Exhibit 10(h)
GHS, INC.
STOCKHOLDERS AGREEMENT
This Stockholders Agreement dated as of May 27, 1999 (this "Agreement")
by and among GHS, Inc., a Delaware corporation (the "Company"), and each of the
individuals or entities signatory hereto (each a "Stockholder" and together the
"Stockholders").
W I T N E S S E T H :
WHEREAS, the Stockholders are parties to a Contribution and Exchange
Agreement dated as of May 20, 1999 (the "Contribution Agreement");
WHEREAS, it is a condition precedent to the obligation of the Company
to proceed with the Closing (as defined in the Contribution Agreement) that the
parties hereto enter into this Agreement;
NOW, THEREFORE, in consideration of the parties to proceed with the
Closing and other good and valuable consideration the receipt and adequacy of
which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
1.01 DEFINED TERMS. The following terms when used in this Agreement,
including its preamble and recitals, shall, except where the context otherwise
requires, have the following meanings, such meanings to be equally applicable to
the singular and plural forms thereof:
"AFFILIATE" shall mean, with respect to any Person, any person that,
directly or indirectly, controls, is controlled by or is under common control
with such Person. For the purposes of this definition, "control" (including,
with correlative meanings, the terms "controlled by" and "under common control
with"), as used with respect to any Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting securities
or by contract or otherwise.
"CLOSING" means the closing of the transactions contemplated by the
Contribution Agreement.
"COMMON STOCK" shall mean and include the Company's currently
authorized common stock, par value $.01 per share and shall include any
securities which may be issued or distributed with respect to, or in exchange
for, such Common Stock, pursuant to a stock dividend, stock split, or other
distribution, merger, consolidation, recapitalization or reclassification or
similar transaction.
"COMMON STOCK EQUIVALENTS" shall mean the number of shares of Common
Stock issuable upon the exercise, exchange or conversion of any security.
"CONTRIBUTION AGREEMENT" shall have the meaning set forth in the first
recital hereof.
"EQUITY SECURITIES" shall mean any security exercisable for, or
convertible or exchangeable into, Common Stock.
"EXPIRATION DATE" shall mean the later to occur of (i) March 31, 2014
or (ii) the termination of the Content Provider Agreement and License by and
among Xxxxxxx X. Xxxxxxx, Xxxxxxx Research International Inc. and
XxxxxxXxxxXxxx.xxx, LLC dated April 23, 1999, as it may hereinafter be amended
from time to time.
"PERSON" shall mean and include an individual, a corporation, a limited
liability company, an association, a partnership, a trust or estate, a
government or any department or agency thereof.
"REGISTRABLE SHARES" shall consist of any and all shares of Common
Stock held by the Stockholders.
"VOTING STOCK" shall mean any shares of Common Stock or of any Equity
Securities entitling the holder thereof to case one or more votes for the
election of the Directors of the Company.
ARTICLE 2
VOTING AGREEMENT
2.01 BOARD OF DIRECTORS OF THE COMPANY; GOVERNANCE. (a) The
Stockholders hereby agree that the Board of Directors shall consist of eight
members and that the initial members of the Board of Directors who shall be
elected within 45 days of the Closing shall be those persons listed on Exhibit A
hereto. At each subsequent election of directors and for so long as Xxxxxxx X.
Xxxxxxx or any of his Affiliates shall hold in the aggregate at least 10% of the
outstanding shares of Common Stock or Common Stock equivalents, (i) Xxxxxxx X.
