Exhibit 10.25
APPLETON PAPERS INC.
SECURITY HOLDERS AGREEMENT
This SECURITY HOLDERS AGREEMENT (this "Agreement") is entered into as of
November 9, 2001, by and among PAPERWEIGHT DEVELOPMENT CORP., a Wisconsin
corporation (the "Successor"), APPLETON INVESTMENTS LLC, a Delaware limited
liability company (the "Parent") and APPLETON PAPERS INC., a Delaware
corporation (the "Company").
RECITALS
WHEREAS, the Parent owns 100% of the outstanding common stock of the
Company as of the date of this Agreement (the "Common Stock");
WHEREAS, the Successor intends to liquidate the Parent and New Appleton,
LLC, a Wisconsin limited liability company, and to merge Arjo Wiggins Delaware
General Partnership with and into the Company, prior to the end of 2001 (the
"Liquidations");
WHEREAS, after the Liquidations, the Successor will own 100% of the Common
Stock;
WHEREAS, in connection with these transactions, the parties wish to provide
for the future voting of the shares of the Common Stock to elect and maintain in
office the members of the Board of Directors and to provide for certain
limitations on the future issuance of shares of the Company's capital stock and
the Company's direct or indirect acquisition of the assets or equity securities
of another natural person, corporation, limited liability company, partnership,
trust or other entity or enterprise (a "Person"), without the prior written
consent of the Successor as set forth below;
AGREEMENT
NOW, THEREFORE, the parties hereto mutually agree as follows:
1. VOTING.
1.1 Shares. The Parent agrees to hold all shares of the Common Stock owned
by the Parent as of the date hereof and any and all other securities
of the Company legally or beneficially acquired by the Parent after
the date hereof (collectively, the "Shares") subject to, and to vote
the Shares in accordance with, the provisions of this Agreement.
1.2 Election of Directors.
(a) Except to the extent otherwise provided in Section 4.4, on all
matters relating to the election of directors of the Company by the
Parent, the Parent agrees to vote all Shares held by the Parent
(pursuant to an action by written
consent or otherwise) so as to elect and maintain in office the
following members to the Company's Board of Directors:
(i) prior to January 1, 2003, three (3) individuals nominated by
the Parent, three (3) individuals nominated by the Chief
Executive Officer of the Company and one (1) individual
nominated by Joint Nomination (as defined below);
(ii) between January 1, 2003, and December 31, 2003, two (2)
individuals nominated by the Parent, three (3) individuals
nominated by the Chief Executive Officer of the Company and
two (2) individuals nominated by Joint Nomination;
(iii) between January 1, 2004, and December 31, 2004, one (1)
individual nominated by the Parent, three (3) individuals
nominated by the Chief Executive Officer of the Company and
three (3) individuals nominated by Joint Nomination; and
(iv) on and after January 1, 2005, four (4) individuals nominated
by the Chief Executive Officer of the Company and three (3)
individuals be nominated by Joint Nomination.
(b) Except to the extent otherwise provided in Section 4.4, (i) any
vote taken to remove any director elected pursuant to any subsection
of Section 1.2(a), or to fill any vacancy created by the resignation
or death of a director elected pursuant to any subsection of Section
1.2(a), shall also be subject to the provisions of the applicable
subsection of Section 1.2(a), and (ii) a director nominated by Joint
Nomination may only be removed by mutual agreement of the Parent and
the Chief Executive Officer of the Company.
