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EXHIBIT 10.1
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT dated as of July 1, 1998, by and among
Roma Restaurant Holdings, Inc. (formerly known as Romacorp, Inc.), a Delaware
corporation (the "Company"), Sentinel Capital Partners, L.P., a Delaware limited
partnership ("Sentinel"), Sentinel Capital Partners II, L.P., a Delaware limited
partnership ("Sentinel II"), Omega Partners, L.P. ("Omega"), Provident Financial
Group, Inc. ("Provident"), Travelers Casualty and Surety Company ("Travelers
I"), The Travelers Insurance Company ("Travelers II"), The Travelers Life and
Annuity Company ("Travelers III") and The Phoenix Insurance Company (together
with Travelers I, Travelers II, and Travelers III, the "Travelers Group", and
Sentinel II, Omega, Provident and the Travelers Group shall be referred to as
the "Investors") and NPC Restaurant Holdings, Inc., a Delaware corporation
("Holdings"). Capitalized terms used herein but not otherwise defined have the
meaning set forth in Section 1. The parties hereto (other than the Company),
their Permitted Transferees and any other person who becomes a party hereto are
collectively referred to as the "Stockholders" and individually as a
"Stockholder."
WHEREAS, each of the Stockholders has purchased from the
Company, or otherwise own, certain shares of the common stock of the Company,
par value $0.01 per share (the "Common Stock"), pursuant to the terms and
conditions of the Recapitalization Agreement;
WHEREAS, it is a condition precedent to the obligations of the
Investors and Holdings under the Recapitalization Agreement that each of the
parties hereto enter into this Agreement; and
WHEREAS, the Company and the Stockholders desire to enter into
this Agreement for the purposes, among others, of (i) establishing the
composition of the Board, (ii) assuring continuity in the management and
ownership of the Company and (iii) limiting the manner and terms by which the
Company Shares may be transferred.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. Definitions. As used herein, the following terms shall have
the following meanings:
"Affiliate" shall mean, as to any Person, any other Person
which directly or indirectly controls, or is under common control with, or is
controlled by, such Person. As used in this definition, "control" (including,
with its correlative meanings, "controlled by" and "under common control with")
shall mean possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise).
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"Approved Sale" means the sale of the Company, in a single
transaction or a series of related transactions, to a third party (which is not
an Affiliate of the Approving Stockholders) (a) pursuant to which such third
party proposes to acquire all or substantially all of the outstanding Common
Stock (whether by merger, consolidation, recapitalization, reorganization,
purchase of the outstanding Common Stock or otherwise) or all or substantially
all of the consolidated assets of the Company, (b) which has been approved by
both the Board and the holders of a majority of the outstanding Sentinel
Stockholder Shares (the "Approving Stockholders"), and (c) pursuant to which all
holders of Common Stock receive with respect thereto (whether in such
transaction or, with respect to an asset sale, upon a subsequent liquidation)
the same form and amount of consideration per share of Common Stock or, if any
holders are given an option as to the form and amount of consideration to be
received, all holders are given the same option.
"Board" means the Company's board of directors.
"Business Day" means any day that is not a Saturday, Sunday or
other day on which banks are required or authorized by law to be closed in the
State of New York or City of New York.
"Bylaws" means the Amended and Restated Bylaws of the Company,
which will be adopted and become effective on the date hereof, and subsequent
amendments thereto.
"Certificate of Incorporation" means the Amended and Restated
Certificate of Incorporation of the Company, which will be adopted and become
effective on the date hereof, and any subsequent amendments thereto.
"Common Stock" has the meaning given thereto in the recitals
hereof.
"Company Shares" means all issued and outstanding shares of
capital stock of the Company and all rights to acquire capital stock of the
Company and all stock appreciation, phantom stock, profit, participation and
similar rights with respect to the Company's capital stock of whatever nature.
"Family Group" means, with respect to an individual
Stockholder, such Stockholder's spouse and descendants (whether natural or
adopted) and any trust solely for the benefit of such Stockholder and/or such
Stockholder's spouse, their respective ancestors and/or descendants (whether
natural or adopted).
"GAAP" means United States generally accepted accounting
principles, as in effect from time to time and as adopted by the Company with
the consent of its independent public accountants, consistently applied.
"Governmental Entity" means individually, and "Government
Entities" means collectively, the United States of America or any other nation,
any state or other political subdivision thereof, or any entity exercising
executive, legislative, judicial, regulatory or administrative functions of
government, including any Tribunal, in each case having jurisdiction over the
Company or any of its Subsidiaries.
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"Holders" means all Stockholders and any other holders of
Company Shares.
"Other Stockholders" means, with respect to a Stockholder, all
Stockholders other than such Stockholder.
"Permitted Transferees" has the meaning given thereto in
Section 4(d).
"Person" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization or a governmental entity or any
department, agency or political subdivision thereof.
"Pro Rata Share" means, with respect to each Stockholder, the
quotient determined by dividing (i) the total number of Stockholder Shares held
by such Stockholder, by (ii) the total number of Stockholder Shares held by all
Stockholders.
"Public Sale" means any sale of Company Shares to the public
pursuant to an offering registered under the Securities Act or to the public
effected through a broker, dealer or market maker pursuant to the provisions of
Rule 144 under the Securities Act.
