EXHIBIT 99.1
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT, dated as of November 17, 1996, by
and among Mattel, Inc., a Delaware corporation ("Parent"), Corporate
Partners, L.P., a Delaware limited partnership ("Corporate
Partners"), Corporate Offshore Partners, L.P., a Bermuda limited
partnership ("Offshore Partners"), The State Board Administration of
Florida, a body corporate organized under the constitution of the
State of Florida (the "State Board", and together with Corporate
Partners and Offshore Partners, the "Stockholders"), and Corporate
Advisors, L.P., a Delaware limited partnership ("Corporate
Advisors").
WITNESSETH:
WHEREAS, the Stockholders collectively beneficially own
Shares of capital stock ("Company Shares") of Tyco Toys, Inc., a
Delaware corporation (the "Company"), as set forth on Schedule I
hereto; and
WHEREAS, Parent and Company have entered into an Agreement
and Plan of Merger, dated as of the date hereof (the "Merger
Agreement"), pursuant to which, among other things, a subsidiary of
Parent will be merged with and into the Company (the "Merger"); and
WHEREAS, as a condition to its willingness to enter into
the Merger Agreement, Parent has required that the Stockholders
agree, and the Stockholders have agreed, to enter into and abide by
the terms of this Stockholders Agreement;
NOW, THEREFORE, in consideration of the premises, the
mutual covenants and agreements set forth herein and other good and
valuable consideration, the sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. OWNERSHIP OF COMPANY SHARES. Each Stockholder
represents and warrants that such Stockholder has or shares the
right to vote and dispose of the number of Company Shares set
forth opposite such Stockholder's name on Schedule I hereto,
subject to such restrictions as may be applicable under law and
the Stock Purchase Agreement for Series B Voting Convertible
Exchangeable Preferred Stock dated April 15, 1994 between the
Stockholders and Tyco Toys, Inc. (the "Stock Purchase Agree-
ment").
2. AGREEMENTS OF THE STOCKHOLDERS. Each Stock-
holder covenants and agrees that during the term of this Stock-
holders Agreement:
(a) such Stockholder shall, at any meeting of the
Company's stockholders called for such purpose (including
at any postponements and adjournments thereof), vote, or
cause to be voted, all Company Shares, together with any
other shares of capital stock of the Company acquired after
the date hereof and prior to the termination hereof, in
which such stockholder has the right to vote in favor of
approval and adoption of the Merger Agreement;
(b) except as otherwise expressly permitted hereby and
except as may be required by the Company Certificate of
Designation, such Stockholder shall not, prior to the
Effective Date (as defined in the Agreement) or the earlier
termination of the Merger Agreement in accordance with its
terms, sell, pledge, transfer or otherwise dispose of such
Stockholder's Company Shares; and
(c) such Stockholder shall not in its capacity as a
stockholder of the Company directly or indirectly encourage
or solicit or hold discussions or negotiations with, or
provide any information to, any person, entity or group
(other than Parent or an affiliate thereof) concerning any
Acquisition Proposal (as defined in the Merger Agreement)
(and other than Company in connection with the Merger);
provided that this clause (c) shall not be binding on the
State Board to the extent that Corporate Advisors does not
have the authority to act for the State Board with respect
to the subject matter of this clause (c).
3. TREATMENT OF SERIES B SHARES. (a) Subject to the terms
and conditions of this Stockholders Agreement, each Stockholder and
Parent agree that on the Effective Date as part of the Merger each
share of the Series B Voting Convertible Exchangeable Preferred
Stock, par value $.10 per share ("Series B Shares") beneficially
owned by such Stockholder shall be converted into or exchanged for
one share of a series of preferred stock of Parent having economic
terms as nearly equivalent as possible to, and with the same voting
and other rights as, the Series B Stock, including the right to
convert into common stock of Parent (the "Parent Series B Stock", and
such conversion or exchange hereby referred to as the "Series B
Shares Treatment"), and each Stockholder hereby waives any rights
such
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Stockholder might otherwise have pursuant to Section 3 or Section 4
of the Certificate of Designation for the Series B Shares in effect
as of the date hereof (the "Certificate of Designation") with respect
to such shares solely as a result of the Merger, other than to
receive such Parent Series B Stock.
(b) In the event that the Series B Treatment is deemed or
considered to be, or is determined to require, an amendment to the
Certificate of Designation or to the Restated Certificate of
Incorporation of Company, as amended as of the date hereof (the
"Certificate of Incorporation"), each Stockholder hereby agrees to
vote all of its Company Shares in favor of any amendment to the
Certificate of Designation or the Certificate of Incorporation as may
be necessary to effectuate the Series B Shares Treatment.
