Exhibit 10.3
FIRST AMENDMENT TO STOCKHOLDERS' AGREEMENT
THIS FIRST AMENDMENT TO STOCKHOLDERS' AGREEMENT, dated as of
July 6, 1999 (this "AMENDMENT"), is made by and among ALEC Holdings, Inc., a
Delaware corporation (the "COMPANY"), Chamer Company, Inc., an Alaska
corporation ("CHAMER"), Xxxx Inlet Region, Inc., an Alaska native corporation
("CIRI"), Xxxx Xxxxxxx ("Xxxxxxx"), and the other persons listed on the
signature pages hereto.
WITNESSETH:
WHEREAS, the Company, Chamer and the stockholders listed on
the signature pages thereto are parties to a Stockholders' Agreement, dated as
of May 14, 1999 (the "STOCKHOLDERS' AGREEMENT");
WHEREAS, the Company and each of CIRI and Xxxxxxx have entered
into separate Stock Subscription Agreements, each dated as of the date hereof;
and
WHEREAS, the parties hereto wish to amend the Stockholders'
Agreement in the manner set forth below so as, among other things, to include
each of Chamer and CIRI as an "Other Investor" and to include Xxxxxxx as a
"Management Investor" under the Stockholders' Agreement;
NOW, THEREFORE, in consideration of the premises and of the
terms and conditions contained herein and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto,
intending to be legally bound, agree as follows:
SECTION 1. AMENDMENT OF INTRODUCTION. The Introduction to the
Stockholders' Agreement is hereby amended to include each of Chamer and CIRI as
an "Other Investor" and to include Xxxxxxx as a "Management Investor."
SECTION 2. ADDITIONAL DEFINITIONS. Article I of the
Stockholders' Agreement is hereby amended to include the following definitions:
"Chamer" shall mean Chamer Company, Inc., an Alaska
corporation.
"CIRI" shall mean Xxxx Inlet Region, Inc. an Alaska native
corporation.
SECTION 3. ADDITIONAL TRANSFER RESTRICTIONS. Section 2.3.5 of
the Stockholders' Agreement is hereby amended and restated to read in its
entirety as follows:
"2.3.5 OTHER TRANSFER RESTRICTIONS. (a) DLJ agrees that, prior
to the consummation of an IPO, no Transfer of Warrants (or shares of Common
Stock issued upon exercise thereof) by DLJ or its direct or indirect Transferees
shall be effective if, following such Transfer, there are more than 10 holders
of Warrants (or Common Stock issued upon exercise thereof)
originally issued to DLJ, which securities are required to bear the legend
provided in Section 2.6.1(a), without the consent of the Company or Fox Xxxxx.
(b) Chamer hereby agrees that, prior to the consummation of an
IPO, no Transfer of shares of Common Stock by Chamer or its direct or indirect
Transferees shall be effective if, following such Transfer, there are more than
six holders of shares of Common Stock originally issued to Chamer, which
securities are required to bear the legend provided in Section 2.6.1(a), without
the consent of the Company or Fox Xxxxx.
(c) CIRI hereby agrees that, prior to the consummation of an
IPO, no Transfer of shares of Common Stock by CIRI or its direct or indirect
Transferees shall be effective if, following such Transfer, there are more than
six holders of shares of Common Stock originally issued to CIRI, which
securities are required to bear the legend provided in Section 2.6.1(a), without
the consent of the Company or Fox Xxxxx.
(d) The restrictions contained in Sections 2.1.1, 2.4 and 2.5
hereof and the provisions regarding Permitted Transferees contained in this
Section 2.3 shall be in addition to and not in lieu or limitation of any
restrictions on the ownership or Transfer of shares of Common Stock (including
with respect to any Restricted Stock) contained in any stock subscription
agreement or employment agreement or any analogous provision of any employment,
compensation or benefit agreement or arrangement or other agreement between the
Company or any of its Affiliates and any Stockholder; provided, however, that
upon the termination of any such agreement or arrangement or lapsing of such
restrictions, the restrictions and provisions contained herein shall continue in
full force and effect pursuant to this Agreement."
