-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BErxhMIH6+4itG27udho2ofQAN6NZToJlEmu6k7ZByjlQnBh+xJr64YNgUPOonB1 m+72D8HRG4YrbZPIpjEJzQ== 0000918964-99-000003.txt : 19990416 0000918964-99-000003.hdr.sgml : 19990416 ACCESSION NUMBER: 0000918964-99-000003 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19990415 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: SAFETY COMPONENTS INTERNATIONAL INC CENTRAL INDEX KEY: 0000918964 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 330596831 STATE OF INCORPORATION: DE FISCAL YEAR END: 0328 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-45337 FILM NUMBER: 99594520 BUSINESS ADDRESS: STREET 1: 2160 NORTH CENTRAL ROAD CITY: FORT LEE STATE: NJ ZIP: 07024 BUSINESS PHONE: 2015920008 MAIL ADDRESS: STREET 1: 2160 NORTH CENTRAL ROAD CITY: FORT LEE STATE: NJ ZIP: 07024 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: SAFETY COMPONENTS INTERNATIONAL INC CENTRAL INDEX KEY: 0000918964 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 330596831 STATE OF INCORPORATION: DE FISCAL YEAR END: 0328 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 2160 NORTH CENTRAL ROAD CITY: FORT LEE STATE: NJ ZIP: 07024 BUSINESS PHONE: 2015920008 MAIL ADDRESS: STREET 1: 2160 NORTH CENTRAL ROAD CITY: FORT LEE STATE: NJ ZIP: 07024 SC 13D/A 1 SCHEDULE 13D AMENDMENT 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 1 )* Safety Components International, Inc. (Name of Issuer) Common Stock (Title of Class of Securities) 786474106 (CUSIP Number) Mr. Robert A. Zummo With a copy to: Safety Components International, Inc. Richard A. Goldberg, Esq. 2160 North Central Road Swidler Berlin Shereff Friedman LLP Fort Lee, NJ 07024 919 Third Avenue (201) 592-0008 New York, New York 10022 (212) 758-9500 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) March 31, 1999 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this statement because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following: [ ]. Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7(b) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). Page 1 SCHEDULE 13D CUSIP No. 786474106 Page 2 of 8 Pages ------- --------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) Robert A. Zummo 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |_| (See Instructions) (b) |_| 3 SEC USE ONLY 4 SOURCE OF FUNDS (See Instructions) 00 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) |_| 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States NUMBER OF 7 SOLE VOTING POWER SHARES 0 BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 1,064,910 EACH 9 SOLE DISPOSITIVE POWER REPORTING 1,064,910 PERSON 10 SHARED DISPOSITIVE POWER WITH 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,064,910 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES |X| 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 20.4% 14 TYPE OF REPORTING PERSON (See Instructions) IN Page 2 Schedule 13D This Amendment No. 1 to Statement on Schedule 13D amends and supplements the Statement on Schedule 13D relating to the event of May 22, 1997 (the "Schedule 13D"), filed by Robert A. Zummo (sometimes referred to as the "Reporting Person"), the Chief Executive Officer and Chairman of the Board of Safety Components International, Inc., a Delaware corporation (the "Company"), relating to the common stock, $0.01 par value per share (the "Common Stock"), of the Company. The principal executive office of the Company is located at 2160 North Central Road, Fort Lee, NJ 07024. Capitalized terms used herein and not otherwise defined shall have the meaning ascribed thereto in the Schedule 13D. Item 5. Interest in Securities of Issuer. Item 5 of the Schedule 13D is amended and restated to read in its entirety as follows: (a) Robert A. Zummo is the beneficial owner of 1,064,910 shares of Common Stock, of which 976,576 shares were acquired in connection with the Valentec Acquisition and 88,334 shares are issuable under currently exercisable options held by Mr. Zummo. Such shares represent, in the aggregate, approximately 20.4% of the issued and outstanding shares of Common Stock, subject to dilution upon conversion of all shares of Series A Convertible Preferred Stock, $.10 par value per share (the "Series A Preferred Stock"), of the Company (See Item 6). The number of shares beneficially owned by the Reporting Person and the percentage of outstanding shares represented thereby are based on the number of outstanding shares as of December 26, 1998, which information is known to the Reporting Person as an officer of the Company. (b) Mr. Zummo has sole dispositive power with respect to all shares of Common Stock beneficially owned by him. See Item 6 for information regarding an arrangement between Mr. Zummo and (i) Brera with respect to the voting of the shares of Common Stock owned by Mr. Zummo and (ii) Francis X. Suozzi, a director of the Company, with respect to certain additional shares of the Common Stock. (c) The Reporting Person has not effected any transactions in the Common Stock within the past 60 days. (d) and (e) Not applicable. Page 3 Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of Issuer. Item 6 of the Schedule 13D is amended and restated to read in its entirety as follows: The Company and BCPartners Investors, LLC, a Delaware limited liability company, and Brera Capital Partners Limited Partnership, a Delaware limited partnership, through a newly formed Delaware limited liability company, Brera SCI, LLC ("Brera"), are parties to an Investment Agreement (the "Investment Agreement"), dated as of March 31, 1999, pursuant to which, among other things, Brera will purchase from the Company 28,000 shares of the Company's Series A Preferred Stock in consideration for $28,000,000 in cash. The Series A Preferred Stock will be convertible at an initial price of $12 per share, subject to adjustment as provided in the certificate of designations relating to the Series A Preferred Stock, into that number of shares of Common Stock equal to the lesser of (i) 18% of the outstanding Common Stock and/or (ii) the maximum number of shares that the Company can issue without shareholder approval under Rule 4460(i) of the Nasdaq National Market (the "Nasdaq Cap"). Any portion of the Series A Preferred Stock that cannot be converted into Common Stock as a result of the Nasdaq Cap shall be convertible only into shares of Series B Junior Participating Preferred Stock of the Company, $0.10 par value per share (the "Series B Preferred Stock"). Following the Stockholder Approval (as defined below) the Series A Preferred Stock will cease to be convertible into Series B Preferred Stock, except in the event the Company is prohibited from issuing Common Stock upon conversion of Series A Preferred Stock as a result of the operation of certain restrictions on conversion contained in the Company's indenture with respect to outstanding debt securities which limit voting rights to 49.9% of the Company's outstanding capital stock (the "Sub-Debt Cap", and together with the Nasdaq Cap, the "Caps"). In such case, the Company would issue Series B Preferred Stock in lieu of the Common Stock that it would be prohibited from issuing. The initial conversion price of the Series A Preferred Stock shall be adjusted on the 25th trading day following the filing by the Company of its annual report on Form 10-K for the year ended March 25, 2000 (the "Adjustment Date"). The conversion price will be derived from a formula which is based on the Company's EBITDA derived from its Form 10-K for the year ended March 25, 2000. The final conversion price based on the foregoing formula will be between $14 and $3 per share (which conversion price range would give Brera the right to convert the Series A Preferred Stock, subject to the Caps, into 2,000,000 shares of Common Stock at $14 per share to 9,333,333 shares of Common Stock at $3 per share) (subject to customary antidilution adjustments). It is expected that the closing (the "Closing") of the transactions contemplated by the Investment Agreement will occur on or prior to May 15, 1999. It is contemplated that simultaneously with the Closing, Brera will purchase 325,801 shares of Common Stock (the "Suozzi Shares") from Francis X Suozzi, a director of the Company, pursuant to a Purchase Agreement, dated as of March 31, 1999, between Brera and Mr. Suozzi (the "Purchase Agreement"). As a condition to the Closing, Brera and Robert A. Zummo will enter into a Page 4 Stockholders' Agreement (the "Stockholders' Agreement"), pursuant to which (i) Robert A. Zummo, at any time, will have the right, subject to certain conditions, to put to Brera up to $2,000,000 of Common Stock owned by Mr. Zummo at market (subject to adjustment, if the sale occurs prior to the first anniversary of the Closing, on substantially the same terms as any adjustment to the conversion price of the Series A Preferred Stock described above), (ii) Mr. Zummo will agree not to otherwise transfer any Common Stock owned by him, or grant any voting rights to any person with respect to such Common Stock, except for (A) estate planning purposes, (B) transfers in a registered public offering, (C) sales under Rule 144 promulgated under the Securities Act of 1933, as amended (the "Act"), or (D) a private placement not to exceed $2,000,000, (iii) Brera will grant Mr. Zummo the right to "tag along" in certain sales of Common Stock by Brera on a pro-rata basis and on substantially the same terms as any sale of Common Stock by Brera, (iv) Mr. Zummo will grant to Brera a right of first