Page Section 1. Voting Arrangements 2 Section 2. The Dolan Family Committee 4 Section 3. Voting and Powers of the Dolan Family Committee 6 Section 4. Meetings of the Dolan Family Committee 6 Section 5. Transfers 8 Section 6. Compensation; Expenses;...
Exhibit 44
CABLEVISION SYSTEMS CORPORATION
AMENDED AND RESTATED
CLASS B STOCKHOLDERS’ AGREEMENT
dated January 13, 2010
Table of Contents
Page | ||||||
Section 1.
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Voting Arrangements | 2 | ||||
Section 2.
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The Xxxxx Family Committee | 4 | ||||
Section 3.
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Voting and Powers of the Xxxxx Family Committee | 6 | ||||
Section 4.
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Meetings of the Xxxxx Family Committee | 6 | ||||
Section 5.
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Transfers | 8 | ||||
Section 6.
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Compensation; Expenses; Liability; Indemnification | 18 | ||||
Section 7.
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Amendment | 19 | ||||
Section 8.
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Termination | 19 | ||||
Section 9.
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Enforceability; Remedies | 20 | ||||
Section 10.
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Jurisdiction and Venue | 20 | ||||
Section 11.
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Endorsement of Cablevision Class B Share Certificates | 20 | ||||
Section 12.
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New MSG Stockholders Agreement | 21 | ||||
Section 13.
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Notices | 21 | ||||
Section 14.
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Construction | 21 | ||||
Section 15.
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Definitions | 22 |
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AMENDED AND RESTATED CLASS B STOCKHOLDERS’ AGREEMENT
Amended and Restated Class B Stockholders’ Agreement (the “Agreement”), dated as of
January 13, 2010, by and among each of the holders of Cablevision NY Group Class B common stock
(“Class B Common Stock”) of Cablevision Systems Corporation, a Delaware corporation
(“Cablevision”), listed on Schedule A, annexed hereto (each, a “Class B
Stockholder”, and collectively, the “Class B Stockholders”).
WITNESSETH:
WHEREAS, the Class B Stockholders entered into a Class B Stockholders’ Agreement on March 19,
2004 (as amended prior to the date hereof, the “Original Agreement”);
WHEREAS, the Class B Stockholders desire to amend and restate the Original Agreement to
reflect their agreement with respect to certain additional matters relating to the voting and
transfer of shares of Class B Common Stock (“Shares”) and for other purposes as set forth
herein;
WHEREAS, each of the Class B Stockholders is currently the record owner of Shares, in the
amounts set forth next to the stockholder’s name on Schedule A hereto;
WHEREAS, the Shares owned by most of the individual Class B Stockholders represent only a
small portion of the voting power of all of the outstanding shares of common stock of Cablevision,
but, collectively, the Shares owned by all the Class B Stockholders represent a significant portion
of such voting power;
WHEREAS, each of the Class B Stockholders, each of the trustees (each individually, a
“Trustee” and collectively, the “Trustees”) of the Class B Stockholders which are
trusts (each such trust, a “Class B Trust” and collectively, the “Class B Trusts”)
and each of the Members (as defined in Section 2.1) believes that it is in the best long-term
interests of the Class B Stockholders and the beneficiaries of the Class B Trusts to consolidate
and unify the voting, management and control power represented by the Shares, to qualify
Cablevision as a “controlled company” under the listing standards of the New York Stock Exchange
and to ensure the continued control of Cablevision by the family of Xxxxxxx X. Xxxxx;
WHEREAS, each of the agreements establishing the respective Class B Trusts provides, in part,
that the Trustee or Trustees of each of such Class B Trusts may enter into this Agreement on behalf
of such Class B Trusts, and each such Trustee has been duly authorized, on behalf of such Class B
Trusts, to enter into, execute and deliver this Agreement and perform all of the obligations
contained herein, including, without limitation, those provisions with respect to the voting and
transfer of Shares;
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WHEREAS, at a meeting of the Board of Directors of Cablevision (the “Board”), held on
January 12, 2010, the Board approved this Agreement and the entering into this Agreement by each of the
Class B Stockholders; and
WHEREAS, certain capitalized terms used herein are defined in Section 15;
NOW THEREFORE, in consideration of the premises and of the mutual promises and agreements
contained herein, the Class B Stockholders and the Members agree as follows:
Section 1. Voting Arrangements.
1.1. On any matter on which any Shares are entitled to vote, each Class B Stockholder shall
vote all of the respective Shares over which such Class B Stockholder has voting control and shall
take all other necessary or desirable actions within such respective Class B Stockholder’s control
(including in his or her capacity as a stockholder, trustee or otherwise, and including, without
limitation, attendance at meetings in person or by proxy for purposes of obtaining a quorum and/or
execution of written consents in lieu of meetings) to vote all such Shares that may be voted on
such matter as follows:
(a) prior to the death or Permanent Incapacity of both Xxxxxxx X. Xxxxx and Xxxxx X. Xxxxx
(the “Transition Time”), in accordance with the determination of a majority of the Shares
voted at a meeting of the Class B Stockholders; provided that (i) at least a
majority of the then outstanding Shares is represented at such meeting (including by proxy),
(ii) all Class B Stockholders have been duly notified, or have waived notice, of such
meeting in accordance with the provisions set forth in Section 4.2 (in analogous application
thereof), (iii) such meeting may be attended telephonically or by other means by virtue of
which all persons participating in the meeting can hear each other and (iv) notwithstanding
the foregoing, any action required or permitted to be taken at any meeting of the Class B
Stockholders may be taken without a meeting if holders representing a majority of the then
outstanding Class B Common Stock consent thereto in writing (such a majority, the “Class B
Majority”);
(b) after the Transition Time,
(i) in accordance with the determination of the Xxxxx Family Committee, acting by
Majority Vote, except in the case of (x) a vote on a Going-Private Transaction, in
which case acting by a Two-Thirds Majority Vote (it being understood and agreed that
nothing in this Agreement shall be construed to require any Class B Stockholder to
participate, directly or indirectly, as a buyer in any Going-Private Transaction) and
(y) a vote on a transaction that would result in a Change in Control, in which case
acting by a Supermajority Vote; provided that, with respect to any Excluded Trust,
the decisions of the Xxxxx Family Committee will be deemed
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non-binding recommendations and nothing in this Section 1.1(b)(i) shall require the
Trustees of the Excluded Trusts to act in accordance with the determination of the Xxxxx
Family Committee; and
(ii) with respect to any Excluded Trusts, in accordance with the determination of
Excluded Trusts holding a majority of the Shares held by all of the Excluded Trusts, except
in the case of a vote on a Going-Private Transaction or a transaction that would result in
a Change of Control, in which case in accordance with the determination of Excluded Trusts
holding two-thirds of the Shares held by all of the Excluded Trusts, in each case that are
voted at a meeting of the Excluded Trusts; provided that (w) at least a
majority of the then outstanding Shares held by all of the Excluded Trusts is represented
at such meeting (including by proxy), (x) all Excluded Trusts have been duly
notified, or have waived notice, of such meeting in accordance with the provisions set
forth in Section 4.2 (in analogous application thereof), (y) such meeting may be
attended telephonically or by other means by virtue of which all persons participating in
the meeting can hear each other and (z) notwithstanding the foregoing, any action
required or permitted to be taken at any meeting of the Excluded Trusts may be taken
without a meeting if Excluded Trusts representing a majority of the then outstanding Shares
held by all of the Excluded Trusts consent thereto in writing.
1.2. In order to secure each Class B Stockholder’s obligation to vote its, his or her Shares
in accordance with the provisions of Section 1.1, each Class B Stockholder hereby appoints such
person as shall be designated in connection with each vote pursuant to Section 1.1 by the Class B
Majority or the Xxxxx Family Committee, as the case may be (such person, the “Applicable
Proxy”), as its, his or her true and lawful proxy and attorney-in-fact, with full power of
substitution, to vote all of such Class B Stockholder’s Shares as provided for in Section 1.1;
provided that the irrevocable proxy granted hereunder by the Excluded Trusts shall
terminate at the Transition Time. The Applicable Proxy may exercise the irrevocable proxy granted
to it hereunder at any time any Class B Stockholder fails to comply with the provisions of Section
1.1. The proxies and powers granted by each Class B Stockholder pursuant to this Section 1.2 are
coupled with an interest and are given to secure the performance of the obligations under this
Agreement. Such proxies and powers will be irrevocable until terminated as provided in this
Section 1.2 or the termination of this Agreement and will survive the death, incompetency and
disability of each Class B Stockholder who is an individual and the existence of each Class B
Stockholder that is a trust or other entity. It is understood and agreed that the Applicable Proxy
will not use such irrevocable proxy unless a Class B Stockholder fails to comply with Section 1.1
and that, to the extent the Applicable Proxy uses such irrevocable proxy, it will only vote such
Shares with respect to the matters specified in, and in accordance with the provisions of, Section
1.1.
1.3. In the event any action is taken by written consent pursuant to Section 1.1(a) or Section
1.1(b)(ii), the other Class B Stockholders or Excluded Trusts, as the case
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may be, shall be promptly notified of such written consent and such written consent shall be
filed with the minutes of the proceedings of the Class B Stockholders or Excluded Trusts, as the
case may be.
1.4. After the Transition Time, the Trustees of the Excluded Trusts will discuss their voting
intentions with the Xxxxx Family Committee in advance of any vote by the Class B Stockholders.
