AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT
THIS AMENDED AND RESTATED STOCKHOLDERS AGREEMENT (this "Agreement")
dated as of March 5, 1997, by and among the VOTING TRUST (the "Voting Trust)
created under the Second Amended WABCO Voting Trust/Disposition Agreement, dated
as of December 13, 1995 (the "Voting Trust Agreement"), VESTAR EQUITY PARTNERS,
L.P., a Delaware limited partnership ("Vestar"), HARVARD PRIVATE CAPITAL
HOLDINGS, INC., a Massachusetts corporation ("Harvard"), AMERICAN INDUSTRIAL
PARTNERS CAPITAL FUND II, L.P., a Delaware limited partnership ("AIP"), and
WESTINGHOUSE AIR BRAKE COMPANY, a Delaware corporation ("WABCO"). The Voting
Trust, Vestar, Harvard, AIP and WABCO are sometimes individually referred to as
a "Party" and collectively the "Parties".
WHEREAS, this Agreement amends and restates the Stockholders
Agreement dated as of January 31, 1995 (the "Existing Stockholder Agreement") by
and among the Voting Trust, Scandinavian Incentive Holdings B.V. ("SIH") and
WABCO, and to which Vestar/WABCO Investors, L.P., Vestar Capital Partners, Inc.,
Xxxxxxx X. Xxxxxxxx, Xxxxxx X. Xxxxxxxxx, and Incentive AB executed limited
joinders;
WHEREAS, concurrently with this Agreement becoming effective Vestar,
Harvard, AIP and members of WABCO's management are purchasing 6 million of the
shares of Common Stock owned by SIH and WABCO is repurchasing 4 million of the
shares of Common Stock owned by SIH (the purchase of such 10 million SIH Shares,
the "SIH Repurchase"); and
WHEREAS, the Parties desire to set forth certain agreements with
respect to the ownership of Common Stock by the Parties other than WABCO and
certain other matters relating to WABCO.
NOW, THEREFORE, in consideration of the promises and mutual
covenants hereinafter set forth, the Parties hereby agree as follows:
1. DEFINITIONS
1.1 In addition to the terms defined elsewhere herein, the following terms
shall have the following meanings:
1.1.1 "Act" shall mean the Securities Act of 1933, as amended.
1.1.2 "Affiliate" shall mean any entity which is now, or hereinafter
becomes controlled by, or in control of, or in common control with,
another entity. "Control" shall mean more than fifty percent (50%)
of the ownership interest or voting rights of any entity, directly
or indirectly.
1.1.3 "AIP Shares" shall mean the shares of Common Stock owned by
AIP.
1.1.4 "Associate" shall mean any natural person who is a partner,
officer, director or employee of (i) another person, (ii) a
corporate general partner of a limited partnership or (iii) a
company or partnership that controls, is controlled by, or is under
common control with, such person. "Person" shall mean an individual,
corporation, partnership, association, joint-stock company, trust
and unincorporated association.
1.1.5 "Common Stock" shall mean shares of common stock, par value
$.01 per share, of WABCO.
1.1.6 "ESOP" shall mean, collectively, the WABCO Employee Stock
Ownership Plan effective January 1, 1995 and the WABCO Employee
Stock Ownership Trust established effective January 1, 1995 pursuant
to the WABCO Employee Stock Ownership Trust Agreement between WABCO
and the U.S. Trust Company of California, N.A., as such plan and
trust may be amended, modified or supplemented from time to time.
1.1.7 "Harvard Shares" shall mean the shares of Common Stock owned
by Harvard.
1.1.8 "Pulse Shares" shall mean the shares of Common Stock delivered
by WABCO pursuant to that certain Asset Purchase Agreement dated as
of January 23, 1995, by and among WABCO, Pulse Acquisition
Corporation, Pulse Electronics, Incorporated and Pulse Embedded
Computer Systems, Inc.
1.1.9 "Qualifying Public Offering" shall mean a sale of shares of
Common Stock in a bona fide underwritten public offering that is
registered under the Act and conducted in the United States in a
manner reasonably designed to effect a broad distribution of such
shares.
1.1.10 "SEC" shall mean the United States Securities and Exchange
Commission.
1.1.11 "SIH Shares" shall mean the 10,000,000 shares of Common Stock
owned by SIH.
1.1.12 "Trustholders" shall mean the holders of Trust Certificates
issued by the Voting Trust in exchange for shares of Common Stock.
1.1.13 "Vestar Shares" shall mean the shares of Common Stock owned
by Vestar or Vestar Capital Partners, Inc.
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1.1.14 "Voting Trust Shares" shall mean the shares of Common Stock
owned by the Voting Trust.
2. NOTICE OF CERTAIN ACTIVITIES
2.1 Harvard hereby agrees that, so long as a Harvard representative is on
the Board of Directors of the Company, Harvard shall provide prompt
written notice to the Company if at any time Harvard competes with WABCO
in the railway products or rail passenger transit business, provided,
however, that this covenant shall only apply with respect to investments
by Harvard in excess of $10,000,000.
