EXHIBIT 10.8
Amended and Restated Director Designation Agreement
AMENDED AND RESTATED DIRECTOR DESIGNATION AGREEMENT
This AMENDED AND RESTATED DIRECTOR DESIGNATION AGREEMENT (the
"Agreement"), dated as of March 29, 1999, is entered into by and among National
Golf Properties, Inc., a Delaware corporation (the "REIT"), National Golf
Operating Partnership, L.P., a Delaware limited partnership (the "Operating
Partnership"), and Xxxxx X. Xxxxx.
RECITALS
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WHEREAS, Xxxxx X. Xxxxx and his Affiliates (as defined below)
previously owned 47 golf courses that were transferred to the REIT and the
Operating Partnership in connection with the initial public offering of shares
of the REIT's common stock (the "Common Stock") in August 1993;
WHEREAS, Xxxxx X. Xxxxx and his Affiliates received shares of the
REIT's common stock and units of common limited partnership interest in the
Operating Partnership in exchange for such golf courses;
WHEREAS, the bylaws of the REIT (the "Bylaws") provide that a
majority of the REIT's board of directors (the "Board of Directors") must be
Independent Directors (as defined in the Bylaws);
WHEREAS, on August 18, 1993, the REIT, the Operating Partnership
and Xxxxx X. Xxxxx entered into that certain Director Designation Agreement (the
"Director Designation Agreement") pursuant to which Xxxxx X. Xxxxx and his
Affiliates were given the right to designate, for nomination and the filling of
vacancies on the Board of Directors, directors who are not Independent Directors
in accordance with the terms of the Director Designation Agreement;
WHEREAS, concurrently with and as a condition to entering into
the Director Designation Agreement, Xxxxx X. Xxxxx also entered into that
certain agreement with the Company, the Operating Partnership and American Golf
Corporation pursuant to which he and certain affiliates became prohibited from
acquiring interests in golf courses in accordance with the terms set forth in
such agreement;
WHEREAS, in entering into the Director Designation Agreement, the
REIT and Xxxxx X. Xxxxx intended that Xxxxx X. Xxxxx and his Affiliates would
have the continuing right to designate one less than a majority of the Board of
Directors;
WHEREAS, on February 26, 1998 and April 17, 1998, the Board of
Directors classified 1,200,000 and 300,000 shares of the REIT's preferred stock,
respectively, as 8% Series A Cumulative Redeemable Preferred Stock (the "Series
A Preferred Stock") and designated that the holders of such Series A Preferred
Stock would have the right, upon the REIT's failure to make full distributions
on any Series A Preferred Stock with respect to any six quarterly periods,
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to elect two additional directors to serve on the Board of Directors until such
time as all distributions in arrears have been paid;
WHEREAS, on March 4, 1998, the REIT, acting in its capacity as general
partner of the Operating Partnership and with the consent of its limited
partners, amended and restated the Agreement of Limited Partnership of the
Operating Partnership (as amended, the "Partnership Agreement") to permit the
issuance of units of preferred limited partnership interest in the Operating
Partnership; and
WHEREAS, the REIT, the Operating Partnership and Xxxxx X. Xxxxx now
desire to enter into this Agreement in order to preserve the intent of the
parties hereto in entering into the Director Designation Agreement and enable
Xxxxx X. Xxxxx to continue to be able to designate one less than a majority in
the event that the holders of Series A Preferred Stock were to elect two
additional directors under the circumstances described above.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, and for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
AGREEMENT
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Article I.
DEFINED TERMS
In addition to the definitions set forth above, the following
definitions shall be for all purposes, unless otherwise clearly indicated to the
contrary, applied to the terms used in this Agreement. All other capitalized
terms used herein without definition shall have the meaning ascribed to them in
the Partnership Agreement:
"Affiliate" means the Immediate Family of Xxxxx X. Xxxxx.
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"Agreement" means this Amended and Restated Director Designation
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Agreement, as it may be amended, supplemented or restated from time to time.
"DGP Persons" shall mean Xxxxx X. Xxxxx and his Affiliates, or any
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successors thereto by descent or devise.
"Immediate Family" means Xxxxx X. Xxxxx'x estate and heirs and current
and former spouse(s), parents, parents-in-law, children, siblings and
grandchildren and any trust or estate, all of the beneficiaries of which consist
of Xxxxx X. Xxxxx or Xxxxx X. Xxxxx'x current or former spouse, parents,
parents-in-law, children, siblings or grandchildren.
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Article II.
BOARD OF DIRECTORS
1. For so long as DGP Persons (a) together beneficially own in the
aggregate either REIT Shares or Common Units, and the ratio of (i) the sum of
the number of such REIT Shares and the REIT Shares Amount applicable to such
Common Units, over (ii) the sum of the total number of REIT Shares outstanding
and the REIT Shares Amount for all Common Units, equals or exceeds 20% and (b)
at least one DGP Person continues to serve as a director or an executive officer
(as defined in Regulation C under the Securities Act) of the REIT, then the DGP
Persons will have the right to designate, for nomination and for the filling of
any vacancies on the Board of Directors, such number of directors of the REIT as
equals one (1) less than a majority of the total number of directors provided
for in the Bylaws, it being understood by the parties hereto that a majority of
the Board of Directors shall consist of Independent Directors (as defined in the
Bylaws). In the event that the Board of Directors is divided into classes, such
designees shall be allocated among such classes as evenly as practicable.