Section 2. The Xxxxx Family Committee.
2.1. The Class B Stockholders hereby create a committee to exercise, to the extent and in the
manner provided herein, certain voting, management and control powers over the Class B Common Stock
(the “Xxxxx Family Committee”), which shall initially consist of eight members (each
individually, a “Member”, and collectively, the “Members”).
2.2. The Class B Stockholders hereby designate Xxxxxxx X. Xxxxx, Xxxxx X. Xxxxx, Xxxxxxxx X.
Xxxxx, Xxxxxxx X. Xxxxx-Xxxxxxx, Xxxxxxxx Xxxxx Xxxxx, Xxxxxxx X. Xxxxx, Xxxxxx X. Xxxxx and Xxxxx
X. Xxxxx as the initial Members, each of whom hereby accepts such designation and hereby agrees to
act as a Member hereunder.
2.3. The Xxxxx Family Committee shall make all reasonable efforts to meet and discuss any
matter to be voted on by the Class B Stockholders prior to the taking of such vote.
2.4. Each Member, other than Xxxxxxx X. Xxxxx and Xxxxx X. Xxxxx, shall have the power to
designate, by an instrument in writing, a person or a series of persons to act as his or her
successor or consecutive successors as a Member; provided that (a) no designation
by any Member shall be inconsistent with designations made by a former Member who is a predecessor
of such Member and (b) except with the prior consent of the Xxxxx Family Committee, acting
by Majority Vote (excluding the vote of the Member wishing to make such designation), no person
shall be designated as a successor Member unless such person is (i) the designating
Member’s spouse, (ii) an Adult child of such designating Member, or (iii) in the
case of a designation by a Member that will take effect upon such Member’s death or Permanent
Incapacity, an Interim Member, but only if such designation of an Interim Member is conditioned on
such Member not being survived by a spouse or Adult child. Once a child of a Member who appointed
an Interim Member has become an Adult, such child shall have the right to remove and replace such
Interim Member. The power of a Member to designate successor Members shall include, without
limitation, the power to designate a temporary successor Member pending a descendant of such
designating Member becoming an Adult. Subject to a Member’s right to replace any such successor
Member pursuant to this Section 2.4, any such instrument of designation shall become effective
according to its terms and shall be revocable at any time prior to the qualification of the
designee. In the event that there shall be more than one instrument
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executed by the same person designating a successor Member, then the instrument that shall
bear the most recent date and shall be unrevoked shall govern. Each former Member shall have the
power, until his or her death or Permanent Incapacity, to replace any successor Member of such
Member (including, without limitation, a temporary successor Member) by designating, in accordance
with this Section 2.4, another person, which may be such former Member, as his or her successor
Member. The Sibling Members hereby make the successor Member designations, if any, set forth
opposite their respective names on Schedule B. For the avoidance of doubt, the voting
rights of any Interim Member on the Xxxxx Family Committee shall be in addition to any rights such
person otherwise has a Member.
2.5. Any Member acting hereunder may resign at any time and for any reason by a written notice
delivered to the other Members, to any former Member that is a predecessor of such Member and to
the designated successor Member of such Member, if any.
2.6. In the event of the death, resignation or other failure to act of a Member other than
Xxxxxxx X. Xxxxx or Xxxxx X. Xxxxx, or in the event of a court appointing a conservator, committee
or guardian for such Member, and in the event that any such vacancy shall not be filled pursuant to
the exercise of such Member’s, or one of such Member’s predecessor’s, power to designate his or her
successor Member, as provided for in Section 2.4, then the successor Member to such Member shall be
an individual designated by the trustees of the Applicable Member’s Trusts, acting unanimously;
provided that (a) the prior consent of the Xxxxx Family Committee, acting by
Majority Vote (excluding the vote of the relevant Member, if any), shall be required for the
appointment of any successor Member who could not have been appointed by such Member without such
consent pursuant to Section 2.4(b) and (b) if such Member is survived by a child, such
child shall have the right at any time after such child has become an Adult to remove and replace
any successor Member appointed pursuant to this sentence. If at any time no successor Member to
such Member shall have been appointed pursuant to the provisions of this Section 2, then, unless
and until such a successor Member shall have been appointed, such Member shall have no successor
Member and such Member shall cease to be a Member and, unless and until such successor Member has
been appointed, the Xxxxx Family Committee shall consist of the remaining Members.
2.7. Notwithstanding Section 2.6, if any Sibling Member or successor Member is no longer
deemed to own any Shares, as determined in accordance with Section 3.1 of this Agreement, then such
Member shall cease to be a Member and thereafter the Xxxxx Family Committee shall consist of the
remaining Members.
2.8. Any rights hereunder of any Adult child of a Member who has died or become Permanently
Incapacitated shall be exercised collectively by all such Adult children, acting by majority vote.
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Section 3. Voting and Powers of the Xxxxx Family Committee.
3.1. After the Transition Time, each Member shall be entitled to one vote on all matters to be
voted on by the Xxxxx Family Committee; provided that (i) if at any time a Member’s
ownership of Shares decreases to less than 50% of such Member’s Class B Baseline Share Ownership at
that time, such Member will not be entitled to a vote, and (ii) if at any time a Member’s
ownership of Shares increases, solely as a result of purchases of Shares from other Class B
Stockholders, to at least 50% more than such Member’s Class B Baseline Share Ownership at that
time, such Member will be entitled to one additional vote. For purposes of this Section 3, each
Member shall be deemed to own the Shares that are owned by the Sibling Group of such Member or, if
such Member is not a Sibling Member, such Member’s predecessor who was a Sibling Member.
3.2. In the event of a tie vote of the Xxxxx Family Committee on a decision that requires a
Majority Vote, the Xxxxx Family Committee will act (including making recommendations to the
Trustees of the Excluded Trusts pursuant to Section 1.1(b)) by majority vote of the Shares then
deemed to be owned by the Members, determined as provided in Section 3.1.
3.3. After the Transition Time, in addition to the powers granted in this Agreement, the Xxxxx
Family Committee, acting by Majority Vote, shall have the power to:
(a) appoint an Applicable Proxy at such time as is specified in Section 1.2 of this
Agreement;
(b) bring, maintain and defend suits, whether in law or in equity, and to settle,
compromise, agree to arbitrate and be bound thereby, and to take any action believed by the
Xxxxx Family Committee to be necessary or advisable to exercise the powers and duties of
the Xxxxx Family Committee under this Agreement; and
(c) employ and pay reasonable compensation to such agents, advisors, accountants,
attorneys and investment counsel as may be necessary or desirable in carrying out the
duties and powers of the Xxxxx Family Committee.
Section 4. Meetings of the Xxxxx Family Committee.
4.1. A meeting of the Xxxxx Family Committee may be called by Xxxxx Approval, prior to the
Transition Time, and, thereafter, by any two Members, in each case by giving notice thereof to the
other Members in accordance with the provisions of this Section 4.
4.2. Notice of any meeting of the Xxxxx Family Committee shall be deemed to be duly given to a
Member (i) if mailed to such Member at least 10 days before the day on which such meeting
is to be held, or (ii) if sent to such Member by facsimile or
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electronic mail not later than three days before the day on which such meeting is to be held,
or (iii) if delivered to the Member personally or orally, by telephone or otherwise, not
later than two days before the day on which such meeting is to be held. Notice of any meeting of
the Xxxxx Family Committee need not be given to any Member if waived by the Member in writing,
whether before or after the holding of such meeting, or if such Member is present at such meeting.
Any meeting of the Xxxxx Family Committee shall be a legal meeting without any notice thereof
having been given if each Member then in office either is present at such meeting or has waived
notice of such meeting.
4.3. At all meetings of the Xxxxx Family Committee, the presence of a majority of the Xxxxx
Family Committee, whether in person or by proxy (granted in accordance with Section 4.4), shall
constitute a quorum for the transaction of business. Except as otherwise expressly provided for in
this Agreement, any act of the Xxxxx Family Committee shall be taken by Majority Vote.
4.4. A Member may authorize (a) such Member’s spouse or any Adult child of such
Member, in each case if such Member is a descendant of Xxxxxxx X. Xxxxx, (b) any Current
Trustee, (c) any other Member or (d) any other person approved by the Xxxxx Family
Committee, acting by Majority Vote (excluding the vote of such Member), to act for him or her
(including to attend and vote at a meeting of the Xxxxx Family Committee or to consent or dissent
to an action of the Xxxxx Family Committee without a meeting) by proxy. Every such proxy must be
in writing and signed by the Member. Every such proxy shall be revocable at the pleasure of the
Member executing it.
4.5. A majority of the Members present, whether or not a quorum is present, may adjourn any
meeting of the Xxxxx Family Committee to another time or place. No notice need be given of any
adjournment meeting unless the time and place of the adjourned meeting are not announced at the
time of adjournment, in which case notice conforming to the requirements of Section 4.2 above shall
be given to each Member.
4.6. Any action required or permitted to be taken at any meeting of the Xxxxx Family Committee
may be taken without a meeting if consented thereto in writing by Members with the sufficient
number of votes to constitute the approval required for such action, and such writing or writings
are filed with the minutes of proceedings of the Xxxxx Family Committee.
4.7. To the extent consistent with the provisions of this Agreement, the Xxxxx Family
Committee may adopt rules and regulations for the conduct of meetings of the Xxxxx Family
Committee.