2.2 Vestar hereby agrees that, so long as a Vestar representative is on
the Board of Directors of the Company, Vestar shall provide prompt written
notice to the Company if at any time Vestar or a wholly-owned subsidiary
of Vestar competes with WABCO in the railway products or rail passenger
transit business; provided, however, that this covenant shall only apply
with respect to investments by Vestar or any of its wholly-owned
subsidiaries in excess of $10,000,000.
3. CERTAIN PURCHASES AND CORPORATE MATTERS
3.1 Repurchases. On or about the date hereof, (i) WABCO is acquiring from
SIH 4,000,000 of the SIH Shares (the "SIH Repurchase"), and (ii) Vestar,
Harvard, AIP and certain members of WABCO's management are collectively
purchasing 6,000,000 of the SIH Shares.
3.2 By-Laws. On or before the effective date hereof, the By-Laws of WABCO
(the "ByLaws") shall be amended to read as set forth in Exhibit 3.2 to
this Agreement.
4. MANAGEMENT OF WABCO
4.1 Board of Directors.
4.1.1 Composition.
(a) Subject to paragraphs (b) through (h) hereof, the Board of
Directors of WABCO (the "Board") shall consist of such number of
persons as is determined from time to time by the affirmative vote
of a majority of the Directors then in office.
(b) The Board shall maintain a Nominating Committee, which
Nominating Committee shall nominate persons to be elected to the
Board as set forth in this Agreement. The Chairman of the Board
shall have exclusive authority to select the members of the Board
who will serve on the Nominating Committee, subject in any event to
the provision in Section 4.1.1(h). At any time that a new Director
is elected pursuant to the terms of this Agreement, the remaining
Directors then in office shall have an obligation to ratify and
approve such elections.
(c) The Nominating Committee shall nominate persons for election to
the Board so that the Board shall be comprised of the following: (i)
the Chief Executive of WABCO; (ii) another executive officer of
WABCO; (iii) at least three individuals
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who are not employees of WABCO or any of its subsidiaries; (iv) one
individual designated by Vestar (the "Vestar Director") (so long as
Vestar and its partners, and Vestar Capital and its stockholders and
officers, and their respective Affiliates collectively and
beneficially own at least 50% of the shares of Common Stock
beneficially owned by Vestar and Vestar Capital immediately after
the closing of the SIH Repurchase); (v) one individual designated by
Xxxxxxx X. Xxxxxxxx (so long as Xx. Xxxxxxxx and members of his
immediate family and their Affiliates collectively and beneficially
own at least 50% of the shares of Common Stock beneficially owned by
Xx. Xxxxxxxx immediately after the closing of the SIH
Repurchase); (vi) one individual designated by Harvard (the "Harvard
Director") (so long as Harvard and its stockholders and officers and
their respective Affiliates collectively and beneficially own at
least 50% of the shares of Common Stock beneficially owned by
Harvard immediately after the closing of the SIH Repurchase); and
(vii) Xxxxxx X. Xxxxxxxxx (so long as (x) Xx. Xxxxxxxxx is able and
willing to serve and (y) Xx. Xxxxxxxxx and his immediate family and
their Affiliates (the "Xxxxxxxxx Group") collectively and
beneficially own at least 50% of the Pulse Shares. So long as Xx.
Xxxxxxxxx meets the qualifications set forth in the foregoing clause
(vii), the Chairman of the Board shall direct the Nominating
Committee to nominate Xx. Xxxxxxxxx as a member of the Board of
Directors.
(d) If requested by WABCO in order to comply with paragraph (c)
above, Vestar, Xx. Xxxxxxxx and/or Harvard shall cause its designee
for Director to resign effective at such time as Vestar, Xx.
Xxxxxxxx or Harvard, as the case may be, no longer has the ability
to designate a Director pursuant to paragraph (c) above, and Xx.
Xxxxxxxxx shall resign effective at such time as the Xxxxxxxxx Group
no longer beneficially owns at least 50% of the Pulse Shares.
(e) Vestar, Harvard and Xx. Xxxxxxxx may, at any time during which
their respective right to designate Directors is applicable, cause
the removal of any Director designated by it or him and designate a
new individual or individuals to serve as Director or Directors by
prior written notice to the Nominating Committee, which shall
promptly nominate such individual(s) for election to the Board.
Except with respect to Xx. Xxxxxxxxx, in the event of a vacancy on
the Board of Directors caused by the death, resignation or removal
of a Director prior to the fulfillment of his term, the Party or
other person or entity originally designating such Director shall,
so long as its right to designate such Director is applicable,
designate an individual to serve as a successor Director and shall
promptly notify the Nominating Committee of such action in writing,
and the Nominating Committee shall promptly nominate such individual
for election to the Board. The death, resignation or removal of Xx.
Xxxxxxxxx as a director shall terminate his right to serve on the
Board of Directors, and the Xxxxxxxxx Group shall have no right to
designate a successor to fill any vacancy caused by such death,
resignation or removal.