2. In the event that the holders of Series A Preferred Stock
shall, pursuant to the terms and conditions specified in the REIT's Articles of
Incorporation as amended from time to time, elect two additional directors to
the Board of Directors, then the Board of Directors shall either (i) cause the
size of the Board of Directors to be increased so that Xxxxx X. Xxxxx and his
Affiliates can designate one less than a majority of the directors on the
Board of Directors or (ii) cause such number of Independent Directors (who were
serving immediately prior to the election of two new directors by the holders of
Series A Preferred Stock) to resign, so that Xxxxx X. Xxxxx and his Affiliates
can designate one less than a majority of the Board of Directors (it being
expressly understood that the two directors elected by the holders of Series A
Preferred Stock shall be considered Independent Directors).
3. Xxxxx X. Xxxxx agrees to vote all shares of Common Stock as to
which he has voting rights, and to use his best efforts to cause all persons
designated by him as directors to vote, for the election of a slate of directors
which shall consist of a majority of Independent Directors, it being understood
that the Independent Directors shall vote in favor of the election of the
remaining directors designated by Xxxxx X. Xxxxx. Xxxxx X. Xxxxx further agrees
to vote all shares of Common Stock with respect to which he has voting rights,
and to use his best efforts to cause all persons designated by him as directors
to vote, in favor of removal from the Board of Directors, upon notice by the
Company, of the person designated as Independent Directors and to elect to the
unexpired term of each Independent Director so removed another person designated
as an Independent Director by the Company. It is understood that the Independent
Directors shall vote in favor of the removal from the Board of Directors, upon
notice from Xxxxx X. Xxxxx, of the person or persons designated by him as
directors and to elect to the unexpired term of each director so removed another
person designated by Xxxxx X. Xxxxx.
In the absence of notice to the contrary from Xxxxx X. Xxxxx, the
foregoing right of designation shall be exercised on behalf of the DGP Persons
by Xxxxx X. Xxxxx. In the event Xxxxx X. Xxxxx is Incapacitated, such right
shall be exercised on behalf the DGP Persons by a single individual who shall
represent that he or she is acting as the duly appointed
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attorney-in-fact of DGP Persons beneficially owning a majority of the total
number of REIT Shares and the REIT Shares Amount referred to in Section 1(a)(i)
above.
Article III.
MISCELLANEOUS
1. Remedies. In addition to being entitled to exercise all
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rights provided herein and granted by law, including recovery of damages, Xxxxx
X. Xxxxx shall be entitled to specific performance of his rights under this
Agreement. The REIT agrees that monetary damages would not be adequate for any
loss incurred by reason of a breach by it of the provisions of this Agreement
and hereby agrees to waive the defense in any action for specific performance
that a remedy at law would be adequate.
2. Amendments and Waivers. The provisions of the Agreement,
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including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the REIT has obtained the written consent of Xxxxx X.
Xxxxx or his representative if Xxxxx X. Xxxxx is Incapacitated. No failure by
any party to insist upon the strict performance of any covenant, duty, agreement
or condition of this Agreement or to exercise any right or remedy consequent
upon any breach thereof shall constitute waiver of any such breach or any other
covenant, duty, agreement or condition.
3. Notices. All notices and other communications in connection
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with this Agreement shall be made in writing by hand-delivery, registered first-
class mail, telex, telecopier, or air courier guaranteeing overnight delivery:
(a) if to Xxxxx X. Xxxxx, initially at 0000 00xx Xxxxxx,
Xxxxx 0000, Xxxxx Xxxxxx, Xxxxxxxxxx 00000; and
(b) if to the REIT, initially at the address of the REIT's
principal executive offices.
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; when
received if deposited in the mail, postage prepaid, if mailed; when answered
back, if telexed; when receipt acknowledged, if telecopied; and on the next
business day, if timely delivered to an air courier guaranteeing overnight
delivery.
4. Successors and Assigns. This Agreement shall not be assignable
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by Xxxxx X. Xxxxx to any person.
5. Counterparts. This Agreement may be executed in any number of
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counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Each party shall become
bound by this Agreement immediately upon affixing its signature hereto.
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6. Governing Law. This Agreement shall be governed by and construed
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in accordance with the internal laws of the State of Delaware without regard to
the choice of law provisions thereof.
7. Severability. In the event that any one or more of the
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provisions contained herein, or the applicaton thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
8. Entire Agreement. This Agreement is intended by the parties as a
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final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
NATIONAL GOLF PROPERTIES, INC.
By: /s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
President
NATIONAL GOLF OPERATING PARTNERSHIP, L.P.
By: National Golf Properties, Inc.,
as General Partner
By: /s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
President
XXXXX X. XXXXX
By: /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
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