refusal in certain sales of Common Stock by Mr. Zummo on substantially the same terms as such sales of Common Stock by Mr. Zummo, and (v) Brera and Mr. Zummo will agree to vote their respective shares of Common Stock to, among other things, amend the By-Laws of the Company as provided in an exhibit to the Investment Agreement, to elect to the Board of Directors those nominees designated by Brera and Mr. Zummo and to amend the Company's Certificate of Incorporation to increase the number of authorized shares of Common Stock from 10,000,000 to 30,000,000. In connection with the Investment Agreement, Mr. Zummo and Brera have entered into a Voting Agreement (the "Voting Agreement"), dated as of March 31, 1999, pursuant to which Mr. Zummo has agreed to vote his Common Stock, including any New Shares (as defined in the Voting Agreement attached hereto as Exhibit 11), in favor of the transactions contemplated by the Investment Agreement, including, without limitation, (i) the approval of the vesting of voting rights in the Series A Preferred Stock, (ii) the issuance of Common Stock upon the exercise of the conversion rights set forth in the Series A Preferred Stock, and (iii) increasing the number of authorized shares of Common Stock of the Company from 10,000,000 to 30,000,000 shares. Mr. Zummo has granted Brera a limited irrevocable proxy to vote his Common Stock in accordance with the Voting Agreement. The Voting Agreement is effective from the date thereof through the earlier of (i) the date upon which the Investment Agreement is validly terminated or (ii) the date upon which the Company's stockholders approve the transactions contemplated by the Investment Agreement (the "Stockholders' Approval"). In connection with the Valentec Acquisition, the Company entered into a Registration Rights Agreement (the "Registration Rights Agreement"), dated as of May 22, 1997, with Robert A. Zummo, Francis X. Suozzi and the Valentec ESOP, pursuant to which the Company will, (i) upon the request of Mr. Zummo, file up to one registration statement under the Act, in order to permit Mr. Zummo (or any subsequent holder of Registrable Securities (as defined in the Registration Rights Agreement) representing at least 5% of the outstanding Common Stock on the date thereof) to offer and sell all or a portion of the Zummo Shares and (ii) notify Mr. Zummo (or any such subsequent holder) if at any time the Company proposes to file a registration statement under the Act and offer Page 5 to Mr. Zummo (or any such subsequent holder) the opportunity to register such number of Zummo Shares as Mr. Zummo (or such subsequent holder) may request. The provisions of the Stockholders' Agreement, Voting Agreement and Registration Rights Agreement are set forth in full in the documents which are filed as Exhibits 10 and 11 hereto and Exhibit 7 to the Schedule 13D, respectively, and are incorporated herein in their entirety by this reference. The foregoing description of the terms and provisions of such documents is a summary only, and is qualified in its entirety by reference to such documents. In connection with the Valentec Acquisition, Mr. Zummo and Mr. Suozzi entered into a Reallocation Agreement (the "Reallocation Agreement") pursuant to which, among other things, 36,430 shares of Common Stock to be received by Mr. Zummo under the Valentec Acquisition were reallocated to Mr. Suozzi in consideration of Mr. Suozzi's release of certain claims relating to consulting fees. As a result, Mr. Zummo received 976,576 shares of Common Stock under the Valentec Acquisition (rather than 1,013,006 shares). In addition, pursuant to such Reallocation Agreement, Messrs. Zummo and Suozzi agreed that for a period of three years from the date thereof, Mr. Suozzi will vote all shares of Common Stock beneficially owned by him on any manner put to a vote of the shareholders of the Company in the same manner as recommended by a majority of the Board of Directors of the Company, or if no such recommendation has been made, as directed by Mr. Zummo; provided, that such agreement shall terminate if Mr. Suozzi shall cease to be on the Board of Directors of the Company (other than as a result of his resignation). Mr. Suozzi beneficially owns an aggregate of 336,634 shares of Common Stock as of the date hereof (which consists of 325,801 shares of Common Stock received by Mr. Suozzi under the Valentec Acquisition and 10,833 shares of Common Stock issuable under currently exercisable stock options).1 Upon consummation of the purchase by Brera of the Suozzi Shares under the Purchase Agreement, Mr. Suozzi will resign as a member of the Company's Board of Directors and the Reallocation Agreement will be terminated and of no further force or effect. Shares of Common Stock owned by Mr. Suozzi which are the subject of the Reallocation Agreement are not included in the shares included herein as being beneficially owned by Mr. Zummo and Mr. Zummo disclaims beneficial ownership of such shares. The provisions of the Reallocation Agreement are set forth in full in the document which is filed as Exhibit 8 to the Schedule 13D, and Sections 1, 2 and 4 of the Reallocation Agreement are incorporated herein by this reference. The foregoing description of the terms and provisions of the Reallocation Agreement is a summary only, and is qualified in its entirety by reference to Sections 1, 2 and 4 of the Reallocation Agreement. 1 The ownership of Common Stock by Francis X. Suozzi relating to the Common Stock received by Mr. Suozzi under the Valentec Acquisition is based on a Schedule 13D filed by Mr. Suozzi and dated August 22, 1997. The beneficial ownership of Common Stock by Mr. Suozzi relating solely to Common Stock issuable under currently exercisable stock options is based on information known to Mr. Zummo as an officer of the Company. Page 6 In connection with the Company's initial public offering, the Company and Mr. Zummo entered into a Stock Option Agreement (the "IPO Option Agreement"), pursuant to which Mr. Zummo was given the option to purchase 40,000 shares of Common Stock under the Company's 1994 Stock Option Plan (the "Plan") at an exercise price of $11.00 per share. On September 17, 1997, the vesting schedule of all options granted by the Company under the Plan was accelerated. Accordingly, all such options now vest in three equal annual installments (rather than four equal annual installments) commencing one year from the date of grant. Options to purchase all shares under the IPO Option Agreement are currently exercisable, however, such options expire in May 1999. The Company and Mr. Zummo are parties to five additional Stock Option Agreements, dated May 6, 1994, May 4, 1995, May 9, 1996 (collectively, the "May Stock Option Agreements"), July 15, 1997 (the "July 1997 Stock Option Agreement") and March 26, 1998 (the "March Stock Option Agreement"), pursuant to which, Mr. Zummo was given the option to purchase, under the Plan, an additional (i) 10,000 shares of Common Stock under each of the May Stock Option Agreements, (ii) 5,000 shares of Common Stock under the July 1997 Stock Option Agreement and (iii) 50,000 shares of Common Stock under the March Stock Option Agreement at an exercise price of $10.00, $21.73, $14.17, $12.38 and $14.13 per share, respectively. Options to purchase 48,334 of such shares are either currently exercisable or will be exercisable within 60 days from the date of this statement, however, options to purchase 10,000 of such shares expire in May, 1999. Item 7. Materials to Be Filed as Exhibits. Item 7 of the Schedule 13D is amended by adding the following at the end of such Item: 9. Stock Option Agreement, dated as of March 26, 1998, between the Company and Robert A. Zummo. 10. Form of Stockholders' Agreement between Mr. Zummo and Brera. 11. Voting Agreement, dated as of March 31, 1999, between Mr. Zummo and Brera. Page 7 After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: April 15, 1999 /S/Robert A. Zummo ------------------ Robert A. Zummo Page 8 EX-10.9 2 STICK OPTION AGREEMENT SAFETY COMPONENTS INTERNATIONAL, INC. STOCK OPTION AGREEMENT Agreement, made as of the 26th day of March, 1998, between Safety Components International, Inc. (the "Company"), a Delaware Corporation, and Robert A. Zummo, (the "Optionee"), residing at 9963 North 79th Place, Scottsdale, Arizona 85258. The Company has duly adopted the Safety Components International, Inc. 1994 Stock Option Plan (the "Plan"), the terms of which are hereby incorporated by reference. In the case of any conflict between the provisions hereof and those of the Plan, the provisions of the Plan shall be controlling. A copy of the Plan (as such may have been amended to date) will be made available for inspection by the Optionee during normal business hours at the principal office of the Company. All capitalized terms used but not defined herein shall have the respective meanings ascribed to them in the Plan. In accordance with Section 3 of the Plan, a committee of the Board of Directors of the Company which administers the Plan (the "Committee") has adopted a resolution granting the Optionee a stock option (the "Option) under the Plan to purchase 50,000 shares (the "Shares") of the Company's Common Stock, par value $.01 per share (the "Common Stock"), for the price and on the terms and conditions set forth in this Agreement and in the Plan. The Option is not intended to satisfy the requirements for an incentive stock option (an "ISO") under the Internal Revenue Code of 1986, as amended (the "Code"). The Company makes no representations or warranties as to the income, estate or other tax consequences to the Optionee of the grant or exercise of the Option or the sale or other disposition of the Shares acquired pursuant to the exercise thereof. 