(f) Any person designated by Vestar, Harvard, Xx. Xxxxxxxx or, in
the case of Xx. Xxxxxxxxx, the Chairman of the Board, as provided
for herein shall be nominated by the Nominating Committee to be
elected to the Board at the stockholders' meeting, or by the
Directors already elected to the Board, as the case may be, voting
in conformity with such nomination. In furtherance thereof, each of
the Voting Trust, Vestar, Harvard, Vestar Capital, AIP, Xx.
Xxxxxxxx, Xx. Xxxxxxxxx, Xxxxxx X. Xxxxxx, Xxxxxx X. Xxxxxxxx and
Xxxx X. Xxxxxxx agrees to vote all of the shares of Common Stock and
any other voting securities of WABCO from time to time held by it or
him in favor of, and each of the Voting Trust, Harvard, Vestar
Capital, AIP, Xx. Xxxxxxxx, Xx. Xxxxxxxxx, Xx. Xxxxxx, Xx. Xxxxxxxx
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and Xx. Xxxxxxx agrees to cause any shares of Common Stock or other
WABCO voting securities as to which it or he from time to time has
the right to direct the vote to be voted in favor of, and to take
any other appropriate steps to cause, the election to the Board of
individuals designated by Vestar, Harvard and/or Xx. Xxxxxxxx and,
in the case of Xx. Xxxxxxxxx, the Chairman of the Board, and
nominated by the Nominating Committee in accordance with this
Section 4.1.1; provided, that Xx. Xxxxxxxx shall not be deemed to
control any shares of Common Stock held by the ESOP for purposes of
this Section 4.1
(g) Each director elected in accordance with the foregoing
paragraphs (b) through (f) shall be elected to one of three classes,
as allocated by the Chairman of the Board in his sole discretion.
Each director will be elected to hold office for a term expiring at
the third succeeding annual meeting. In all such cases, a Director's
term of office shall continue until his successor is duly elected
and qualified or until his earlier resignation or removal. Until
such time as Vestar designates a new individual in accordance with
this Section 4.1.1, Xxxxx X. Xxxxxx shall be the Vestar Director and
shall continue in his current term as a Director. The Harvard
Director shall fill the vacancy to be created by Xxxxxx Xxxxxx'
resignation from the Board and shall be nominated for a full term
expiring in 2000. Each other Director currently serving as such
(with the exception of Xx. Xxxxxx) will continue his present term.
(h) Each committee of the Board shall include either the Vestar
Director or the Harvard Director (as determined by Harvard and
Vestar) as one of its members.
4.1.2 Powers and Management.
(a) The Board of Directors shall have full power to control, manage
and direct the business of WABCO and to take such actions as may be
necessary to further the purposes of WABCO.
(b) The management of the business of WABCO shall be the
responsibility of a Chief Executive Officer, to be appointed by the
Board of Directors. Xxxxxxx X. Xxxxxxxx shall continue to be the
Chief Executive Officer of WABCO and he shall continue to serve as
Chief Executive Officer until replaced by the Board of Directors in
accordance with the provisions of any employment agreement then in
force between WABCO and Xx. Xxxxxxxx. The Chief Executive Officer of
WABCO shall, subject to subsection(a) above, be entitled to make all
decisions regarding the ordinary course of business operations of
WABCO according to good business practice.
(c) All of the Directors shall have one vote each. A quorum shall be
constituted by a majority of the Directors then in office.
5. TRANSFER OF SECURITIES
5.1 No Transfer.
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5.1.1 Except as permitted by Section 5.2 hereof, until March 31,
2001, neither Vestar, Harvard, AIP nor the Voting Trust shall sell,
transfer, assign, mortgage, change, hypothecate, give away or
otherwise dispose of (collectively, "transfer") any Common Stock
owned or held by it. Any transfer contrary to the provisions of this
Agreement shall be null and void. The foregoing shall not restrict
(i) the transferability of interests in the Voting Trust so long as
any such transfer does not affect the underlying Common Stock and
(ii) the ability of Vestar Capital Partners, Inc. to pledge the
40,000 Vestar Shares currently held by Vestar Capital Partners, Inc.
5.1.2 No transfer of shares of Common Stock by Vestar, Harvard, AIP
or the Voting Trust shall be permitted pursuant to Section 5.2
hereof except (i) pursuant to an effective registration statement
covering such shares under the Act and any applicable state
securities laws, (ii) in a transaction permitted by Rule 144
promulgated under the Act and as to which WABCO has received
reasonably satisfactory evidence of compliance with the provisions
of Rule 144, (iii) to a person whom the seller reasonably believes
is a Qualified Institutional Buyer within the meaning of Rule 144A
promulgated under the Act purchasing for its own account or for the
account of a Qualified Institutional Buyer that is aware that the
transfer is being made in reliance upon Rule 144A promulgated under
the Act, or (iv) upon receipt of a legal opinion in form and
substance reasonably acceptable to WABCO rendered by counsel (who
may be an employee of the party for whom or on whose behalf the
opinion is being rendered) reasonably satisfactory to WABCO to the
effect that the transaction does not require registration under the
Act and any applicable state securities laws. This Section shall not
apply to transfers by Vestar, Harvard or AIP to their respective
Affiliates as permitted by Section 5.2.1.