SECTION 4. CIRI DEMAND REGISTRATION RIGHT. In order to provide
CIRI with one demand registration right under the Stockholders' Agreement, the
following is hereby agreed:
(a) Section 3.1.1 of the Stockholders' Agreement is hereby
amended and restated to read in its entirety as follows:
"3.1.1 PIGGYBACK REGISTRATIONS. If at any time the Company
proposes to register for sale by the Company under the Securities Act any of its
equity securities (other than a registration on Form S-4 or Form S-8, or any
successor or similar forms), or any shares pursuant to a Demand Registration
under Section 3.1.2, in a manner that would permit registration of Registrable
Securities for sale to the public under the Securities Act and in an
underwritten offering, the Company will each such time promptly give written
notice to all Stockholders who beneficially own any Registrable Securities of
its intention to do so, of the registration form of the SEC that has been
selected by the Company and of such holders' rights under this Section 3.1 (the
"Piggyback Notice"). The Company will use its reasonable best efforts to
include, and to cause the underwriter or underwriters to include, in the
proposed offering, on the same terms and conditions as the securities of the
Company included in such offering, all Registrable Securities that the Company
has been requested in writing, within fifteen (15) calendar days after the
Piggyback Notice is given, to register by the Stockholders thereof (each such
registration pursuant to this
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Section 3.1.1, a "Piggyback Registration"); provided, however, that (i) if, at
any time after giving a Piggyback Notice and prior to the effective date of the
registration statement filed in connection with such registration, the Company
shall determine for any reason not to register such equity securities (or, in
the case of a Demand Registration (as defined below), FPC, DLJ or CIRI
(whichever has initiated such Demand Registration), so determines), the Company
may, at its election (or, in the case of a Demand Registration where FPC, DLJ or
CIRI (whichever has initiated such Demand Registration), so determines, the
Company shall), give written notice of such determination to all Stockholders
who beneficially own any Registrable Securities and, thereupon, shall be
relieved of its obligation to register any Registrable Securities in connection
with such abandoned registration, and (ii) in case of a determination by the
Company to delay registration of its equity securities (or, in the case of a
Demand Registration, FPC, DLJ or CIRI (whichever has initiated such Demand
Registration), so determines), the Company shall be permitted to (or, in the
case of a Demand Registration where FPC, DLJ or CIRI (whichever has initiated
such Demand Registration), so determines, the Company shall) delay the
registration of such Registrable Securities for the same period as the delay in
registering such other equity securities (provided that clauses (i) and (ii)
shall not relieve the Company of its obligations under Section 3.1.2). In the
case of any registration of Registrable Securities in an underwritten offering
pursuant to this Section 3.1.1, all Stockholders proposing to distribute their
securities pursuant to this Section 3.1.1 shall, at the request of the Company
(or, in the case of a Demand Registration, FPC, DLJ or CIRI (whichever has
initiated such Demand Registration)), enter into an agreement in customary form
with the underwriter or underwriters. Notwithstanding the foregoing, following
an IPO, the Company shall not be obligated to effect registration of Registrable
Securities for which Piggyback Registration is requested by an Other Investor
if, at the time of such request, all such Registrable Securities are eligible
for sale to the public by the requesting Other Investor without registration
under Rule 144 under the Securities Act, with such sale not being limited by
either the timing or volume restrictions thereunder."