1. (a) The price at which the Optionee shall have the right to purchase the Shares under this Agreement is $14.125 per share subject to adjustment as provided in Paragraph 4 below. (b) Unless the Option is previously terminated pursuant to the Plan or this Agreement and subject to the terms of any other agreement between Optionee and the Company (including, without limitation, any employment or other agreement which may provide for, among other things, an accelerated vesting schedule), the Option shall be exercisable in three (3) installments of 16,666 Shares each on the first and second anniversaries, and 16,668 Shares on the third anniversary of the date of grant. In no event shall any Shares be purchasable under this Agreement after March 26, 2008 (ten years from the date of grant) (the "Expiration Date"). Except as provided in subparagraph (c) hereof, the Option shall cease to be exercisable thirty (30) days after the date the Optionee terminates services as an employee of the Company or any Affiliate of the Company for reasons other than cause and immediately upon the termination of the employee for cause, and all rights of the Optionee hereunder shall thereupon terminate. (c) If the Optionee ceases to be an employee of the Company or any Affiliate of the Company and this cessation is due to retirement (as defined by the Committee in its sole discretion), or to disability (as defined in each case by the Committee in its sole discretion) or to death, the Option shall be exercisable as provided in this subparagraph. The Optionee, or in the event of his disability, his duly appointed guardian or conservator, or in the event of his death, his executor or administrator shall have the privilege of exercising the unexercised portion of the Option which the Optionee could have exercised on the day on which he ceased to be an employee of the Company or any Affiliate of the Company, provided, however, that such exercise must be in accordance with the terms of this Agreement and within (i) three (3) months after the Optionee's retirement or disability or (ii) (A) twelve (12) months after the Optionee's death or (B) three (3) months after the Optionee's death if such death occurs during the three (3) month period following the termination of the Optionee's employment by reason of retirement or mental or physical disability, as the case may be. In no event, however, shall the Optionee or his executor or administrator, as the case may be, exercise the option after the Expiration Date specified in subparagraph 1 (b). For all purposes of this Agreement, an approved leave of absence shall not constitute an interruption or cessation of the Optionee's service as an employee of the Company or any Affiliate of the Company. 2. Nothing contained herein shall be construed to confer on the Optionee any right to continue as an employee of the Company or any Affiliate of the Company or to derogate from any right of the Company or any Affiliate thereof to retire, request the resignation thereof or discharge the Optionee, or to layoff or require a leave of absence of the Optionee, with or without pay, at any time, with or without cause. 3. The Option shall not be sold, pledged, assigned, or transferred in any manner except to the extent that the Option may be exercised by an executor or administrator as provided in subparagraph 1 (c) above. The Option may be exercised, during the lifetime of the Optionee, only by the Optionee, or in the event of his disability, his duly appointed guardian or conservator. 4. (a) If the outstanding shares of Common Stock are affected by any (i) subdivision or consolidation of shares, (ii) dividend or other distribution (whether in the form of cash, shares of Common Stock, other securities, or other property), (iii) recapitalization or other capital adjustment of the Company or (iv) merger, consolidation or other reorganization of the Company or other rights to purchase shares of Common Stock or other securities of the Company, or other similar corporate transaction or event, such that an adjustment is determined by the Committee to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Committee shall, in such manner as it may deem necessary to prevent dilution or enlargement of the benefits or potential benefits intended to be made under the Plan, adjust any or all of (x) the number and type of Shares subject to the unexercised portion of the Option, and (y) the exercise price with respect to the unexercised portion of the Option, or if deemed appropriate, make provision for a cash payment with respect to the unexercised portion of the Option. In computing any adjustment under this paragraph, any fractional share shall be eliminated. (b) In the event of (i) a merger or consolidation to which the Corporation is a party of (ii) a sale by the Company of all or substantially all of its assets, the Option shall, after such merger, consolidation or sale, be exercisable into the kind and number of shares of stock and/or securities, cash or other property which Optionee would have been entitled to receive if Optionee had held the Common Stock issuable upon the exercise of the Option immediately prior to such consolidation, merger or sale. 5. The Option shall be exercised when written notice of such exercise, signed by the person entitled to exercise the Option, has been delivered or transmitted by registered or certified mail, to the Secretary of the Company at its principal office. Said written notice shall specify the number of Shares purchasable under the Option which such person then wishes to purchase and shall be accompanied by such documentation, if any, as may be required by the Company as provided in Paragraph 7 below and be accompanied by payment of the aggregate Option price. Such payment shall be, without limitation, in the form of (i) cash, shares of Common Stock, outstanding options or other consideration, or any combination thereof, having a Fair Market Value (as defined in the Plan) on the exercise date equal to the exercise price of the Option or portion thereof being exercised or (ii) a broker-assisted cashless exercise program established by the Committee. Delivery of said notice and such documentation shall constitute an irrevocable election to purchase the Shares specified in said notice and the date on which the Company receives said notice and documentation shall, subject to the provisions of Paragraphs 6 and 7, be the date as of which the Shares so purchased shall be deemed to have been issued. The person entitled to exercise the Option shall not have the right or status as a holder of the Shares to which such exercise relates prior to receipt by the Company of such payment, notice and documentation. 6. Anything in this Agreement to the contrary notwithstanding, in no event may the Option be exercisable if the Company shall, at any time and in its sole discretion, determine that (i) the listing, registration or qualification of any shares otherwise deliverable upon such exercise, upon any securities exchange or under any state or federal law, or (ii) the consent or approval of any regulatory body or the satisfaction of withholding tax or other withholding liabilities is necessary or desirable in connection with such exercise. In such event, such exercise shall be held in abeyance and shall not be effective unless and until such withholding, listing, registration, qualification, or approval shall have been affected or obtained free of any conditions not acceptable to the Company. 7. The Committee may require as a condition to the right to exercise the Option hereunder that the Company receive from the person exercising the Option, representations, warranties and agreements, at the time of any such exercise, to the effect that the Shares are being purchased for investment only and without any present intention to sell or otherwise distribute such Shares and that the Shares will not be disposed of in transactions which, in the opinion of counsel to the Company, would violate the registration provisions of the Securities Act of 1933, as then amended, and the rules and regulations thereunder. The certificate issued to evidence such Shares shall bear appropriate legends summarizing such restrictions on the disposition thereof. 