(c) From and after the Effective Date, Parent agrees to pay
any and all dividends and distributions on the Parent Series B Shares
(including accrued and unpaid dividends on the Series B Shares) when
due (or, if past due as of the Effective Date, then on the Effective
Date).
4. AUTHORITY OF CORPORATE ADVISORS TO ACT FOR THE STATE
BOARD. (a) Subject to Section 7(b), the State Board and Corporate
Advisors each represents to Parent that Corporate Advisors has full
power and authority, pursuant to the provisions of an Investment
Management Agreement, dated as of June 17, 1988 (the "Management
Agreement"), to act on behalf of the State Board in connection with
the transactions contemplated by this Stockholders Agreement (except
as set forth in the proviso in Section 2(c) hereof) and that Parent
can rely on any action taken by Corporate Advisors in connection
therewith as if such action were taken by the State Board.
(b) Subject to Section 7(b), so long as the Management
Agreement remains in effect without amendment of the provisions
granting Corporate Advisors the authority to act on behalf of the
State Board, any and all actions that are required or permitted to be
taken by the State Board pursuant to this Stockholders Agreement may
be taken by Corporate Advisors on behalf of the State Board and any
and all notices required to be given by Parent to the State Board
pursuant to this Stockholders Agreement may be given to Corporate
Advisors in lieu of giving such notice to the State Board; provided,
however, that the provisions of this sentence shall not relieve the
State Board of any of its obligations pursuant to this Stockholders
Agreement. Parent shall be entitled to assume that, and to act in
reliance on the assumption that, the Management Agreement remains in
effect without amendment of any
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such provisions unless and until it receives written notice from the
State Board to the contrary.
5. SUCCESSORS AND ASSIGNS. A Stockholder may not sell,
pledge, transfer, convert or otherwise dispose of its Company Shares
except to another Stockholder without the prior written consent of
Parent, which consent shall be granted or withheld in Parent's sole
discretion.
6.(A) REPRESENTATIONS AND WARRANTIES OF PARENT. Par-
ent makes the following representations and warranties to each
Stockholder:
(i) Parent has all requisite corporate power and authority
to enter into this Stockholders Agreement and the Merger Agreement
and to consummate the transactions contemplated hereby and thereby.
The execution and delivery of this Stockholders Agreement and the
Merger Agreement and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by all
necessary corporate action on the part of Parent. Parent has duly
executed and delivered this Stockholders Agreement and the Merger
Agreement and this Stockholders Agreement and the Merger Agreement
constitute its legal, valid and binding obligations enforceable
against it in accordance with their respective terms except as may be
limited by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights generally and except that the
availability of equitable remedies, including specific performance,
is subject to the discretion of the court before which any proceeding
therefor may be brought.
(ii) Parent is not subject to or obligated under (A) any
charter, by-law, indenture or other loan document provision (other
than the Credit Agreement dated as of March 10, 1995, among Parent,
the Banks named therein and Bank of America National Trust and
Savings Association, as amended (the "Parent Credit Agreement")) or
(B) any other contract, license, franchise, permit, order, decree,
concession, lease, instrument, judgment, statute, law, ordinance,
rule or regulation applicable to Parent or any of its subsidiaries or
their respective properties or assets, which would be breached or
violated, or under which there would be a default (with or without
notice or lapse of time, or both), or under which there would arise a
right of termination, cancellation or acceleration of any obligation
or the loss of a material benefit, by execution and delivery of this
Stockholders Agreement and the Merger Agreement, and the consummation
of the transactions contemplated hereby and thereby (including the
issuance of the Parent Series B Stock, the issuance of shares of
common stock of Parent upon the conversion and the compliance by
Parent with the terms of
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such securities (collectively, the "Securities")) other than, in the
case of clause (B) only, (X) any breaches, violations, defaults,
terminations, cancellations, accelerations or losses which, either
singly or in the aggregate, will not have a Parent Material Adverse
Effect (as defined in the Merger Agreement) or prevent the
consummation of the transactions contemplated hereby or thereby,
including the issuance of such Securities and compliance by Parent
with the terms thereof and (Y) the laws and regulations referred to
in the next sentence. Except as referred to herein or in connection,
or in compliance, with the provisions of the Hart-Scott-Rodino
Antitrust Improvements Act of 1933, as amended (the "Securities
Act"), the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and other governmental approvals required under the applicable
laws of any foreign jurisdiction ("Foreign Laws") and the
environmental, corporation, securities or blue sky laws or
regulations of the various states, no filing or registration with, or
authorization, consent or approval of, any public body or authority
is necessary for the consummation by Parent of the Merger or the
other transactions contemplated by this Merger Agreement (including
the issuance of the Securities), other than filings, registrations,
authorizations, consents or approvals the failure of which to make or
obtain would not have a Parent Material Adverse Effect or prevent the
consummation of the transactions contemplated hereby or thereby,
including the issuance of the Securities and compliance by Parent
with the terms thereof.