"Qualified Public Offering" means the sale, in an underwritten
public offering registered under the Securities Act, of shares of the Company's
Common Stock providing aggregate gross proceeds (before deducting under-writing
discounts and expenses) to the Company and any selling Stockholders of at least
$50 million and at an offering price which represents a common equity valuation
of the Company's Common Stock outstanding immediately prior to the issuance of
Common Stock in connection with such offering of at least $120 million.
"Recapitalization Agreement" means the Recapitalization
Agreement by and among the Company, NPC International, Inc., Holdings and
Sentinel, dated as of April 24, 1998, as amended, with certain rights and
obligations assigned to Sentinel II, Omega, Provident and the Travelers Group.
"Registration Rights Agreement" means that Registration Rights
Agreement by and among the parties hereto, dated as of the date hereof.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended
from time to time.
"Sentinel Stockholder Shares" means all Stockholder Shares
issued or issuable to Sentinel or Sentinel II and their Affiliates or otherwise
acquired by such Persons.
"Stockholder Shares" means (i) any Common Stock held by the
Stockholders, and (ii) any equity securities of the Company issued or issuable
directly or indirectly with respect to the securities referred to in clause (i)
above by way of stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization; provided that Stockholder Shares shall not include (a) shares of
Common Stock issued pursuant to the
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conversion or exercise of any options, warrants or other convertible securities
or (b) any equity securities of the Company issued or issuable with respect to
the securities referred to in clause (a) above in connection with a combination
or split of shares, recapitalization, merger, consolidation or other
reorganization. As to any particular shares constituting Stockholder Shares,
such shares will cease to be Stockholder Shares when they have been sold in a
Public Sale, an Approved Sale, or upon the consummation of a Qualified Public
Offering.
"Stock Option Plan" means the Roma Restaurant Holdings, Inc.
1998 Stock Option Plan, as in effect from time to time.
"Subsidiary" means, with respect to any Person, any
corporation, partnership, association or other business entity of which (i) if a
corporation, a majority of the total voting power of shares of stock entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries
of that Person or a combination thereof, or (ii) if a partnership, association
or other business entity, a majority of the partnership or other similar
ownership interest thereof is at the time owned or controlled, directly or
indirectly, by any Person or one or more Subsidiaries of that Person or a
combination thereof. For purposes hereof, a Person or Persons shall be deemed to
have a majority ownership interest in a partnership, association or other
business entity if such Person or Persons shall be allocated a majority of
partnership, association or other business entity gains or losses or shall be or
control the managing director or a general partner of such partnership,
association or other business entity.
"Transaction Documents" means the following agreements, all of
which are dated as of the date hereof, as amended from time to time: this
Agreement, the Recapitalization Agreement (including the Schedules thereto), the
Registration Rights Agreement, and the Transitional Financial and Accounting
Services Agreement.
"Transitional Financial and Accounting Services Agreement"
means that Transitional Financial and Accounting Services Agreement by and among
the Company and NPC Management, Inc., dated as of the date hereof.
"Tribunal" means any government, arbitration panel, court or
governmental department, commission, board, bureau, agency or instrumentality of
the United States of America or any state, province, commonwealth, nation,
territory, possession, county, parish, town, township, village, municipality or
other Government Entity, whether now or hereafter constituted and/or existing.
2. Board of Directors.
(a) Until the provisions of this Section 2 cease to be
effective, to the extent permitted by law, each Stockholder shall vote all
voting securities of the Company over which such Stockholder has voting control,
and shall take all other necessary or desirable actions within such
Stockholder's control (whether in such Stockholder's capacity as a stockholder,
director, member of a board committee or officer of the Company or otherwise,
and including, without limitation, attendance at meetings in person or by proxy
for purposes of obtaining a quorum and execution of
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written consents in lieu of meetings), and the Company shall take all necessary
and desirable actions within its control (including, without limitation, calling
special Board and stockholder meetings), so that:
(i) the authorized number of directors on the Board shall be
established at between 5 and 11 persons and that the following persons
shall be elected to the Board:
(A) up to 9 persons (depending on the current authorized
size of the board) designated by Sentinel II, who
shall initially include Xxxx X. XxXxxxxxx, Xxxx X.
Xxxxxx, Xxxxxxx X. Xxxxx and Xxxxxx X. Page;
(B) 1 person designated by Sentinel, who shall initially
be Xxxxx X. Xxxxx;
(C) so long as Holdings holds 5% or more of the
outstanding Common Stock or Holdings has not
transferred more than 50% of the Common Stock it
holds immediately after consummation of the
transactions contemplated by the Recapitalization
Agreement, 1 person designated by Holdings, who shall
initially be Xxxxx X. Xxxxxxxx (the "Holdings
Director");
(ii) the composition of the board of directors of each of the
Company's Subsidiaries (a "Sub Board") shall be determined by a
majority of the entire Board;
(iii) the Board shall, and each Sub Board may, create a
Compensation Committee and an Audit Committee;
(iv) all committees of the Board or a Sub Board (other than
the Compensation Committee and Audit Committee) shall be created only
upon the approval of a majority of the voting power of the Board and
the composition of all committees shall consist of such persons as a
majority of the voting power of the Board determines, provided that as
long as Holdings shall be entitled to designate a director of the
Company pursuant to clause (i)(B) above, each committee of the Board
shall include the Holdings Director;
(v) directors shall be removed from the Board, a Sub Board or
any committee thereof (without cause) at the written request of the
Stockholder or Stockholders which have the right to designate such
directors hereunder, but only upon such written request and under no
other circumstances, except as required by law; and
(vi) in the event that any representative designated hereunder
for any reason ceases to serve as a member of the Board or a Sub Board
or any committee thereof during such representative's term of office,
the resulting vacancy on the Board or such Sub Board or committee shall
be filled by a representative designated by the Stockholder or
Stockholders who designated the departing director.
