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EXHIBIT 10.7
OXFORD AUTOMOTIVE, INC.
Shareholder Agreement
This Shareholder Agreement (the "Agreement") is made as of the 10th
day of January, 1997, by and among Oxford Automotive, Inc., a Michigan
corporation formerly known as BMG-MI, Inc. (the "Company"), and the
shareholders set forth on Exhibit A to this Agreement (each individually a
"Shareholder" and collectively the "Shareholders") and applies to all shares of
the stock in the Company, of whatever class or series, that a Shareholder now
owns or later acquires (the "Shares").
Background
A. Certain other holders of shares of common stock of the Company
have executed Shareholder Agreements, one dated October 23,
1995, and the other dated February 26, 1996, that restrict the
rights of such holders to transfer such shares (the "Prior
Shareholder Agreements"). The parties to the Prior
Shareholder Agreements shall be referred to as the "Original
Shareholders" for the purposes of this Agreement. Copies of
the Prior Shareholder Agreements are attached to this
Agreement as Exhibits C and D.
B. The Shareholders were holders of shares of the common stock of
Lobdell Holdings, Inc., a Michigan corporation ("Holdings"),
prior to the merger of Holdings with and into the Company
pursuant to that certain Agreement and Plan of Merger between
Holdings and the Company dated January 8, 1997 (the "Holdings
Merger"). The Company is the surviving corporation after the
Holdings Merger, which was made effective on the same date as
this Agreement.
Agreement
1. Definitions. The following terms are defined for the purposes
of this Agreement:
(a) "Shareholder" includes a Shareholder's
representative, executor or legal guardian as necessary.
(b) "Transfer" is any sale, exchange or other disposition
or encumbrance of a Shareholder's Shares, whether absolute or as security,
whether for a valuable consideration or as a gift, whether voluntary or
involuntary, except that a "transfer" shall not be deemed to include a transfer
of a Shareholder's shares to a living trust of which Shareholder serves as the
sole trustee or a transfer pursuant to the Shareholder's last will and
testament, provided that the transferee shall execute a copy of this Agreement
as a condition precedent to the transfer of any Share on the books of the
Company and to recognition as a shareholder for any purpose.
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2. Restrictions on Transfer by Shareholder.
(a) A Shareholder may not transfer any Shares without
first complying with the provisions of this Agreement.
(b) Except with the prior written consent of sixty
percent (60%) in interest of the shares of common stock of the Company owned by
Shareholders and Original Shareholders other than the Shareholder seeking to
transfer his Shares or in connection with a transaction contemplated by Section
4, a Shareholder shall not transfer any of his Shares.
(c) Each of the certificates representing the Shares
shall contain the following legends:
ON THE FACE OF
THE CERTIFICATE: THIS CERTIFICATE IS SUBJECT TO TRANSFER RESTRICTIONS
NOTED ON THE REVERSE SIDE HEREOF.
ON THE BACK OF
THE CERTIFICATE: THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND
VOTING AGREEMENTS CONTAINED IN THAT CERTAIN
SHAREHOLDER AGREEMENT, DATED JANUARY 10, 1997, BY
AND AMONG THE COMPANY AND CERTAIN SHAREHOLDERS OF THE
ISSUER.
3. Redemption Upon Death. Upon the death of a Shareholder, the
other Shareholders and the Original Shareholders may, subject to the provisions
of this Section 3, purchase the Shares of that Shareholder. Such election
shall be in writing within thirty (30) days of the date of death, and specify
the number of shares to be purchased. If the purchase election is exercised,
the purchase shall be in such proportions as the Shareholders and the Original
Shareholders (excluding the Shareholder whose shares are being purchased (the
"Selling Shareholder")) shall agree upon jointly in writing, or in the event
that they fail to agree, then such purchase shall be proportionate to the
relative number of Shares in the Company held by each Shareholder and Original
Shareholder electing to participate in the purchase. The purchase price shall
be determined and payable as provided in Section 4.
4. Purchase Price. If a purchase price cannot be agreed upon by
the purchasing Shareholders and Original Shareholders and the Selling
Shareholder within thirty (30) days of the date of death, Selwyn Isakow or in
the event Selwyn Isakow, or an entity controlled by him, is no longer a holder
of Shares or is considered the Selling Shareholder, a majority in number of the
purchasing Shareholders and Original Shareholders shall select an appraiser
experienced in the appraisal of companies which are engaged in the business of
the Company to appraise the Company as of the date of death. The appraisal
shall be the higher value of the Company (i) as a going
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concern, or (ii) on a liquidation basis. The purchase price for the Shares to
be purchased shall be the pro rata portion of the value of the Company. The
purchase price shall be payable against receipt of the certificates
representing the Shares, duly endorsed for transfer not later than one hundred
eighty (180) days subsequent to death, as follows: (i) the lesser of
twenty percent (20%) of the purchase price or the original cost basis of the
Shares shall be paid in cash, and (ii) the remaining unpaid balance, if any, by
delivery of each purchasing Shareholder's and Original Shareholder's promissory
note. The promissory note shall (i) be unsecured, (ii) have a five-year term
providing for annual payments of principal equal to 20% of the face amount,
(iii) bear interest, payable quarterly, at the variable interest rate announced
from time to time by NBD Bank as its prime rate, (iv) permit pre-payment in
whole or in part, without penalty, at any time, (v) be non-negotiable, and (vi)
entitle the holder to declare the unpaid principal amount and all interest
accrued thereon immediately due and payable, after customary notice and grace
periods, upon the failure to pay any installment when due.
