "put"
option under this SECTION 8.1(i) will expire within
twenty (20) calendar days from the date the Employee
Stockholder or his estate receives a written notice
from the Company with respect to its "put" option.
(ii) Upon an Employee Stockholder's Termination For Cause,
the Company will have the right, exercisable at any
time, to purchase all of the Employee Stockholder
Shares at a price per Employee Stockholder Share
equal to the Formula Price.
(iii) Upon an Employee Stockholder's Termination Without
Cause, the Employee Stockholder will have a "put"
option to require the Company to purchase all of the
Employee Stockholder Shares at a price per Employee
Stockholder Share equal to the Formula Price. The
Employee Stockholder's "put" option under this
SECTION 8.1(a)(iii) will expire within twenty (20)
calendar days from the date the Employee Stockholder
receives a written notice from the Company with
respect to its "put" option.
(iv) Upon an Employee Stockholder's Voluntary Termination,
the Company will have the right, exercisable at any
time, to purchase all of the Employee Stockholder
Shares at a price per Employee Stockholder Share
equal to the Formula Price.
8.2 EXERCISE OF RIGHTS. The rights to purchase or sell the
Employee Stockholder Shares under the provisions of this SECTION 8 may be
exercised by giving written notice of such exercise (the "Employee Stockholder
Repurchase Notice") to the respective Employee Stockholder (if exercised by the
Company) or to the Company (if exercised by an Employee Stockholder), in each
case within the time period set forth in the applicable paragraph of SECTION
8.1, which notice must specify a closing date not later than fifty (50) business
days after the date of such notice, upon which date the Company will make
payment against delivery by the Employee Stockholder or his or her successors
and transferees pursuant to SECTION 2.2 of certificates representing the
Employee Stockholder Shares to be sold. Subject to SECTION 9, the Company shall
pay to an Employee Stockholder or his or her successors and transferees pursuant
to SECTION 2.2 the purchase price for such Shares as determined pursuant to this
SECTION 8 in cash at Closing.
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<PAGE> 18
8.3 EXERCISE OF "PUT" OPTION. An Employee Stockholder may
exercise his "put" option under SECTION 8.1 by giving written notice to the
Company within the period described in the applicable paragraph. Subject to
SECTION 9, the Company shall endeavor to pay cash for the Shares as purchased.
8.4 REPURCHASE AND PURCHASE RIGHTS BINDING ON TRANSFEREES. The
rights to purchase set forth in this SECTION 8 will be binding upon each
Employee Stockholder and his or her successor(s) and assignee(s) pursuant to
SECTION 2.2, and any such successor(s) and assignee(s) must agree in writing, in
form reasonably satisfactory to the Company to comply with the provisions of
this SECTION 8 in particular, and with the provisions of this Agreement in
general.
SECTION 9. COMPANY'S INABILITY TO SATISFY OBLIGATIONS
------------------------------------------
If the Company is not able to perform any of its obligations
to repurchase Shares under this Agreement because, in the judgment of the Board
of Directors based on the advice of counsel, such performance would cause the
Company to violate any financing agreement with its lenders or would violate the
provisions of applicable laws, statutes, rules or regulations, the Company's
Certificate of Incorporation, the Company's Bylaws, any agreement to which the
Company is a party, including, without limitation, any provisions of any
agreement, instrument or other document evidencing, securing or otherwise
relating to any Debt ("Debt Instrument"), then the Company shall use its
reasonable efforts to accomplish such purchase and sale as soon as practicable
without violating the terms of any Debt Instrument or any applicable law
PROVIDED, HOWEVER, that the Company will not amend its Certificate of
Incorporation or its Bylaws or enter into any agreement with the intent of
avoiding its obligations under this Agreement. If the provisions of SECTION 9
limit the Company's repurchase of the Shares of more than one Stockholder, then,
with respect to any Shares that the Company becomes obligated to purchase
simultaneously, the Company shall purchase such Shares on a pro rata basis from
each such Stockholder. Notwithstanding the limitations set forth in this SECTION
9, if the Company becomes obligated to purchase any Shares under SECTION 8, at a
minimum the Company shall promptly purchase as many such Shares as it is
permitted to purchase under applicable law and any Debt Instrument.