(b) The Company shall pay the reasonable out-of-pocket
expenses incurred by each director in connection with attending the meetings of
the Board or any Sub Board and any committee thereof. In addition, the Company
shall pay such additional reasonable compensation
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to directors who are not employees of the Company or any of its Subsidiaries, as
the Board so determines.
(c) The provisions of this Section 2 shall terminate
automatically and be of no further force and effect upon the consummation of a
Qualified Public Offering.
(d) If any party fails to designate a representative to fill a
directorship pursuant to the terms of this Section 2, the election of a Person
to such directorship shall be accomplished in accordance with the Bylaws, the
Certificate of Incorporation and applicable law. In the event that any provision
of the Company's Bylaws or certificate of incorporation is inconsistent with any
provision of this Section 2, the Stockholders shall take such action as may be
necessary to amend any such provision in the Bylaws or the Certificate of
Incorporation to remedy such inconsistency.
3. Conflicting Agreements. Each Stockholder represents that
such Stockholder has not granted and is not a party to any proxy, voting trust
or other agreement which is inconsistent with or conflicts with the provisions
of this Agreement, and no holder of Company Shares shall grant any proxy or
become party to any voting trust or other agreement which is inconsistent with
or conflicts with the provisions of this Agreement.
4. Restrictions on Transfer of Company Shares.
(a) Transfer of Company Shares. No Holder shall sell,
transfer, assign, pledge or otherwise dispose (a "Transfer") of (whether with or
without consideration and whether voluntarily or involuntarily or by operation
of law) any interest in such Holder's Company Shares except (i) if such Transfer
does not, in the discretion of the Company's independent auditors, adversely
effect the recapitalization accounting treatment of the transactions to be
consummated as contemplated by the Recapitalization Agreement and (ii) pursuant
to the provisions of this Section 4 or Section 5, or in a Public Sale; provided
that in no event shall Holdings be permitted to Transfer more than 50% of the
number of shares (as adjusted for any splits, consolidations or other similar
transactions) of any class of Company Shares held by it immediately following
the consummation of the transactions contemplated by the Recapitalization
Agreement until the one year anniversary of the date hereof.
(b) Tag Along Rights. Subject to Sections 4(a), 4(c) and 4(e),
at least 15 days prior to any Transfer of more than 50% of the outstanding
Company Shares by Sentinel and/or Sentinel II (the "Transferring Stockholders"),
the Transferring Stockholders shall deliver a written notice (the "Sale Notice")
to the Company and the Other Stockholders, specifying in reasonable detail the
identity of the prospective transferee(s) and the terms and conditions of the
Transfer. The Other Stockholders may elect to participate in the contemplated
Transfer by delivering written notice to the Transferring Stockholders within 10
days after delivery of the Sale Notice. If any Other Stockholders have elected
to participate in such Transfer, each of the Transferring Stockholders and such
Other Stockholders shall be entitled to sell in the contemplated Transfer, at
the same price and on the same terms, a number of Company Shares of any series
or class equal to the product of (i) the quotient determined by dividing the
number of Stockholder Shares of such series or class owned by such Stockholder
by the aggregate number of Stockholder Shares of such
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series or class owned by the Stockholders participating in such Transfer and
(ii) the aggregate number of Company Shares of such series or class to be sold
in the contemplated Transfer.
(c) First Refusal Rights.
(i) Subject to Sections 4(a), 4(b), 4(d) and 4(e), at least
60 days prior to any sale of Company Shares by any Stockholder (other
than Sentinel or Sentinel II) or any of their Permitted Transferees,
such Person making such sale (the "Offering Stockholder") shall deliver
a written notice (the "Transfer Notice") to the Company and the Other
Stockholders specifying in reasonable detail the number of shares
proposed to be sold (the "Transfer Stock"), the proposed purchase price
(which shall be payable solely in cash) and the other terms and
conditions of the sale and enclosing therewith a true and complete copy
of a written offer, letter of intent or other written document signed
by the prospective transferee setting forth the proposed terms and
conditions of the sale. The Company (or its designee(s)) may elect to
purchase all (but not less than all) of the Transfer Stock, upon the
same terms and conditions as those set forth in the Transfer Notice, by
delivering a written notice of such election to the Stockholders within
20 days after the Transfer Notice has been delivered to the Company.
(ii) If the Company and its designee(s) have not elected to
purchase all of the Transfer Stock, Sentinel II (or designee(s)) may
elect to purchase, upon the same terms and conditions as those set
forth in the Transfer Notice, all or some of the number (the "Sentinel
Portion") of shares of Transfer Stock equal to the product of (A)
Sentinel II's Pro Rata Share (provided that the determination of Pro
Rata Share shall be made without regard to any Stockholder Shares held
by the Offering Stockholder), multiplied by (B) the number of shares of
Transfer Stock, by giving written notice of such election to the
Stockholders within 30 days after the Transfer Notice has been
delivered to Sentinel II (the "Sentinel Option Period"). The quotient,
determined by dividing (x) the number of shares of Transfer Stock
elected to be purchased by Sentinel II by (y) the Sentinel Portion,
shall be referred to as the "Sentinel Ratio".