8. This Agreement shall be construed and enforced in accordance with the laws of the State of Delaware and applicable Federal law. Subject to subparagraph 1(c) hereof, this Agreement shall be binding upon and shall insure to the benefit of the parties hereto and their respective heirs, personal representatives, successors or assigns, as the case may be. IN WITNESS WHEREOF, the parties have witnessed this Agreement to be duly executed and delivered as of the date first above written. SAFETY COMPONENTS INTERNATIONAL, INC. /S/ Robert A. Zummo By:/S/ Jeffrey J. Kaplan - ------------------- --------------------------- Optionee Jeffrey J. Kaplan Executive Vice President and Chief Financial Officer EX-10.10 3 FORM OF STOCKHOLDER'S AGREEMENT STOCKHOLDER'S AGREEMENT THIS STOCKHOLDER AGREEMENT (this "Agreement") is made this ____ day of ___________, 1999, by and between ROBERT A. ZUMMO ("Zummo") and BRERA SCI, LLC, a Delaware limited liability company (the "Investor"). W I T N E S S E T H WHEREAS, Safety Components International, Inc., a Delaware corporation (the "Company"), and the Investor have entered into an Investment Agreement (the "Investment Agreement"), pursuant to which the Investor has agreed to purchase, in the aggregate, from the Company, and the Company has agreed to issue and sell to the Investor, (i) 28,000 shares of the Company's Series A Convertible Preferred Stock, par value $0.10 per share (the "Senior Preferred Stock"), having the rights, preferences, privileges and restrictions set forth in the form of Certificate of Designations of Series A Convertible Preferred Stock (the "Senior Certificate of Designations"), initially convertible into shares of common stock, $.01 par value per share (the "Common Stock"), and, under certain circumstances, shares of the Company's Series B Junior Participating Preferred Stock, par value $0.10 per share (the "Junior Preferred Stock," and together with the Senior Preferred Stock, the "Preferred Stock"), having the rights, preferences, privileges and restrictions set forth in the form of Certificate of Designations of Series B Junior Participating Preferred Stock (the "Junior Certificate of Designations,"and together with the Senior Certificate of Designations, the "Certificates of Designations"); WHEREAS, Zummo is the Chief Executive Officer and a significant shareholder of the Company; WHEREAS, on the date hereof, Zummo and the Investor own the number of shares of capital stock of the Company set forth on Schedule 1 hereto; WHEREAS, as an inducement to completion of the transactions contemplated by the Investment Agreement, Zummo and the Investor have agreed to vote the shares of Stock owned by them pursuant to the provisions of this Agreement; NOW, THEREFORE, in consideration of the foregoing, the parties hereto, intending to be legally bound hereby, agree with each other as follows: 1. Certain Defined Terms. Capitalized terms used in this Agreement have the meanings set forth in this Section 1, are defined in the provisions of this Agreement identified in this Section 1 or, if not defined in this Agreement, have the meanings set forth in the Investment Agreement. (a) "Board" shall mean the Board of Directors of the Company. 1 (b) "Counterpart" shall mean a counterpart to this Agreement in the form of Exhibit A hereto, pursuant to the execution of which a Person shall become bound by all of the terms and conditions to this Agreement. (c) "Designated Transferee" shall mean, with respect to Zummo (i) his spouse, (ii) any of his lineal ancestors or descendants, (iii) spouses of such lineal descendants, (iv) trusts for the benefit of any such spouse, lineal descendant or spouse of a lineal descendant, or (v) organizations exempt from federal income taxation under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended. With respect to any Stockholder, the term "Designated Transferee" shall also mean only any Affiliate (as defined in Section 12b-2 under the Exchange Act of 1934, as amended) of the Stockholder or the original parties to this Agreement. (d) "Exempt Transaction" shall mean (i) any Transfer of shares of Stock to a Designated Transferee; (ii) any Transfer of shares of Stock to the public pursuant to a registration; or (iii) any Transfer of shares of Stock to the public pursuant to Rule 144 promulgated under the Securities Act of 1933, as amended. (e) "Investor Nominees" means (i) one (1) individual nominated by the Investor as of the Closing Date, (ii) two (2) additional individuals nominated by the Investor as of the date of Shareholder Approval, (iii) two (2) additional individuals nominated by the Investor as of the Adjustment Date (as defined in the Senior Certificate of Designations) and (iv) additional individuals designated by the Investor in accordance with Section C of Article VIII of the Senior Certificate of Designations or, in each case, their replacements designated by the Investor. (f) "Personal Representative" shall mean, in the event of Zummo's death, his designated beneficiary, or, in the absence of such designation, the estate or other legal representative of Zummo and, in the event of Zummo's disability, a Person specifically designated by him, or, in the absence of such designation, the guardian or other legal representative of Zummo. (g) "Shares" shall mean and include all issued and outstanding shares of Common Stock or Preferred Stock now owned or hereafter acquired by the Stockholders. (h) "Stock" shall mean and include (i) all shares of Common Stock and Preferred Stock of the Company, including without limitation, shares of Common Stock issued, issuable or transferable (A) on the exercise of rights to acquire shares of Common Stock or (B) on the conversion or exchange or exercise of securities convertible into or exchangeable or exercisable for Common Stock, and (ii) all other securities of the Company which may be issued in exchange for or in respect of shares of Common Stock or Preferred Stock (whether by way of stock split, stock dividend, combination, reclassification, reorganization or any other means). (i) "Stockholder" shall mean Zummo, the Investor, a Designated Transferee and any other Person who becomes a party to this Agreement pursuant to the terms hereof. 2 (j) "Transfer" shall mean any transfer of Stock, whether by sale, assignment, gift, will, devise, bequest, operation of the laws of descent and distribution, or in trust, pledge, hypothecation, mortgage, encumbrance or other disposition. The verb to "Transfer" shall mean to sell, assign, give, transfer (including by gift, will, devise, bequest, or operation of laws of descent and distribution, or in trust), pledge, hypothecate, mortgage, encumber or dispose of. (k) "Zummo Nominees" means five (5) individuals nominated by Zummo (which shall include Zummo), or their replacements designated by Zummo or his Personal Representative. Initially, the Zummo Nominees shall be the members of the Board immediately prior to the Closing (taking into account the resignation of Francis Suozzi) and John C. Corey. 2. Designated Transferees to become Parties to this Agreement. If any Stockholder Transfers its Stock to any Designated Transferee, such transferee shall, as a condition to such Transfer, execute a Counterpart and thereafter the transferee shall be treated as a Stockholder for all purposes under this Agreement. A Designated Transferee of Zummo (other than the Investor) shall be required to take the actions required to be taken by Zummo hereunder, and a Designated Transferee of the Investor (other than Zummo) shall be required to take the actions required to be taken by the Investor hereunder. In the event that a Stockholder Transfers its Stock to a Person that is not a Designated Transferee in accordance with this Agreement, such transferee (except in the case of a transfer from Zummo to Investor or an Affiliate thereof) shall not be subject to this Agreement or entitled to any of the benefits of this Agreement, unless otherwise agreed to by the Investor and Zummo. A Transfer by Zummo of Stock to a Designated Transferee shall not be subject to the provisions of Section 3 hereof. 3. Standstill Agreement. Except in accordance with the provisions of this Agreement, Zummo agrees, until the third anniversary of this Agreement, not to: (i) sell, transfer, pledge, assign or otherwise dispose of, or enter into any contract, option or other arrangement or understanding with respect to the sale, transfer, pledge, assignment or other disposition of, any shares of Stock; or (ii) deposit any shares of Stock into a voting trust, enter into a voting agreement or otherwise grant any voting rights to any other person or entity with respect to any such securities. None of (x) a Transfer by Zummo of Stock in a registered public offering nor (y) sales under Rule 144 promulgated under the Securities Act of 1933 or (z) a private placement not to exceed $2,000,000 in the aggregate shall be subject to the provisions of Section 3 hereof. A Transfer by Zummo in violation of this Section 3 shall be null and void. 4. Right of First Refusal. (a) If at any time after the third anniversary of this Agreement Zummo desires to Transfer all or a portion of his Stock pursuant to an arm's-length offer from a bona fide third party other than a Designated Transferee (the "Proposed Transferee"), Zummo shall submit a written offer (the "Offer") to sell such shares of Stock (the "Offered Shares") to the Investor, on terms and conditions, including price, not less favorable to the Investor than those on which Zummo proposes to sell the Offered Shares to the Proposed Transferee. The Offer shall disclose 3 the identity of the Proposed Transferee, the number of Offered Shares proposed to be sold, the terms and conditions, including price, of the proposed sale, that the Proposed Transferee has been informed of the Right of First Refusal (as defined below) provided for in this Section 4 and any other material facts relating to the proposed sale. (b) Subject to the provisions of this Section 4, the Investor shall have the irrevocable right of first refusal ("Right of First Refusal") for a period of twelve (12) days after its receipt of the Offer (the "Acceptance Period") to purchase all (but not a portion) of the Offered Shares. The Investor may exercise its Right of First Refusal to purchase the Offered Shares by notifying Zummo in writing (the "Acceptance Notice") within the Acceptance Period of its intention to purchase the Offered Shares, for the price and upon the terms and conditions specified in the Offer. If the Investor declines to purchase all of the Offered Shares or fails to deliver the Acceptance Notice within the Acceptance Period (which failure shall be deemed conclusive of the Investor's intent to decline the opportunity to purchase any Offered Shares), then all of the Offered Shares may be sold by Zummo at any time within ninety (90) days after the date the Offer was made. Any such sale shall be to the Proposed Transferee, at not less than the price specified in the Offer, and upon other terms and conditions, if any, not more favorable to the Proposed Transferee than those specified in the Offer. Any Offered Shares not sold within such 90-day period shall continue to be subject to the requirements of a prior offer pursuant to this Section 4. (c) A Transfer by Zummo of Stock pursuant to an Exempt Transaction shall not be subject to the provisions of Section 4 hereof but shall be subject to the provisions of Section 3 hereof (except as expressly stated therein). 