Xxxxxxx or such Affiliates shall have the right to nominate three persons as
Directors of the Company (the "Xxxxxxx Directors"), and (ii) a Nominating
Committee consisting of the directors (other than the Xxxxxxx Directors and the
Company's Chief Executive Officer) and their respective successors shall have
the right to nominate four persons as Directors of the Company and (iii) the
eighth Director shall be the Company's Chief Executive Officer. Except as
otherwise provided in the Company's by-laws, all decisions of the Board of
Directors shall be made by a majority of its members. The Board of Directors
shall be headed by a non-executive Chairman of the Board who, provided Xxxxxxx
X. Xxxxxxx or any of his Affiliates shall hold in the aggregate at least 10% of
the outstanding shares of Common Stock or Common Stock equivalents, shall be
Xxxxxxx X. Xxxxxxx or a person nominated by Xx. Xxxxxxx from amongst the
Directors and said person shall also serve as the Chairman of the Executive
Committee. The Chairman shall perform his duties at the direction of the Board
of Directors. The Company shall have a Chief Executive Officer responsible for
the management and day to day operations of the Company.
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The Chief Executive Officer shall be appointed by the Board of Directors of the
Company and shall execute his duties in accordance with the decisions of and
shall report to the Board of Directors. Officers and employees of the Company
shall report to the Chief Executive Officer.
2.02 COVENANT TO VOTE. Each of the Stockholders shall appear in person
or by proxy at any annual or special meeting of stockholders for the purpose of
obtaining a quorum and shall vote or cause the vote of the shares of Voting
Stock owned by such Stockholder or by any Affiliate of such Stockholder, either
in person or by proxy, at any annual or special meeting of stockholders of the
Company called for the purpose of voting on the election, if such Director has
been nominated for election, or removal, if such Director has been designated
for removal, of Directors, or by consensual action of stockholders with respect
to such election or removal of Directors, in favor of such election of the
Directors nominated, or removal of the Directors designated, in accordance with
Section 2.01 and for the replacement of the Directors in accordance with Section
2.03. In addition, each of the Stockholders shall appear in person or by proxy
at any annual or special meeting of stockholders for the purpose of obtaining a
quorum and shall vote or cause the vote of the shares of Voting Stock owned by
such Stockholder or any Affiliate of such Stockholder upon any matter submitted
to a vote of the stockholders of the Company in the manner recommended by the
Board of Directors of the Company, provided that such recommendation has
received the required vote of such body, and in a manner so as to be consistent
and not in conflict with, and to implement, the terms of this Agreement.
2.03 VACANCIES. The Stockholders hereby agree that if any Director is
unable to serve or, once having commenced to serve, is removed or withdraws from
the Board of Directors of the Company, the replacement of such Director on the
Board of Directors of the Company will be nominated in accordance with the
procedures described in Section 2.01.
2.04 NO VOTING OR CONFLICTING AGREEMENTS. Each of the Stockholders
agrees that it will not and will not permit any Affiliate to grant any proxy or
enter into or agree to be bound by any voting trust with respect to its shares
of Voting Stock or to enter into any stockholder agreements or arrangements of
any kind with any Person with respect to its shares of Voting Stock in any such
case in a manner that is inconsistent with the provisions of this Agreement.
2.05 ACTIONS CONSISTENT WITH AGREEMENT. Except as required by
applicable law, the Company shall not take any action inconsistent with the
provisions of this Agreement.
2.06 VOTING OF COMMON STOCK BY THE COMPANY. To the extent not
prohibited by applicable law, if the Company or one or more of its Affiliates
shall hold, beneficially or of record, shares of Voting Stock at the time of any
vote of holders of Common Stock, the Company shall vote or cause to be voted
such shares of Voting Stock for and against any proposal in the same proportion
as the shares of Common Stock held by the Stockholders (other than the Company
or any of its Affiliates) are voted for and against such proposal.
2.07 NO CUMULATIVE VOTING The Stockholders agree that they will not
amend the Company's Certificate of Incorporation to permit cumulative voting.
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2.08 EXPIRATION OF RIGHTS. Notwithstanding any other provision of this
Agreement, the parties hereto hereby agree that the rights granted pursuant to
this Article 2 shall expire and be of no further force and effect as of the
Expiration Date.
