EXHIBIT 99.2
PANAVISION INC.
STOCKHOLDERS AGREEMENT
This STOCKHOLDERS AGREEMENT (this "Agreement") is made and entered
into this 26th day of July, 2000, by and among Panavision Inc., a Delaware
corporation (the "Company"), Sony Electronics Inc., a Delaware corporation
("Sony"), and PX Holding Corporation, a Delaware corporation ("PX
Holding").
W I T N E S S E T H
WHEREAS, Sony and the Company are parties to that certain Stock and
Warrant Purchase Agreement of even date herewith (the "Purchase Agreement")
pursuant to which Sony is purchasing 714,300 shares (the "Purchase Shares")
of the Company's common stock, par value $.01 per share ("Common Stock"),
and a warrant (the "Warrant") to purchase an additional 714,300 shares of
Common Stock (the "Warrant Shares"); and
WHEREAS, prior to the consummation of the transactions contemplated
by the Purchase Agreement, PX Holding owned more than 90% of the issued and
outstanding Common Stock of the Company.
NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth herein, the Company, Sony and PX Holding agree as follows:
1. DEFINITIONS
1.1 As used in this Agreement, the following terms shall have the
meanings ascribed to them below:
"Affiliate" means, with respect to any specified Person, (i) any
other Person 50% or more of whose outstanding voting securities are
directly or indirectly owned, controlled or held with the power to vote by
such specified Person or (ii) any other Person directly or indirectly
controlling, controlled by or under direct or indirect common control with
such specified Person. For purposes of this definition, the term "control"
means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person by virtue of
ownership of voting securities, by contract or otherwise. For purposes of
this Agreement, PX Holding and its Affiliates shall not be deemed to be an
Affiliate of Sony or of any of Sony's Affiliates, and Sony and its
Affiliates shall not be deemed to be an Affiliate of PX Holding or of any
of PX Holding's Affiliates.
"Governmental Authority" shall mean any federal, state, municipal or
other governmental authority, department, commission, board, agency or
other instrumentality.
"Operating Agreement" shall mean the Operating Agreement of DHD
Ventures, LLC, of even date herewith, by and between the Company and Sony.
"Person" shall mean any individual, corporation, partnership, limited
liability company, limited liability partnership, joint venture, estate,
trust, cooperative, foundation, union, syndicate, league, consortium,
coalition, committee, society, firm, company or other enterprise,
association, organization or other entity or any federal, state, municipal
or other governmental authority, department, commission, board, agency or
other instrumentality.
"Sony Director" shall mean one person designated by Sony to serve as
a director on the Board who shall be subject to the approval of PX Holding,
such approval not to be unreasonably withheld.
"Third Party" shall mean any Person other than Affiliates of PX
Holding (other than the Company).
1.2 As used in this Agreement, the terms "Purchase Shares" and
"Warrant Shares" shall include all shares of Common Stock issued in respect
of the Purchase Shares or Warrant Shares in the event of a stock split,
stock dividend or similar transaction or pursuant to Sony's anti-dilution
rights set forth in the Warrant, dated the date hereof, issued by the
Company to Sony.
2. BOARD OF DIRECTORS
2.1 PX Holding shall vote, and cause its Affiliates to vote, all
shares of Common Stock owned or held of record by PX Holding and its
Affiliates at any regular or special meeting of the stockholders of the
Company called for the purpose of filling positions on the Board of
Directors of the Company (the "Board"), or in any written consent executed
in lieu of such a meeting, and shall take all actions within its control
that are necessary to ensure the election or appointment to the Board of
the Sony Director, commencing within seven days of the date hereof.
2.2 In the event of any vacancy of the Sony Director on the Board,
whether caused by the death, disability, retirement, resignation, removal,
termination of term of office or otherwise, PX Holding shall take all
actions within its control that are necessary to cause the election to the
Board of a replacement Sony Director.
2.3 Sony may at any time request in writing that the Sony Director be
removed as a member of the Board, with or without cause, and upon such
written request, PX Holding shall vote, and cause its Affiliates to vote,
all of its Common Stock to effect such removal. Neither the Company nor PX
Holding nor its Affiliates shall take any action to remove the Sony
Director from the Board without Sony's prior written consent.
2.4 The Company shall cooperate with Sony and PX Holding, and take
all such actions that it may lawfully take, to achieve the results intended
by this Section 2, including, without limitation, the appointment within
seven days of the date hereof of the Sony Director to the Board.