SECTION 10. REGULATORY REQUIREMENTS; CESSATION OF DIRECT INVESTMENT PROGRAM.
----------------------------------------------------------------
(a) Notwithstanding anything else set forth herein to the
contrary, in the event of any reasonable determination in good faith by the
Warrant Holders that, by reason of any existing or future Federal or state rule,
regulation, guideline, order, request or directive (whether or not having the
force of law and whether or not failure to comply therewith would be unlawful)
(collectively, a "REGULATORY REQUIREMENT"), the Warrant Holders is effectively
restricted or prohibited from holding any of the Shares then held by the Warrant
Holders, the Company and the Stockholders shall use reasonable good faith
efforts to take such action as they may determine is reasonably necessary and
appropriate to permit the Warrant Holders to transfer the Shares to comply with
such Regulatory Requirement. All such actions shall be taken at the expense of
the Warrant Holders. The Warrant Holders shall give written notice to the
Company and the other Stockholders of any reasonable determination by it
hereunder and the transfer it
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believes may be necessary or appropriate to permit it to comply with such
Regulatory Requirement.
(b) Notwithstanding anything else set forth herein to the
contrary, in the event the Warrant Holders or any successor or other group of
First Union Corporation or BlackRock Inc., as applicable, or their directly or
indirectly wholly-owned subsidiaries engaging in substantially the same business
cease making direct and mezzanine debt and/or equity investments and make a
determination to liquidate all their private equity positions that can be
liquidated as set forth in a representation letter to the Company, then the
Company and the Stockholders shall permit the Warrant Holders, as applicable, to
transfer its Shares. All such actions shall be taken at the expense of the
Warrant Holders, as applicable. The Warrant Holders, as applicable, shall give
written notice to the Company and the other Stockholders of any determination by
it hereunder.
(c) Notwithstanding any provision of (a) above, if the Warrant
Holders gives a notice under paragraph (a) hereof setting forth the Transfer it
believes may be necessary or appropriate to permit it to comply with such
Regulatory Requirement, or, under paragraph (b) hereof setting forth the
representations set forth in such paragraph, in lieu of the Warrant Holders and
the Company taking such action as may be set forth in paragraph (a) or (b), the
Company shall have the option, at the determination of a majority of the members
of its Board of Directors, to repurchase all the Shares held by the Warrant
Holders. At any time within 15 days after the date of their receipt of the
notice given pursuant to paragraph (a) or (b) above, the Company may indicate
its interest in purchasing all the Shares held by the Warrant Holders by giving
written notice to the Warrant Holders (with copies to the Stockholders). If the
Company has indicated its interest in purchasing all the Shares held by the
Warrant Holders, then the Company shall have the right to purchase such capital
stock for a period of 90 days (or such longer period as may be required to
obtain necessary regulatory approvals for closing the repurchase) (the
"REPURCHASE PERIOD"). During the Repurchase Period, the Company shall endeavor
to obtain financing in amounts sufficient to provide for the purchase of the
Shares held by the Warrant Holders. If, at the end of the Repurchase Period, the
Company has not been able to obtain financing in amounts sufficient to provide
for the purchase of the Shares held by the Warrant Holders, then the Warrant
Holders shall have the right to sell such capital stock. Any such repurchase
shall be based on the fair market value of such shares, as determined by an
appraisal thereof by three independent qualified appraisers, one being selected
by the Company, one being selected by the Warrant Holders, and the third
appraiser being chosen by the two appraisers thus chosen, which determination
shall be final and binding on all parties. The cost of any such appraisal shall
be borne one-half by the Company and one-half by the Warrant Holders.