(iii) If Sentinel II has elected to purchase any shares of
Transfer Stock, each Other Stockholder shall have the right to elect to
purchase, upon the same terms and conditions as those set forth in the
Transfer Notice, all or some of a number of shares of Transfer Stock
equal to the product of (A) the Sentinel Ratio, (B) such Stockholder's
Pro Rata Share (provided that the determination of Pro Rata Share shall
be made without regard to any Stockholder Shares held by the Offering
Stockholder) and (C) the number of shares of Transfer Stock, by giving
written notice of such election to the Other Stockholders within 10
days after the Sentinel Option Period (the "Stockholder Option
Period"). Those Other Stockholders electing to purchase shares of
Transfer Stock shall be referred to as "Electing Stockholders".
(iv) If Sentinel II has elected to purchase any shares of
Transfer Stock but Sentinel II and the Electing Stockholders have not
elected to purchase all the Transfer Stock, each of Sentinel II and the
Electing Stockholders shall have the right to elect to purchase all
(but not less than all) of the shares of Transfer Stock not previously
elected to be purchased (the
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"Excess Stock"), by giving written notice of such election to the
Stockholders within 10 days after the Stockholder Option Period. If
more than one of Sentinel II and the Electing Stockholders elects to
purchase the Excess Stock, the Excess Stock will be sold pro rata to
the Stockholders electing to purchase such shares based on the number
of Stockholder Shares owned by each such Stockholder.
(v) If neither (A) the Company (or its designee(s)) nor (B)
Sentinel II (or its designee(s)) and the Other Stockholders elects to
purchase all of the Transfer Stock specified in the Transfer Notice,
then no Stockholder shall be permitted to purchase any of the Transfer
Stock and the Offering Stockholder may sell the Transfer Stock at a
price and on terms no more favorable to the transferee(s) thereof than
specified in the Transfer Notice during the 60-day period immediately
following the expiration of the Stockholder Option Period. Any Transfer
Stock not transferred within such 60-day period will be subject to the
provisions of this Section 4(c) upon any subsequent proposed sale.
(d) Approval Rights. Notwithstanding anything herein to the
contrary, if pursuant to Section 4(c)(v) Holdings or any of its Permitted
Transferees (the "Holdings Seller") has the right to Transfer the Transfer Stock
to Persons other than the Company or the Stockholders, then the Company shall
have the right to approve or disapprove of the prospective transferee(s) within
10 days of the Holdings Seller giving notice to the Company of the identities of
such prospective transferee(s); provided that the Company shall only disapprove
of a prospective transferee on a good faith basis. If the Company approves the
prospective transferee(s) then the Holdings Seller shall have the right to
Transfer the Transfer Stock to such transferee(s) as provided in Section
4(c)(v). If the Company disapproves of the prospective transferee(s), then (i)
the Holdings Seller shall have the right to Transfer the Transfer Stock to such
transferee(s) as provided in Section 4(c)(v) provided that the joinder(s) to
this Agreement that are required to be executed by such transferee(s) pursuant
to Section 10 (b) shall be amended to expressly provide that such transferee(s)
shall not be deemed "Stockholders" nor their securities "Stockholder Shares" for
the purposes of this Agreement, (ii) if the Holdings Seller does not Transfer
the Transfer Stock to the disapproved transferee(s) then the Company shall use
reasonable efforts (at the expense of the Holdings Seller) to assist the
Holdings Seller in the Transfer of the Transfer Stock to such Person(s) as the
Company approves within the 90-day period immediately following the expiration
of the applicable Stockholder Option Period.
(e) Permitted Transfers. The restrictions contained in
Sections 4(a), 4(b) and 4(c) shall not apply with respect to (A) the pledge of
Company Shares made by the Stockholders pursuant to Section 7 and (B) any
Transfer of Company Shares by any Stockholder (i) in the case of an individual
Stockholder, pursuant to applicable laws of descent and distribution or to any
member of such Stockholder's Family Group, (ii) in the case of an Investor, (x)
among its Affiliates, partners, employees and consultants or other Persons
acceptable to the Company, (y) to any employee, prospective employee, director
or prospective director of the Company or any Affiliate of the Company or (z) to
any former or prospective employee, director or prospective director of such
entity or any Affiliate of such entity, and (iii) in the case of Holdings or any
other Stockholder which is not an individual, among its respective Affiliates,
partners, employees and consultants, or to any former or prospective employee,
director or prospective director of such entity or any Affiliate of such entity;
provided, that the restrictions contained in Sections 4(a), 4(b) and 4(c) shall
continue to be applicable to such Company Shares after any such Transfer; and
provided further, that
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the transferees of such Company Shares shall have agreed in writing to be bound
by the provisions of this Agreement which affect the Company Shares so
transferred by executing a Joinder Agreement in the form substantially attached
hereto as Exhibit A. All transferees permitted under this Section 4(d) are
collectively referred to herein as "Permitted Transferees."
(f) Assistance Rights. Notwithstanding anything to the
contrary herein, to the extent a sale of Company Shares by Holdings is not
prohibited by Section 4(a), at the request of Holdings, the Company shall use
reasonable efforts (at the expense of Holdings) to assist Holdings in the
Transfer of its Company Shares to a Person acceptable to the Company; provided
that no such assistance shall be deemed a waiver of any of the Company's rights
hereunder including, without limitation, its rights contained in Section 4(c).