(b) Section 3.1.2 of the Stockholders' Agreement is hereby
amended and restated to read in its entirety as follows:
"3.1.2 DEMAND REGISTRATIONS. The Company, (i) upon the
reasonable request of FPC, from time to time, or (ii) following the consummation
of an IPO, upon the reasonable request of DLJ or CIRI (by the holders of at
least 25% of, in the case of DLJ, the shares of Common Stock issued or issuable
upon exercise of the Warrants or, in the case of CIRI, the shares of Common
Stock originally issued to CIRI) (each such party being an "Initiating Party"),
shall use its reasonable best efforts to register under the Securities Act any
reasonable portion of Registrable Securities held by the Initiating Party
(including, at the election of such Initiating Party, in an underwritten
offering) and bear all expenses in connection with such offering in a manner
consistent with Section 3.1.3 below and shall enter into such other agreements
in furtherance thereof (each such registration pursuant to this Section 3.1.2, a
"Demand Registration"), and the Company shall provide customary indemnifications
in such instances (in a manner consistent with the indemnification provisions of
this Article III) to the Initiating Party and any such underwriters. FPC shall
have the right to initiate up to six (6) Demand Registrations pursuant to this
Section 3.1.2. Each of DLJ and CIRI shall have the right to initiate one (1)
Demand Registration pursuant to this Section 3.1.2; provided, that the Company
shall not be obligated to effect a Demand
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Registration on behalf of either of DLJ or CIRI within nine (9) months of the
effectiveness of another registration under this Section 3.1. A registration
shall not count as a Demand Registration unless and until the registration
statement relating thereto has been declared effective by the SEC and not
withdrawn. If any Demand Registration requested by FPC is in the form of an
underwritten offering, FPC shall designate the underwriter or underwriters to be
utilized in connection such offering. If the Demand Registration requested by
either of DLJ or CIRI is in the form of an underwritten offering, the Company
shall designate an underwriter or underwriters to be utilized in connection such
offering, which selection shall be reasonably acceptable to DLJ or CIRI, as the
case may be."
SECTION 5. AMENDMENTS TO STOCKHOLDERS' AGREEMENT. Section 5.11
of the Stockholders' Agreement is hereby amended and restated to read in its
entirety as follows:
"5.11 AMENDMENT. (a) This Agreement may not be amended or
supplemented except by an instrument in writing signed by the Company and by
Stockholders holding a majority of the then outstanding shares of Common Stock
held by all Stockholders; PROVIDED that any amendment, supplement or
modification of this Agreement which adversely affects the rights and
obligations of any Stockholder or group of Stockholders (the "Affected Holders")
differently than those of the other Stockholders shall also require the approval
of Affected Holders holding a majority of the outstanding shares of Common Stock
held by all such Affected Holders; PROVIDED FURTHER, the foregoing proviso
notwithstanding, any amendment, supplement or modification of this Agreement
that adversely affects the Other Investors (or a group thereof, including the
Management Investors, as a group, and DLJ, as a group) as a class may be
approved by Other Investors (or members of such group, as the case may be)
holding Common Stock, Options or Warrants, which together represent a majority
of the sum of the total number of (x) the shares of such Common Stock and (y)
the shares of Common Stock issuable upon exercise of such Options or Warrants
held by all the Other Investors (or such group, as the case may be). The
foregoing notwithstanding, (i) the Company, without the consent of any other
party hereto, may amend Schedule I and the signature pages hereto, in order to
add any Other Investor or any other party that becomes a holder of Common Stock
or securities convertible into or exercisable for Common Stock and (ii) FPC and
the Company may amend Article III of this Agreement (other than in a manner that
would materially reduce the Other Investors' rights or materially increase the
Other Investors' obligations with respect to Piggyback Registrations) without
the agreement or consent of any Other Investor.
(b) Notwithstanding anything in Section 5.11(a) to the
contrary, (i) any amendment, supplement or modification of this Agreement which
(A) adds any material additional restriction on the ability of either of DLJ or
CIRI to transfer its shares of Common Stock in addition to those restrictions
already contained in this Agreement; (B) deprives either of DLJ or CIRI of its
ability to sell its shares of Common Stock pursuant to Section 2.4 on the same
price, terms and conditions as FPC, or deprives either of DLJ or CIRI of
sufficient written notice of FPC's desire to sell its shares of Common Stock as
is appropriate under the circumstances for either of DLJ or CIRI, as the case
may be, to be able to exercise such right; (C) substantially eliminates either
(1) the piggyback rights of either of DLJ or CIRI pursuant to Section 3.1.1 or
(2) the right of either of DLJ or CIRI to demand one registration pursuant to
Section 3.1.2; or (D) extends the
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14- and 180-day time periods referred to in Section 3.4(a) or the 180-day time
period referred to in the proviso to the third sentence in Section 3.5; shall in
each instance also require the approval of either of DLJ or CIRI, whichever is
so affected, and (ii) any amendment, supplement or modification of Article III
of this Agreement which materially reduces the benefits to either of DLJ or
CIRI, as the case may be, of Article III taken as a whole, shall in each
instance also require the approval of either of DLJ or CIRI, whichever is so
affected."