5. Tag-Along Rights. (a) If the Investor at any time proposes to Transfer any shares of Stock (other than pursuant to an Exempt Transaction), the Investor shall afford Zummo the right to participate in such Transfer in accordance with this Section 5. (b) If the Investor desires to Transfer any shares of Stock, the Investor shall give written notice to Zummo (a "Notice of Transfer") not less than 12 nor more than 120 days prior to any proposed Transfer of any such shares of Stock. Each such Notice of Transfer shall: (i) specify in reasonable detail (A) the number and type of shares of Stock which such the Investor proposes to Transfer, (B) the identity of the proposed transferee or transferees of such shares of Stock, (C) the time within which, the price per share at which and all other terms and conditions upon which such the Investor proposes to transfer such shares of Stock and (D) the percentage of the Stock then owned by the Investor which the Investor proposes to Transfer to such proposed transferee or transferees (the "Applicable Percentage"), calculated on a fully-diluted basis and shall be carried out to a tenth of a share; and 4 (ii) make explicit reference to this Section 5 and state that the right of Zummo to participate in such Transfer under this Section 5 shall expire unless such offer is accepted within 12 days after receipt of such Notice of Transfer. (c) Zummo shall have the right to Transfer to the proposed transferee or transferees up to that number of shares of Stock then owned by Zummo which is multiplied by the Applicable Percentage (calculated on a fully-diluted basis and shall be carried out to a tenth of a share and then rounded to the nearest share), at the same price per share and on the same terms and conditions as are applicable to the proposed transfer by the Investor, provided that (i) the consideration payable to Zummo shall be paid in the same form as that paid to the Investor and (ii) Zummo shall not be required in connection with any such transaction to make any representation, warranty or covenant other than a representation as to Zummo's power and authority to effect such Transfer, as to Zummo's title to the shares of Stock to be transferred by him and other than such representations, warranties or covenants made by the Investor (to the extent applicable to Zummo). (d) Zummo must notify the Investor, within 12 days after receipt of the Notice of Transfer, if Zummo desires to accept such offer and to Transfer any of his shares of Stock in accordance with this Section 5. If Zummo declines to provide such notice within such 12-day period, such failure shall be deemed conclusive of Zummo's intent to decline the opportunity to Transfer shares of Stock. Any and all Transfers of shares by Zummo pursuant to this Section 5 shall be made either concurrently with or prior to the Transfer of shares by the Investor. (e) A Transfer by Zummo of Stock pursuant to this Section 5 shall not be subject to the provisions of Section 3 hereof. Zummo shall not have any rights pursuant to this Section 5 to participate in any Exempt Transaction by the Investor. 6. Put Rights. (a) Zummo, at any time, shall have the right, but not the obligation, to put to the Investor, a number of shares of Stock owned by Zummo not to exceed in Aggregate Value (i) $2,000,000 less (ii) the gross proceeds of sales under clause (x), (y) or (z) of Section 3. Zummo shall exercise such put by providing a written notice (the "Put Notice") to the Investor at least twelve (12) days before date of sale. The Investor shall then have the obligation to buy the number of shares specified in the Put Notice at the Aggregate Value set forth in the Put Notice. The Investor shall fulfill its obligations under this Section 6 on the date of sale set forth in the Put Notice; provided, however that Investor shall have no such obligation at any time when the Value at the time of the Put Notice is less than $3 per share of Stock. A Transfer by Zummo of Stock pursuant to this Section 6 shall not be subject to the provisions of Section 3 hereof but shall reduce the amount that can be sold under clause (y) of Section 3. 5 (b) As used herein, "Value" means, with respect to a share of Stock, (A) if the shares are listed or admitted for trading on any national securities exchange or included in The Nasdaq National Market or Nasdaq SmallCap Market, the last reported sales price per share as reported on such exchange or market; (B) if the shares are not listed or admitted for trading on any national securities exchange or included in The Nasdaq National Market or Nasdaq SmallCap Market, the average of the last reported closing bid and asked quotation per share for the shares as reported on the National Association of Securities Dealers Automated Quotation System ("NASDAQ") or a similar service if NASDAQ is not reporting such information; (C) if the shares are not listed or admitted for trading on any national securities exchange or included in The Nasdaq National Market or Nasdaq SmallCap Market or quoted by NASDAQ, the average of the last reported bid and asked quotation per share for the shares as quoted by a market maker in the shares (or if there is more than one market maker, the bid and asked quotation shall be obtained from two market makers and the average of the lowest bid and highest asked quotation); and (D) in the absence of any such listing or trading, the Board shall determine in good faith the per share fair value of the Stock, which determination shall be set forth in a certificate of the Secretary of the Corporation. In each case, the determination of Value shall be based on the twenty (20) trading day average, ending on the day before the day of the Put Notice. In no event shall the Value be in excess of $14 per share of Stock. As used herein, "Aggregate Value" means Value multiplied by the number of shares of Stock to be sold to the Investor pursuant to this Section 6. (c) In the event that a sale takes place pursuant to this Section 6 prior to the Adjustment Date (as defined in the Senior Certificate of Designations) and such Value is greater than the conversion price fixed at the Adjustment Date, Zummo shall either (x) Transfer to the Investor, within twelve (12) days after the Adjustment Date, a number of shares of Stock (based on the Value at the Adjustment Date) equal to the difference between (i) the Aggregate Value with respect to the sale and (ii) the Aggregate Value where the Value is equal to the Conversion Price fixed at the Adjustment Date or (y) deliver to the Investor a note bearing interest at the rate of 8.0%, maturing on March 31, 2004 and requiring equal quarterly payments of principal and interest beginning on the last day of the calendar quarter after the Adjustment Date. In the event that a sale takes place pursuant to this Section 6 prior to the Adjustment Date and such Value is less than the conversion price fixed at the Adjustment Date, the Investor shall Transfer to Zummo, within twelve (12) days after the Adjustment Date, a number of shares of Stock (based on the Value at the Adjustment Date) equal to the difference between (i) the Aggregate Value where the Value is equal to the Conversion Price fixed at the Adjustment Date and (ii) the Aggregate Value with respect to the sale. A Transfer of Stock pursuant to this Section 6(b) shall not be subject to the provisions of Sections 3, 4 or 5 hereof. 