5. Majority's Ability to Sell the Company.
(a) All of the Shareholders agree to execute and deliver
to Selwyn Isakow an irrevocable proxy in the form of Exhibit B. Except as
specifically provided in Section 5(b), Selwyn Isakow may vote such proxies as
he and he alone determines appropriate and shall not be liable to any
Shareholder in connection with any matter with respect to which he votes the
Shares pursuant to such proxies.
(b) If the Original Shareholders and the Shareholders
having a majority in interest of the voting securities of the Company determine
that it is in the best interests of all of the Original Shareholders and the
Shareholders, taken as a whole, to sell all or substantially all of the assets
of the Company or to cause the Company to merge or consolidate with or into
another corporation or other entity (each, a "Transaction"), Selwyn Isakow
shall exercise the proxies provided to him pursuant to Section 5(a) consistent
with the decision of a majority in interest of the voting securities of the
Company held by the Original Shareholders and the Shareholders, provided,
however, such holders notify him in writing at least one (1) business day prior
to the date on which he is to vote or execute a consent with respect to a
Transaction, otherwise he shall be entitled to vote such Shares as he and he
alone determines appropriate, as provided in Section 5(a).
6. Notices. All notices or communications permitted or required
under this Agreement shall be given by express mail, certified mail or by
personal service, with all postage or fees prepaid addressed to the applicable
party as set forth on Exhibit A.
7. Additional Capital Contributions. The Shareholders understand
that additional paid in capital may be necessary for the Company's business.
If the Board of Directors of the Company determines to issue additional capital
stock, warrants, options or convertible securities, the Shareholders agree
among themselves to exercise the opportunity to purchase such additional
securities in proportion to their ownership interest existing at that time.
Securities not purchased by any Shareholder shall be offered to the Original
Shareholders and the other Shareholders in
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proportion to their relative ownership interests not taking into account the
interest of the Shareholder who refused to purchase additional securities.
8. Complete Agreement. This Agreement contains the entire
understanding of the parties with respect to transactions contemplated by this
Agreement. No representations, inducement, agreement, amendment, promise or
understanding will have any force or effect unless the same is in writing and
validly executed by the parties to this Agreement. Notwithstanding the
preceding sentence, the Company may modify Exhibit A from time to time to
reflect new persons to whom Shares have been issued or to delete Shareholders
who no longer own Shares.
9. Successors. This Agreement shall be binding upon the parties
and their successors and assigns and may be specifically enforced.
10. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one instrument. The Company shall have custody of counterparts
executed in the aggregate by all Shareholders.
11. Miscellaneous. This Agreement shall be governed by and
construed in accordance with the laws of the State of Michigan, without regard
to its rules regarding choice of law. Each stock certificate representing
Shares shall bear an appropriate legend referring to this Agreement. If there
exist the requisite consents to a transfer, the transferees shall execute a
copy of this Agreement as a condition precedent to the registration of his
ownership of Shares on the books of the Company and to it recognition as a
shareholder for any purpose.
OXFORD AUTOMOTIVE, INC.
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Selwyn Isakow, President
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Exhibit A
1. Patrick T. Flynn
The Oxford Investment Group, Inc.
2000 N. Woodward Avenue, Suite 130
Bloomfield Hills, Michigan 48304
2. Charles L. Dardas
Oxford Automotive, Inc.
2000 N. Woodward Avenue, Suite 130
Bloomfield Hills, Michigan 48304
3. Jeffrey J. Mason
Oxford Automotive, Inc.
2000 N. Woodward Avenue, Suite 130
Bloomfield Hills, Michigan 48304
4. John H. Ferguson
Oxford Automotive, Inc.
1574 Eagle Street North
Cambridge, Ontario N3H 4S5
Canada
5. Richard Kaspers
Packaging Concepts + Design, Inc.
800 Mandoline
Madison Heights, Michigan 48071
6. Selwyn Isakow
The Oxford Investment Group, Inc.
2000 N. Woodward Avenue, Suite 130
Bloomfield Hills, Michigan 48304
7. Steven M. Abelman
Oxford Automotive, Inc.
2000 N. Woodward Avenue, Suite 130
Bloomfield Hills, Michigan 48304
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8. Larry C. Cornwall
Oxford Automotive, Inc.
2000 N. Woodward Avenue, Suite 130
Bloomfield Hills, Michigan 48304
9. Donald C. Campion
Oxford Automotive, Inc.
2000 N. Woodward Avenue, Suite 130
Bloomfield Hills, Michigan 48304
10. Manfred Walt
Suite 4440 BCE Place
181 Bay Street
Toronto, Ontario M5J 2T3
Canada
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Exhibit B
IRREVOCABLE PROXY
I appoint Selwyn Isakow, my proxy, to vote all of my shares of common
stock of Oxford Automotive, Inc. that are entitled to vote at any meeting of
the Shareholders of Oxford Automotive, Inc. This proxy concerns all matters
that may properly come before any such meeting, and any adjournment thereof.
Date: January 8, 1997
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[Name]
Certificate No.
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Number of Shares
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SIGNATURE PAGE
The undersigned hereby executes the Shareholder Agreement (the
"Agreement") of Oxford Automotive, Inc., a Michigan corporation, dated as of
January 10, 1997, and hereby agrees to all of the terms and provisions thereof.
The undersigned hereby joins and executes the Agreement and hereby authorizes
this Signature Page to be attached thereto.
Dated: January 8, 1997
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