3. TAG-ALONG RIGHTS
3.1 (A) PX Holding shall not, and shall cause its Affiliates not to,
directly or indirectly, sell, exchange (in a business combination
transaction or otherwise), transfer or otherwise dispose of, to any Third
Party in a bona fide transaction (or series of related transactions (it
being understood that any two or more transactions need not be with the
same purchaser in order to be "related")), a number of shares of Common
Stock held by PX Holding and its Affiliates which constitute at least 40%
of all shares of Common Stock then issued and outstanding (a "40% Sale")
(or, after a 40% Sale, a number of shares of Common Stock which constitute
at least 5% of all shares of Common Stock then issued and outstanding) (in
either such event, such number of shares, the "Tag-Along Minimum Amount")
unless PX Holding and its Affiliates comply with this Section 3.1.
(B) If PX Holding or an Affiliate of PX Holding receives a bona
fide offer (an "Included Offer") from a Third Party to purchase or
otherwise acquire an aggregate number of shares of Common Stock (the
"Included Shares") held by any one or more of PX Holding and its Affiliates
which meets or exceeds the Tag-Along Minimum Amount which PX Holding
and/or its Affiliates determines to accept, PX Holding shall then cause all
material terms of the Included Offer (including the identity of the Third
Party, the number of shares which the Third Party is seeking to purchase or
otherwise acquire and the per share price contained in the Included Offer)
to be reduced to writing and shall deliver written notice (the "Included
Notice") of such Included Offer to Sony as provided for in this Agreement.
The Included Notice shall contain an offer by such Third Party to purchase
or otherwise acquire, in addition to the Included Shares being acquired
from PX Holding, an aggregate amount of Purchase Shares and Warrant Shares
from Sony as determined pursuant to Section 3.2 below at the same per share
price and on the same other terms as contained in the Included Offer.
(C) Sony shall, within ten (10) days after the date the
Included Notice is given to Sony (the "Included Notice Period"), deliver a
reasonably detailed written notice to PX Holding (the "Tag-Along Notice")
which shall either (i) subject to Section 3.2 below, specify the number of
Purchase Shares and Warrant Shares held by Sony which it wishes to sell
pursuant to the Included Offer (the "Tag-Along Shares") and the total
number of Purchase Shares, Warrants and Warrant Shares then owned by Sony
or (ii) indicate that Sony does not wish to exercise its rights under
Section 3 of this Agreement in connection with the Included Offer. In the
event such Third Party modifies any of the material terms of the Included
Offer, the Third Party shall deliver an amended Included Notice to PX
Holding and Sony. Sony shall, if it so desires to sell, exchange, transfer
or otherwise dispose of Tag-Along Shares pursuant to the Included Notice,
as so amended, deliver to PX Holding an amended Tag-Along Notice specifying
the amended number of Tag-Along Shares prior to the date (such date and the
last day of the Included Notice Period, each a "Response Date") which is
the later of five (5) days after the date such amended Included Notice is
delivered to Sony or the end of the original Included Notice Period.
3.2 Sony shall have the right to sell pursuant to the Included Offer
a number of Tag-Along Shares equal to the product of (x) the total number
of shares of Common Stock to be acquired by the Third Party pursuant to
such Included Offer multiplied by (y) a fraction, the numerator of which
shall be the aggregate number of Purchase Shares and Warrant Shares held by
Sony and its Affiliates, and the denominator of which shall be the sum of
the aggregate number of shares of Common Stock owned by PX Holding and its
Affiliates and the aggregate number of Purchase Shares and Warrant Shares
held by Sony and its Affiliates. Notwithstanding the foregoing, in the
event that the consummation of the sale of the Included Shares would result
in the deregistration of the Common Stock under the Securities Act of 1933,
as amended, Sony shall have the right to sell, pursuant to the Included
Offer, a number of Tag-Along Shares equal to 100% of the Purchase Shares
and Warrant Shares then owned by Sony or its Affiliates.