(c) For the purposes of this Agreement, individuals nominated by
"Joint Nomination" for election as directors of the Company shall be
individuals proposed by the Parent and accepted (including acceptance
by default pursuant to the penultimate sentence of this Section
1.2(c)) by the Chief Executive Officer of the Company in the manner
set forth in this Section 1.2(c). Either the Parent or the Chief
Executive Officer may initiate a Joint Nomination by so notifying the
other in writing (a "Notice of Joint Nomination"), and upon delivery
or receipt of a Notice of Joint Nomination, as the case may be, the
Parent shall promptly notify the Chief Executive Officer in writing of
the name, age, business address, residence address and principal
occupation or employment of each proposed nominee and, if applicable,
the name(s) of the individual(s) who previously held the
directorship(s) for which such nominee(s) is or are proposed for Joint
Nomination pursuant to this Section 1.2(c) (a "Notice of Proposed
Nominees" that, if the Notice of Joint Nomination is delivered by the
Parent, may be included in the Notice of Joint Nomination). Following
the Chief Executive Officer's receipt of a Notice of Proposed
Nominees, the Parent shall promptly provide the Chief Executive
Officer with such additional information regarding any or all
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such proposed nominees as may be reasonably be requested by the Chief
Executive Officer. The Chief Executive Officer may in his sole
discretion accept or reject any or all such proposed nominees and,
within fifteen (15) days following his receipt of a Notice of Proposed
Nominees, shall notify the Parent in writing as to whether he accepts
or rejects any or all of such proposed nominees (a "Notice of
Acceptance/Rejection"). Each such nominee accepted by the Chief
Executive Officer pursuant to a Notice of Acceptance/Rejection shall
be deemed to be nominated by Joint Nomination for election as a
director of the Company. If the Chief Executive Officer fails to
deliver a Notice of Acceptance/Rejection within such fifteen-day
period, (i) the Parent shall select from among such proposed nominees
such number of individuals as there are open directorships to be
filled by Joint Nomination pursuant to Section 1.2(a), and (ii) the
individual(s) so selected by the Parent shall be deemed to be
nominated by Joint Nomination for election as a director(s) of the
Company. If the Chief Executive Officer delivers a Notice of
Acceptance/Rejection to the Parent within such fifteen-day period
rejecting all such proposed nominees in respect of any or all such
open directorships, the Parent shall promptly thereafter deliver to
the Chief Executive Officer a new Notice of Proposed Nominees
regarding one or more new proposed nominees for each such remaining
open directorship, and the Parent and the Chief Executive Officer
shall follow the procedures set forth in this Section 1.2(c) mutatis
mutandis.
(d) Upon receiving notice of any valid nomination or removal of a
director, the Parent shall execute and deliver a written consent of
sole shareholder (as described in Section 180.0704 of the Wisconsin
Business Corporation Law) electing such nominee or approving such
removal, as the case may be.
2. ISSUANCE OF ADDITIONAL SHARES; ACQUISITIONS BY COMPANY.
2.1 Issuance of Additional Shares. The Company shall not issue any
additional shares of its capital stock to any Person other than the
Parent or the Successor without the prior written consent of the
Successor.
2.2 Acquisitions by Company. The Company shall not, and shall not permit
any of its direct or indirect subsidiaries to, purchase or otherwise
acquire, by merger, consolidation or otherwise, in a single
transaction or a series or related transactions, any equity securities
of or other equity interest in, or any assets of, another Person for
cash or other consideration having an aggregate fair market value in
excess of One Hundred Million Dollars ($100,000,000) without the prior
written consent of the Successor. For the purposes of this Section
2.2, the terms "equity securities" and "equity interest" also include
any debt securities or other rights convertible into or exchangeable
for equity securities of or other equity interest in another Person.
3. TERMINATION. This Agreement shall continue in full force and effect from \
the date hereof until the date as of which the parties hereto terminate
this Agreement by unanimous written consent of the Company (acting by
majority of the members of the
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Board of Directors then in office) and the Parent, as of which date it
shall terminate in its entirety.
4. MISCELLANEOUS.
4.1 Ownership. Each party hereto represents and warrants to the other
parties hereto that such party has full power and capacity to execute,
deliver and perform this Agreement, which has been duly executed and
delivered by, and evidences the valid and binding obligation of, such
party enforceable in accordance with its terms.
4.2 Further Action. The Company shall not permit the transfer of any of
the Shares on its books, and shall not issue a new certificate
representing any of the Shares, unless and until the Person to whom
such Shares are to be transferred shall have executed a written
agreement pursuant to which such Person shall agree to be bound by all
of the provisions of this Agreement as if such Person were an original
party hereto.
4.3 Specific Performance. The parties hereto hereby declare that it is
impossible to measure in money the damages that will accrue to a party
hereto or to its successors and assigns by reason of a failure to
perform any of their respective obligations under this Agreement and
agree that the terms of this Agreement shall be specifically
enforceable. If any party hereto or its successors 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
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.