4.8. Members may participate in a meeting of the Xxxxx Family Committee by means of conference
telephone or similar communications equipment by means of which
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all persons participating in the meeting can hear each other, and participation in a meeting
pursuant to this provision shall constitute presence in person at such meeting.
4.9. Notice shall be sent to all Members and Class B Stockholders, to the addresses set forth
in Schedule C (or to such other address as the party entitled to such notice shall
hereafter designate), of any action taken pursuant to a vote of the Xxxxx Family Committee, whether
such action is taken at a meeting or by action by written consent.
Section 5. Transfers.
5.1. Power of Transfer. Subject to the provisions of the Xxxxx Children Trusts
Registration Rights Agreement, to the extent applicable, this Agreement and any applicable federal
or state securities laws, each of the Class B Stockholders shall have the right, with respect to
all or a portion of the Shares owned by such Class B Stockholder, either individually or grouped
with other Class B Stockholders to sell, transfer, assign, pledge, encumber or otherwise dispose
of, including in connection with the death of such Class B Stockholder (“Transfer”), any
such Shares.
5.2. Transfer Restrictions. Notwithstanding any of the rights set forth in this
Section 5, no Class B Stockholder, other than Xxxxxxx X. Xxxxx, Xxxxx X. Xxxxx and any trust of
which either of them is a trustee, may Transfer any or all of its Shares other than to a Permitted
Holder unless:
(a) if, as a result of such Transfer, there would be a Change in Control of Cablevision, such
Class B Stockholder shall have received the Xxxxx Approval, prior to the Transition Time, and,
thereafter, the approval of the Xxxxx Family Committee, acting by Supermajority Vote, for such
Transfer;
(b) each share of Class B Common Stock being transferred is first converted into one share of
Cablevision NY Group Class A common stock (“Class A Common Stock”) prior to such Transfer,
unless (i) such Transfer is a pledge or encumbrance of such Shares and complies with
Section 5.9(a), or (ii) otherwise agreed by Xxxxx Approval, prior to the Transition Time,
and, thereafter, the approval of the Xxxxx Family Committee, acting by Two-Thirds Majority Vote
(excluding the vote of any Member requesting such Transfer); and
(c) such Class B Stockholder complies with all other applicable provisions of this Section 5.
5.3. Market Sale.
(a) In the event a Class B Stockholder (the “Initial Market Sale Seller”) proposes to
sell any Shares (the “Initial Market Sale Shares”) owned by it in a Market Sale, unless
such sale is an Exempted Sale by such Class B Stockholder, such Initial Market Sale
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Seller must first provide notice (the “Market Sale Notice”) to the other Class B
Stockholders (the “Market Sale Offerees”), each of which shall have the right, exercisable
within five Business Days after receipt of the Market Sale Notice, to (i) purchase the
Initial Market Sale Shares owned by the Initial Market Sale Seller for a price per Share equal to
97% of the average closing price of shares of Class A Common Stock over the four week period prior
to the date of the Market Sale Notice (the “Market Sale Price”), or (ii)
participate in the Market Sale with the Initial Market Sale Seller. For the avoidance of doubt,
(x) any Market Sale that would result in a Change in Control shall require the approval
described in Section 5.2(a) and (y) any Market Sale Shares (as defined below) that are sold
in a Market Sale shall first be converted into shares of Class A Common Stock, and any Market Sale
Shares that are sold to a Class B Stockholder pursuant to this Section 5.3 shall not be converted
into shares of Class A Common Stock.
(b) If any Market Sale Offeree elects to participate in the Market Sale (a “Market Sale
Participant” and, together with the Initial Market Sale Seller, the “Market Sale
Sellers”) as provided in Section 5.3(a)(ii), such Market Sale Offeree shall provide notice (the
“Second Market Sale Notice”) to the other Class B Stockholders (other than the Initial
Market Sale Seller), each of which will have the right, exercisable within five Business Days after
receipt of the Second Market Sale Notice to purchase the Shares to be sold by such Market Sale
Participant in the Market Sale (“Market Sale Tag Along Shares” and, together with the
Initial Market Sale Shares, the “Market Sale Shares”) for the Market Sale Price.
(c) If the Market Sale Offerees have not elected to purchase all the Market Sale Shares within
the applicable election periods, each Market Sale Offeree that elected to purchase Market Sale
Shares shall be provided an additional three Business Days, after the expiration of such election
periods, to elect to purchase the remaining Market Sale Shares. If the offer to sell the Market
Sale Shares in a Market Sale is oversubscribed at the expiration of any election period, such
Market Sale Shares and the Market Sale Price in respect thereof will be allocated on a pro rata
basis among the Market Sale Offerees which have elected to purchase Market Sale Shares so that such
electing Market Sale Offeree will purchase a portion of the Market Sale Shares which bears the same
ratio to the Market Sale Shares as the Shares of each electing Market Sale Offeree bear to the
total number of Shares owned collectively by all such electing Market Sale Offerees, or as may
otherwise be agreed among such electing Market Sale Offerees, provided that no Market Sale Offeree
that elects to purchase Market Sale Shares will be required to purchase more Market Sale Shares
than the amount set forth in its election.
(d) If the Market Sale Offerees have elected to purchase less than all of the Market Sale
Shares, the Market Sale Shares to be sold to the Market Sale Offerees shall be apportioned as set
forth in this Section 5.3(d). Each Market Sale Offeree shall purchase from each Market Sale Seller
a number of Shares equal to the product of (i) the number of Shares such Market Sale
Offeree has elected to purchase and (ii) the quotient obtained by dividing (x) the
number of Market Sale Shares that such Market Sale Seller offered for sale
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and (b) the total number of Market Sale Shares that all of the Market Sale Sellers
offered for sale, rounded down to the nearest whole number, or as may otherwise be agreed among
such Market Sale Offerees and the sellers.
(e) In the event the number of Aggregated Market Sale Shares that Market Sale Offerees have
not elected to purchase pursuant to this Section 5.3 exceeds the Rule 144 Threshold on the
expiration date of the election periods under Section 5.3(c), the number of Shares to be sold by
the holders of such Aggregated Market Sale Shares shall be reduced so that each such holder is
entitled to sell in the Market Sale a number of Shares equal to the product of (i) the Rule
144 Threshold and (ii) the fraction determined by dividing (x) the total number of
Aggregated Market Sale Shares owned by such holder as of such date by (y) the total number
of Aggregated Market Sale Shares, or as may otherwise be agreed among such Market Sale Offerees.
(f) Subject to Section 5.3(g) and Section 5.3(h), the closing of the sale to the Market Sale
Offerees pursuant to a Market Sale will be held as soon as practicable after the expiration of all
of the applicable election periods under Section 5.3(c), and, in any event, no later than
(i) 30 days after such expiration, if the value of such Market Sale Shares is less than
$100 million, and (ii) 60 days after such expiration, if the value of such Market Shares is
more than $100 million (the “Market Sale Scheduled Closing Date”). Contemporaneously with
such closing, each Market Sale Seller will deliver a certificate or certificates representing the
Market Sale Shares, properly endorsed for transfer and with all necessary transfer or documentary
stamps, if any, affixed or if the Market Sale Shares are not certificated, the Market Sale Seller
will cause such Shares to be transferred by book entry transfer or other similar means, and in each
case free and clear of all liens, restrictions or encumbrances against receipt from each purchasing
Market Sale Offeree of the Market Sale Price or allocable portion thereof in cash or by certified
or bank cashier’s check or wire or interbank transfer of funds.
(g) The obligation of a Market Sale Seller and a purchasing Market Sale Offeree to proceed
with the closing on the Market Sale Scheduled Closing Date and the obligation to consummate a sale
prior to the Market Sale Expiration Date will be conditioned upon and the Market Sale Scheduled
Closing Date or the Market Sale Expiration Date, as applicable, will be extended to a date which is
five Business Days following the last to occur of (i) the expiration (or earlier
termination) of any applicable waiting period and, if extended, the extended waiting period under
the HSR Act, and (ii) the receipt of all governmental and regulatory consents, approvals or
waivers that may be required in connection with the purchase and sale of the Market Sale Shares.
Each Market Sale Seller and the purchasing Market Sale Offerees will use all reasonable efforts to
cooperate with each other or with a third party to promptly make all filings, give all notices and
secure all consents, approvals and waivers that may be required in connection with the purchase and
sale of the Market Shares.
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(h) Each Market Sale Seller will have the right (subject to Section 5.3(e)) beginning with the
expiration of the last election period under Section 5.3(c) and continuing until 90 days thereafter
or, if later, the last date for the closing of such purchase under Section 5.3(f) or Section 5.3(g)
(such later date being the “Market Sale Expiration Date”), as applicable, to sell all
Market Sale Shares that the Market Sale Offerees do not elect to purchase in a Market Sale. If
such Market Sale Shares are not sold prior to the Market Sale Expiration Date, all rights to sell
such Market Sale Shares pursuant to such Market Sale, without making another offer to the Market
Sale Offerees pursuant to this Section 5.3, will terminate and the provisions of this Section 5.3
will continue to apply to any proposed Market Sale (other than an Exempted Sale) in the future.