(g) Termination of Restrictions. The restrictions set forth in
this Section 4 shall continue with respect to each Company Share until the
earlier of (i) the Transfer of such Company Share in a Public Sale or an
Approved Sale, or (ii) the consummation of a Qualified Public Offering.
5. Sale of the Company.
(a) In the event that an Approved Sale is proposed (a
"Proposed Sale"):
(i) The Company shall provide a written notice (the "Approved
Sale Notice") of such Proposed Sale to each of the Holders not later
than the twentieth (20th) Business Day prior to the consummation of the
Proposed Sale. The Approved Sale Notice shall contain written notice of
the Proposed Sale, setting forth the consideration to be paid by the
third party or parties and the other material terms and conditions of
the Proposed Sale.
(ii) Anything herein to the contrary notwithstanding, neither
the Company nor the holders of Sentinel Stockholder Shares shall have
any obligation to any Holder to sell or otherwise dispose of the
Company Shares of any Holder pursuant to this Section 5 or as a result
of any decision by the Company or the holders of Sentinel Stockholder
Shares, as applicable, not to accept or consummate any proposed sale of
the Company or securities of the Company (it being understood that any
and all such decisions shall be made by the Company or the holders of
Sentinel Stockholder Shares, as applicable, in such person's sole
discretion). No Holder shall be entitled to make any sale of Company
Shares directly to any third party pursuant to an Approved Sale (it
being understood that all such sales shall be made only on the terms
and pursuant to the procedures set forth in this Section 5).
(b) In the event of an Approved Sale, each Holder will (i)
consent to and raise no objections against the Approved Sale or the process
pursuant to which the Approved Sale was arranged, (ii) waive any dissenter's
rights and other similar rights, and (iii) if the Approved Sale is structured as
a sale of securities, each Holder will agree to sell its Company Shares on the
terms and conditions of the Approved Sale. Each Holder will take all necessary
and desirable actions as directed by the Board and the Approving Stockholders in
connection with the consummation of any Approved Sale, including without
limitation executing the applicable purchase agreement and granting identical
indemnification rights. Each Holder shall be required to make indemnification
payments in connection with any Approved Sale only to the extent that the amount
required to be
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paid by such Holder is proportionate to the proportion of the total
consideration received by all Holders, compared to the consideration actually
received by such Holder.
(c) All Holders will bear their pro rata share (based upon the
number of shares sold) of the reasonable costs of any sale of Company Shares
pursuant to an Approved Sale to the extent such costs are incurred for the
benefit of all selling Holders and are not otherwise paid by the Company or the
acquiring party. Costs incurred by any Holder on its own behalf will not be
considered costs of the transaction hereunder.
(d) This Section 5 shall automatically terminate upon the
consummation of a Qualified Public Offering.
6. Stockholders' Rights of First Refusal on Company's Issuance
of Equity Equivalents. (a) If at any time the Company wishes to issue any equity
securities or any options, warrants or other rights to acquire equity securities
(collectively, the "Equity Equivalents") to any Person or Persons (other than
pursuant to the Stock Option Plan), the Company shall promptly deliver a notice
of intention to sell (the "Company's Notice of Intention to Sell") to each
Stockholder setting forth a description of the Equity Equivalents to be sold and
the proposed purchase price and terms of sale. Upon receipt of the Company's
Notice of Intention to Sell, Sentinel II shall have the right to elect to
purchase, at the price and on the terms stated in the Company's Notice of
Intention to Sell, all or some of the number (the "Pro-Rata Sentinel Portion")
of Equity Equivalents equal to the product of (x) Sentinel II's Pro Rata Share,
multiplied by (y) the number of Equity Equivalents to be issued. Such election
is to be made by Sentinel II by written notice to the Company and the Other
Stockholders within 20 days after receipt by Sentinel II of the Company's Notice
of Intention to Sell (the "Acceptance Period"). The quotient, determined by
dividing (A) the number of Equity Equivalents elected to be purchased by
Sentinel II by (B) the Pro-Rata Sentinel Portion, shall be referred to as the
"Sentinel Percentage". If Sentinel II has elected to purchase any of the Equity
Equivalents, each Other Stockholder shall have the right to elect to purchase,
at the price and on the terms stated in the Company's Notice of Intention to
Sell, all or some of a number of the Equity Equivalents equal to the product of
(m) the Sentinel Percentage, (n) such Stockholder's Pro Rata Share and (o) the
number of Equity Equivalents to be issued, by written notice to the Company and
the Other Stockholders within 10 days after the Acceptance Period. In the event
that the Equity Equivalents to be issued at any time as contemplated by this
Section 6 are either voting securities of the Company or securities which are
convertible, exercisable or otherwise exchangeable for voting securities of the
Company and for any reason one or more of the Stockholders determines in its
sole discretion that it would be detrimental to such Stockholder or its
affiliates to purchase such securities as provided for hereby, then the Company
shall make available to any such Stockholder an amount of alternative securities
equal to the amount of such Equity Equivalents as such Stockholder is entitled
to purchase pursuant to the terms hereof which are identical to such Equity
Equivalents in all respects except for the fact that such alternate securities
shall be non-voting securities or convertible, exercisable or otherwise
exchangeable for non-voting securities (the "Alternative Securities").