5.1.3 At the request of WABCO, each share certificate for the Common
Stock held by Vestar, Harvard, AIP or the Voting Trust shall be
provided with the following legend:
"The shares of stock represented by this certificate are
subject to, and may be sold, transferred, assigned, mortgaged,
changed, hypothecated, given away or otherwise disposed of
(collectively, "transferred") only in accordance with, the
provisions of the Amended and Restated Stockholders Agreement
dated as of March 5, 1997. The shares of stock represented by
this certificate have not been registered under the Securities
Act of 1933, as amended (the "Act"), or any applicable state
securities laws, and may not be transferred , and Westinghouse
Air Brake Company (the "Company") is not required to give
effect to any attempted transfer, except in accordance with
the terms of said Stockholders Agreement and (i) pursuant to
an effective registration statement covering such security
under the Act and any applicable state securities laws, (ii)
in a transaction permitted by Rule 144 promulgated under the
Act and as to which the Company has received reasonably
satisfactory evidence of compliance with the provisions of
Rule 144, (iii) to a person whom the seller reasonably
believes is a Qualified Institutional Buyer within the meaning
of Rule 144A promulgated under the Act purchasing for its own
account or for the account of a Qualified Institutional Buyer
that is aware that the transfer is being made in reliance upon
Rule 144A promulgated under the Act, or (iv) upon receipt of a
legal opinion in form and substance reasonably acceptable to
the Company rendered by counsel (who may be an employee of the
party for whom or on whose behalf the opinion is
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being rendered) reasonably satisfactory to the Company to the
effect that the transaction does not require registration
under the Act and any applicable state securities laws."
5.2 Transfers Allowed.
5.2.1 On or prior to March 31, 1998 the Harvard Shares, the Vestar
Shares and the AIP Shares may only be transferred (i) to Affiliates
or partners of such transferor who agree in a writing, in form and
substance reasonably satisfactory to WABCO, to be bound by and
subject to the provisions of this Agreement , (ii) in connection
with the exercise of "piggyback" registration rights granted to such
transferor by WABCO, or (iii) in connection with any merger,
consolidation, reorganization, recapitalization or similar
transaction or any tender or exchange offer approved or recommended
by WABCO's Board of Directors. After March 31, 1998 the Harvard
Shares, the Vestar Shares and the AIP Shares may be transferred as
permitted under the foregoing clauses (i), (ii) and (iii) and (w) in
a Qualifying Public Offering, (x) in any disposition to a person
which, to the best knowledge of Harvard, Vestar or AIP, as the case
may be, after due inquiry (it being understood that Harvard, Vestar
and AIP may rely on representations and warranties made by such
person and such person's Schedule 13D or Schedule 13G filings with
the SEC unless Harvard, Vestar or AIP has actual knowledge that such
Schedules are not accurate), will not beneficially own, together
with such person's Affiliates, a number of shares of Common Stock
then outstanding on a fully diluted basis which, when combined with
the number of Harvard Shares, Vestar Shares or AIP Shares, as the
case may be, being disposed of in such disposition would constitute
more than 6% of the shares of Common Stock then outstanding on a
fully diluted basis, (y) to or through any broker, underwriter,
placement agent or other financial intermediary, acting in such
capacity, which undertakes in a writing reasonably satisfactory to
WABCO to effect any subsequent transfer by it of such Harvard
Shares, AIP Shares or Vestar Shares, as the case may be, in a
Qualifying Public Offering or (z) to any person (other than any
person which, to the best knowledge of Harvard, Vestar or AIP, as
the case may be, after due inquiry, is a competitor or customer of
WABCO or has, prior to such sale, initiated or been an active
participant in, an unsolicited change of control transaction by
tender offer, proxy contest, consent solicitation or otherwise with
respect to WABCO), provided that WABCO shall have a right of first
offer with respect to any Harvard Shares, Vestar Shares or AIP
Shares, as the case may be, proposed to be sold in accordance with
this clause (z) pursuant to Section 5.2.2 hereof unless WABCO shall
have approved of such transfer in writing.