(iii) Status of Shares. The shares of Parent Series B Stock
will be, prior to the Effective Date, duly authorized by all
necessary corporate action on the part of Parent and upon their
issuance will be validly issued and outstanding, fully paid and
nonassessable and free and clear of any liens. The shares of common
stock of Parent issuable upon conversion or exchange of the shares of
Parent Series B Stock or the Parent Notes will be, prior to the
Effective Date validly reserved for issuance, and upon issuance upon
such conversion or exchange will be validly issued and outstanding,
fully paid and nonassessable, and free and clear of any liens. The
notes of Parent issuable upon exchange of the Shares (the "Parent
Notes") will be, prior to issuance thereof, duly authorized by all
necessary corporate action on the part of Parent, and when issued and
exchanged for shares of Parent Series B Stock, will constitute valid
and binding obligations of Parent, enforceable in accordance with
their term except as may be limited by bankruptcy, insolvency or
other similar laws affecting the enforcement of creditors' rights
generally and except that the availability of equitable remedies,
including specific performance, is subject to the discretion of the
court before which any proceeding therefor may be brought. The shares
of common stock of
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Parent issuable upon conversion or exchange of the Series B Shares
will be authorized for listing upon notice of issuance on the
principal trading market on which shares of common stock of Parent
are traded at such time. The issuance of the Parent Series B Shares
in the Merger will not be subject to any pre-emptive rights.
(B) REPRESENTATIONS OR WARRANTIES OF THE STOCKHOLD-
ERS. Each Stockholder makes the following representations, on
its own behalf, to Parent:
(i) Stockholder has all requisite power and authority to
enter into this Stockholders Agreement. The execution and delivery of
this Stockholders Agreement and the consummation of the transactions
contemplated hereby are duly authorized by all necessary partnership
or other action on the part of Stockholder. Stockholder has duly
executed and delivered this Stockholders Agreement and this
Stockholders Agreement constitutes its legal, valid and binding
obligations enforceable against it in accordance with their
respective terms except as may be limited by bankruptcy, insolvency
or other similar laws affecting the enforcement of creditors' rights
generally and except that the availability of equitable remedies,
including specific performance, is subject to the discretion of the
court before which any proceeding therefor may be brought.
(ii) Stockholder is not subject to or obligated under (A)
any charter, by-law, partnership agreement, indenture or other loan
document provision or (B) any other contract, license, franchise,
permit, order, decree, concession, lease, instrument, judgment,
statute, law, ordinance, rule or regulation applicable to Stockholder
or any of its affiliates or their respective properties or assets,
which would be breached or violated, or under which there would be a
default (with or without notice or lapse of time, or both), or under
which there would arise a right of termination, cancellation or
acceleration of any obligation or the loss of a material benefit, by
execution and delivery of this Stockholders Agreement and the
consummation of the transactions contemplated hereby other than, in
the case of clause (B) only, the Stock Purchase Agreement (for which
the Company has pursuant hereto given its consent to the execution of
and the consummation of the transactions contemplated by this
Stockholders Agreement) any breaches, violations, defaults,
terminations, cancellations, accelerations or losses which, either
singly or in the aggregate, will not prevent the consummation of the
transactions contemplated by this Stockholders Agreement.
7. OTHER AGREEMENTS. (a) Registration Rights.
Parent agrees with Stockholders that on the Effective Date,
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Parent shall, pursuant to a writing satisfactory to the Stockholders,
assume and be bound by all obligations of the Company under the
Registration Rights Agreement dated April 15, 1994 between the
Stockholders and Company, and Parent and Stockholders agree that such
agreement shall be amended to pertain to the Parent Series B Stock
(and the securities which may be issued on conversion or exchange
thereof) in lieu of the Series B Stock.
(b) Exempt Voting Securities. Notwithstanding anything to
the contrary contained in this Agreement, Parent and Shareholder
agree that (i) the restrictions and obligations contained in Section
2 shall not apply to any voting securities of Company acquired or
held by the State Board with respect to which Corporate Advisors does
not have sole or shared voting or dispositive power with respect
thereto pursuant to the Management Agreement, which voting securities
shall include Company Shares if such Shares are released from the
custody account maintained by Corporate Advisors on behalf of the
State Board pursuant to the Management Agreement, and (ii) the State
Board shall not be bound by the obligations or prohibitions set forth
in Section 2(c); provided, however, that the foregoing shall not be
deemed to be a limitation of any of the obligations imposed by this
Agreement upon Corporate Advisors, acting on behalf of the State
Board.