3.3 If, by 5:00 p.m., New York City time, on the last occurring
Response Date, Sony shall not have delivered to PX Holding a Tag Along
Notice with respect to the last Included Notice delivered to Sony, then
Sony shall be deemed to have thereafter irrevocably waived its rights under
Section 3 of this Agreement with respect to such Included Offer provided
that the transactions contemplated by the Included Offer are consummated in
accordance with the immediately following sentence. Thereafter, PX Holding
and its Affiliates may sell or otherwise dispose of the number of shares of
Common Stock included in the Included Offer without including any of the
Purchase Shares or the Warrant Shares; provided that (i) the form of
consideration being paid to PX Holding and/or its Affiliates in such sale
or other disposition has not changed from the form specified in the
Included Notice, (ii) in the case where more than one type of consideration
is being paid to PX Holding and/or its Affiliates in such sale or other
disposition, the percentage of the overall consideration that each type of
consideration comprises has not changed from the percentages specified in
the Included Notice, and (iii) such sale or other disposition is completed
on terms no more favorable to PX Holding and its Affiliates than those set
forth in the Included Notice within (A) sixty (60) days after the
termination of the last occurring Response Date or (B) in the event that
the transactions contemplated by the Included Offer require the approval of
any one or more Governmental Authorities, the later to occur of: (1) the
date specified in the foregoing clause (A); and (2) the earlier to occur of
(x) the second business day following the receipt of the last required
approval from a Governmental Authority and (y) one hundred eighty (180)
days after the termination of the last occurring Response Date.
3.4 Any attempt by PX Holding or its Affiliates to transfer Common
Stock in violation of Section 3 hereof shall be void, and the Company shall
not effect such a transfer nor shall it treat any alleged transferee as the
holder of such shares.
4. TERMINATION
4.1 The provisions contained in Section 2 of this Agreement shall
continue in full force and effect from the date hereof through the earliest
of the following dates, upon which such provisions shall terminate in their
entirety:
(A) the date as of which the parties hereto terminate this
Agreement by written consent of the Company, Sony and PX Holding, or
(B) the date which is the latest of:
(i) the earlier to occur of the date upon which (A) an
Event of Termination (as defined in the Operating Agreement) has
occurred and (B) the Operating Agreement ceases to be in effect;
(ii) the date upon which Sony and its Affiliates cease to
own shares of Common Stock constituting at least five percent (5%) of
the then issued and outstanding Common Stock; and
(iii) the date upon which Sony and its Affiliates cease
to own shares of Common Stock constituting at least (A) fifty percent
(50%) of the maximum number of shares of Common Stock owned at any
time by Sony and its Affiliates and (B) one percent (1%) of the then
issued and outstanding Common Stock.
For the avoidance of doubt, any Common Stock acquirable upon the exercise
of any unexercised Warrants shall not be deemed to be owned by Sony or any
of its Affiliates unless and until such shares of Common Stock are, in
fact, acquired by Sony or any of its Affiliates upon the exercise of such
Warrants.
4.2 The provisions contained in Section 3 of this Agreement shall
continue in full force and effect from the date hereof until Sony and its
Affiliates no longer hold (i) any Purchase Shares, (ii) in the case where
the Warrant has not been exercised or has been exercised in part only, the
Warrant or any warrants issued as a result of the partial exercise of the
Warrant, and (iii) in the event that the Warrant has been exercised in
whole or in part, any Warrant Shares, after which time such provisions
shall terminate and have no further force or effect.
5. MISCELLANEOUS
5.1 The parties hereto hereby declare that it is impossible to
measure in money the damages which will accrue to a party hereto or to its
heirs, personal representatives, or assigns by reason of a failure to
perform any of the obligations under this Agreement and agree that the
terms of this Agreement shall be specifically enforceable. If any party
hereto or its heirs, personal representatives, or assigns institutes any
action or proceeding to specifically enforce the provisions hereof, any
person against whom such action or proceeding is brought hereby waives the
claim or defense therein that such party or such personal representative
has an adequate remedy at law, and such person shall not offer in any such
action or proceeding the claim or defense that such remedy at law exists.
5.2 All notices or other communications required or permitted
hereunder shall be in writing and shall be deemed given or delivered (i)
when delivered personally or by private courier, (ii) when actually
delivered by registered or certified United States mail, return receipt
requested, or (iii) when sent by telecopy (provided that it is confirmed by
a means specified in clause (i) or (ii)), addressed as follows:
If to Sony, to:
Sony Electronics Inc.
1 Sony Drive
Park Ridge, New Jersey 07656
Attention: General Counsel, Legal Department
Telephone: (201) 930-6420
Telecopy: (201) 930-6099
With a copy to:
Rosenman & Colin LLP
575 Madison Avenue
New York, New York 10022
Attention: David H. Landau, Esq.
Telecopy: (212) 940-8776
Telephone: (212) 940-6608
If to PX Holding, to:
PX Holding Corporation
35 East 62nd Street
New York, New York 10021
Attention: Barry F. Schwartz,
Executive Vice President and
General Counsel
Telephone: (212) 572-8600
Telecopy: (212) 572-5056
If to the Company, to:
Panavision Inc.
