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EXHIBIT 1
Shareholders Agreement
This Shareholders Agreement (this "Agreement") is entered into
this 17th day of December, 1995, between USA Waste Services, Inc., a
Delaware corporation (the "Company"); Xxxxxx X. Xxxxxxxxx, Xx., and Xxxx X.
Xxxxx (Xxxxxx X. Xxxxxxxxx, Xx., and Xxxx X. Xxxxx are referred to
collectively herein as the "Company Stockholders"); Xxxx X. Xxxxxx, Xx.,
Xxxx X. Xxxxxx, Xx., Xxxxxxxxx X. Xxxxxx (Xxxx X. Xxxxxx, Xx., Xxxx X.
Xxxxxx, Xx. and Xxxxxxxxx X. Xxxxxx are referred to collectively herein as
the "Rangos Family Members") and Xxxx Xxxxxx Development Corporation, Inc.,
(together with the Rangos Family Members, the "Rangos Shareholders").
RECITALS
The parties hereto are parties to a Shareholders Agreement
dated June 30, 1995, which was entered into upon the consummation of the
Agreement and Plan of Merger dated as of November 28, 1994 among the
Company, Xxxxxxxx Acquisition Corporation and Xxxxxxxx Development Company,
Inc.(the "June 30 Shareholders Agreement").
The Company intends to enter into an Agreement and Plan of
Merger on or about the date hereof (the "Merger Agreement") with Riviera
Acquisition Corporation, a California corporation and wholly-owned
subsidiary of the Company ("Acquisition"), and Western Waste Industries, a
California corporation ("Western"), providing for the merger of Acquisition
with and into Western (the "Merger"), with Western being the surviving
corporation and becoming a subsidiary of the Company.
The parties hereto have agreed that the Shareholders Agreement
is to be amended effective upon the consummation of the Merger Agreement,
to read as set forth herein, at which time Xx. Xxxxx Xxxxxxxxxx, Xx. Xxxxx
Tufkenian and Xx. Xxxxxx XxXxxxxx, who were formerly directors of Western,
are to be elected as directors of the Company and Xxxxx Xxxxxxxxxx is to be
elected as a member of the Executive Committee of the Board of Directors of
the Company.
This Agreement shall constitute a binding agreement as of the
date hereof but the provisions hereof shall become effective upon
consummation of the Merger Agreement; provided, however, that this
Agreement shall terminate in the event that (i) the Company fails to
perform any of its obligations set forth in that certain memorandum of
understanding between the Rangos shareholders and the Company dated the
date hereof, (ii) any of the Rangos shareholders shall have given written
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notice to the Company concerning such failure to perform and (iii) such
failure shall not have been cured within ten (10) days after receipt of
such notice, and in any event prior to consummation of the Merger
Agreement. In the event of such termination, or in the event that the
Merger Agreement is terminated, this Agreement shall be of no force and
effect from and after the date of either such termination and the June 30
Shareholders Agreement shall thereafter continue in full force and effect,
without giving any effect to this Agreement. Termination of this Agreement
shall be without liability on the part of any of the parties hereto.
In consideration of the foregoing and the respective covenants
and agreements set forth in this Agreement, the Company, the Company
Stockholders and the Rangos Shareholders agree as follows:
Section 1 Term.
The term (the "Term") of this Agreement shall commence at the
date hereof and continue until such time as the aggregate number of shares
of Common Stock beneficially held by the Rangos Shareholders and their
affiliates (as defined below) is less than five percent (5%) of the issued
and outstanding shares of Common Stock. For the purpose of calculating the
percentage of shares of Common Stock held by the Rangos Shareholders and
their affiliates, all shares that the Rangos Shareholders may acquire upon
the exercise or conversion of options, warrants, rights of conversion or
other rights to acquire shares (whether or not exercisable at the time of
such determination) shall be included in the number of shares held by the
Rangos Shareholders and their affiliates and the number of shares issued
and outstanding, but shares that may be acquired by other persons pursuant
to such rights shall not be included in the number of shares issued and
outstanding. For the purposes of this Agreement, an "affiliate" of a
person includes (i) if such person is a natural person, such person's
spouse, parents, children, siblings, mothers and fathers-in-law, sons and
daughters-in-law and brothers and sisters-in-law any trusts established
solely for the benefit of any of the foregoing and (ii) any partnership,
corporation, joint venture, association or other entity owned and
controlled solely by the Rangos Shareholders and any persons included
within the preceding clause (i).
Section 2 Board of Directors of the Company.