8. TERMINATION. (a) The parties agree and intend that this
Stockholders Agreement be a valid and binding agreement enforceable
against the parties hereto and that damages and other remedies at law
for the breach of this Stockholders Agreement are inadequate. This
Stockholders Agreement may be terminated at any time prior to the
Closing Date by mutual written consent of the parties hereto and
shall be automatically terminated in the event that the Merger
Agreement is terminated in accordance with its terms.
(b) This Stockholders Agreement may also be terminated by
the Stockholders in their sole discretion in the event that (i) the
Effective Date shall not have occurred on or prior to the one year
anniversary of the date hereof, (ii) Section 3.1(d) of the Merger
Agreement shall have been amended or modified, without the prior
written consent of the Stockholders, if such amendment or
modification is adverse to the interests of the Stockholders or (iii)
any other amendment or modification of the Merger Agreement shall
have been made without the prior written consent of the Stockholders
which amendment is adverse to the interests of the Stockholders with
respect to the transactions contemplated hereby or by the Merger
Agreement.
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9. NOTICES, ETC. All notices required by or otherwise with
respect to this Stockholders Agreement shall be in writing and shall
be deemed to have been duly given to any party when delivered
personally (by courier service or otherwise), or when delivered by
telecopy and confirmed by return telecopy, in each case to the
applicable addresses set forth below:
(a) if to Parent:
Mattel, Inc.
333 Continental Boulevard
El Segundo, California 90245-5012
Attention: Barnett Rosenberg, Esq.
General Counsel
Telecopy: (310) 252-2567
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention: Andrew R. Brownstein
Telecopy: (212) 403-2000
Telephone: (212) 403-1000
(b) If to Corporate Partners, Offshore Partners,
Corporate Advisors or the State Board:
c/o Corporate Partners, L.P.
One Rockefeller Center
New York, New York 10020
Attention: Jonathan Kagan
Telecopy: (212) 332-5581
with a copy to:
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, New York 10019
Attention: Timothy G. Massad
Telecopy: (212) 474-3700
Telephone: (212) 474-1000
10. GOVERNING LAW. This Stockholders Agreement
shall be governed by the laws of the State of Delaware without
giving effect to the principles of conflicts of laws thereof.
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11. COUNTERPARTS. This Stockholders Agreement may
be executed in one or more counterparts, all of which shall be
considered one and the same and each of which shall be deemed
an original.
12. HEADINGS. The Section headings contained herein
are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Stockholders Agreement.
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IN WITNESS WHEREOF, each of the undersigned, intending to
be legally bound, has caused this Stockholders Agreement to be duly
executed and delivered on the date first set forth above.
MATTEL, INC.
By: /s/ Ned Mansour
Name: Ned Mansour
Title: President
CORPORATE PARTNERS, L.P.
CORPORATE OFFSHORE PARTNERS, L.P.
By: Corporate Advisors, L.P.,
General Partner
By: LFCP Corp., General Partner
By: /s/ David B. Golub
Name: David B. Golub
Title: Managing Director
THE STATE BOARD OF ADMINISTRATION
OF FLORIDA
By: Corporate Advisors, L.P.,
Attorney-in-Fact
By: LFCP Corp., General Partner
By: /s/ David B. Golub
Name: David B. Golub
Title: Managing Director
CORPORATE ADVISORS, L.P.
By: LFCP Corp., General Partner
By: /s/ David B. Golub
Name: David B. Golub
Title: Managing Director
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By executing this Stockholders Agreement in the space provided below
the Company hereby consents to the execution, delivery and
performance of this Stockholders Agreement by each Stockholder and
agrees that the same shall not constitute a breach of any provision
of the Stock Purchase Agreement and acknowledges that the
Stockholders shall retain and be entitled to all rights under the
Certificate of Designation in the event of the termination of this
Stockholders Agreement prior to the occurrence of the Series B
Treatment.
TYCO TOYS, INC.
By: /s/ Harry J. Pearce
Name: Harry J. Pearce
Title: Vice Chairman
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SCHEDULE 1
Number of Shares
Of Tyco Series B
Name Preferred Stock
Corporate Partners, LP. 45,617*
Corporate Offshore
Partners, L.P. 3,249*
State Board of Administration
of Florida 4,765*
Total 53,631
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* Notwithstanding the foregoing, Corporate Advisors as general
partner of Corporate Partners and Offshore Partners, and as
investment manager over the Shares owned by the State Board,
which are held in a custody account, may be deemed to have the
power to vote or to direct the vote, and to dispose or to direct
the disposition, of the Shares.
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