6 7. Governance Provisions. (a) From and after the date hereof, each Stockholder agrees to vote (including by execution of a written consent or in any other manner permitted by law and the Company's Certificate of Incorporation and/or the By-laws) all of his or its Shares over which he or it has voting control, and will take all other necessary or desirable actions within his or its control, and the Company will take all necessary or desirable actions within its control, in order to cause: (i) as of the Closing Date, the amendment of the By-laws of the Company as contemplated by the Investment Agreement, in the form annexed hereto as Exhibit A (the "Amended By-laws"); (ii) as of the date of Shareholder Approval (as defined in the Amended Bylaws), (A) the election to the Board of the Investor Nominees contemplated by the Amended Bylaws and (B) the amendment of the Company's Amended and Restated Certificate of Incorporation to increase the number of authorized shares of the Company's common stock from 10,000,000 to 30,000,000; and (iii) as of each annual or special meeting held on or after the date of Shareholder Approval (A) prior to the end of the Preferred Stock Period, (as defined in the Amended By-laws) the election to the Board of the nominees for election (including without limitation Preferred Stock Replacement Designees and Corporation Replacement Designees, each as defined in the Amended By-laws) presented to the Board or the Nominating Committee in accordance with the Amended By-laws and (B) after the Preferred Stock Period but prior to the termination of this Agreement, the election to the Board of an equal number of nominees for election presented to the Board or the Nominating Committee by Zummo and the Investor. (b) Unless required for the due exercise of their fiduciary duties, the Stockholders will not take any action to remove any Board representative designated pursuant to this Section 7 without the prior written consent of the Person who or which designated that director. (c) Nothing contained in this Agreement shall have the effect of causing any Zummo Nominee or Investor Nominee to be deemed to be the deputy of or otherwise required to discharge his or her duties on the Board under the direction of, or with special attention to the interests of, the person designating such nominee to serve on the Board. (d) Nothing in this Agreement is intended to affect the right, if any, of holders of Preferred Stock, voting as a class, to elect additional directors to the Board in the event of (i) six consecutive missed dividend payments, (ii) a failure to redeem shares of Preferred Stock or (iii) a breach of the Consolidated EBITDA (as defined in the Senior Certificate of Designations) coverage ratio test, each as provided in the Senior Certificate of Designations. 7 (e) From and after the termination of this Agreement, for so long as any Stockholder owns at least 250,000 shares of Common Stock (or shares of Preferred Stock convertible into Common Stock) of the Company, each Stockholder agrees to vote (including by execution of a written consent or in any other manner permitted by law and the Company's Certificate of Incorporation and/or the By-laws) all of his or its Shares over which he or it has voting control, and will take all other necessary or desirable actions within his or its control, in order to cause the election to the Board of the nominees for election presented to the Board or the Nominating Committee in accordance with the By-laws. 8. Further Agreements. Zummo agrees to contribute any patent rights, copyrights and trademarks referenced in Section 3 of that certain Royalty Agreement, dated November 9, 1998, between Valentec International Corporation and John Finnell, to the Company or a wholly owned subsidiary thereof. 9. Specific Performance. Because of the unique character of the shares of Stock and the agreements set forth herein, the Company will be irreparably damaged if this Agreement is not specifically enforced. Should any dispute arise concerning any provision of this Agreement, an injunction may be issued restraining any action taken in contravention of this Agreement pending the determination of such controversy. In the event of any controversy concerning any provision of this Agreement, such right or obligation shall be enforceable in a court of equity by a decree of specific performance. Such remedy shall be cumulative and not exclusive, and shall be in addition to any other remedy which the Company or the other Stockholders of the Company may have. 10. Termination. Except as provided in Sections 7(e) and 12 hereof, this Agreement shall terminate on the first date on which (i) the Investor and its Designated Transferees, in the aggregate, or (ii) Zummo and his Designated Transferees, in the aggregate, no longer directly or indirectly Beneficially Own at least 250,000 shares of Common Stock (or shares of Preferred Stock convertible into Common Stock) of the Company; provided, however, that such termination shall not be effective to the extent that Zummo or the Investor falls below such ownership as a result of a Transfer in violation of this Agreement. 11. Notices. Any notice or other communication under this Agreement shall be in writing (including telecopier or facsimile or similar writing) and shall be deemed to have been duly given (i) on the date of service if personally served, (ii) on the first day after mailing if mailed to the party to whom notice is to be given by overnight courier, or (iii) on the date sent if sent by telecopier, to the parties at the following addresses or telecopier numbers (or at such other address or telecopier number for a party as shall be specified by like notice): 8 If to Zummo, to: Safety Components International, Inc. 2160 North Central Road Fort Lee, New Jersey 07024 Attention: Robert A. Zummo Telecopy No.: (201) 592-7501 With a copy to: Swidler Berlin Shereff Friedman, LLP 919 Third Avenue New York, NY 10022-9998 Attention: Richard A. Goldberg, Esq. Telecopy No.: (212) 758-9526 If to the Investor, to Brera SCI, LLC c/o Brera Capital Partners LLC 712 Fifth Avenue New York, NY 10019 Attention: Jun Tsusaka Telecopy No.: With a copy to: Skadden, Arps, Slate, Meagher & Flom (Illinois) 333 West Wacker Drive Chicago, IL 60606 Attention: Peter C. Krupp, Esq. Telecopy No.: (312) 407-0411 12. Entire Agreement; Amendments. This Agreement supercedes that certain letter agreement, dated February 14, 1999, among the parties hereto and this Agreement, the Investment Agreement and the documents described therein or attached or delivered pursuant thereto set forth the entire agreement among the parties hereto with respect to the subject matter hereof. Neither this Agreement nor any provision hereof may be amended, modified or supplemented in whole or in part at any time except by an agreement in writing duly executed by the parties thereto. No failure on the part of any party to exercise, and no delay in exercising, any right shall operate as waiver thereof, nor shall any single or partial exercise by any party of any right preclude any other or future exercise thereof of any other right. 9 13. Counterparts. This Agreement may be executed (including by facsimile) in two or more counterparts, each of which shall be deemed to constitute an original, but all of which together shall constitute one and the same instrument. 14. Governing Law. This Agreement shall be governed by, and interpreted in accordance with, the laws of the State of Delaware applicable to contracts made and to be performed in that State without reference to its conflicts of laws rules. The parties hereto agree that the appropriate and exclusive forum for any disputes arising out of this Agreement solely among the Stockholders shall be the United States District Court for the Southern District of New York, and the parties hereto irrevocably consent to the exclusive jurisdiction of such courts, and agree to comply with the requirements necessary to give such courts jurisdiction. The parties hereto further agree that the parties will not bring suit with respect to any disputes arising out of this agreement except as expressly set forth below for the execution or enforcement of judgment, in any jurisdiction other than the above specified courts. Each of the parties hereby irrevocably consents to the service of process in any action or proceeding hereunder by the mailing of copies by registered or certified airmail, postage prepaid, to the address specified in Section 10 hereof. The foregoing shall not limit the rights of any party hereto to serve process in any other manner permitted by the law or to obtain execution of judgment in any other jurisdiction. The parties further agree, to the extent permitted by law, that final and unappealable judgment against any of them in any action or proceeding contemplated above shall be conclusive and may be enforced in any other jurisdiction within or outside the United States by suit on the judgment, a certified copy of which shall be conclusive evidence of the fact and the amount of indebtedness. The parties agree to waive any and all rights that they may have to a jury trial with respect to disputes arising out of this Agreement. 15. Successors and Assigns. The provisions hereof shall inure to the benefit of, and be binding upon, the parties hereto and their successors and permitted assigns. Except as set forth in this Agreement, neither this Agreement nor any rights hereunder shall be assignable by operation of law or otherwise by any party hereto without the prior written consent of the other parties hereto. 16. No Third-Party Beneficiaries. This Agreement is for the sole benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement, except that the provisions of Section 7 shall inure to the benefit of and be enforceable by the Investor Nominees. 17. Severability. If any provision of this Agreement is held illegal, invalid, or unenforceable, such illegality, invalidity, or unenforceability will not affect any other provision hereof. This Agreement shall, in such circumstances, be deemed modified to the extent necessary to render enforceable the provisions hereof. 