ARTICLE 3
RESTRICTIONS ON TRANSFERS BY THE STOCKHOLDERS
3.01 RESTRICTIONS ON TRANSFERS GENERALLY. Each Stockholder hereby
agrees that such Stockholder shall not, and shall not permit any Affiliate to,
directly or indirectly, transfer, sell or otherwise dispose of any shares of
Common Stock or Equity Securities, other than (i), pursuant to an effective
registration statement under the Securities Act, (ii) pursuant to the terms and
conditions of Rule 144 under the Securities Act or (iii) pursuant to an
exemption from registration under the Securities Act and any state securities or
Blue Sky laws; PROVIDED, HOWEVER, that any transfer, sale or other disposition
pursuant to clause (iii) above shall be only to a transferee who shall agree to
be bound by the terms hereof and be deemed to be a Stockholder under this
Agreement.
3.02 TRANSFERS TO AFFILIATES. Notwithstanding anything to the contrary
contained in Section 3.01 and subject to the provisions of Section 3.04, a
Stockholder may transfer its shares of Common Stock or Equity Securities to an
Affiliate of such Stockholder ("Permitted Transferee") provided that such
Stockholder shall not transfer control of any such Affiliate to a person which
is not an Affiliate of such Stockholder without first reacquiring such shares of
Common Stock or Equity Securities; and provided further, that the Permitted
Transferee of a Stockholder may only transfer its shares of Common Stock or
Equity Securities to the transferor Stockholder from whom such Permitted
Transferee received such shares of Common Stock or Equity Securities or any of
such transferor's Permitted Transferees or otherwise in accordance with the
terms hereof.
3.03 RESTRICTIVE LEGENDS. Each share of Common Stock and Equity
Securities shall bear a legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO, AND ARE
TRANSFERABLE ONLY UPON COMPLIANCE WITH, THE PROVISIONS OF THE
STOCKHOLDERS AGREEMENT DATED MAY 27, 1999, AMONG GHS, INC. AND CERTAIN
OF ITS STOCKHOLDERS. A COPY OF THE ABOVE-REFERENCED AGREEMENT IS ON
FILE AT THE OFFICE OF GHS, INC.
3.04 TRANSFEREES SUBJECT TO AGREEMENT. Any transferee of any shares of
Common Stock or Equity Securities shall, as a condition of the consummation of
such transfer, agree to be subject to the terms of Article 2 of this Agreement,
other than share sold pursuant to Section 3.01(i) or (ii).
3.05 EXPIRATION OF RESTRICTIONS. The parties hereto hereby agree that
the restrictions set forth in Article 3 hereof shall expire and be of no further
force and effect as of the Expiration Date.
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ARTICLE 4
CERTAIN REPRESENTATIONS
4.01 STOCKHOLDER REPRESENTATION. Each Stockholder represents and
warrants as to itself that as of the Closing Date (after giving effect to all
transactions occurring on or as of the Closing Date) such Stockholder is not a
party with any other Person to any other agreement other than the Contribution
Agreement with respect to the holding, voting, acquisition or disposition of
shares of Common Stock or Equity Securities.
4.02 COMPANY REPRESENTATION. The Company represents and warrants that
as of the Closing Date it is not a party with any other Person to any other
agreement with respect to the holding, voting, acquisition or disposition of
shares of Common Stock or Equity Securities other than the Contribution
Agreement, the Stockholder Support Agreement by and among the Company, Xxxxx &
Company Incorporated and Xxxxxxx X. Xxxxxx, or as described therein.
ARTICLE 5
MISCELLANEOUS
5.01 INJUNCTIVE RELIEF. It is acknowledged that it will be impossible
to measure in money the damages that would be suffered if the parties fail to
comply with certain of the obligations imposed on them by this Agreement,
including without limitation those obligations set forth in Article 2 and
Article 3, and that in the event of any such failure, an aggrieved Person will
be irreparably damaged and will not have an adequate remedy at law. Any such
Person shall, therefore, be entitled to injunctive relief and/or specific
performance to enforce such obligations, and if any action should be brought in
equity to enforce any of such provisions of this Agreement, none of the parties
hereto shall raise the defense that there is an adequate remedy at law.