(a) The Company, the Company Stockholders and the Rangos
Shareholders agree that they shall use their best efforts to cause the
Board of Directors of the Company immediately upon consummation of the
Merger to be increased from nine to twelve members and, at all times during
the Term
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of this Agreement, to cause the Board of Directors to consist of no more
than twelve members, except as otherwise may be required pursuant to
governing instruments of securities issued by the Company.
(b) During the Term of this Agreement, the Company and the
Company Stockholders shall use their best efforts to cause the Board of
Directors to include at all times two persons who are designated by the
Rangos Shareholders. The initial designees of the Rangos Shareholders
shall be Xxxx X. Xxxxxx, Xx. and Xxxxxxxxx X. Xxxxxx. If the designees of
the Rangos Shareholders are other than Xxxx Xxxxxx, Xx., Xxxx Xxxxxx, Xx.,
or Xxxxxxxxx Xxxxxx, such designees must be reasonably acceptable to the
Company. The Company shall, no later than thirty days prior to the mailing
of any proxy or information statement with respect to a stockholder meeting
at which directors are to be elected, notify the Rangos Shareholders of the
date of such mailing; the Rangos Shareholders shall notify the Company of
the names of the persons they designate to serve on the Board of Directors
of the Company pursuant to this Section no later than ten days prior to the
date of such mailing; and the Company and the Company Stockholders shall
use their best efforts to have such designees nominated for election as
directors and elected as directors. The Rangos Shareholders shall notify
the Company of the name of any person they designate to fill a vacancy on
the Board of Directors resulting from the resignation or other removal of a
person previously designated by the Rangos Shareholders no later than
thirty days after such vacancy is created, and the Company and the Company
Stockholders shall use their best efforts to cause the Board of Directors
to appoint such person as a director of the Company. For purposes of this
Section, the Company may rely on a notice from Xxxx X. Xxxxxx, Xx. as a
notification from the Rangos Shareholders, or on a notice from such other
person as is designated in a writing signed by all Rangos Shareholders.
(c) During the Term of this Agreement, the Company, the
Company Stockholders and the Rangos Shareholders shall use their best
efforts to cause the Board of Directors to include at all times (in
addition to the two persons who are members pursuant to Section 2(b)) four
persons who are approved by at least five members of the Executive
Committee of the Board of Directors of the Company and none of whom is an
officer or employee of the Company.
(d) During the term of this Agreement, and subject to the
provisions of clauses (b) and (c) of this Section 2, the Rangos
Shareholders and the Company Stockholders agree to use their best efforts
to cause (i) the election (and re-election during the term of this
Agreement) of the individuals who constitute the initial Board of Directors
immediately
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following the effective time of the Merger (the "Initial Directors"), and
(ii) the selection of and election of persons nominated (consistent with
the provisions of Section 2(c) above) by a majority of the Initial
Directors to fill any vacancies on the Board of Directors created by the
resignation or removal of an Initial Director (other than a vacancy created
by the resignation or removal of a designee of the Rangos Shareholders);
provided that any person becoming a director subsequent to the date hereof
whose election, or nomination for election, was approved consistent with
the provisions of Section 2(c) above) by a vote of a majority of the
Initial Directors shall be for purposes of this Section 2(d) considered as
though such person were an Initial Director.
Section 3 Executive Committee of the Board of Directors of the Company.
(a) The Company and the Company Stockholders agree that at all
times during the Term of this Agreement they shall use their best efforts
to establish and maintain an Executive Committee of the Board of Directors
consisting of six (6) directors.
(b) The Company and the Company Stockholders agree that at all
times during the Term of this Agreement they shall use their best efforts
to cause the Executive Committee of the Board of Directors to include the
two persons designated by the Rangos Shareholders pursuant to Section 2(b)
of this Agreement.
Section 4 Approval of Certain Actions.