5.2.2 If either Harvard, Vestar or AIP (the "Selling Party")
proposes to sell any Harvard Shares, Vestar Shares or AIP Shares, as
the case may be pursuant to clause (z) of Section 5.2.1 hereof (a
"Third Party Sale"), the Selling Party shall not transfer such
Shares (the "Offered Shares") without first offering the Offered
Shares to WABCO in accordance with the following procedures. The
Selling Party shall provide to WABCO written notice of its intention
to sell (the "Sale Notice"), which Sale Notice shall include a
request for WABCO to make a written offer (the "WABCO Offer") to
purchase for cash all of the Offered Shares. WABCO shall have the
right to make a WABCO Offer for the Offered Shares by notifying the
Selling Party (such notice being referred to as an "Election
Notice") at any time within 35 days of WABCO's receipt of the Sale
Notice of WABCO's
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intent to make such WABCO Offer; provided, that any such Election
Notice from WABCO shall be irrevocable, contain all of the material
terms and conditions of the sale and be accompanied by a commitment
letter from a bank or other responsible source of financing for such
purchase or a certificate signed by the Chief Financial Officer of
WABCO certifying that WABCO has sufficient funds to purchase the
Offered Shares. If WABCO exercises its right to purchase the Offered
Shares pursuant to the foregoing sentence, the closing of the
purchase of the Offered Shares by WABCO shall take place at the
principal offices of WABCO on a date specified by WABCO in the
Election Notice, but in any event not later than 100 days after
receipt by WABCO of the Sale Notice. On the closing date for such
purchase, the Selling Party shall deliver the Offered Shares to
WABCO free and clear of all liens, encumbrances and security
interests and, in connection therewith, the Selling Party shall
execute and deliver such agreements, documents and instruments,
including stock powers, as WABCO shall reasonably require. If WABCO
fails to deliver an Election Notice within 35 days of receipt by
WABCO of the Selling Party Sale Notice or if WABCO otherwise advises
the Selling Party in writing that WABCO does not intend to exercise
its right to acquire the Offered Shares, the Selling Party shall be
entitled to sell the Offered Shares to any other person without any
requirements as to the terms and conditions of such sale; provided,
that if the Selling Party does not sell the Offered Shares by the
earlier to occur of 180 days from the expiration of WABCO's right to
deliver an Election Notice or 180 days from written notice from
WABCO that it does not intend to exercise its right to acquire the
Offered Shares, the provisions of this Section 5.2.2 shall again
apply to the Offered Shares.
If WABCO delivers its Election Notice for the Offered Shares within
35 days of receipt by WABCO of the Selling Party Sale Notice, the
Selling Party shall be entitled to offer the Offered Shares to any
person pursuant to a Third Party Sale at a price that is more
favorable to the Selling Party than those set forth in the Election
Notice, provided that any such sale must occur within 180 days of
the date of delivery of the Election Notice.
Notwithstanding the foregoing, if the Selling Party's Sale Notice is
in connection with any tender offer or exchange offer for
outstanding Common Stock, WABCO shall be required to the extent
WABCO desires to purchase the Offered Shares to exercise its right
to so purchase, and to close such purchase of, the Offered Shares by
the date which is the earlier of (i) 10 days following receipt of
such Sale Notice and (ii) the business day prior to the expiration
of such tender or exchange offer.
5.2.3 After March 31, 1998 Harvard, Vestar and AIP shall be
permitted to sell Shares pursuant to and subject to the limitations
set forth in Rule 144 of the SEC under the Act.
5.2.4 Notwithstanding any provision herein to the contrary,
Trustholders (other than Xxxxxxx X. Xxxxxxxx, Xxxxxx X. Xxxxxx,
Xxxxxx X. Xxxxxxxx and Xxxx X. Xxxxxxx, who shall be subject to
Section 5.2.5 below) shall, to the extent permitted by the Voting
Trust Agreement, be permitted to transfer Voting Trust Shares,
withdraw Voting Trust Shares from the Voting Trust, and/or sell or
otherwise dispose of Shares at any time. Upon expiration of the
Voting Trust, Voting Trust Shares may be distributed in accordance
with the terms thereof and such Voting Trust Shares will no longer
be subject to Section 5.1.
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5.2.5 (a) Except as permitted by Section 5.2.5(b), 5.2.5(c) and
5.2.5(d), until Xxxxx 00, 0000, xxxx of Messrs. Kassling, Fernandez,
Brooks, Xxxxxxxx and Xxxxxxx (collectively, the "Management Group")
shall sell, transfer, assign, mortgage, change, hypothecate, give
away or otherwise dispose of (collectively "transfer") any shares of
Common Stock beneficially owned by him or any of his interest in the
Voting Trust (treating any Common Stock held by the Voting Trust for
the account of any member of the Management Group as Common Stock
owned by such member).
(b) Subject to Section 5.2.5(f) below, each member of the Management
Group shall be permitted to transfer shares of Common Stock
beneficially owned by him at any time in accordance with the terms
of Section 8 of the Voting Trust Agreement, as in effect on the date
hereof, regardless of whether such person is a participant in the
Voting Trust. Each member of the Management Group who is also a
participant in the Voting Trust shall be permitted to withdraw
shares of Common Stock from the Voting Trust at any time in
accordance with the terms of the Voting Trust Agreement, as in
effect on the date hereof.
(c) So long as any member of the Management Group continues to be an
employee of WABCO or any of its subsidiaries, such member, together
with his transferees permitted under this Section 5.2.5, may
transfer during each 12-month period following the effective date of
this Agreement, in the aggregate, 5% of the shares of Common Stock
beneficially owned by such member on the date of this Agreement.
(d) In the event that a member of the Management Group's employment
with WABCO and its subsidiaries is terminated for any reason, such
member, together with his transferees permitted under this Section
5.2.5, may transfer during each 12-month period following the
effective date of such termination, in the aggregate, 20% of the
shares of Common Stock beneficially owned by such member on the
effective date of such termination. The restriction in this Section
5.2.5(d) may be waived by the Chairman of the Board of WABCO as to
any member of the Management Group if such member delivers to the
Chairman a request for waiver indicating that such waiver is
required in order to alleviate personal hardship. The decision as to
whether and to what extent to grant a waiver shall be in the sole
discretion of the Chairman.