5.4. Right of First Refusal.
(a) Prior to any proposed sale of Shares otherwise permitted pursuant to this Section 5, other
than to a Permitted Holder or in a Market Sale, the Class B Stockholder proposing to sell such
Shares (the “ROFR Transferor”) shall obtain a bona fide, non-collusive, binding
arm’s-length written offer, subject only to customary conditions, with respect to the proposed sale
(a “Third Party Offer”) from a third party that is not an affiliate of such ROFR Transferor
(the “Third Party”), which the ROFR Transferor desires to accept. The Third Party Offer
shall not be subject to unstated conditions or contingencies or be part of a larger transaction
such that the price for the Shares proposed to be transferred in the Third Party Offer (the
“Offered Shares”) does not accurately reflect the Fair Market Value of such Offered Shares,
and the Third Party Offer shall contain a description of all of the consideration, material terms
and conditions for the proposed sale. The ROFR Transferor shall send a copy of the Third Party
Offer, which shall include the identity of the Third Party, to each of the Class B Stockholders
(the “Offerees”), together with a written offer to sell the Offered Shares to the Offerees
on the same terms and conditions, including the Third Party Price, as the Third Party Offer. For
the avoidance of doubt, any Shares to be transferred to a Third Party pursuant to a Third Party
Offer shall first be converted into shares of Class A Common Stock, and any Shares transferred to
any Class B Stockholder upon the exercise of its rights in this Section 5.4 shall not be converted
to shares of Class A Common Stock.
(b) Each Offeree will have 10 Business Days from the receipt of such written offer from the
ROFR Transferor to give written notice to the ROFR Transferor of its, his or her respective
election to purchase the Offered Shares. The ROFR Transferor will notify each Offeree as to the
number of Offered Shares that other Class B Stockholders did not elect to purchase pursuant to this
Section 5 within two Business Days following such election (the “Offeree Notice”).
(c) If the Offerees have not elected to purchase all the Offered Shares within the applicable
election period, each Offeree that has so elected to purchase Offered Shares shall be provided an
additional three Business Days from the expiration of such election period to elect to purchase the
remaining Offered Shares. If the offer to sell the
11
Offered Shares is oversubscribed at the expiration of any election period, such Offered Shares
and the Third Party Price in respect thereof will be allocated on a pro rata basis among the
Offerees which have elected to purchase Offered Shares so that each such electing Offeree will
receive a portion of the Offered Shares which bears the same ratio to the Offered Shares as the
Shares of such electing Offeree bear to the total number of Shares owned collectively by all such
electing Offerees, or as may otherwise be agreed among such electing Offerees, provided that no
Offeree that elects to purchase Offered Shares will be required to purchase more Offered Shares
than the amount set forth in its election.
(d) Subject to Section 5.4(e) and Section 5.4(f), the closing of the sale to the Offerees
pursuant to an Offering will be held as soon as practicable after the expiration of all of the
election periods under Section 5.4(c), and, in any event, no later than (i) 30 days after
such expiration, if the value of such Offered Shares is less than $100 million, and (ii) 60
days after such expiration, if the value of such Offered Shares is more than $100 million (the
“Scheduled Closing Date”). Contemporaneously with such closing, the ROFR Transferor will
deliver a certificate or certificates representing the Offered Shares, properly endorsed for
transfer and with all necessary transfer or documentary stamps, if any, affixed, or if the Offered
Shares are not certificated, the ROFR Transferor will cause such Shares to be transferred by book
entry transfer or other similar means, in each case, free and clear of all liens, restrictions or
encumbrances against receipt from each purchasing Offeree of the Third Party Price or allocable
portion thereof in cash or by certified or bank cashier’s check or wire or interbank transfer of
funds.
(e) The obligation of a ROFR Transferor and a purchasing Offeree to proceed with the closing
on the Scheduled Closing Date and the obligation of a ROFR Transferor and a Third Party to
consummate a sale prior to the Expiration Date will be conditioned upon and the Scheduled Closing
Date or the Expiration Date, as applicable, will be extended to a date which is five Business Days
following the last to occur of (i) the expiration (or earlier termination) of any
applicable waiting period and, if extended, the extended waiting period under the HSR Act, and
(ii) the receipt of all governmental and regulatory consents, approvals or waivers that may
be required in connection with the purchase and sale of the Offered Shares. The ROFR Transferor
and the purchasing Offerees will use all reasonable efforts to cooperate with each other or with a
third party to promptly make all filings, give all notices and secure all consents, approvals and
waivers that may be required in connection with the purchase and sale of the Offered Shares.
(f) Notwithstanding the provisions of Section 5.4(a) through (e), elections to purchase made
by the Offerees will not be binding on the ROFR Transferor if (x) the Offerees have not
elected, as provided in Section 5.4(c), to purchase all of the Offered Shares or (y) the
Offerees have not closed on the purchase of all the Offered Shares by the Scheduled Closing Date
(as such Scheduled Closing Date may be extended pursuant to Section 5.4(e)) in accordance with the
terms hereof. In such event, no sales pursuant to such elections will be required to be made by
the ROFR Transferor and the ROFR Transferor will
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have the right for a period of 120 days after the expiration of the last election period in
Section 5.4(c) or, if later, the last date for the closing of such purchase under Section 5.4(d) or
Section 5.4(e) (such later date being the “Expiration Date”), as appropriate, to sell all
but not less than all of the Offered Shares, but only to the Third Party for a price (including any
non-cash consideration in the Third Party Offer) and on terms no more favorable to the Third Party
than the Third Party Price and the terms of the Third Party Offer. If such Offered Shares are not
sold prior to the Expiration Date, all rights to sell such Offered Shares pursuant to such Third
Party Offer, without making another offer to the Offerees pursuant to this Section 5.4, will
terminate and the provisions of this Section 5.4 will continue to apply to any proposed transfer in
the future.
5.5. Tag-Along Rights.
(a) Subject to Section 5.4, if one or more Class B Stockholders (the “Transferring
Stockholders”) desire to sell any or all of their Shares, other than to a Permitted Holder or
in a Market Sale, and such sale would result in a Change of Control (and has been approved as
provided in Section 5.2(a)), each Class B Stockholder shall have the right to participate on the
same terms and conditions and for the same per share consideration as the Transferring Stockholders
in the sale in the manner set forth in this Section 5.5. If Class B Stockholders do not elect to
purchase such Shares pursuant to Section 5.4, the Transferring Stockholders shall, prior to such
sale, deliver to the other Class B Stockholders prompt written notice (the “Transfer
Notice”), which notice shall state (i) the name of the proposed transferee,
(ii) the number of Shares proposed to be transferred (the “Transferred Shares”) and
the percentage (the “Tag Percentage”) that such number of Shares constitutes of the total
number of Shares owned by such Transferring Stockholders, (iii) the proposed purchase price
therefore, including a description of any non-cash consideration sufficiently detailed to permit
the determination of the Fair Market Value thereof, and (iv) the other material terms and
conditions of the proposed sale, including the proposed sale date (which date may not be less than
30 days after delivery of the Transfer Notice). Such notice shall be accompanied by a written
offer from the proposed transferee to purchase the Transferred Shares, which offer may be
conditioned upon the consummation of the sale by the Transferring Stockholders, or the most recent
drafts of the purchase and sale documentation between the Transferring Stockholders and the
transferee which shall make provision for the participation of the other Class B Stockholders in
such sale consistent with this Section 5.5.
(b) Each Class B Stockholder may elect to participate in the proposed sale to the proposed
transferee identified in the Transfer Notice by giving written notice to the Transferring
Stockholders within the 10 Business Day period after the delivery of the Transfer Notice (any Class
B Stockholder that so elects, a “Tag-Along Participant”), which notice shall state that
such Tag-Along Participant elects to exercise its rights of tag-along under this Section 5.5 and
shall state the maximum number of Shares sought to be transferred (which number may not exceed the
product of (i) all such Shares owned by such Tag-Along Participant, multiplied by
(ii) the Tag Percentage). Each Class B Stockholder shall be
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deemed to have waived its right of tag-along with respect to the Transferred Shares hereunder
if it fails to give notice within the prescribed time period. The proposed transferee of
Transferred Shares will not be obligated to purchase a number of Shares exceeding that set forth in
the Transfer Notice, and in the event such transferee elects to purchase less than all of the
additional Shares sought to be transferred by the Tag-Along Participants, the number of Shares to
be transferred by the Transferring Stockholders and each such Tag-Along Participant shall be
reduced so that each such Class B Stockholder is entitled to sell its Pro Rata Portion of the
number of Shares the proposed transferee elects to purchase (which in no event may be less than the
number of Transferred Shares set forth in the Transfer Notice). For purposes of this Section 5.5,
on the applicable sale date, “Pro Rata Portion” means, with respect to any Class B
Stockholder, the number of Shares equal to the product of (i) the total number Shares that
the proposed transferee elects to purchase and (ii) the quotient determined by dividing
(a) the total number of Shares owned by such Class B Stockholder as of such date by
(b) the number of such Shares owned in the aggregate by the Transferring Stockholders and
all Tag-Along Participants as of such date.
(c) Each Tag-Along Participant shall receive consideration in the same form and per Share
amount after deduction of such Tag-Along Participant’s proportionate share of the related expenses.