The Company and the Company Stockholders agree to use their
best efforts to cause the Company to amend its by-laws to provide that the
Company shall not, and shall not permit any of its subsidiaries to, take
any of the following actions unless such action has been approved by the
affirmative vote of at least two-thirds (2/3) of the members of the Board
of Directors of the Company:
(1) Approve or enter into any merger of the Company with or
into another entity, or any merger of any other entity
with or into the Company (other than a merger with a
wholly-owned subsidiary of the Company) if such entity
has assets having a fair market value (as determined in
good faith by the Board of Directors) of more than
$25,000,000; provided that if such entity has a fair
market value in excess of $5,000,000 and less than
$25,000,000 (as determined in good faith by
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the Executive Committee) such transaction shall require
approval of the Executive Committee;
(2) Approve or enter into any transaction or series of
related transactions involving the sale or other transfer
of all or substantially all of the assets of the Company;
(3) Approve the issuance of or issue any shares of, or rights
to acquire shares of, the capital stock of the Company
(other than pursuant to previously approved employee
benefit plans or employee benefit plans consistent with
customary practice in the industry);
(4) Approve or enter into any transaction as a result of
which the Company would acquire, directly or through a
subsidiary of the Company, assets (whether by purchase,
merger or consolidation) for more than $25,000,000 in
consideration (whether the consideration is in the form
of cash, assets or securities) to be paid, transferred or
issued by or on behalf of the Company or any subsidiary
of the Company; provided that if such consideration is in
excess of $5,000,000 but less than $25,000,000, such
transaction shall require the approval of the Executive
Committee;
(5) Approve or enter into any transaction as a result of
which the Company or any subsidiary of the Company would
dispose of assets having a fair market value (as
determined in good faith by the Board of Directors) of
more than $1,000,000;
(6) Approve any amendment to the Certificate of Incorporation
or By-laws of the Company;
(7) Approve or enter into any transaction as a result of
which the Company or any subsidiary of the Company would
incur indebtedness for borrowed money in excess of
$5,000,000;
(8) Approve or enter into any transaction in which the
Company or any subsidiary of the Company would enter into
a lease of real or personal property involving annual
payments in excess of $1,000,000;
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(9) Approve or substantially modify annual operating and
capital budgets of the Company; or
(10) Make any changes in the composition of committees of the
Board of Directors of the Company.
The Company and the Company Stockholders shall use their best efforts to
cause such by-law amendment to be in effect during the Term of this
Agreement.
Section 5 Notice.
All notices called for under this Agreement must be in writing
and will be deemed given if:
(1) delivered personally;
(2) delivered by facsimile transmission and receipt is
acknowledged verbally or electronically;
(3) telexed; or
(4) mailed by registered or certified mail (return
receipt requested), postage prepaid;
to the parties to this Agreement at the following addresses (or at such
other address for a party as is specified by like notice; provided that
notices of a change of address will be effective only upon receipt of the
notice):
To the Company:
USA Waste Services, Inc.
0000 XXX Xxxxxxx
Xxxxx 000 - Xxxxx Xxx
Xxxxxx, Xxxxx 00000
Attention: General Counsel
To the Rangos Shareholders:
Xxxx X. Xxxxxx, Xx.
0000 Xxxxx 000
Xxxxxxx Xxxx, Xxxxxxxxxxxx 00000
Section 6 Severability.
If any provision of this Agreement is held invalid, such
invalidity will not affect any other provision of the Agreement that can be
given effect without the invalid provision, and to this end, the provisions
of this Agreement are separable.
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Section 7 Assignment.
This Agreement will bind and inure to the benefit of the
parties hereto and their respective successors and permitted assigns, but
the rights of the Rangos Shareholders may not be assigned to any person
other than affiliates of the Rangos Shareholders.
Section 8 Amendment.
This Agreement may be modified only by a written instrument
duly executed by all parties to the Agreement and compliance with any
provision or condition contained in this Agreement, or the obtaining of any
consent provided for in this Agreement, may be waived only by written
instrument duly executed by the party to be bound by such waiver.
Section 9 Governing Law.
The rights of the parties arising under this Agreement shall be
construed and enforced under the laws of the State of Delaware without
giving effect to any choice of law or conflict of law rules.
Section 10 Counterparts.
This Agreement may be executed in two or more counterparts,
each of which will be deemed an original but all of which will constitute
one and the same instrument.
Section 11 Best Efforts Obligations.
For purposes of this Agreement, the term "best efforts" shall,
(i) with respect to the Rangos Shareholders and the Company Stockholders,
require such persons to take all lawful action in their capacities as
members of the Board of Directors and with respect to the voting of the
shares of Common Stock held by such persons, and (ii) with respect to the
Rangos Shareholders, the Company Stockholders and the Company, require
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such person to refrain from taking any action which could reasonably be
expected to frustrate the purposes intended to be accomplished by the best
efforts obligations provided herein.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date set forth in the first paragraph of this
Agreement.
USA Waste Services, Inc.,
By: /s/ Xxxx X. XxXxxxxx
Xxxx X. XxXxxxxx
Executive Vice President
/s/ Xxxx X. Xxxxxx, Xx.
Xxxx X. Xxxxxx, Xx.
/s/ Xxxx X. Xxxxxx, Xx.
Xxxx X. Xxxxxx, Xx.
/s/ Xxxxxxxxx X. Xxxxxx
Xxxxxxxxx X. Xxxxxx
Xxxx Xxxxxx Development Corporation,
Inc.
By: /s/ Xxxxxxxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxxxxxx, Xx.
Xxxxxx X. Xxxxxxxxx, Xx.
/s/ Xxxx X. Xxxxx
Xxxx X. Xxxxx