10 18. Attorney's Fees. In the event of litigation of any dispute or controversy arising from, in, under or concerning this Agreement or any amendment hereof, including, without limiting the generality of the foregoing, any claimed breach hereof or thereof, the prevailing party in such action shall be entitled to recover from the other party in such action, such sum as the court shall fix as reasonable attorney's fees incurred by such prevailing party. IN WITNESS WHEREOF, the parties have executed this Stockholder Agreement under seal on the date first above written. BRERA SCI, LLC By: ___________________________ Title: _______________________________ Robert A. Zummo 11 Exhibit A TO STOCKHOLDER AGREEMENT COUNTERPART THIS INSTRUMENT forms part of the Stockholder Agreement (the "Agreement") made as of the __ day of ________, 1999, by and between ROBERT A. ZUMMO ("Zummo") and BRERA SCI, LLC, a Delaware limited liability company (the "Investor"), and any additional Stockholders (as defined in the Agreement) of Safety Components International, Inc., from time to time, which Agreement permits execution (including by facsimile) by counterpart. The undersigned hereby acknowledges having received a copy of the said Agreement (which is annexed hereto as Schedule I) and having read the said Agreement in its entirety, and for good and valuable consideration, receipt and sufficiency of which is hereby acknowledged, hereby agrees that the terms and conditions of the said Agreement shall be binding upon the undersigned as a Stockholder and as a Designated Transferee (as defined in the Agreement) of __________________ and such terms and conditions shall inure to the benefit of and be binding upon the undersigned and its successors and permitted assigns. IN WITNESS WHEREOF, the undersigned has executed this instrument this ____ day of ___________, 199 . ____________________________________ (SIGNATURE OF STOCKHOLDER) ____________________________________ (NAME IN BLOCK LETTERS) 12 EX-10.11 4 VOTING AGREEMENT VOTING AGREEMENT THIS VOTING AGREEMENT ("Agreement") is being executed and delivered as of March 31, 1999, by Robert A. Zummo ("Shareholder") in favor of and for the benefit of Brera SCI, LLC, a Delaware limited liability company (the "Acquiror"). WHEREAS, Shareholder controls the right to vote 976,576 shares (the "Shares") of common stock of Safety Components International, Inc., a Dela ware corporation (the "Company"), excluding shares of common stock owned by Francis X. Suozzi which Shareholder has the right to vote pursuant to the terms of a Reallocation Agreement dated as of May 22,1997. WHEREAS, Acquiror and the Company intend to execute an Invest ment Agreement (the "Investment Agreement") pursuant to which the Acquiror will purchase Series A Convertible Preferred Stock of the Company. WHEREAS, Acquiror has required, as a condition to entering into the Investment Agreement, that Shareholder enter into this Agreement. NOW, THEREFORE, in order to induce Acquiror to enter into the transactions contemplated by the Investment Agreement, and in further consideration of the mutual covenants and agreements contained herein, the parties agree as follows: Section 1. Representation and Warranties. Shareholder represents and warrants to Acquiror that: (a) Shareholder is the holder and beneficial owner of the Shares and has good and valid title to the Shares, free and clear of any liens, pledges, security interests, adverse claims, equities, options, proxies, charges, encumbrances or restrictions of any nature. Except as provided in this Agreement, Shareholder has not appointed or granted any proxy or entered into a voting agreement, which appointment, agreement or grant is still effective, with respect to any of the Shares. (b) This Agreement and the Proxy (defined below) (the "Transaction Documents") (i) have been, or when executed will be, duly and validly executed on behalf of Shareholder and (ii) constitute, or when executed will consti tute, valid and binding obligations of Shareholder, enforceable against Shareholder in 1 accordance with their respective terms, subject to laws of general application relating to bankruptcy, insolvency and the relief of debtors, and to rules of law governing specific performance, injunctive relief and other equitable remedies. (c) None of the execution, delivery or performance of any Transaction Document will directly or indirectly, (i) result in any violation or breach of any agreement or other instrument to which Shareholder is a party or by which Shareholder or any of the Shares is bound; or (ii) result in a violation of any law, rule, regulation, order, judgment or decree to which Shareholder or any of the Shares is subject. The execution and delivery of this Agreement by Shareholder does not, and the performance of this Agreement by Shareholder shall not, require any consent, approval, authorization or permit of, or filing with or notification to, any governmen tal entity. (d) The representations and warranties contained in this Shareholder Agreement will be accurate in all material respects at all times through the Expiration Date (defined below) as if made on that date. Section 2. Agreement to Vote Shares. During the period from the date of this Shareholder Agreement through the earlier of (i) the date upon which the Investment Agreement is validly terminated, or (ii) the date upon which the share holders of the common stock of the Company approve the transactions contemplated by the Investment Agreement (including without limitation the vesting of voting rights with respect to the Series A Convertible Preferred Stock) (the "Expiration Date"), Shareholder shall cause any holder of record of the Shares or any New Shares to vote such Shares in favor of the transactions contemplated by the Investment Agreement including, without limitation, (A) the approval of the vesting of voting rights in the Series A Convertible Preferred Stock, (B) the issuance of common stock upon the exercise of the conversion rights set forth in the Series A Convertible Preferred Stock and (C) increasing the number of authorized shares of Common Stock of the Corporation from 10,000,000 to 30,000,000 shares, at every meeting of the shareholders of the Company, however called (and every adjournment or postponement thereof), or by written consent in lieu of such a meeting or otherwise. Section 3. Irrevocable Proxy. Concurrently with the execution of this Agreement, Shareholder agrees to deliver to Acquiror a proxy in the form attached hereto as Exhibit A (the "Proxy"), which shall be irrevocable to the fullest extent permitted by law, with respect to the Shares, and shall be deemed to be coupled with an interest. Shareholder understands and agrees that such proxy shall be used in the event that Shareholder fails or is unable to vote the Shares or the New Shares, if any, in accordance with Section 2. 2 Section 4. Transfer and Encumbrance. Shareholder agrees not to transfer, sell, offer or otherwise dispose of or encumber any of the Shares or any new Shares into a voting trust or grant a proxy to enter into a voting agreement or similar agreement with respect to any of the Shares from the date of this Agreement through the Expiration Date, unless such transferee agrees to assume Shareholder's obliga tions under this Agreement in a form reasonably acceptable to Acquiror. Section 5. Additional Purchases. Shareholder agrees that any shares of capital stock of the Company acquired by Shareholder on or after the date of this Agreement shall be subject to the terms of this Agreement to the same extent as if they constituted Shares. For purposes of this Agreement, the term "New Shares" shall mean any shares of capital stock of the Company that Shareholder purchases or otherwise acquires beneficial ownership of, or acquires the right to vote or share in the voting of, after the execution of this Agreement, whether through the exercise of any option or warrant to purchase such capital stock, or otherwise. Section 6. No Ownership Interest. Nothing contained in this Agreement shall be deemed to vest in Acquiror any direct or indirect ownership or incidence of ownership of or with respect to any Shares or New Shares. All rights, ownership, and economic benefits of and relating to the Shares and to options to acquire Shares shall remain and belong to Shareholder, and Acquiror shall have no authority to manage, direct, superintend, restrict, regulate, govern, or administer any of the policies or operations of the Company or exercise any power or authority to direct Shareholder in the voting of any of the Shares, except as otherwise expressly provided herein. Section 7. Specific Performance. Shareholder agrees that in the event of any breach or threatened breach by Shareholder of any covenant, obligation or other provision contained in this Agreement, Acquiror shall be entitled (in addition to any other remedy that may be available to it) to (a) a decree or order of specific performance or mandamus to enforce the observance and performance of such covenant, obligation or other provision, and (b) an injunction restraining such breach or threatened breach. Section 8. Notices. All notices and other communications pursuant to this Agreement shall be in writing and shall be deemed to be sufficient if con tained in a written instrument and shall be deemed given if delivered personally or sent by nationally recognized overnight courier to the parties at the following addresses (or at such other address for a party as shall be specified by like notice): 3 If to Acquiror: Brera SCI, LLC c/o Brera Capital Partners, LLC 712 Fifth Avenue, 34th Floor New York, New York 10019 Attn: Jun Tsusaka Tel.: 212-835-1350 Fax.: 212-835-1398 with a copy to: Skadden, Arps, Slate, Meagher & Flom (Illinois) 333 West Wacker Drive Suite 2100 Chicago, Illinois 60606 Attn: Peter C. Krupp Tele 312-407-0700 Fax: 312-407-0411 if to Shareholder: Robert A. Zummo c/o Safety Components International, Inc. 2160 North Central Road Fort Lee, New Jersey 07024 Telephone: (201) 592-0008 Fax: (201) 592-7501 All such notices and other