Each Tag-Along Participant shall agree to make or agree to the same customary representations,
covenants, indemnities and agreements as the Transferring Stockholders so long as they are made
severally and not jointly and, among any Persons liable for a particular liability, such liability
is borne by such Persons on a pro rata basis based the consideration contemplated by the related
definitive agreement(s) to be received by such Person (with respect to each Class B Stockholder
participating in a sale pursuant to this Section 5.5, the “Anticipated Proceeds”);
provided that (i) any general indemnity given by the Transferring Stockholders or
Tag-Along Participants for liabilities not specific to one or more of them shall be apportioned
among them in accordance with their respective Anticipated Proceeds and with respect to each
Tag-Along Participant shall not exceed such Tag-Along Participant’s Anticipated Proceeds, and
(ii) any representation relating specifically to a Class B Stockholder participating in a
sale pursuant to this Section 5.5 and/or its ownership of Shares to be transferred shall be made
only by that Class B Stockholder.
(d) The fees and expenses incurred in connection with a sale under this Section 5.5 and for
the benefit of all Class B Stockholders participating in a sale pursuant to this Section 5.5 (it
being understood that costs incurred by or on behalf of a Class B Stockholder for his, her or its
sole benefit will not be considered to be for the benefit of all Class B Stockholders), to the
extent not paid or reimbursed by the transferee or acquiring Person, shall be shared by all the
Class B Stockholders participating in a sale pursuant to this Section 5.5 on a pro rata basis,
based on each such Class B Stockholder’s Anticipated Proceeds. The proposed sale date may be
extended beyond the date described in the Transfer Notice to the extent necessary to obtain
required approvals of any Governmental Body and other required approvals.
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(e) Each Tag-Along Participant shall deliver to the transferee at the closing of the sale of
the Transferred Shares to the transferee such Transferred Shares by book-entry transfer or other
similar means, if such Transferred Shares are not certificated, or, if such Transferred Shares are
certificated, certificates representing the Transferred Shares to be transferred by such Tag-Along
Participant, duly endorsed for transfer or accompanied by stock powers duly executed, in either
case executed in blank or in favor of the applicable purchaser against payment of the aggregate
purchase price therefor by wire transfer of immediately available funds.
(f) If the Transferring Stockholders sell or otherwise Transfer to the transferee any of their
Shares in breach of this Section 5.5, then each other Class B Stockholder shall have the right to
sell to the Transferring Stockholders, and the Transferring Stockholders undertake to purchase from
each other Class B Stockholder, the number of Shares that such Class B Stockholder would have had
the right to sell to the transferee pursuant to this Section 5.5, for a per Share amount and form
of consideration and upon the terms and conditions on which the transferee bought such Shares from
the Transferring Stockholders, but without any indemnity being granted by any other Class B
Stockholder to the Transferring Stockholders; provided that nothing contained in this
Section 5.5(f) shall preclude any Class B Stockholder from seeking alternative remedies against any
of the Transferring Stockholders as a result of its breach of this Section 5.5.
5.6. Drag-Along Rights.
(a) Subject to Section 5.4, if one or more Class B Stockholders (the “Drag-Along
Sellers”) propose to sell, other than to a Permitted Holder or in a Market Sale, all of their
Shares, and such sale would result in a Change of Control (and has been approved as provided in
Section 5.2(a)), then, if requested by the Drag-Along Sellers, each other Class B Stockholder
(each, a “Selling Stockholder”) shall be required to sell all of the Shares held by it in
such transaction (the “Drag Transaction”).
(b) The Drag-Along Sellers shall provide written notice (the “Drag-Along Notice”) to
each Selling Stockholder of any proposed Drag Transaction as soon as practicable following their
compliance with Sections 5.2(a) and 5.4 and their exercise of the rights provided in Section
5.6(a). The Drag Along Notice shall set forth the consideration to be paid by the purchaser for
the Shares, the identity of the purchaser and the material terms of the Drag Transaction.
(c) The consideration to be received by a Selling Stockholder shall be the same form and
amount of consideration per Share to be received by the Drag-Along Sellers, and, subject to Section
5.6(d), the terms and conditions of such sale shall be the same as those upon which the Drag-Along
Sellers sell their Shares.
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(d) In connection with the Drag Transaction, each Selling Stockholder will agree to make or
agree to the same customary representations, covenants, indemnities and agreements as the
Drag-Along Sellers so long as they are made severally and not jointly and, among any Persons liable
for a particular liability, such liability is borne by such Persons on a pro rata basis based on
the consideration received by each such Person; provided that (i) any general
indemnity given by the Drag-Along Sellers or Selling Stockholders not specific to any of them shall
be shared by each of the Drag-Along Sellers and Selling Stockholders, in the case of the Selling
Stockholders on a several basis according to the consideration received by such Selling Stockholder
and not in excess of such Selling Stockholder’s net proceeds from the sale, (ii) any
representation relating specifically to a Selling Stockholder and/or its Shares shall be made only
by that Selling Stockholder, and (iii) in no event shall any Class B Stockholder be
obligated to agree to any non-competition covenant or other similar agreement as a condition of
participating in such sale.
(e) The fees and expenses incurred in connection with a sale under this Section 5.6 and for
the benefit of all Class B Stockholders (it being understood that costs incurred by or on behalf of
a Class B Stockholder for his, her or its sole benefit will not be considered to be for the benefit
of all Class B Stockholders), to the extent not paid or reimbursed by the transferee or acquiring
Person, shall be borne by the Drag-Along Sellers, unless the closing of such sale occurs, in which
case they shall be shared by all the Class B Stockholders on a pro rata basis, based on the
consideration received by each Class B Stockholder in respect of its Shares.
(f) Each Selling Stockholder shall deliver to the applicable transferee, upon the consummation
of the Drag Transaction, the Shares to be transferred by such Selling Stockholder by book-entry
transfer or other similar means, if such Shares are not certificated, or, if such Shares are
certificated, certificates representing such Shares duly endorsed for transfer or accompanied by
stock powers duly executed, in either case executed in blank or in favor of the applicable
transferee against payment of the aggregate purchase price therefor by wire transfer of immediately
available funds.
5.7. Other Restrictions.
(a) No Class B Stockholder, other than Xxxxxxx X. Xxxxx, Xxxxx X. Xxxxx or any trust of which
either of them is a trustee, shall exercise demand registration rights pursuant to either
Registration Rights Agreement without Xxxxx Approval, prior to the Transition Time, and,
thereafter, the approval of the Xxxxx Family Committee, acting by Two-Thirds Majority Vote.
(b) Except as may be permitted in connection with a Transfer in accordance with this Section
5, no Class B Stockholder shall convert its Shares into shares of Class A Common Stock without
Xxxxx Approval, prior to the Transition Time, and,
16
thereafter, the approval of the Xxxxx Family Committee, acting by Two-Thirds Majority Vote
(excluding the vote of any Member requesting such conversion).
5.8. CFD/HAD Transfers.
(a) The provisions of Section 5 of this Agreement shall not apply to Xxxxxxx X. Xxxxx, Xxxxx
X. Xxxxx or any trust of which either of them is a trustee.
(b) If the executor of the estate of either Xxxxxxx X. Xxxxx or Xxxxx X. Xxxxx, or any trustee
of any trust created by either of them, determines that it is likely to be necessary to sell Shares
in order to obtain cash to pay estate or similar inheritance taxes relating to the death of either
Xxxxxxx X. Xxxxx or Xxxxx X. Xxxxx, such executor or trustee may sell such Shares, and any
additional Shares as such executor or trustee determines is necessary to provide cash to pay
expenses of such estate or trust relating to such death, without complying with any of the
provisions of this Section 5, except (i) Section 5.2(b), which shall only apply if the
Shares are sold to anyone other than a Permitted Holder, and (ii) that, as soon as
reasonably practicable, and in any event no later than 60 days prior to the due date of such taxes,
such executor or trustee shall provide notice of the sale of such Shares to the other Class B
Stockholders, who shall have 10 Business Days from receipt of such notice in which to elect to
purchase such Shares at their Fair Market Value as of the date such notice is sent. The sale and
purchase of such Shares to Permitted Holders pursuant to this Section 5.8(b) shall be in compliance
with Sections 5.3(c) and (f) – (h) (in analogous application thereof), except that, in the event
the closing date for such sale provided for in such Sections or otherwise agreed to by any Class B
Stockholder that has elected to purchase such Shares (with respect to the Shares that such Class B
Stockholder has elected to purchase) would not occur on or prior to the due date of such taxes,
such executor or trustee may sell such Shares in a Market Sale at any time after the date that is
one month prior to such due date.
(c) If, as provided by the will of either Xxxxxxx X. Xxxxx or Xxxxx X. Xxxxx or any trust
created by either of them, any Class B Stockholder disclaims his, her or its right to inherit any
Shares from Xxxxxxx X. Xxxxx or Xxxxx X. Xxxxx and, as a result of such disclaimer, the executor of
the estate of either of them or the trustee(s) of such trust thereafter desires to Transfer such
Shares other than to a Permitted Holder, such Transfer shall be subject to all of the provisions of
this Agreement.
5.9. Pledges and Involuntary Transfers.
(a) Except with the Xxxxx Approval, prior to the Transition Time, and, thereafter, the
approval of the Xxxxx Family Committee, acting by Supermajority Vote, no Class B Stockholder shall
pledge any Shares unless (i) such Shares remain registered solely in the name of the
pledgor of the Shares, (ii) the pledgee agrees in writing that such Shares shall be
converted into shares of Class A Common Stock prior to any foreclosure thereon and otherwise shall
not be so converted, and that the pledgor’s rights to foreclose on such Shares
17
is subject to the rights of the Class B Stockholders (other than the pledgor) provided in
Section 5.9(c) and (iii) any foreclosure on such Shares would not result in a Change in
Control.
