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SHAREHOLDERS AGREEMENT
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This Shareholders Agreement (this "Agreement") is entered into as of this
9th day of June, 1997 by and among Cyrk, Inc., a Delaware corporation (the
"Company"), Allan Brown, Eric Stanton, Gregory Shlopak, and Patrick Brady (each
a "Shareholder", and together the "Shareholders").
INTRODUCTION
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The Company, Allan Brown and Eric Stanton, along with Simon Marketing,
Inc., a Nevada corporation, and SMI Merger, Inc., a Delaware corporation, are
parties to an Agreement and Plan of Merger, dated as of May 7, 1997 (as amended
from time to time, the "Merger Agreement"), pursuant to which, INTER ALIA, Allan
Brown and Eric Stanton have acquired shares of common stock, par value $.01 per
share, of the Company (the "Common Stock"). The execution of this Agreement is a
condition precedent to the Closing of the transaction contemplated under the
Merger Agreement. Capitalized terms used herein and not otherwise defined shall
have the meanings given to them in the Merger Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
Section 1. Appointment of Director.
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(a) Promptly upon the execution of this Agreement, the Board of Directors
of the Company (the "Board") shall take all necessary action to increase the
size of the Board to six and to appoint Allan Brown to be a member of the Board
as a class I director; PROVIDED, HOWEVER, that Allan Brown's appointment to be a
member of the Board shall be effective as soon as determined by Allan Brown to
be reasonably practicable but no later than January 1, 1998. At each election
thereafter of class I directors, and provided that Allan Brown beneficially owns
at least five percent (5%) of the issued and outstanding Common Stock of the
Company as of the date of such election, the Shareholders shall nominate Allan
Brown for election as a class I director.
(b) At any time following the execution of this Agreement, Eric Stanton
shall have the right, upon his request, to be appointed a member of the Board
(and to be a class I, II or III director, as determined by Eric Stanton in his
sole discretion and set forth in such request). Within ninety (90) days
following the Board's receipt of such request of Eric Stanton, the Board shall
take all necessary action to increase the size of
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the board by one (1) and appoint Eric Stanton to be a member of the Board as a
class I, II, or III director in accordance with Eric Stanton's request referred
to above. At each election thereafter of the class of directors of the Board to
which Eric Stanton is appointed, and provided that Eric Stanton beneficially
owns at least five percent (5%) of the issued and outstanding Common Stock of
the Company as of the date of such election, the Shareholders shall nominate
Eric Stanton for election as a class I, II or III director, as the case may be.
SECTION 2. VOTING. At all meetings (and written actions in lieu of
meetings) of the stockholders of the Company at which directors are to be
elected, and at which Allan Brown, Eric Stanton, Gregory Shlopak or Patrick
Brady have been nominated for election, each Shareholder shall vote all of such
Shareholder's stock to elect Allan Brown, Eric Stanton, Gregory Shlopak and
Patrick Brady, as the case may be, as directors of the Company.
SECTION 3. MEETINGS. The Company will cause its Board of Directors to meet
on a regular basis, not less often than quarterly, and will give each director
at least 7 days prior notice of the time and place of any meeting.
SECTION 4. REPRESENTATIONS. Each Shareholder represents and warrants to
each other party that such Shareholder is not bound by any agreement or
commitment that conflicts with or would interfere with the performance of such
Shareholder's obligations under this Agreement.
SECTION 5. MISCELLANEOUS. This Agreement shall survive indefinitely and
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Delaware. If any
provision of this Agreement is rendered void, invalid or unenforceable by any
court of law for any reason, such invalidity or unenforceability shall not void
or render invalid or unenforceable any other provision of this Agreement. This
Agreement may be changed, waived, discharged or terminated only with the written
consent of each party hereto. This Agreement may be executed in one or more
counterparts, and with counterpart signature pages, each of which shall be an
original, but all of which together shall constitute one in the same Agreement.
SECTION 6. NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed given if delivered personally, telecopied (which
is confirmed) or mailed by registered or certified mail (return receipt
requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
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(a) if to Allan Brown or Eric Stanton, to:
Allan Brown
c/o Simon Marketing, Inc.
1900 Avenue of the Stars
4th Floor, Suite 400
Los Angeles, CA 90067
Eric Stanton
c/o Simon Marketing Hong Kong Ltd.
Evergo House, 3rd Floor
38 Gloucester Road
Wanchai, Hong Kong
with a copy to:
Irell & Manella
1800 Avenue of the Stars
Suite 900
Los Angeles, CA 90067
Attention: Alvin Segal, Esq.
Mihaly, Schuyler & Mitchell
1801 Century Park East
Suite 1201
Los Angeles, CA 90067
Attention: Zoltan Mihaly, Esq.
Shearman & Sterling
599 Lexington Avenue
New York, NY 10022
Attention: David W. Heleniak, Esq.
(b) if to the Company, Patrick Brady or to Gregory
Shlopak, to:
Cyrk, Inc.
3 Pond Road
Gloucester, MA 01930
Patrick Brady
c/o Cyrk, Inc.
3 Pond Road
Gloucester, MA 01930
Gregory Shlopak
c/o Cyrk, Inc.
3 Pond Road
Gloucester, MA 01930
with a copy to:
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Choate, Hall & Stewart
Exchange Place
53 State Street
Boston, MA 02109
Attention: Cameron Read, Esq.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
CYRK, INC.
By: /s/ Gregory P. Shlopak
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Name: Gregory P. Shlopak
Title:
/s/ Allan Brown
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Allan Brown
/s/ Eric Stanton
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Eric Stanton
/s/ Gregory Shlopak
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Gregory Shlopak
/s/ Patrick Brady
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Patrick Brady
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