SECTION 11. LEGEND ON SHARE CERTIFICATES
----------------------------
All certificates representing Shares and Warrants now or
hereafter held by a Stockholder will be endorsed with a legend reading as
follows until such time as the Shares or Warrants represented by such
certificates no longer are subject to the provisions of this Agreement:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR
UNDER THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
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SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS EITHER (A) THEY ARE
REGISTERED UNDER THE ACT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT OR (B) THE COMPANY HAS RECEIVED EVIDENCE SATISFACTORY TO IT
(WHICH MAY INCLUDE AN OPINION OF COUNSEL) THAT SUCH PROPOSED
DISPOSITION IS EXEMPT FROM SUCH REGISTRATION.
"THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND
CONDITIONS OF AN AGREEMENT AMONG STOCKHOLDERS DATED AS OF JUNE 1, 1999
TO WHICH THE COMPANY IS A PARTY. A COPY OF SUCH AGREEMENT MAY BE
OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF
THIS CERTIFICATE TO THE CORPORATE SECRETARY OF THE COMPANY."
Upon execution of this Agreement, any certificates for Shares presently held by
the Stockholders shall be surrendered to the Company, and such certificates
shall be endorsed with such legend and returned to the appropriate Stockholder.
SECTION 12. DURATION OF AGREEMENT
---------------------
This Agreement will terminate and be of no further force and
effect upon the earliest to occur of the following: (i) the consummation of an
Initial Public Offering, (ii) the liquidation of the Company, and (iii) the
consent of all Stockholders.
SECTION 13. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
--------------------------------------------------
Each Stockholder severally represents and warrants to the
Company and to each other as follows:
(a) If a corporation, the Stockholder is a corporation duly
organized, validly existing, and in good standing under the laws of the
state of its incorporation and has requisite corporate power and
authority to enter into this Agreement and to undertake the
transactions contemplated in this Agreement;
(b) If a limited liability company, the Stockholder is a
limited liability company duly organized, validly existing and in good
standing under the laws of the state of its formation and has requisite
limited liability company power and authority to undertake the
transactions contemplated by this Agreement;
(c) If a partnership, the Stockholder is a partnership duly
organized, validly existing, and in good standing under the laws of the
state of its formation and has requisite partnership power and
authority to enter into this Agreement and to undertake the
transactions contemplated in this Agreement;
(d) If a trust, the Stockholder is a trust duly organized,
validly existing and in good standing under the laws of the state of
its formation and has requisite power and authority to enter into this
Agreement and to undertake the transactions contemplated in this
Agreement;
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<PAGE> 21
(e) If an individual, the Stockholder is legally competent to
enter into this Agreement and to undertake the transactions
contemplated in this Agreement;
(f) The execution, delivery and performance of this Agreement
will not violate any provision of law, any order of any court, or other
agency of government, or any provision of any indenture, agreement, or
other instrument to which the Stockholder or any of the Stockholder's
properties or assets is bound, or conflict with, result in a breach of,
or constitute (with due notice or lapse of time or both) a default
under any such indenture, agreement, or other instrument, or result in
the creation or imposition of any lien, charge, or encumbrance of any
nature whatsoever upon any of the properties or assets of the
Stockholder, except as contemplated by this Agreement; and
(g) This Agreement has been duly and validly authorized,
executed, and delivered by the Stockholder and constitutes the legal,
valid, and binding obligation of the Stockholder, enforceable in
accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation, fraudulent
conveyance, and other similar laws and principles of equity affecting
creditors' rights and remedies generally.
SECTION 14. COVENANT OF AND RELATED TO HILITE HOLDINGS, LLC
-----------------------------------------------
(a) In the event Hilite Holdings acquires any other Person,
each Stockholder shall have the right to participate up to its
Proportionate Percentage in the transaction on the same terms and
conditions as Hilite Holdings.