6219 De Soto Avenue
Woodland Hills, California 91367
Attention: John Farrand
Telephone: (818) 316-1000
Telecopy: (818) 316-1110
With a copy, in the case of PX Holding or the Company, to:
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
Attention: Alan C. Myers, Esq.
Telephone: (212) 735-3000
Telecopy: (212) 735-2000
or to such other address as such party may indicate by a notice delivered
to the other parties hereto.
5.3 This Agreement shall not be changed, modified, or amended except
by a writing signed by the party to be affected by such change,
modification or amendment, and this Agreement may not be discharged except
by performance in accordance with its terms or by a writing signed by the
party to which performance is to be rendered.
5.4 If any provision of this Agreement or the application of any
provision hereof to any person or circumstances is held invalid, the
remainder of this Agreement and the application of such provision to other
persons or circumstances shall not be affected unless the provision held
invalid shall substantially impair the benefits of the remaining portions
of this Agreement.
5.5 This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective heirs, executors, administrators,
successors and permitted assigns. This Agreement may not be assigned by
either party hereto, except with the prior written consent of the other
party hereto; provided, however, that each party may assign its rights, but
not its obligations, under this Agreement to any Affiliate of such party.
5.6 (A) This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware applicable to contracts
made and to be performed wholly within said State, without giving effect to
the conflict of laws principles thereof.
(B) Neither party shall commence any legal proceeding or action
against the other party under this Agreement unless and until the parties
have attempted in good faith to settle the underlying dispute through
negotiation or mediation for a period of not less than 30 days. Each of the
parties hereto irrevocably and unconditionally submits to the exclusive
jurisdiction of the United States District Court for the Southern District
of New York or, if such court will not accept jurisdiction, the Supreme
Court of the State of New York, New York County or any court of competent
civil jurisdiction sitting in New York County, New York. In any action,
suit or other proceeding, each of the parties hereto irrevocably and
unconditionally waives and agrees not to assert by way of motion, as a
defense or otherwise any claims that it is not subject to the jurisdiction
of the above courts, that such action or suit is brought in an inconvenient
forum or that the venue of such action, suit or other proceeding is
improper. Each of the parties hereto also agrees that any final and
unappealable judgment against a party hereto in connection with any action,
suit or other proceeding shall be conclusive and binding on such party and
that such award or judgment may be enforced in any court of competent
jurisdiction, either within or outside of the United States. A certified or
exemplified copy of such award or judgment shall be conclusive evidence of
the fact and amount of such award or judgment.
(C) EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES THE RIGHT TO
A JURY TRIAL IN CONNECTION WITH ANY LEGAL PROCEEDING RELATING TO THIS
AGREEMENT OR THE ENFORCEMENT OF ANY PROVISION OF THIS AGREEMENT.
5.7 Should any party hereto bring an action to enforce the terms of
this Agreement then, if the party hereto which brought such action prevails
in such action it shall be entitled to recovery of its attorney's fees from
the party hereto against whom such action was brought, and if the party
hereto against whom such action was brought prevails in such action it
shall be entitled to recovery of its attorney's fees from the party hereto
which brought such action.
5.8 This Agreement sets forth the entire agreement and understanding
among the parties as to the subject matter hereof and merges and supersedes
all prior discussions, agreements and understandings of every kind and
nature among them.
5.9 The captions appearing in this Agreement are inserted only as a
matter of convenience and for reference and in no way define, limit or
describe the scope and intent of this Agreement or any of the provisions
hereof.
5.10 This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original and all of which taken together shall
constitute a single agreement.
5.11 The parties have participated jointly in the negotiation and
drafting of this Agreement. Consequently, in the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be
construed as if drafted jointly by the parties hereto, and no presumption
or burden of proof shall arise favoring or disfavoring either party by
virtue of the authorship of any provision of this Agreement.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have executed this
Stockholders Agreement as of the date first above written.
PANAVISION INC.
By: /s/ John Farrand
------------------------
Name: John Farrand
Title: President and Chief Executive Officer
PX HOLDING CORPORATION
By: /s/ Glenn P. Dickes
------------------------
Name: Glenn P. Dickes
Title: Vice President
SONY ELECTRONICS INC.
By: /s/ Edward Grebow
-------------------------
Name: Edward Grebow
Title: Deputy President