(e) Each member of the Management Group agrees not to effect any
public sale or distribution of shares of Common Stock owned by him
or any similar security of the Company, or any securities
convertible into or exchangeable or exercisable for such securities,
or any securities into which such securities are convertible or for
which such securities are exchangeable or exercisable, during the 10
days prior to, and during the 90 day period beginning on, the
effective date of any registration statement in which "Holders" (as
defined in that certain Common Stock Registration Rights Agreement
of even date herewith among the Company, Vestar, Harvard, AIP, the
Voting Trust and certain other holders of shares of Common Stock)
are participating in connection with an underwritten public offering
of shares of Common Stock (except as part of such registration), if
and to the extent reasonably requested in writing (with reasonable
prior notice) by the lead managing underwriter of the underwritten
public offering.
(f) Each member of the Management Group agrees that no shares of
Common Stock (or any interests in the Voting Trust) beneficially
owned by him, his spouse or his minor children will be transfered in
a transfer permitted by this
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Section 5.2.5 (other than subsections (c) and (d) above) unless the
transferee agrees in a writing, in form and substance reasonably
satisfactory to WABCO, to be bound by and subject to the provisions
of this Section 5.2.5.
(g) Shares of Common Stock beneficially owned by the Management
Group are as follows:
Xxxxxxx X. Xxxxxxxx 1,548,336 shares
Xxxxxx X. Xxxxxxxxx 643,444 shares
Xxxxxx X. Xxxxxx 437,300 shares
Xxxxxx X. Xxxxxxxx 640,200 shares
Xxxx X. Xxxxxxx 251,000 shares
It is agreed that the foregoing shares include all shares of Common
Stock controlled by the Management Group and their respective
spouses and minor children and that all of the foregoing shares
shall be subject to this Agreement.
(h) Shares of Common Stock held by the ESOP shall not be deemed to
be beneficially owned by any member of the Management Group for
purposes of this Agreement. Shares of Common Stock held in the
Voting Trust (other than shares deposited by members of the
Management Group in the Voting Trust) also shall not be deemed to be
beneficially owned by any member of the Management Group for
purposes of this Agreement.
6. ASSIGNMENT
6.1 This Agreement and all of the provisions hereof shall be binding upon
and inure to the benefit of the Parties to this Agreement and their
respective successors and assigns.
6.2 Neither this Agreement nor any of the rights, interests and
obligations hereunder shall be assignable by any Party without the prior
written consent of the other Parties; provided, however, Vestar, Harvard
and AIP shall have the right to assign their rights, interests and
obligations hereunder to their respective Affiliates from time to time so
long as such Affiliates agree in a writing, in form and substance
reasonably satisfactory to WABCO, to be bound by and subject to the
provisions of this Agreement.
7. TERM
7.1 This Agreement shall continue in effect (unless terminated by a mutual
agreement of the Parties) until March 31, 2007.
8. CONCILIATION AND ARBITRATION
8.1 Conciliation. If any dispute, claim or difference arises out of or
relating to this Agreement, or as to the rights and liabilities of the
Parties hereunder or as to the breach or invalidity hereof, or in
connection with the construction of this Agreement (each such event being
hereinafter called a "Dispute"), the Parties shall use their best efforts
to resolve the Dispute and, if they so desire, consult outside experts for
assistance in arriving at such a resolution.
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8.2 Arbitration. (a) Any Dispute shall be finally settled by arbitration
in accordance with the Commercial Arbitration Rules of the American
Arbitration Association ("AAA") effective as of the commencement of the
arbitration(the "Rules"), except as such Rules may be modified as provided
in this Agreement. The arbitration shall be held in New York, New York,
unless the parties mutually agree to have the arbitration held elsewhere,
and judgment upon the award made therein may be entered by any court
having jurisdiction thereof; provided, however, that nothing contained in
this paragraph shall be construed to limit or preclude a party from
bringing any action in any court of competent jurisdiction for injunctive
or other provisional relief to compel another party to comply with its
obligations under this Agreement during the pendency of the arbitration
proceedings. The arbitral tribunal shall be composed of three(3)
arbitrators, who shall be experienced commercial litigators admitted to
practice law in the State of New York. If the Dispute is between two of
the Parties, each Party shall appoint one arbitrator. If the Dispute is
among more than two Parties hereto, the Parties shall mutually agree upon
and appoint two arbitrators. If such Parties fail to nominate an
arbitrator (in the case of a two-party Dispute) or if the Parties fail to
agree upon two arbitrators (in the case of a more than two Party Dispute)
in accordance with the two preceding sentences within thirty(30) days from
the date when the notice of intention to arbitrate referred to in Rule 6
of the Rules (the "Commencement Notice") has been received by the
Respondent (as defined in the Rules) such appointment shall, upon written
request by either or any Party (as the case may be) to the AAA, be made in
accordance with Rule 14 of the Rules. The two arbitrators thus appointed
shall attempt to agree upon the third arbitrator to act as chairperson of
the arbitration tribunal. If said two (2) arbitrators fail to appoint the