(b) In the event that Hilite Holdings determines to pursue an
initial public offering ("Hilite Holdings Offering") of its equity
securities, each Stockholder shall have the right ("Exchange Right") to
exchange on a pro rata basis its or his shares of the Company into
equity securities of Hilite Holdings . Hilite Holdings shall provide
the Stockholders prior notice of its determination to pursue a Hilite
Holdings Offering (a "Holdings Offering Notice"). The Stockholders may
exercise its or his Exchange Right for a period of 30 days following
receipt of the Holdings Offering Notice. A Stockholder's obligation to
effect an exchange of its or his shares of common stock of the Company
for equity securities of Hilite Holding pursuant to the Exchange Right
shall be conditioned upon the consummation of the Hilite Holdings
Offering.
SECTION 15. REPORTS
-------
The Company shall provide to each Stockholder quarterly and
annual financial reports (without exhibits), as soon as practicable after the
completion of such reports, and in the event that the Company files quarterly
and annual reports with the Securities and Exchange Commission, the Company
shall provide copies of such reports (without exhibits) to the Stockholders as
soon as practicable after the date of such filing. In addition, all Stockholders
will be invited to an annual meeting of Stockholders to be held at least once
each year in accordance with the Company's By-laws.
SECTION 16. CONSENT TO JURISDICTION AND SERVICE OF PROCESS
----------------------------------------------
Each Stockholder irrevocably consents to the non-exclusive
jurisdiction of the state and federal courts located in Cleveland, Ohio, agrees
that any action, suit or proceeding by
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or among the Stockholders (or any of them) or the Company and any Stockholder
may be brought in any court in Cleveland, Ohio, and waives any objection that
the Stockholder may now or hereafter have to the choice of forum whether
personal jurisdiction, venue, FORUM NON CONVENIENS or on any other ground. Each
Stockholder further agrees that final judgment against it or him in any such
action or proceeding will be conclusive and may be enforced in any other
jurisdiction within or outside the State of Ohio by suit on the judgment, a
certified or exemplified copy of which will be conclusive evidence of the fact
and the amount of such judgment.
SECTION 17. INDIVIDUAL STOCKHOLDERS; COMMUNITY PROPERTY
-------------------------------------------
Each individual Stockholder or transferee required to become a
party to this Agreement whose Shares are or become "community property" shall,
at the later of the date of this Agreement or the time when his or her spouse
first has a "community property" interest in any of such Shares, cause such
spouse to execute a counterpart of this Agreement and any amendment hereto
executed by such Stockholder, or another writing in form and substance
satisfactory to the Company, subjecting such spouse and the spouse's "community
property" interest in such Shares to the applicable provisions of this Agreement
or any such writing solely by reason of his or her "community property" interest
in Shares.
SECTION 18. BENEFITS OF AGREEMENT
---------------------
This Agreement will be binding upon and inure to the benefit
of the parties and their respective successors, permitted assigns, heirs,
executors, administrators and legal representatives.
SECTION 19. NOTICES
-------
All notices, requests, consents, and other communications must
be in writing, delivered in person or duly sent by a nationally recognized
overnight courier service or by first-class registered or certified mail,
postage prepaid, addressed as follows:
(a) If to the Company: Hilite Industries, Inc.
Terminal Tower
50 Public Square, 32nd Floor
Cleveland, Ohio 44113
Attn: Michael T. Kestner
with copies to: Jones, Day, Reavis & Pogue
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
Attn: John M. Saada, Jr., Esq.
(b) If to the Stockholders, at the addresses shown below their
names on SCHEDULE I attached to this Agreement, or to such other address that
has been designated by notice in writing by such party to the others in
accordance with the provisions of this SECTION 19.
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Each party will at all times have an address to which any communications may be
sent. All such notices, requests, consents and other communications will be
deemed to have been received (i) in the case of personal delivery or facsimile,
on the date of such delivery, (ii) in the case of delivery by recognized
overnight courier service on the first business day following delivery of such
notice to the overnight courier, and (iii) in the case of mailing, on the third
(3rd) business day following such mailing.