(b) No pledgee of Shares shall be designated as a Qualifying Creditor (as defined in the
Registration Rights Agreements) for purposes of either Registration Rights Agreement unless
authorized, prior to the Transition Time, by Xxxxx Approval, and, thereafter, by the Xxxxx Family
Committee, acting by Two-Thirds Majority Vote.
(c) Prior to any Transfer of Shares in connection with the bankruptcy or divorce of any Class
B Stockholder or any foreclosure by any lender on any Shares pledged to such lender as permitted
pursuant to Section 5.9(a), the Class B Stockholders (other than the Class B Stockholder that is
the subject of such bankruptcy or divorce or is the pledgor of such Shares) shall be provided five
Business Days’ notice and in such time shall have the right to purchase such Shares at their Fair
Market Value as of the date such notice is sent. The sale and purchase of such Shares pursuant to
this Section 5.9(c) shall be in compliance with
Sections 5.3(c) and (f) - (h) (in analogous
application thereof). For the avoidance of doubt, any Shares to be transferred in connection with
the bankruptcy or divorce of any Class B Stockholder or any foreclosure by any lender other than to
a Permitted Holder shall first be converted into shares of Class A Common Stock, and any such
Shares transferred to any Class B Stockholder upon the exercise of its rights in this Section
5.9(c) shall not be converted to shares of Class A Common Stock.
5.10. Assignment of Purchase Rights; Unauthorized Transfers.
(a) Each Class B Stockholder may assign, in whole or in part, any of it rights to purchase
Shares pursuant to Sections 5.3, 5.4, 5.8 and 5.9 to any other Class B Stockholder that is part of
the same Sibling Group as such assigning Class B Stockholder.
(b) Any Transfer or attempted Transfer of Shares in violation of any provision of this
Agreement shall be void.
Section 6. Compensation; Expenses; Liability; Indemnification.
6.1. No Class B Stockholder or Member shall be entitled to compensation for acting hereunder.
6.2. The expenses of the Xxxxx Family Committee shall be paid by the Class B Stockholders in
proportion to the respective Class B Stockholder’s ownership of Class B Common Stock at the time
such expense was incurred or in such other manner as determined by Majority Vote.
6.3. No Class B Stockholder or Member at any time acting under this Agreement shall be liable
for any loss, liability, expense or damage to any of the Class B
18
Stockholders, Members or beneficiaries of the Class B Trusts occasioned by such Class B
Stockholder’s or Member’s acts or omissions in good faith in carrying out his or her duties under
this Agreement (including acts or omissions in reliance on opinion of counsel), and in any event a
Class B Stockholder or Member shall be liable only for his or her willful default, wrongdoing or
gross negligence, but not for honest errors of judgment.
6.4. A Class B Stockholder or Member shall be entitled to be indemnified by the Class B
Stockholders for any liabilities resulting from, or arising in connection with, such Class B
Stockholder’s or Member’s entering into this Agreement and/or the performance of his or her
obligations in accordance with the terms of this Agreement. Any such indemnification shall be made
by the Class B Stockholders in proportion to the respective Class B Stockholders’ ownership of
Class B Common Stock determined as of the time of the event for which such indemnification is being
sought.
6.5. Each Adult beneficiary of a Class B Trust hereby agrees to release each Trustee of such
Class B Trust from any claim that may, now or in the future, arise from, or in connection with,
such Trustee’s entering into this Agreement and/or the performance of his or her obligations in
accordance with the terms of this Agreement, and each such Trustee of a Class B Trust shall be
entitled to be indemnified by the Adult beneficiaries of such Class B Trusts, jointly and
severally, for any liabilities resulting from, or arising in connection with, such Trustee’s
entering into this Agreement and/or the performance of his or her obligations in accordance with
the terms of this Agreement.
Section 7. Amendment.
7.1. Prior to the Transition Time, the provisions of this Agreement may be amended by a
written instrument signed by the Class B Stockholders who then have voting control over two-thirds
of the total outstanding Shares and, after the Transition Time, the provisions of this Agreement
may be amended by a Two-Thirds Majority Vote; provided, in each case, that the provisions
of Section 4 of this Agreement may be amended at any time by a Majority Vote.
7.2. Notwithstanding Section 7.1, any amendment to this Agreement that would result in any
Class B Trust that immediately prior to such amendment is not subject to taxation on its income or
gains by the State of New York becoming subject thereto shall require the consent of such Class B
Trust.
Section 8. Termination.
8.1. Unless sooner terminated by a written instrument signed by, prior to the Transition Time,
the Class B Stockholders who then have voting control over two-thirds of the total outstanding
Shares and, following the Transition Time, by the Xxxxx Family Committee, acting by Two-Thirds
Majority Vote, this Agreement shall terminate upon the
19
earlier of (i) the number of Class B Stockholders governed by this Agreement ceasing
to be at least two in number, or (ii) the aggregate number of outstanding Shares ceasing to
constitute at least 30% of the total voting power of the aggregate number of outstanding shares of
Class A Common Stock and Class B Common Stock.
Section 9. Enforceability; Remedies.
9.1. The Class B Common Stock governed by this Agreement cannot be purchased in the open
market and represents a significant portion of the voting control of Cablevision. For those
reasons, among others, the parties hereto and the beneficiaries of the respective Class B Trusts
will be irreparably damaged in the event that this Agreement is not specifically enforced. Should
any dispute arise as to any vote of any such Class B Common Stock or any other action under this
Agreement, an injunction may be issued restraining any such vote or other action pending the
determination of such controversy, and in the event a Class B Stockholder fails to follow
directions as provided for herein, such Class B Stockholder’s obligation to follow such direction
shall be enforceable in a court of equity by a decree of specific performance. Such remedies
shall, however, be cumulative and not exclusive and shall be in addition to any other remedy any of
the parties hereto may have.
Section 10. Jurisdiction and Venue.
10.1. Each party to this Agreement hereby agrees that any Action will be commenced in the
United States District Court for the Southern District of New York or in any court of the State of
New York located in such District. Each party to this Agreement hereby irrevocably consents to the
jurisdiction and venue of the United States District Court for the Southern District of New York
and of any court of the State of New York located in such District in connection with any Action.
Section 11. Endorsement of Cablevision Class B Share Certificates.
11.1. As soon as possible after the execution of this Agreement, the Class B Stockholders
shall endorse on the face of the certificates representing the Class B Common Stock, now owned or
hereafter acquired by the Class B Stockholders, a legend reading substantially as follows:
“The voting and transfer of the shares represented by this Certificate is
restricted by, and subject to the terms and conditions of, the Amended and
Restated Class B Stockholders’ Agreement, dated as of
January 13, 2010, as it may
be further amended, a copy of which is with the Secretary of the
Cablevision Systems Corporation and will be furnished without charge to the
holder of such shares upon written request.”
20
Section 12. New MSG Stockholders Agreement.
12.1. Pursuant to the anticipated spin-off of Cablevision’s Madison Square Garden, Inc.
(“MSG”) as a new entity, the holders of Class B Common Stock will become holders of the
Class B common stock of MSG (the “MSG Stock”) and, as such, intend to enter into an
agreement substantially the same as this Agreement with respect to the shares of MSG Stock owned by
them.
Section 13. Notices.
13.1. Any notice required or desired to be delivered hereunder shall be (i) in
writing, (ii) delivered by personal delivery, sent by commercial delivery service or
certified mail, return receipt requested, or by facsimile or electronic mail, (iii) deemed
to have been given on the date of personal delivery, the date set forth in the records of the
delivery service or return receipt, or in the case of facsimile or electronic mail, upon dispatch,
and (iv) addressed as designated on Schedule C hereto (or to such other address as
the party entitled to notice shall hereafter designate in accordance with the terms hereof), with
copies as designated on Schedule C hereto.
Section 14. Construction.
14.1. Except as otherwise provided herein, the provisions of this Agreement shall apply to any
successor Class B Stockholder who becomes a party to this Agreement in accordance with Section 14.5
of this Agreement or any successor Member, as if such successor were the original Class B
Stockholder or Sibling Member named herein. All of the provisions of this Agreement shall apply to
all Shares now owned or hereafter acquired by the Class B Stockholders. Except as may be expressly
provided herein, nothing hereunder shall be deemed to constitute any person a third party
beneficiary of this Agreement.
14.2. Whenever necessary or appropriate, the use herein of any gender shall be deemed to
include the other gender and the neuter and the use herein of either the singular or the plural
shall be deemed to include the other.
14.3. The headings and titles herein are for convenience of reference only and are to be
ignored in any construction of the provisions hereof.
14.4. This Agreement shall be governed and construed according to the laws of the State of New
York, without regard to its rules for conflicts of laws.