(b) If effective acceptance shall not be received pursuant to
paragraph (a) above in respect of all the Equity Equivalents or Alternative
Securities, then the Company may, at its election, during a period of one
hundred and twenty (120) days following the expiration of the
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Acceptance Period, sell and issue the remaining Equity Equivalents to another
Person at a price and upon terms no more favorable to such person than those
stated in the Company's Notice of Intention to Sell; provided, however, that
failure by a Stockholder to exercise its option to purchase with respect to one
offering, sale and issuance of Equity Equivalents shall not affect its option to
purchase Equity Equivalents or rights to acquire Equity Equivalents in any
subsequent offering, sale and purchase. In the event the Company has not sold
the Equity Equivalents, or entered into a binding agreement to sell the Equity
Equivalents, within such one hundred and twenty (120) day period, the Company
shall not thereafter issue or sell any Equity Equivalents without first offering
such securities to each Stockholder in the manner provided in Section 6(a)
hereof.
(c) If a Stockholder gives the Company notice, pursuant to the
provisions of this Section 6, that such Stockholder desires to purchase any of
the Equity Equivalents or Alternative Securities, payment therefor shall be by
check or wire transfer, against delivery of the securities at the executive
offices of the Company within ten (10) days after giving the Company such
notice, or, if later, the closing date as mutually agreed between the Company
and such Stockholder for the sale of such Equity Equivalents or Alternative
Securities. In the event that any such proposed issuance is for a consideration
other than cash, such Stockholders will be entitled to pay cash for each share
or other unit, in lieu of such other consideration, in the amount determined in
good faith by the Board to constitute the fair value of such consideration other
than cash to be paid per share or other unit.
(d) The right of first refusal contained in this Section 6
shall not apply to (i) the issuance of shares of Common Stock as a stock
dividend or upon any subdivision or stock split of the outstanding shares of
Common Stock; (ii) the issuance of shares of Common Stock upon conversion of any
shares of convertible securities; (iii) the issuance of shares of Common Stock,
or the grant of options, warrants or rights to subscribe for shares of Common
Stock, to officers, directors and other employees of the Company and to
consultants to the Company pursuant to stock options that are issued pursuant to
the Stock Option Plan or such other options that are granted to such persons and
that are approved by a majority of the entire Board (in each case, as such
number of shares may be adjusted from time to time in accordance with the terms
of the Stock Option Plan or agreements evidencing grants thereunder); or (iv)
the issuance of Common Stock pursuant to any under-written public offering.
(e) The Company and each Stockholder represents and warrants
that it is not a party to any agreement other than this Agreement with any
persons relating to any right of first refusal or preemptive right upon
issuances of Equity Equivalents.
(f) This Section 6 shall automatically terminate upon the
consummation of a Qualified Public Offering.
7. Covenant to Pledge. Each Stockholder (other than Holdings)
agrees that, at the request of Sentinel, they shall pledge their Company Shares
to a financial institution designated by Sentinel, to the same proportionate
extent that Sentinel pledges its Company Shares to such institution pursuant to
debt facilities entered into by the Company.
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8. Legend. In addition to any legend required by any other
Transaction Document, each certificate evidencing Company Shares and each
certificate issued in exchange for or upon the transfer of any Company Shares
(if such shares remain Company Shares as defined herein after such transfer)
shall be stamped or otherwise imprinted with a legend in substantially the
following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE
ORIGINALLY ISSUED ON ______________, AND HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE
TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS
SUBJECT TO A STOCKHOLDERS AGREEMENT DATED AS OF JULY 1, 1998,
BY AND AMONG THE ISSUER OF SUCH SECURITIES (THE "COMPANY") AND
CERTAIN OF THE COMPANY'S STOCKHOLDERS. A COPY OF SUCH
STOCKHOLDERS AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE
COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST."
The Company shall imprint such legend on certificates evidencing Company Shares
outstanding prior to the date hereof. The legend set forth above shall be
removed from the certificates evidencing any shares which cease to be Company
Shares.
9. Transfers in Violation of Agreement. Any Transfer or
attempted Transfer of any Company Shares in violation of any provision of this
Agreement shall be null and void, and the Company shall not record such Transfer
on its books or treat any purported transferee of such Company Shares as the
owner of such shares for any purpose.
10. Transfer of Company Shares.
(a) Company Shares are transferable only pursuant to (i)
public offerings registered under the Securities Act, (ii) subject to the
provisions of Section 4 and Section 5 above, Rule 144 or Rule 144A (or any
similar rule or rules then in effect) of the SEC if such rule is available, and
(iii) subject to Section 4, Section 5 and Section 10(b) below, any other legally
available means of Transfer.
(b) In connection with the Transfer of any Company Shares
other than a Transfer described in clause (i) or (ii) of Section 10(a) above or
a Transfer to a Permitted Transferee, the holder thereof shall deliver written
notice to the Company describing in reasonable detail the Transfer or proposed
Transfer, together with an opinion of counsel reasonably acceptable to the
Company to the effect that such Transfer of Company Shares may be effected
without registration of such Company Shares under the Securities Act. No
Transfer or issuance of any Company Shares shall be permitted unless and until
the prospective transferee agrees to become a party to this Agreement and be
bound by all the terms and conditions hereof by executing and delivering to the
Company, a joinder to this Agreement in the form attached hereto as Exhibit A
(the "Joinder
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Agreement") or, if applicable, in the form of the Joinder Agreement as amended
as provided in Section 4(d).
(c) Upon the request of a holder of Company Shares, the
Company shall promptly supply to such Person or its prospective transferees all
information regarding the Company required to be delivered in connection with a
Transfer pursuant to Rule 144A (or any similar rule or rules then in effect) of
the SEC.