SECTION 6. CIRI BOARD REPRESENTATION. The Stockholders'
Agreement is hereby amended to include a new Article VI, which shall read in its
entirety as follows:
"6.1 CIRI BOARD REPRESENTATION. At all times prior to the
consummation of an IPO, each of the parties hereto and their Transferees shall
take all necessary action as is permitted under applicable law to nominate and
elect to the Board, and otherwise to ensure that the Board consists of, one
person designated by CIRI; provided, however, that none of the parties hereto
nor their Transferees shall have any obligation under this Section 6.1 at and
following such time as CIRI ceases to own at least 50% of the number of shares
of Common Stock originally issued to CIRI."
SECTION 7. EFFECT OF AMENDMENTS. Each of the parties hereto
agrees that its execution and delivery to the Company of this Amendment shall
evidence its written consent to the addition of each of Chamer and CIRI as an
"Other Investor" and to the addition of Xxxxxxx as a "Management Investor" under
the Stockholders' Agreement, subject to all of the attendant rights and
obligations of an Other Investor or a Management Investor, as the case may be,
set forth in the Stockholders' Agreement and to the other changes provided
herein. From and after the date hereof, all references to the Stockholders'
Agreement shall be deemed to refer to the Stockholders' Agreement as amended by
this Amendment.
SECTION 8. MISCELLANEOUS.
(a) DEFINED TERMS. Capitalized terms used but not defined
herein shall have the meanings ascribed to them in the Stockholders' Agreement.
(b) SUCCESSORS AND ASSIGNS. This Amendment shall be binding
upon and shall inure to the benefit of the parties, and their respective
successors and assigns. If any Stockholder or any Affiliate thereof or any
Transferee of any Stockholder shall acquire any shares of Common Stock in any
manner, whether by operation of law or otherwise, such shares shall be held
subject to all of the terms of the Stockholders' Agreement as amended by this
Amendment, and by taking and holding such shares such Person shall be
conclusively deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Amendment.
(c) GOVERNING LAW. This Amendment shall be governed and
construed and enforced in accordance with the laws of the State of New York,
without regard to the principles of conflicts of law thereof.
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(d) DESCRIPTIVE HEADINGS, ETC. The headings in this Amendment
are for convenience of reference only and shall not limit or otherwise affect
the meaning of terms contained herein. Unless the context of this Amendment
otherwise requires, references to "hereof," "herein," "hereby," "hereunder" and
similar terms shall refer to this entire Amendment.
(e) SEVERABILITY. If any term or provision of this Amendment
shall to any extent be invalid or unenforceable, the remainder of this Amendment
shall not be affected thereby, and each term and provision of this Amendment
shall be valid and enforceable to the fullest extent permitted by law. Upon the
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties shall negotiate in good faith to modify this
Amendment so as to effect their original intent as closely as possible in an
acceptable manner to the end that transactions contemplated hereby are fulfilled
to the extent possible.
(f) FURTHER ASSURANCES. The parties hereto shall from time to
time execute and deliver all such further documents and do all acts and things
as the other parties may reasonably require to effectively carry out or better
evidence or perfect the full intent and meaning of this Amendment.
(g) COMPLETE AMENDMENT; COUNTERPARTS. This Amendment (together
with the Stockholders' Agreement and the other agreements referred to herein and
therein) constitutes the entire agreement of the parties and supersedes all
other agreements and understandings, both written and oral, among the parties or
any of them, with respect to the subject matter hereof. This Amendment may be
executed by any one or more of the parties hereto in any number of counterparts,
each of which shall be deemed to be an original, but all such counterparts shall
together constitute one and the same instrument.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be duly executed on the date first written above.