4.4 Governing Law; Compliance with Law. This Agreement, and the rights of
the parties hereto, shall be governed by and construed in accordance
with the laws of the State of Wisconsin as such laws apply to
agreements among Wisconsin residents made and to be performed entirely
within the State of Wisconsin. Notwithstanding anything to the
contrary contained in this Agreement, nothing in this Agreement shall
require the Parent or the Successor to take any action that would
violate, in the opinion of the counsel for the Parent or the
Successor, any law or fiduciary obligation to which the Parent or the
Successor is subject, including but not limited to the Internal
Revenue Code of 1986, as amended, and the Employee Retirement Income
Security Act of 1974, as amended. If the Parent or the Successor rely
on this Section 4.4 to forego taking action otherwise required under
this Agreement, the Parent and the Successor shall cooperate with the
other parties in good faith to determine an alternative course of
action that would be consistent with the purposes of this Agreement
and permitted by this Section 4.4.
4.5 Amendment and Waiver. This Agreement may be amended, and provisions of
this Agreement may be waived, only by an instrument in writing signed
by the
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Company (as approved by a majority of the members of the Board of
Directors then in office) and the Parent. Any amendment or waiver so
executed shall be binding upon each of the parties hereto and any
successor or assignee of any such party. No waiver of any breach of
this Agreement extended by any party hereto to any other party hereto
shall be construed as a waiver of any rights or remedies of any other
party hereto or with respect to any subsequent breach.
4.6 Severability. In the event one or more of the provisions of this
Agreement should for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this
Agreement, and this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein.
4.7 Additional Shares. In the event that, subsequent to the date of this
Agreement, any shares or other securities are issued on or in exchange
for any of the Shares by reason of any stock dividend, stock split,
combination of shares, reclassification or the like, such shares or
other securities shall be deemed to be Shares governed by this
Agreement.
4.8 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of
which together shall constitute one and the same agreement.
4.9 Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors
and assigns, including, without limitation, the Successor. Immediately
following the Liquidations, the term "Parent" used in this Agreement
shall be defined as the Successor.
4.10 Notices. Any notices required in connection with this Agreement shall
be in writing and shall be deemed effectively given: (a) upon personal
delivery to the party to be notified, (b) when sent by confirmed
facsimile, if sent during normal business hours of the recipient, or
if not sent during normal business hours of the recipient, on the next
business day, (c) five (5) days after having been sent by registered
or certified mail, return receipt requested and postage prepaid, or
(d) one (1) day after deposit with a nationally recognized overnight
courier, specifying next day delivery, with written confirmation of
delivery. Such notices shall be addressed to the party or parties to
be notified at the following address(es) or at such other address as a
party may designate from time to time by ten (10) days prior written
notice to the other parties hereto:
To the Company at: Appleton Papers Inc.
825 East Wisconsin Avenue
P.O. Box 359
Appleton, Wisconsin 54912-0359
Attention: Chief Executive Officer
Telecopier: (920) 991-7852
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To the Parent at: Appleton Investments LLC
825 East Wisconsin Avenue
P.O. Box 359
Appleton, Wisconsin 54912-0359
Attention: Managing Agent-Secretary
Telecopier: (920) 991-7852
To the Successor at: Paperweight Development Corp.
825 East Wisconsin Avenue
P.O. Box 359
Appleton, Wisconsin 54912-0359
Attention: Chief Executive Officer
Telecopier: (920) 991-7852
4.11 Entire Agreement. This Agreement constitutes the full and entire
understanding and agreement among the parties hereto with regard to
the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have executed this SECURITY HOLDERS
AGREEMENT as of the date set forth in the first paragraph hereof.
PARENT: COMPANY:
APPLETON INVEMENTS LLC APPLETON PAPERS INC.
By: /s/ Paul J. Karch By: /s/ Paul J. Karch
Paul J. Karch Paul J. Karch, Vice President, Law & Public
Managing Agent-Secretary Affairs, Secretary and General Counsel
SUCCESSOR:
PAPERWEIGHT DEVELOPMENT CORP.
By: /s/ Paul J. Karch
Paul J. Karch
Vice President and Secretary
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