11. Financial Statements and Other Information. The Company
shall deliver to each Stockholder who holds at least 5% of the Stockholder
Shares (except the information described in clause (b) below shall be delivered
to all Stockholders):
(a) within 30 days after the end of each month (or equivalent
fiscal period of the Company), a copy of the unaudited consolidated balance
sheets of the Company as of the end of such month (or equivalent fiscal period
of the Company) and the related consolidated statements of income and statements
of cash flows and changes in stockholders equity for such month (or equivalent
fiscal period of the Company) and for the portion of the fiscal year ending as
of the end of such month (or equivalent fiscal period of the Company), all in
reasonable detail and prepared in accordance with GAAP, consistently applied
(subject to normal year-end adjustments and the exclusion of such footnotes as
may be required in accordance with GAAP, consistently applied), accompanied by
comparisons to the Company's annual budget and to the corresponding periods in
the preceding fiscal year, including a management discussion and analysis of
such financial statements and comparisons;
(b) within 90 days after the close of each fiscal year, a copy
of the audited consolidated financial statements of the Company, consisting of
consolidated balance sheets as of the end of such fiscal year and consolidated
statements of income and statements of cash flows and changes in stockholders'
equity for such fiscal year, setting forth in comparative form in each case the
consolidated figures for the previous fiscal year-end, which financial
statements shall be prepared in accordance with GAAP, consistently applied,
certified without qualification by a "big- six" accounting firm selected by the
Company, accompanied by (a) a management discussion and analysis of such
financial statements and comparisons, and (b) such firm's annual management
letter to the Board;
(c) not less than 30 days following the beginning of each
fiscal year, projected consolidated statements of cash flows and changes in
stockholders equity of the Company and its Subsidiaries including summary
details of cash disbursements (including capital expenditures) and a summary of
Indebtedness (as defined in the Recapitalization Agreement) in each case for
such ensuing fiscal year, on a monthly basis;
(d) promptly after the commencement thereof, notice of all
actions, suits, and proceedings before any Tribunal or other Government Entity
affecting the Company or any of its Subsidiaries which, if determined adversely
to any Person, could have a Material Adverse Effect (as defined in the
Recapitalization Agreement);
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(e) promptly after the sending or filing thereof, copies of
all regular, periodic or special reports, and all registration statements, which
the Company files with the SEC or any national securities exchange or securities
market;
(f) promptly after the furnishing thereof, copies of any
statement or report furnished to any holder of indebtedness pursuant to the
terms of any indenture, loan or credit or similar agreement, and not otherwise
required to be furnished pursuant to any other paragraph of this Section 11; and
(g) such other information respecting the Company's, or its
Subsidiaries' business, financial condition or prospects as any Stockholder may,
from time to time, reasonably request in writing.
Provided that the obligations of the Company contained in this Section
11 (other than those obligations contained in clause (e) above) shall continue
until the earlier of the consummation of a Public Sale, Approved Sale, or a
Qualified Public Offering.
12. Amendment and Waiver. Except as otherwise provided herein,
no modification, amendment or waiver of any provision of this Agreement shall be
effective against the Company or the Stockholders unless such modification,
amendment or waiver is approved in writing by the Company and the holders of not
less than 51% of the Stockholder Shares, respectively. Notwithstanding anything
to the contrary, no modification, amendment or waiver or any provision of this
Agreement that adversely affects the rights or obligations of any Stockholder
relative to the rights and obligations of the Other Stockholders hereunder shall
be effective against such Stockholder unless approved in writing by such
Stockholder. The failure of any party to enforce any of the provisions of this
Agreement shall in no way be construed as a waiver of such provisions and shall
not affect the right of such party thereafter to enforce each and every
provision of this Agreement in accordance with its terms.
13. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
14. Entire Agreement. Except as otherwise expressly set forth
herein, this document and the other Transaction Documents embody the complete
agreement and understanding among the parties hereto with respect to the subject
matter hereof and supersede and preempt any prior understandings, agreements or
representations by or among the parties, written or oral, which may have related
to the subject matter hereof in any way.
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15. Successors and Assigns. Except as otherwise provided
herein, this Agreement shall bind and inure to the benefit of and be enforceable
by the Company and its successors and assigns and the Stockholders and any
subsequent holders of Company Shares and the respective permitted successors and
assigns of each of them, so long as they hold Company Shares.
16. Counterparts. This Agreement may be executed in separate
counterparts each of which shall be an original and all of which taken together
shall constitute one and the same agreement.
17. Remedies. The parties hereto shall be entitled to enforce
their rights under this Agreement specifically to recover damages by reason of
any breach of any provision of this Agreement and to exercise all other rights
existing in their favor. The parties hereto agree and acknowledge that money
damages may not be an adequate remedy for any breach of the provisions of this
Agreement and that the Company, and may in its sole discretion apply to any
court of law or equity of competent jurisdiction for specific performance and/or
injunctive relief (without posting a bond or other security) in order to enforce
or prevent any violation of the provisions of this Agreement.
18. Notices. All notices, demands or other communications to
be given or delivered under or by reason of the provisions of this Agreement
will be in writing and will be deemed to have been given at such time as (i)
actually received, when delivered personally, (ii) mailed by certified or
registered mail, return receipt requested and postage prepaid, or sent via a
nationally recognized overnight courier, or (iii) sent via facsimile to the
recipient accompanied by a certified or registered mailing. Such notices,
demands and other communications will be sent to the Company and the
Stockholders at the address set forth below or at such address or to the
attention of such other person as the recipient party has specified by prior
written notice to the sending party.