ALEC HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
_______________________________
Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice President
and Chief Financial Officer
FOX XXXXX CAPITAL FUND, L.P.,
By Fox Xxxxx Capital Fund, LLC, its General
Partner
By: /s/ W. Xxxxxx Xxxxx, III
_______________________________
Name: W. Xxxxxx Xxxxx, III
Title: Member
FPC INVESTORS, L.P.,
By Fox Xxxxx Capital, LLC, its General Partner
By: /s/ W. Xxxxxx Xxxxx, III
_______________________________
Name: W. Xxxxxx Xxxxx, III
Title: Member
ALEC COINVESTMENT FUND I, LLC,
By Fox Xxxxx Capital, LLC, its Manager
By: /s/ W. Xxxxxx Xxxxx, III
_______________________________
Name: W. Xxxxxx Xxxxx, III
Title: Member
ALEC COINVESTMENT FUND II, LLC,
By Fox Xxxxx Capital, LLC, its Manager
By: /s/ W. Xxxxxx Xxxxx, III
_______________________________
Name: W. Xxxxxx Xxxxx, III
Title: Member
[SIGNATURE PAGE TO FIRST AMENDMENT TO STOCKHOLDERS' AGREEMENT]
ALEC COINVESTMENT FUND III, LLC,
By Fox Xxxxx Capital, LLC, its Manager
By: /s/ W. Xxxxxx Xxxxx, III
_______________________________
Name: W. Xxxxxx Xxxxx, III
Title: Member
ALEC COINVESTMENT FUND IV, LLC,
By Fox Xxxxx Capital, LLC, its Manager
By: /s/ W. Xxxxxx Xxxxx, III
_______________________________
Name: W. Xxxxxx Xxxxx, III
Title: Member
ALEC COINVESTMENT FUND V, LLC,
By Fox Xxxxx Capital, LLC, its Manager
By: /s/ W. Xxxxxx Xxxxx, III
_______________________________
Name: W. Xxxxxx Xxxxx, III
Title: Member
ALEC COINVESTMENT FUND VI, LLC,
By Fox Xxxxx Capital, LLC, its Manager
By: /s/ W. Xxxxxx Xxxxx, III
_______________________________
Name: W. Xxxxxx Xxxxx, III
Title: Member
DLJ INVESTMENT PARTNERS, L.P.,
By DLJ Investment Partners, Inc., Managing
General Partner
By: /s/ Xxx Xxxxx
_______________________________
Name: Xxx Xxxxx
Title: Vice President
[SIGNATURE PAGE TO FIRST AMENDMENT TO STOCKHOLDERS' AGREEMENT]
DLJ INVESTMENT FUNDING, INC.
By: /s/ Xxx Xxxxx
_______________________________
Name: Xxx Xxxxx
Title: Vice President
DLJ ESC II L.P.,
By DLJ LBO Plans Management Corporation, its
General Partner
By: /s/ Xxx Xxxxx
_______________________________
Name: Xxx Xxxxx
Title: Vice President
CHAMER COMPANY, INC.,
By: /s/ Xxxxxxx X. Xxxxxxx
_______________________________
Name: Xxxxxxx X. Xxxxxxx
Title: President
XXXX INLET REGION, INC.
By: /s/ Xxxx X. Xxxxx
_______________________________
Name: Xxxx X. Xxxxx
Title: President and CEO
/s/ Xxxxxxx X. Xxxxxxxx
__________________________________
Xxxxxxx Xxxxxxxx
Management Investor
00000 X.X. 00xx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
[SIGNATURE PAGE TO FIRST AMENDMENT TO STOCKHOLDERS' AGREEMENT]
___________________________________
Xxxxx X. Xxxxxxx
Management Investor
00000 XX 00xx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
/s/ Xxxxxx X. Xxxxxx
__________________________________
Xxxxxx X. Xxxxxx
Management Investor
0000 XX 00xx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
/s/ Xxxxxxx X. Xxxxxxxxx
__________________________________
Xxxxxxx X. Xxxxxxxxx
Management Investor
__________________________________
Xxxxx Xxxxxx
Management Investor
0000 Xxxxxx Xxxxx
Xxxx Xxxx, Xxxxxx 00000
/s/ Xxxx Xxxxxxx
__________________________________
Xxxx Xxxxxxx
Management Investor
[SIGNATURE PAGE TO FIRST AMENDMENT TO STOCKHOLDERS' AGREEMENT]