SECTION 20. GOVERNING LAW; CONSTRUCTION; VENUE
----------------------------------
This Agreement is governed by and construed in accordance with
the laws of the State of Delaware, without regard to its conflicts of law rules.
The headings or titles to Sections in this Agreement are intended solely for
convenience and no provision of this Agreement is to be construed by reference
to the heading or title of any Section. Unless otherwise specifically stated,
references in this Agreement to Sections or Schedules refer to Sections and
Schedules of this Agreement.
SECTION 21. MODIFICATION AND WAIVER
-----------------------
Except as otherwise provided in this Agreement, neither this
Agreement nor any provision of this Agreement may be modified, changed, waived,
discharged or terminated except by an instrument in writing signed by the
holders of at least 75% of the outstanding Shares, and such modification,
amendment or waiver shall be binding on all holders of Shares who are parties to
this Agreement; provided that in no event shall an obligation of any holder of
Shares or Warrants be increased or a right of any holder of Shares or Warrants
be decreased, except upon the written consent of such holder.
SECTION 22. ENTIRE AGREEMENT
----------------
This Agreement and the Schedules attached to this Agreement
constitute the entire agreement among the parties with respect to matters or
understandings involving the subject matter contained herein and supersedes in
its entirety any and all prior agreements or understandings, oral or written,
among any or all of the undersigned relating to such ownership, control or
disposition, except that this Agreement shall not supersede the Change in
Control Agreement with each Employee Stockholder.
SECTION 23. SEVERABILITY
------------
If any provision of this Agreement, or the application thereof
to any Person or circumstance, is adjudged or ruled to be invalid or
unenforceable, the remaining provisions of this Agreement and the application
thereof to other Persons or circumstances will not be affected by such ruling.
SECTION 24. REMEDIES
--------
The parties recognize and agree that if the Company or any of
the Stockholders breaches its, his or her obligations under this Agreement, the
other parties hereto may not have an adequate remedy at law. Such breach will
cause such other parties irreparable harm for which there may be no adequate
remedy at law. If any party institutes an action or proceeding to
20
<PAGE> 24
enforce the provisions of this Agreement, such party will be entitled to the
remedies of specific performance and injunctive relief, and any such Person
against whom such action or proceeding is brought hereby waives any claim or
defense that there is an adequate remedy at law. The right to obtain an
injunction under this Agreement will not be considered a waiver of any right on
the part of the non-breaching parties to recover damages and to assert any other
claims for remedies which such parties may have at law or in equity. The
breaching party shall bear any expenses incurred by an injured party, including
reasonable attorneys' fees, in enforcing its rights under this Agreement.
SECTION 25. COUNTERPARTS
------------
This Agreement may be executed in one or more counterparts,
each of which will be deemed to be an original, but all of which taken together
will constitute one and the same instrument.
[Signatures on Following Page]
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<PAGE> 25
IN WITNESS WHEREOF, the parties have executed or caused this
Agreement to be executed as of the day and year first above written.
"THE COMPANY"
HILITE INDUSTRIES, INC.
By: /s/ MICHAEL T. KESTNER
-------------------------------------
Name: Michael T. Kestner
Title: Vice President, Chief Financial
Officer and Secretary
"THE STOCKHOLDERS"
HILITE HOLDINGS, LLC
By: /s/ MICHAEL T. KESTNER
-------------------------------------
Name: Michael T. Kestner
Title: Vice President, Chief Financial
Officer and Secretary
JAMES E. LINEBERGER, JR. TRUST
By: /s/ JAMES E. LINEBERGER, JR.
-------------------------------------
Name: James E. Lineberger, Jr.
Title: Trustee
GEOFFRY S. LINEBERGER TRUST
By: /s/ JAMES E. LINEBERGER, JR.
-------------------------------------
Name: James E. Lineberger, Jr.