14.5. This Agreement shall be binding on the parties hereto and their respective heirs,
executors, administrators, successors and assigns. Without limiting the generality of the
preceding sentence, this Agreement shall be binding on (i) any “Descendant’s Trust” (as
that term is defined in the agreements establishing the respective Class B Trusts) or any similar
continuing trust, whether created through the exercise of a
21
power of appointment or otherwise, and whether created during the life of or following the
death of one or more of the persons presently eligible to receive income from the respective Class
B Trusts and (ii) any individual person or entity that hereafter acquires any Shares;
provided that (x) as a condition to such Transfer, any such person or entity shall
agree in writing to be bound by the terms and conditions of this Agreement, pursuant to an
instrument of assumption that has been deemed reasonably satisfactory in substance and form by
Xxxxx Approval, prior to the Transition Time, or, thereafter, the Xxxxx Family Committee, acting by
Majority Vote, and shall thereafter be deemed to be a Class B Stockholder for all purposes of this
Agreement and (y) unless such person’s or entity’s accession to this Agreement would not
result in such person or entity or any of the parties to this Agreement becoming subject to the
restrictions in Section 203 of the Delaware General Corporation Law on “business combinations” (as
defined therein) with Cablevision, such accession shall be conditioned upon the approval thereof by
the Cablevision board of directors for purposes of Section 203 of the Delaware General Corporation
Law and, if such approval is not obtained, such person shall not be, and shall be deemed never to
have been, a party to this Agreement.
14.6. Nothing in this Agreement shall be deemed to modify or otherwise affect any rights of
Cablevision or any of its subsidiaries under any agreement to which it and any Class B Stockholder
or Class B Stockholders are parties.
14.7. This Agreement may be executed in any number of counterparts, each of which shall be
deemed an original, but all of which together can constitute one and the same instrument.
Section 15. Definitions
15.1. Defined Terms. When used in this Agreement, the following terms shall have the
meanings set forth below:
“Acceptable Marital Trust” means any marital trust, the income of which is for the
benefit of the spouse of any Sibling Member or his or her descendants and the principal of which is
for the benefit of one or more of such Sibling Member and his or her descendants.
“Action” means any action, suit or proceeding arising out of or relating to this
Agreement.
“Adult” means a person having attained the age of 21.
“Anticipated Proceeds” has the meaning set forth in Section 5.5(c).
“Agreement” has the meaning set forth in the preamble hereof.
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“Aggregated Market Sale Shares” means the Market Sale Shares held by Class B
Stockholders whose sales of shares of Class A Common Stock would be aggregated for purposes of Rule
144(e) under the Securities Act, or any successor provision.
“Applicable Member’s Trust” means, with respect to any Member, the trusts that are
part of the Sibling Group of such Member or, if such Member is not a Sibling Member, such Member’s
predecessor who was a Sibling Member.
“Applicable Proxy” has the meaning set forth in Section 1.2.
“Board” has the meaning set forth in the recitals hereof.
“Business Day” means any day of the year other than a Saturday, Sunday or any other
day on which commercial banks in New York, New York are authorized or required by law to be closed.
“Cablevision” has the meaning set forth in the preamble hereof.
“Change in Control” means (x) any reorganization, consolidation, merger,
readjustment or other transaction that results in the Class B Stockholders, collectively, ceasing
to possess, directly or indirectly, (i) at least 50% of the total voting power of any
corporation surviving such transaction or, if such corporation is a subsidiary of another
corporation, of such controlling corporation, as the case may be, or (ii) if the surviving
or controlling entity is not a corporation, the power to direct or cause the direction of the
management policies thereof by reason of ownership of voting securities, by contract or otherwise
or (y) any sale of all or substantially all of the assets of Cablevision and its
subsidiaries to any corporation with respect to which the Class B Stockholders do not possess at
least 50% of the total voting power of such corporation, or if the acquiring entity is not a
corporation, the power to direct or cause the direction of the management policies thereof by
reason of ownership of voting securities, by contract or otherwise.
“Class A Common Stock” has the meaning set forth in Section 5.2(b).
“Class B Baseline Share Ownership” of any Member means the total number of Shares set
forth next to such Member’s name on Schedule D hereto, as increased to reflect any Class B
Common Stock acquired after the date hereof by gift or inheritance, excluding any gift or
inheritance from such Member’s Sibling Group.
“Class B Common Stock” has the meaning set forth in the preamble hereof.
“Class B Majority” has the meaning set forth in Section 1.1(a).
“Class B Stockholder” or “Class B Stockholders” has the meaning set forth in
the preamble hereof.
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“Class B Trust” or “Class B Trusts” has the meaning set forth in the recitals
hereof.
“Current Trustee” means each of Xxxxx X. Xxxxx, Xxxxxxxx X. Xxxxx, Xxxx X. Xxxxx, Xxxx
X. Xxxxx and Xxxxxxx X. Xxxxx.
“Xxxxx Approval” shall mean the prior approval of Xxxxxxx X. Xxxxx, prior to his death
or Permanent Incapacity, and, thereafter, if Xxxxx X. Xxxxx is then alive and not suffering from
Permanent Incapacity, Xxxxx X. Xxxxx, until her death or Permanent Incapacity.
“Xxxxx Family Committee” has the meaning set forth in Section 2.1.
“Xxxxx Children Trusts Registration Rights Agreement” means the Xxxxx Children Trusts
Registration Rights Agreement, dated as of January 13, 2010, between Cablevision and certain of the Class
B Trusts, as such agreement may be further amended, supplemented or replaced.
“Drag-Along Notice” has the meaning set forth in Section 5.6(b).
“Drag-Along Sellers” has the meaning set forth in Section 5.6(a).
“Drag Transaction” has the meaning set forth in Section 5.6(a).
“Excluded Trust” shall mean any Class B Trust that is, at the time of a particular
vote of Shares, not subject to taxation on its income or gains by the State of New York.
“Exempted Sale” means a Market Sale by any Class B Stockholder in which the
anticipated proceeds, when combined with the proceeds from all other Market Sales by other members
of the Sibling Group to which such Class B Stockholder belongs during the preceding 12 months, does
not exceed $2,500,000.
“Expiration Date” has the meaning set forth in Section 5.4(f).
“Fair Market Value” as of any date means for (a) publicly traded securities,
the average of the daily volume-weighted average price per share of such common stock for each of
the ten trading days prior to such date (as reported by Bloomberg Financial L.P. using the VWAP
function, or if unavailable, by another authoritative source, or if no other authoritative source
is available, based upon the average of the daily closing prices (instead of the daily
volume-weighted average prices) for such 10 trading days, as reported by Bloomberg Financial L.P.
or another authoritative source), and (b) non-publicly traded securities, or any asset or
other consideration, the fair market value as determined in good faith by Xxxxx Approval, prior to
the Transition Time, and thereafter, unless all Members
24
otherwise agree, an independent financial advisor retained by the Xxxxx Family Committee,
acting by Majority Vote. For purposes of determining their Fair Market Value, Shares shall be
treated as shares of Class A Common Stock.
“Going-Private Transaction” means any transaction, other than a transaction that would
result in a Change in Control, pursuant to which Class B Stockholders, with or without other equity
partners, would acquire all or substantially all of Cablevision’s common stock and shares of such
stock would no longer be registered under the Securities Exchange Act of 1934, as amended, or
listed on any stock exchange.
“Governmental Body” means any (i) nation, state, county, city, town, village,
district or other jurisdiction of any nature; (ii) federal, state, local, municipal,
foreign or other government; (iii) governmental or quasi-governmental authority of any
nature (including any governmental agency, branch, board, commission, department, instrumentality,
office or other entity, and any court or other tribunal); (iv) multi-national organization
or body; and/or (v) government entity exercising, or entitled or purporting to exercise,
any administrative, executive, judicial, legislative, police, regulatory or taxing authority or
power of any nature.
“HSR Act” means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended.
“Initial Market Sale Seller” has the meaning set forth in Section 5.3(a).
“Initial Market Sale Shares” shall have the meaning set forth in Section 5.3(a).
“Interim Member” means (i) a Current Trustee of one of the Applicable Member’s
Trusts or any sibling of the relevant Member who is designated as a guardian of any minor child of
the relevant Member, or (ii) in the event that the relevant Member is not survived by a
person described in clause (i), any other trustee of one of the Applicable Member’s Trusts or any
individual designated as a guardian of any minor child of the relevant Member.
“Majority Vote” means the affirmative vote of a majority of the votes of the Members.
“Market Sale” means a sale of shares of Class A Common Stock obtained upon conversion
of Shares in an open market sale pursuant to an exemption from the registration requirements of the
Securities Act, including a sale pursuant to Rule 144 of the Securities Act.
“Market Sale Expiration Date” has the meaning set forth in Section 5.3(h).
“Market Sale Notice” has the meaning set forth in Section 5.3(a).
25
“Market Sale Offerees” has the meaning set forth in Section 5.3(a).
“Market Sale Participant” has the meaning set forth in Section 5.3(b).
“Market Sale Price” has the meaning set forth in Section 5.3(a).
“Market Sale Scheduled Closing Date” has the meaning set forth in Section 5.3(f).
“Market Sale Sellers” has the meaning set forth in Section 5.3(b).
“Market Sale Shares” has the meaning set forth in Section 5.3(b).
“Market Sale Tag Along Shares” has the meaning set forth in Section 5.3(b).
“Member” or “Members” has the meaning set forth in Section 2.1.
“Member Trust” means, with respect to each Sibling Member, the Class B Trusts set
forth across from such Sibling Member’s name on Schedule D hereto.
“MSG” has the meaning set forth in Section 12.1.
“MSG Stock” has the meaning set forth in Section 12.1.
“Offered Shares” has the meaning set forth in Section 5.4(a).
“Offeree Notice” has the meaning set forth in Section 5.4(b).
“Offerees” has the meaning set forth in Section 5.4(a).