5.02 FURTHER ASSURANCES. Each party hereto shall do and perform or
cause to be done and performed all such further acts and things and shall
execute and deliver all such other agreements, certificates, instruments and
documents as any other party hereto reasonably may request in order to carry out
the intent and accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.
5.03 GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws of
the State of New York, without regard to the conflicts of laws principles
thereof.
5.04 ENTIRE AGREEMENT; AMENDMENT; WAIVER. This Agreement (i) together
with the Contribution Agreement contains the entire agreement among the parties
hereto with respect to the subject matter hereof, (ii) supersedes all prior
written agreements and negotiations and oral understandings, if any, with
respect thereto, (iii) may not be amended or supplemented except by an
instrument or counterparts thereof in writing signed by the Company and the
Stockholders so long as they shall hold in the aggregate at least 1% of the
outstanding shares of
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Common Stock and Common Stock equivalents. No waiver of any term or provision
shall be effective unless in writing signed by the party to be charged.
5.05 BINDING EFFECT. This Agreement shall be binding on and inure to
the benefit of the parties hereto and, subject to the terms and provisions
hereof, their respective legal representatives, successors and assigns.
5.06 INVALIDITY OF PROVISION. The invalidity or unenforceability of any
provision of this Agreement in any jurisdiction shall not affect the validity or
enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of this Agreement, including that provision, in any
other jurisdiction.
5.07 COUNTERPARTS. This Agreement may be executed simultaneously in two
or more counterparts, all of which shall be deemed but one and the same
instrument and each of which shall be deemed an original, and it shall not be
necessary in making proof of this Agreement to produce or account for more than
one such counterpart.
5.08 NOTICES. All notices and other communications provided for or
given or made hereunder shall be in writing (including delivery by facsimile
transmission) and, unless otherwise provided herein, shall be deemed to have
been given when received by the party to whom such notice is to be given at its
address set on the signature page hereto, or such other address for the party as
shall be specified by notice given pursuant hereto.
5.09 HEADINGS. The descriptive headings of the several paragraphs of
this Agreement are inserted for convenience only and do not constitute part of
this Agreement.
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IN WITNESS WHEREOF, this Agreement has been executed by or on behalf of
each of the parties hereto as of the date first above written.
GHS, INC.
By /s/ Xxxx Xxxx
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Name: Xxxx Xxxx
Title: President
STOCKHOLDERS:
/s/ Xxxxxxx X. Xxxxxxx
------------------------------------
XXXXXXX X. XXXXXXX
Address: 0000 Xxxx Xxxxxx Xxxxx
Xxx Xxxxx, XX 00000
XXXXXXX RESEARCH
INTERNATIONAL INC.
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chairman
Address: 0000 Xxxx Xxxxxx Xxxxx
Xxx Xxxxx, XX 00000
CYL DEVELOPMENT HOLDINGS, LLC
By: /s/ Xxxxx Xxx
--------------------------------
Name: Xxxxx Xxx
Title: Manager
Address: 000 Xxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxxx, XX 00000-0000
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EXHIBIT A
(A) NOMINEES OF XXXXXXX X. XXXXXXX
Three persons to be designated by Xxxxxxx X. Xxxxxxx
(B) OTHER NOMINEES
1. Xxxxx Xxxxxxx
2. Xxxxxxxx X. Xxxxx
3. Xxxxxxx X. Xxxxxxx
4. A fourth director to be selected by the Board of Directors of
the Company existing at the Closing
In the event that any of the preceding named persons shall fail to
agree to serve as a director of the Company within 30 days of the Closing, then
the Board of Directors of the Company existing at the Closing shall designate
replacement nominees to serve as directors of the Company.
(C) THE CHIEF EXECUTIVE OFFICER OF GHS
The person, if any, designated as the Chief Executive Officer of the
Company.
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