Title: Trustee
CHRISTOPHER LINEBERGER TRUST
By: /s/ JAMES E. LINEBERGER, JR.
-------------------------------------
Name: James E. Lineberger, Jr.
Title: Trustee
22
<PAGE> 26
THE BRADY FAMILY LIMITED PARTNERSHIP
By: /s/ DANIEL W. BRADY
-------------------------------------
Name: Daniel W. Brady
Title: General Partner
FIRST FIDELITY PRIVATE CAPITAL, INC.
By: /s/ EDWARD H. ROSS
-------------------------------------
Name: Edward H. Ross
Title: Senior Vice President
/s/ SAMUEL M. BERRY
-------------------------------------
Samuel M. Berry
/s/ CHRIS A. CURTO
-------------------------------------
Chris A. Curto
/s/ ARTHUR D. JOHNSON
-------------------------------------
Arthur D. Johnson
/s/ DONALD M. MAHER
-------------------------------------
Donald M. Maher
/s/ WILLIE VERCHER
-------------------------------------
Willie Vercher
/s/ DR. KRISHNAMURTHY SUNDARARAJAN
-------------------------------------
Dr. Krishnamurthy Sundararajan
/s/ RONALD E. REINKE
-------------------------------------
Ronald E. Reinke
23
<PAGE> 27
MAGNETITE ASSET INVESTORS L.L.C.
By: BLACKROCK FINANCIAL MANAGEMENT, INC.,
as Managing Member
By: /s/ DENNIS M. SCHANEY
----------------------------------
Name: Dennis M. Schaney
Title: Managing Director
24
<PAGE> 28
SCHEDULE I
----------
Name & Addresses Of Stockholders & Respective Stockholdings
-----------------------------------------------------------
Name & Address Stockholdings
- -------------- -------------
Hilite Holdings, LLC 1,726,397**
Terminal Tower
50 Public Square, 32nd Floor
Cleveland, Ohio 44113
James E. Lineberger, Jr. Trust 29,239
1120 Boston Post Road
Darien, CT 06820
Geoffry S. Lineberger Trust 29,240
1120 Boston Post Road
Darien, CT 06820
Christopher Lineberger Trust 29,240
1120 Boston Post Road
Darien, CT 06820
The Brady Family Limited Partnership 7,018
2845 Parkwood Lane
Aurora, IL 60504
*Samuel M. Berry 21,053
c/o Hilite Industries, Inc.
1671 S. Broadway
Carrollton, TX 75006
*Chris A. Curto 3,500**
c/o Hilite Industries, Inc.
1671 S. Broadway
Carrollton, TX 75006
*Arthur D. Johnson 13,900**
c/o Hilite Industries, Inc.
1671 S. Broadway
Carrollton, TX 75006
25
<PAGE> 29
Names & Address Stockholdings
- --------------- -------------
*Ronald E. Reinke 9,800**
c/o Hilite Industries, Inc.
1671 S. Broadway
Carrollton, TX 75006
*Donald M. Maher 9,035
c/o Hilite Industries, Inc.
1671 S. Broadway
Carrollton, TX 75006
*Willie Vercher 5,250**
c/o Hilite Industries, Inc.
1671 S. Broadway
Carrollton, TX 75006
*Dr. Krishnamurthy Sundararajan 5,250**
c/o Hilite Industries, Inc.
1671 S. Broadway
Carrollton, TX 75006
First Fidelity Private Capital, Inc. 66,278 Warrants
One First Union Center, 5th Floor
301 South College Street
Charlotte, NC 28288
Attn: Mr. Edward H. Ross
Magnetite Asset Investors L.L.C. 33,139 Warrants
c/o BlackRock Financial Management, Inc.
345 Park Avenue
29th Floor
New York, New York 10154
Attn: Mr. Dennis M. Schaney
*Management Shareholders
**Includes Shares issued subsequent to June 1, 1999
26