“Original Agreement” has the meaning set forth in the recitals hereof.
“Permanent Incapacity” means, with respect to an individual, any individual whose
ability to receive and evaluate information effectively or to communicate decisions, or both, is
impaired to such an extent that the individual permanently lacks the capacity to manage his or her
financial resources, as determined by certification of one licensed physician.
“Permitted Holder” means Xxxxxxx X. Xxxxx, Xxxxx X. Xxxxx, any descendants of Xxxxxxx
X. Xxxxx and Xxxxx X. Xxxxx, any trusts for the benefit of any such descendants, including any
Acceptable Marital Trust, and any entity owned exclusively by one or more of the foregoing.
26
“Person” means an individual, a partnership, a limited partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a joint venture, an
unincorporated organization, any other business entity or a Governmental Body.
“Pro Rata Portion” has the meaning set forth in Section 5.5(b).
“Registration Rights Agreements” means the Xxxxx Children Trusts Registration Rights
Agreement and the Xxxxx Registration Rights Agreement, dated as of January 13, 2010, between Cablevision,
Xxxxxxx X. Xxxxx and certain other Class B Stockholders, as such agreement may be further amended,
supplemented or replaced.
“ROFR Transferor” has the meaning set forth in Section 5.4(a).
“Rule 144 Threshold” means the maximum number of shares of Class A Common Stock that
could be sold under Rule 144(e) under the Securities Act, or any successor provision.
“Scheduled Closing Date” has the meaning set forth in Section 5.4(d).
“Second Market Sale Notice” has the meaning set forth in Section 5.3(b).
“Securities Act” means the Securities Act of 1933, as amended.
“Selling Stockholder” has the meaning set forth in Section 5.6(a).
“Shares” has the meaning set forth in the recitals hereof.
“Sibling Group” of any Sibling Member means (a) such Sibling Member and his or
her descendants, (b) each Member Trust, to the extent that such Sibling Member or his or
her descendants or stepchildren are income beneficiaries of any such Member Trust or would be
entitled to receive current income if current income were to be distributed by any such Member
Trust, (c) any successor trust to any Member Trust or any new trust established after the
date hereof, in each case to the extent that such Sibling Member or his or her descendants or
stepchildren are income beneficiaries of any such trust or would be entitled to receive current
income if current income were to be distributed by any such trust, (d) any Acceptable
Marital Trust for the benefit of such Sibling Member’s spouse and (e) to the extent of such
Sibling Member’s or his or her descendants’ or stepchildren’s attributable interest therein, any
legal entity, including, but not limited to, partnerships, limited liability companies, limited
partnerships, corporations or joint ventures, formed after the date hereof, which owns Shares that
were contributed to such entity, directly or indirectly, by such Sibling Member, his or her
descendants or any of the entities referenced in clauses (b)-(d) above.
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“Sibling Member” shall mean each of Xxxxxxxx X. Xxxxx, Xxxxxxx X. Xxxxx-Xxxxxxx,
Xxxxxxxx Xxxxx Xxxxx, Xxxxxxx X. Xxxxx, Xxxxxx X. Xxxxx and Xxxxx X. Xxxxx.
“Supermajority Vote” means the affirmative vote of all but one of the votes of the
Members.
“Tag-Along Participant” has the meaning set forth in Section 5.5(b).
“Tag Percentage” has the meaning set forth in Section 5.5(a).
“Third Party” has the meaning set forth in Section 5.4(a).
“Third Party Offer” has the meaning set forth in Section 5.4(a).
“Third Party Price” means the amount of consideration set forth in the Third Party
Offer, which, if all or part of such consideration is in cash, will be that amount in cash, and as
to any consideration in the Third Party Offer which is not in cash, will be deemed to be an amount
of cash equal to the Fair Market Value of such consideration.
“Transfer” has the meaning set forth in Section 5.1.
“Transfer Notice” has the meaning set forth in Section 5.5(a).
“Transferred Shares” has the meaning set forth in Section 5.5(a).
“Transferring Stockholders” has the meaning set forth in Section 5.5(a).
“Transition Time” has the meaning set forth in Section 1.1(a).
“Trustee” or “Trustees” has the meaning set forth in the recitals hereof.
“Two-Thirds Majority Vote” means the affirmative vote of two-thirds of the votes of
the Members.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF this Agreement has been executed by each of the parties hereto, and shall
be effective as of the date first above written.
XXXXXXX X. XXXXX, individually, and as Trustee of
the Xxxxxxx X. Xxxxx 2009 Revocable Trust, the
Xxxxxxx X. Xxxxx 2008 Grantor Retained Annuity
Trust #2, the Xxxxxxx X. Xxxxx 2009 Grantor
Retained Annuity Trust #1, the Xxxxxxx X. Xxxxx
2009 Grantor Retained Annuity Trust #2, the Xxxxxxx
X. Xxxxx 2009 Grantor Retained Annuity Trust #3 and
the Xxxxxxx X. Xxxxx 2010 Grantor Retained Annuity
Trust #1 |
||||
/s/ Xxxxxxx X. Xxxxx | ||||
Xxxxxxx X. Xxxxx | ||||
XXXXX X. XXXXX, individually, and as Trustee of the
Xxxxx X. Xxxxx 2009 Revocable Trust, the Xxxxx X.
Xxxxx 2009 Grantor Retained Annuity Trust #1, the
Xxxxx X. Xxxxx 2009 Grantor Retained Annuity Trust
#2 and Xxxxx X. Xxxxx 2010 Grantor Retained Annuity
Trust #1 |
||||
/s/ Xxxxx X. Xxxxx | ||||
Xxxxx X. Xxxxx | ||||
XXXXX X. XXXXX, individually | ||||
/s/ Xxxxx X. Xxxxx | ||||
Xxxxx X. Xxxxx | ||||
XXXXXX X. XXXXX, individually | ||||
/s/ Xxxxxx X. Xxxxx | ||||
Xxxxxx X. Xxxxx | ||||
[Signature Page to the Cablevision Systems Corporation Amended and Restated Class B Stockholders’ Agreement]
XXXXXXX X. XXXXX, individually |
||||
/s/ Xxxxxxx X. Xxxxx | ||||
Xxxxxxx X. Xxxxx | ||||
XXXXXXXX XXXXX XXXXX, individually |
||||
/s/ Xxxxxxxx Xxxxx Xxxxx | ||||
Xxxxxxxx Xxxxx Xxxxx | ||||
XXXXXXX X. XXXXX-XXXXXXX, individually |
||||
/s/ Xxxxxxx X. Xxxxx-Xxxxxxx | ||||
Xxxxxxx X. Xxxxx-Xxxxxxx | ||||
XXXXXXXX X. XXXXX, individually, and as a Trustee
of the Xxxxxxx X. Xxxxx Children Trusts FBO
Xxxxxxxx X. Xxxxx, Xxxxxxx X. Xxxxx-Xxxxxxx,
Xxxxxxxx Xxxxx Xxxxx, Xxxxxxx X. Xxxxx, Xxxxxx X.
Xxxxx and Xxxxx X. Xxxxx, and as Trustee of the
Xxxxxxx Xxxxx 1989 Trust, the Xxxx Xxxxx 1989 Trust
and the Xxxx Xxxxx 1989 Trust |
||||
/s/ Xxxxxxxx X. Xxxxx | ||||
Xxxxxxxx X. Xxxxx | ||||
[Signature Page to the Cablevision Systems Corporation Amended and Restated Class B Stockholders’ Agreement]
XXXXXXXX X. XXXXX, not individually, but as a Trustee of the Xxxxxxx X. Xxxxx 2009 Family Trusts | ||||
/s/ Xxxxxxxx X. Xxxxx | ||||
Xxxxxxxx X. Xxxxx | ||||
XXXXX X. XXXXX, not individually, but as a Trustee of the Xxxxxxx X. Xxxxx 2009 Family Trusts | ||||
/s/ Xxxxx X. Xxxxx | ||||
Xxxxx X. Xxxxx | ||||
XXXX X. XXXXX, not individually, but as a Trustee of the Xxxxxxx X. Xxxxx Children Trust FBO Xxxxxxxx X. Xxxxx and the Xxxxxxx X. Xxxxx Children Trust FBO Xxxxx X. Xxxxx | ||||
/s/ Xxxx X. Xxxxx | ||||
Xxxx X. Xxxxx | ||||
XXXXXXX X. XXXXX, not individually, but as a Trustee of the Xxxxxxx X. Xxxxx Children Trust FBO Xxxxxxxx Xxxxx Xxxxx and the Xxxxxxx X. Xxxxx Children Trust FBO Xxxxxx X. Xxxxx | ||||
/s/ Xxxxxxx X. Xxxxx | ||||
Xxxxxxx X. Xxxxx | ||||
[Signature Page to the Cablevision Systems Corporation Amended and Restated Class B Stockholders’ Agreement]
XXXX X. XXXXX, not individually, but as a Trustee of the Xxxxxxx X. Xxxxx Children Trust FBO Xxxxxxx X. Xxxxx-Xxxxxxx and the Xxxxxxx X. Xxxxx Children Trust FBO Xxxxxxx X. Xxxxx | ||||
/s/ Xxxx X. Xxxxx | ||||
Xxxx X. Xxxxx | ||||
[Signature Page to the Cablevision Systems Corporation Amended and Restated Class B Stockholders’ Agreement]