chairperson within thirty (30) days from the date of appointment of the
second arbitrator, upon written request of either party to the AAA, such
appointment shall be made in accordance with Rule 15 of the Rules. The
arbitrators shall have no power to waive, alter, amend, revoke, or suspend
any of the provisions of this Agreement, provided, however, that the
arbitrators shall have the power to decide all questions with respect to
the interpretation and validity of this Subsection 8.2. An arbitrator may
not act as an advocate for the party nominating him, and all three
arbitrators shall be impartial and unbiased. A majority vote by the three
arbitrators shall be required on any decision made by them; provided,
however, that lacking such a majority in the case of questions of amounts
of dollar or other quantities, the vote for the greatest amount or
quantity shall be deemed to be a vote for the amount or quantity next in
magnitude in order to form a majority for such vote. The arbitrators shall
permit such discovery as they shall determine is appropriate in the
circumstances, taking into account the needs of the Parties and the
desirability of making discovery expeditious and cost-effective. Any such
discovery shall be limited to information directly relevant to the
controversy or claim in arbitration and shall be concluded within thirty
(30) days after the appointment of the arbitration panel. This agreement
to arbitrate shall be binding upon the heirs or successors and the assigns
and any trustee, receiver or executor of each party hereto. Except to the
extent required by law or court or administrative order, no party,
arbitrator, representative, counsel or witness shall disclose or confirm
to any person not present at the arbitration hearings, any information
about the arbitration proceeding or hearings, including the names of the
parties and arbitrators, the nature and amount of the claims, the
financial condition of any party, the expected date of hearing or the
award made.
(b) Subject to and not in any way limiting subsection (a) hereof, each of
the parties hereto irrevocably consents to personal jurisdiction in any
action brought in connection with this Agreement in the United Stated
District Court for the Southern District of New York or any New York court
of competent jurisdiction, including, but not limited to, any action to
enforce an award rendered pursuant to subsection (a) hereof, and the
Voting Trust and WABCO each hereby appoints Xxxx Xxxxx Xxxx & XxXxxx,
Attention: Xxxx
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X. Xxxxxxx, Xxx. as its agent for service of process, Vestar hereby
appoints Vestar Capital Partners, Inc., Attention: Xxxxxx X. Xxxxxx as its
agent for service of process, Harvard hereby appoints Ropes & Xxxx,
Attention: Xxxxx X. Xxxx as its agent for service of process and AIP
hereby appoints American Industrial Partners Corporation, Attention: Xxx
Xxxxxxx as its agent for service of process. The submission of the Parties
to jurisdiction as set forth in this subsection (b) does not constitute
and shall not be deemed a consent to jurisdiction for any purpose other
than those expressly set forth in this Agreement.
9. GENERAL PROVISIONS
9.1 Notices. Any notice, request, demand, waiver or other communication
required or permitted to be given hereunder shall be in writing and shall
be deemed to have been duly given (i) when delivered by hand, (ii) five
business days after it is mailed certified or registered mail, return
receipt requested with postage prepaid, (iii) when answered back if sent
by telecopy (with receipt confirmed) or (iv) three business days after it
is sent by express delivery service, as follows:
If to Vestar:
c/o Vestar Capital Partners, Inc.
Seventeenth Street Plaza
0000 00xx Xxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Fax: 000-000-0000
With a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Fax: 000-000-0000
If to the Voting Trust:
c/o Westinghouse Air Brake Company
0000 Xxx Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx
Fax: 000-000-0000
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With a copy to:
Xxxx Xxxxx Xxxx & XxXxxx
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxx X. XxXxxxx, Esq.
Fax: 000-000-0000
If to Harvard:
c/o Harvard Private Capital Group, Inc.
000 Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxx Xxxxxx
Fax: 000-000-0000
With a copy to:
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-00000
Attention: Xxxxx X. Xxxx, Esq.
Fax: 000-000-0000
If to AIP:
American Industrial Partners
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Fax: 000-000-0000
With a copy to:
American Industrial Partners
Xxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxx Xxxxxxx
Fax: 000-000-0000
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If to WABCO:
Westinghouse Air Brake Company
0000 Xxx Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Fax: (000) 000-0000
With a copy to:
Xxxx Xxxxx Xxxx & XxXxxx
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxx X. XxXxxxx, Esq.
Fax: 000-000-0000
Any Party may change its address specified for notices here in by
designating a new address by notice in accordance with this Section.
9.2 Waiver. Any failure on the part of either Party hereto to comply with
any of its obligations, agreement or conditions hereunder may be waived by
the other Party. No waiver of any provision of this Agreement shall be
deemed, or shall constitute, a waiver of any other provision, whether or
not similar, nor shall any waiver constitute a continuing wavier.
9.3 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the Parties and their respective heirs, legal representatives,
executors, administrators, successors and assigns as permitted by the
terms of this Agreement.