To the Company:
Roma Restaurant Holdings, Inc.
c/o Romacorp, Inc.
0000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxxxx Xxxx
Facsimile: (000) 000-0000
With copies (which shall not constitute notice to the Company)
to:
Sentinel Capital Partners, L.P.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxx
Xxxx X. XxXxxxxxx
Facsimile: (000) 000-0000
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and
Xxxxxxxx & Xxxxx
Citicorp Center
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxxx Xxxxx, Esq.
Facsimile: (000) 000-0000
To Sentinel or Sentinel II:
Sentinel Capital Partners, L.P.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxx
Xxxx X. XxXxxxxxx
Xxxx X. Xxxxxx
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice to Sentinel)
to:
Xxxxxxxx & Xxxxx
Citicorp Center
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxxx Xxxxx, Esq.
Facsimile: (000) 000-0000
To Omega:
Omega Partners, L.P.
Xxx Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
To the Travelers Group:
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To Holdings:
NPC Restaurant Holdings, Inc.
c/o NPC International, Inc.
00000 Xxxxxxx Xxxx., Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxx
Facsimile: (000) 000-0000
With a copy (which shall not constitute notice to Holdings)
to:
Xxxx X. Xxxxxx, Esq.
Xxxxxxx, Mag & Fizzell, P.C.
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
19. GOVERNING LAW. ALL QUESTIONS CONCERNING THE CONSTRUCTION,
VALIDITY AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING
EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE
STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF
THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE.
20. Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
* * * * *
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EXHIBIT A
FORM OF JOINDER TO
STOCKHOLDERS AGREEMENT
THIS JOINDER to the Stockholders Agreement, dated as of
___________, 199_ by and among Roma Restaurant Holdings, Inc., a Delaware
corporation (the "Company"), and certain stockholders of the Company (the
"Agreement"), is made and entered into as of _________ by and between the
Company and _________________ ("Holder"). Capitalized terms used herein but not
otherwise defined shall have the meanings set forth in the Agreement.
WHEREAS, Holder has acquired certain shares of Common Stock
("Holder Stock"), and the Agreement and the Company requires Holder, as a holder
of Common Stock, to become a party to the Agreement, and Holder agrees to do so
in accordance with the terms hereof.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties to this Joinder hereby
agree as follows:
1. Agreement to be Bound. Holder hereby agrees that upon
execution of this Joinder, it shall become a party to the Agreement and shall be
fully bound by, and subject to, all of the covenants, terms and conditions of
the Agreement as though an original party thereto and shall be deemed a
Stockholder for all purposes thereof. In addition, Holder hereby agrees that all
Common Stock held by Holder shall be deemed Company Shares for all purposes of
the Agreement.
2. Successors and Assigns. Except as otherwise provided
herein, this Joinder shall bind and inure to the benefit of and be enforceable
by the Company and its successors and assigns and Holder and any subsequent
holders of Holder Stock and the respective successors and assigns of each of
them, so long as they hold any shares of Holder Stock.
3. Counterparts. This Joinder may be executed in separate
counterparts each of which shall be an original and all of which taken together
shall constitute one and the same agreement.
4. Notices. For purposes of Section 18 of the Agreement, all
notices, demands or other communications to the Holder shall be directed to:
[Name]
[Address]
[Facsimile Number]
5. GOVERNING LAW. ALL QUESTIONS CONCERNING THE CONSTRUCTION,
VALIDITY AND INTERPRETATION OF THIS JOINDER SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING
EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE
STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE
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19
APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF
DELAWARE.
6. Descriptive Headings. The descriptive headings of this
Joinder are inserted for convenience only and do not constitute a part of this
Joinder.
* * * * *
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20
IN WITNESS WHEREOF, the parties hereto have executed this
Stockholders Agreement as of the date first above written.
ROMA RESTAURANT HOLDINGS, INC.
By: /s/ Xxxxxx X. Page
------------------------------
Name: Xxxxxx X. Page
Title: President
SENTINEL CAPITAL PARTNERS, L.P.
By Sentinel Partners, L.P.
Its: General Partner
By: Sentinel Partners, Inc.
Its: General Partner
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Title: Secretary
SENTINEL CAPITAL PARTNERS II, L.P.
By Sentinel Partners II, L.P.
Its: General Partner
By: Sentinel Partners II, Inc.
Its: General Partner
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Title: President & Secretary
OMEGA PARTNERS, L.P.
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxx X. Xxxxx
Title: General Partner
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PROVIDENT FINANCIAL GROUP, INC.
By: /S/
------------------------------
Name:
Title:
TRAVELERS CASUALTY AND SURETY
COMPANY
By: /S/ Xxxxx X. Xxxxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: 2nd Vice President
THE TRAVELERS INSURANCE COMPANY
By: /S/ Xxxxx X. Xxxxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: 2nd Vice President
THE TRAVELERS LIFE AND ANNUITY
COMPANY
By: /S/ Xxxxx X. Xxxxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: 2nd Vice President
THE PHOENIX INSURANCE COMPANY
By: /S/ Xxxxx X. Xxxxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: 2nd Vice President
NPC RESTAURANT HOLDINGS, INC.
By: /S/ Xxxx X. Xxxx
------------------------------
Name:
Title:
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