communications shall be deemed to have been received (a) in the case of personal delivery, on the date of such delivery, (b) in the case of a telecopy, when the party receiving such copy shall have confirmed receipt of the communication, and (c) in the case of delivery by nationally recognized overnight courier, on the business day following dispatch. Section 9. Severability. If any provision of this Agreement or any part of any such provision is held under any circumstances to be invalid or enforce able in any jurisdiction, then (a) such provision or part thereof shall, with respect to such circumstances and in such jurisdiction, be deemed amended to conform to applicable laws so as to be valid and enforceable to the fullest possible extent, (b) the invalidity or unenforceability of such provision or part thereof under such circum stances and in such jurisdiction shall not affect the validity or enforceability of such provision or part thereof under any other 4 circumstances or in any other jurisdiction, and (c) such invalidity of enforceability of such provision or part thereof shall not affect the validity or enforceability of the remainder of such provision or the validity or enforceability of any other provision of this Agreement. Each provision of this Agreement is separable from every other provision of this Agreement, and each part of each provision of this Agreement is separable from every other part of such provision. Section 10. Governing Law. This Agreement shall be construed in accordance with, and governed in all respects by, the laws of the State of New York (without giving effect to principles of conflicts of laws that might refer the gover nance or the construction of this Agreement to the law of another jurisdiction). Section 11. Waiver. No failure on the part of Acquiror to exercise any power, right, privilege or remedy under this Agreement, and no delay on the part of Acquiror in exercising any power, right, privilege or remedy under this Agree ment, shall operate as a waiver of such power, right, privilege or remedy; and no single or partial exercise of any other such power, right, privilege, or remedy shall preclude any other or further exercise thereof or of any other power, right, privilege or remedy. Acquiror shall not be deemed to have waived any claim arising out of this Agreement, or any power, right, privilege or remedy under this Agreement, unless the waiver of such claim, power, right, privilege or remedy is expressly set forth in a written instrument duly executed and delivered on behalf of such party; and any such waiver shall not be applicable or have any effect except in the specific instance in which it is given. Section 12. Captions. The captions in this Agreement are for convenience of reference only, shall not be deemed to be a part of this Agreement and shall not be referred to in connection with the construction or interpretation of this Agreement. Section 13. Further Assurances. Shareholder shall execute or cause to be delivered to Acquiror or the Company such instruments and other documents and shall take such other actions as Acquiror may reasonably request to effectuate the intent and purposes of this Agreement. 5 Section 14. Entire Agreement. This Agreement sets forth the entire understanding of Shareholder and Acquiror relating to the subject matter hereof and supersedes all prior agreements and understandings between such parties relating to the subject matter hereof. Section 15. Amendments. This Agreement may not be amended, modified, altered or supplemented other than by means of a written instrument duly executed and delivered on behalf of Acquiror and Shareholder. Section 16. Assignment. This Agreement and all obligations of the Shareholder hereunder are personal to Shareholder and may not be transferred or assigned by Shareholder at any time. Acquiror may assign its rights under this Agreement to its affiliates at any time. Section 17. Binding Nature. Subject to Section 16, this Agreement will be binding upon Shareholder and Shareholder's representatives, executors, administrators, estate, heirs, successors and assigns, and will inure to the benefit of Acquiror and its successors and assigns. Without limiting the generality of anything contained in Section 4, if any person or entity shall acquire Shares or New Shares from Shareholder in any manner, whether by operation or law or otherwise, such Shares shall be held subject to all the terms and provisions of this Agreement, and by taking and holding such Shares, such person or entity shall be conclusively deemed to have agreed to be bound and to comply with all the terms and provisions of this Agreement. Without limiting the foregoing, Shareholder agrees that the obligations of Shareholder hereunder shall not be terminated by operation of law, whether by death or incapacity of Shareholder, or, in the case of a trust, by the death or incapac ity of any trustee or the termination of such trust. Section 18. Attorneys' Fees and Expenses. If any legal action or other legal proceeding relating to the enforcement of any position of this Agreement is brought against Shareholder, the prevailing party shall be entitled to recover reasonable attorneys' fees, costs and disbursements including without limitation at the pre-trial and appellate stages of any proceeding (in addition to any other relief to which the prevailing party may be entitled). Section 19. Survival. The representations and warranties contained in this Agreement shall survive the Expiration Date. Section 20. Termination. This Agreement will terminate as of the termination of the Investment Agreement. 6 IN WITNESS WHEREOF, the undersigned has executed and delivered this VOTING AGREEMENT as of the date first written above. ROBERT A. ZUMMO /S/ Robert A. Zummo ------------------- SHARES OF THE COMPANY BENEFICIALLY OWNED: 976,576 shares of the Common Stock of the Company AGREED AND ACCEPTED: BRERA SCI, LLC By:/S/ BRERA SCI, LLC - --------------------- 7 EXHIBIT A LIMITED IRREVOCABLE PROXY The undersigned shareholder of Safety Components International, Inc., a Delaware corporation (the "Company"), hereby irrevocably appoints Brera SCI, LLC, a Delaware limited liability company and its affiliates, and each of them, the attorneys and proxies of the undersigned, with full power of substitution and resubstitition, to vote the shares of capital stock of the Company which the under signed is entitled to vote at any meeting of the shareholders of the Company (and every adjournment or postponement thereof) or by written consent in lieu of such a meting or otherwise, which shares are listed below (the "Shares"), and any and all other shares of capital stock of the Company acquired by the undersigned (or which the undersigned is otherwise entitled to vote) on or after the date hereof (the "New Shares"), but only with respect to approval of the consummation of the transactions contemplated by the Investment Agreement including, without limitation, (A) the vesting of voting rights in the Series A Convertible Preferred Stock, (B) the issuance of common stock upon the exercise of the conversion rights set forth in the Series A Convertible Preferred Stock and (C) increasing the number of authorized shares of Common Stock of the Corporation from 10,000,000 to 30,000,000 shares (the "Identified Matters"). Upon the execution hereof, all prior proxies given by the undersigned with respect to the Shares and the New Shares, if any, and any and all other shares or securities issued or issuable in respect thereof on or after the date hereof are hereby revoked, but only to the extent that they relate to the Identified Matters, and no subsequent proxies will be given with respect to the Identified Matters. This proxy is irrevocable and coupled with an interest and is granted in connection with that certain Voting Agreement, dated as of the date hereof, executed by the undersigned shareholder in favor of Acquiror, and is granted in consideration of Acquiror entering into the Investment Agreement. Terms used but not defined in this proxy shall have the meanings given to them in the Voting Agreement. The attorneys and proxies named above will be empowered at any time prior to the termination of the Investment Agreement (i) to exercise all voting and other rights of the undersigned with respect to the Shares and the New Shares, if any (including, without limitation, the power to execute and deliver written consents with respect to the Shares and the New Shares, if any), but only with respect to the Identified Matters, at every meeting of the shareholders of the Company (and every adjourn ment or postponement thereof) or by written consent in lieu of such a meeting, or otherwise, and (ii) to vote the Shares and the New Shares, if any, in favor of approval of the Identified Matters and the other actions and transactions contemplated by the Investment Agreement (including, without limitation, any amendment of the Com pany's articles of incorporation required in connection therewith). This limited irrevocable proxy will terminate as of the termination of the Investment Agreement. Any obligations of the undersigned pursuant to this Limited Irrevocable Proxy shall be binding upon the successors and assigns of the undersigned. Dated as of: March 31, 1999 ROBERT A. ZUMMO /S/ Robert A. Zummo ----------------------- SHARES WHICH SHAREHOLDER IS ENTITLED TO VOTE: 976,576 shares of the common stock, par value $.01 per share, of Safety Components International, Inc. -----END PRIVACY-ENHANCED MESSAGE-----