9.4 Severability. If any provision of this Agreement should be or become
fully or partly invalid or unenforceable for any reason whatsoever or
violate any applicable law, this Agreement is to be considered divisible
as to such provision and such provision is to be deleted from this
Agreement, and the remainder of this Agreement shall be deemed valid and
binding as if such provision were not included herein. There shall be
substituted for any such provision deemed to be deleted a suitable
provision which, as far as it is legally possible, comes nearest to what
the Parties desired or would have desired according to the sense and
purpose of this Agreement had this been considered when concluding this
Agreement.
9.5 Headings. The section and other headings in this Agreement are
inserted solely as a matter of convenience and for reference only, and do
not constitute a part of this Agreement.
9.6 Entire Agreement. This Agreement constitutes the entire agreement
among the Parties as to the subject matter hereof and supersedes any other
agreements, representations, warranties, or communications, whether oral
or written, among the Parties (or their Affiliates) relating to the
subject matter hereof. Each of WABCO, the other parties hereto and, by its
execution and delivery of its termination letter, SIH hereby acknowledges
and agrees that the Existing Stockholders Agreement is amended and
restated in full by this Agreement and that all obligations owed by SIH
and its Affiliates
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to WABCO under the Existing Stockholders Agreement (other than under
Section 10 thereof) are terminated effective upon the effectiveness of
this Agreement.
9.7 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware and such laws shall also
govern in the settlement by arbitration or otherwise of any and all
disputes arising between the Parties as well as the validity of the
arbitration clause in Section 11 above.
9.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.9 Exhibits Incorporated. All Exhibits attached hereto are incorporated
herein by reference, and all blanks in such Exhibits, if any, will be
filled in as required in order to consummate the transactions contemplated
herein and in accordance with this Agreement.
9.10 Modifications. No modification, alteration, addition, change or
amendment of the terms of this Agreement shall be binding on the Parties
unless reduced to writing and duly executed by each of the Parties hereto
in the same manner as the execution of this Agreement.
9.11 Effect of Stock Splits, Stock Dividends, Etc. If the outstanding
shares of Common Stock shall be changed into or exchangeable for a
different number or kind of shares of stock or other securities of WABCO
or another corporation, or if the outstanding number of shares of Common
Stock is increased or decreased, in each case as a result of a stock
dividend, stock split-up, reverse stock split-up, reorganization,
reclassification, combination of shares, merger, consolidation or like
event (collectively, a "Stock Event"), the provisions of this Agreement
shall apply to the shares or other securities acquired pursuant to such
Stock Event (the "Additional Shares") to the extent (but only to the
extent) that such provisions apply to the shares of Common Stock on which
or as a result of which the Additional Shares are issued or paid to the
holders thereof.
9.12. Effectiveness. This Agreement shall become effective upon the
consummation of the SIH Repurchase.
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IN WITNESS WHEREOF, each party hereto has executed or caused this
Agreement to be executed on its behalf, all on the day and year first above
written.
VESTAR EQUITY PARTNERS, L.P.
By: VESTAR ASSOCIATES, L.P., its General
Partner
By: VESTAR ASSOCIATES CORPORATION,
its General Partner
/s/ Xxxxx X. Xxxxxx
-----------------------------------
By: Xxxxx X. Xxxxxx
Title: Managing Director
HARVARD PRIVATE CAPITAL HOLDINGS, INC.
By: /s/ Xxxx X. Xxxxx
--------------------------------------------
Its: Authorized Signatory
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------------
Its: Authorized Signatory
VOTING TRUST
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------------
Its: Trustee
WESTINGHOUSE AIR BRAKE COMPANY
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------------
Its: Vice President and Secretary
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AMERICAN INDUSTRIAL PARTNERS
CAPITAL FUND II, L.P.
By: American Industrial Partners II, L.P., its
General Partner
By: American Industrial Partners Corporation,
its General Partner
/s/ Xxxxxxxx X. Xxxxxx
------------------------------------------
By: Xxxxxxxx X. Xxxxxx
Title: Chairman
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JOINDER
Vestar Capital Partners, Inc. joins in this Amended and Restated
Stockholders Agreement for the limited purpose of agreeing to be bound by and to
be entitled to the benefits of Sections 2, 4 and 5 hereof.
VESTAR CAPITAL PARTNERS, INC.
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Managing Director
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JOINDER
The undersigned join in this Amended and Restated Stockholders
Agreement for the limited purpose of agreeing to be bound by and to be entitled
to the benefits of Sections 4 through 9 hereof.
/s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------
Xxxxxxx X. Xxxxxxxx
DAVIDECO, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------
Its: Director
/s/ Xxxxxx X. Xxxxxxxxx
--------------------------------------
Xxxxxx X. Xxxxxxxxx
/s/ Xxxxxx Xxxxxxxxx
--------------------------------------
Xxxxxx Xxxxxxxxx
/s/ Xxxxxx X. Xxxxxx
--------------------------------------
Xxxxxx X. Xxxxxx
SUEBRO, INC.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Its: President
/s/ Xxxx X. Xxxxxxx
--------------------------------------
Xxxx X. Xxxxxxx
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