STOCKHOLDERS AGREEMENT
AGREEMENT, dated as of the 16th day of February, 1998, among the Shaker
Stockholders, the Xxxxxx Stockholders and the Westwood Stockholders who are
defined and whose names and addresses are set forth on Exhibit A hereto,
collectively, the "Stockholders" and HOMETOWN AUTO RETAILERS, INC. (the
"Company").
WITNESSETH
WHEREAS, the Stockholders, in the aggregate, will own, upon the
consummation of a combination transaction among certain automobile dealerships
controlled by them, all of the outstanding shares of Class B Common Stock (the
"Shares") of the Company (as used herein the term "Shares" shall include all
securities of any kind or class issued with respect to the Shares as a result of
stock dividends, stock splits, mergers, acquisitions, exchanges, liquidating
distributions or other capital changes); and
WHEREAS, the Stockholders seek to provide for the election of directors of
the Company and related management matters.
NOW, THEREFORE, it is agreed as follows:
1. Effective upon the consummation of the proposed public offering of
Class A Common Stock of the Company (the "Closing Date"), the Stockholders
shall, in every instance, unless five of the six Directors (as hereinafter
defined) shall otherwise agree, vote all of their Shares: (a) for the election,
as directors of the Company, of six directors (such directors and their
respective successors pursuant to this Agreement being hereinafter referred to
as the "Directors"), two of whom shall be designated by each of the three
Stockholder groups who are parties hereto; and (b) on all other matters in the
manner determined by a majority (i.e., no less than four) of such Directors. The
initial six Directors designated by each of the respective Stockholder groups
shall be as follows: (x) Shaker Stockholders: Xxxxxx Xxxxxx and Xxxxx Xxxxxx;
(y) Xxxxxx Stockholders: Xxxxxxx X. Xxxxxx Xx. and Xxxxx Xxxxxx; and (z)
Westwood Stockholders: Xxxxxxxxx X. Xxxxxxxx and Xxxxxx X. Xxxxxxxx. In the
event of the death, incapacity or other inability to serve of any Director, the
Stockholder group which designated such Director shall have the exclusive right
to designate a successor nominee for director. In connection with the foregoing,
each of the Stockholders hereby agrees, on behalf of himself/herself and his/her
heirs, administrators, successors and assigns, that he/she shall execute such
other documents as may be necessary or appropriate to effectuate the elections
of Directors as aforesaid and all actions approved by the Board of Directors. In
the event of the death or legal incompetency of any Stockholder, the term
Stockholder shall thereafter include the executor or administrator of such
Stockholder or, following any distribution of the shares owned by such
Stockholder, the designee of a majority of such shares held by all distributees,
heirs or other persons taking by the laws of descent and distribution and any
remaining shares held by any such executor, administrator or the estate of such
Stockholder.
2. Each of the Stockholders agrees that he/she will not sell, transfer,
pledge or otherwise dispose of any of his/her Shares unless the transferee
agrees, in a writing satisfactory to counsel for the Company, to be bound by
this Agreement and the voting provisions hereunder, provided, however, that
these provisions shall not apply to a public sale on a stock exchange or in the
over-the-counter market pursuant to an exemption from registration under the
Securities Act of 1933, as amended, or a sale pursuant to an effective
registration statement under such Act.
3. This Agreement shall be for a term of five (5) years commencing on the
date hereof.
4. To facilitate the enforcement of the voting provisions hereof, each of
the Stockholders does, by this Agreement, hereby appoint the person then holding
the office of Secretary of the Company or his/her designee, with full power of
substitution, the attorney and proxy of such Stockholder to attend all meetings
of the Stockholders of the Company and to sign all consents of Stockholders of
the Company and to vote his/her Stock in accordance with the provisions hereof.
In addition, each of the Stockholders does hereby bind his/her heirs,
administrators, successors and assigns to be bound by this proxy and, if
necessary, to execute a counterpart of this Agreement. THIS PROXY SHALL BE
IRREVOCABLE FOR THE TERM OF THIS AGREEMENT.
5. In the event of the death or incompetency of any of the Stockholders,
this Agreement shall be binding upon his executors or other administrators and
upon all persons who succeed to his shares by will or the laws of intestate
successors; provided however, that such persons shall be allowed to act under
this Agreement only by a vote of a majority of the shares held by such group and
only after all of the members of such group have executed a document
satisfactory to the Company and its counsel agreeing to be bound by the
provisions hereof.
6. All of the Stockholders who are or who may hereafter become parties to
this Agreement shall submit their stock certificates to the Company which shall
imprint, or cause to have imprinted, thereon the following legend:
"The shares of stock represented by this certificate are
subject to certain restrictions and obligations set forth in an
Agreement dated as of the 16th day of February, 1998 between the
Company, the Registered Holder of this certificate and certain other
stockholders of the Company. Such shares may be voted only as
authorized pursuant to an irrevocable proxy which has been granted
pursuant to and subject to the terms of the Agreement and may be
transferred only as authorized pursuant to such Agreement. A copy of
the Agreement is on file in the office of the Secretary of the
Company.
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7. Each party hereto, on behalf of himself/herself and his/her heirs,
administrators, successors and assigns, agrees to provide notice of any death or
incapacity of a Director, any successor designee for director, and any
Stockholder.
8. This Agreement shall be governed by the General Corporation Law of the
State of Delaware and shall be construed under New York Law.
9. Notices shall be sent, delivery prepaid, by certified mail, return
receipt requested, or by overnight courier to the addresses set forth under each
signature line unless any signatory or successor to a signatory shall provide a
different address to every party hereto by notice similarly served.
10. This Agreement cannot be changed, modified or terminated except in
writing signed by the parties hereto.
11. This Agreement shall be binding upon the parties hereto and their
heirs, successors and assigns.
IN WITNESS WHEREOF, this Agreement has been signed as of the date first
above written.
HOMETOWN AUTO RETAILERS, INC.
By:
-----------------------------------
Name:
Title:
Shaker Stockholders
--------------------------------------
Xxxxxx Xxxxxx
000 Xxxxx Xxxx
Xxxxxxxxxxx, XX 00000
---------------------------------------
Xxxxxx Xxxxxx
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
----------------------------------------
Xxxxxx X. Shaker
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
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Xxxxxx Xxxxxx Voting Trust
000 Xxxxxx Xxxx
Xxxxxxxxxx, XX 00000
By:
-------------------------------------
Xxxxx Xxxxxx, Authorized Trustee
0000 Xxxx Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
----------------------------------------
Xxxxxxx Xxxxxx
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
----------------------------------------
Xxxxxxx Xxxxxx Voting Trust
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
By:
-------------------------------------
Xxxxxx Xxxxxx, Authorized Trustee
Xxxxx Xxxxxxx
00 Xxxxxxxx Xxxx
Xxx, XX 00000
----------------------------------------
Xxxxx Xxxxxx
0000 Xxxx Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
----------------------------------------
Xxxxx Xxxxxx
000 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
----------------------------------------
Xxxxxx Xxxxxx
000 Xxxxxx Xxxx
Xxxxxxxxxx, XX 00000
----------------------------------------
Xxxx Xxxxxx
000 Xxxxxx Xxxx
Xxxxxxxxxx, XX 00000
4
----------------------------------------
Xxxx Xxxxxx
000 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Xxxxxx Stockholders
--------------------------------------
Xxxxxxx X. Xxxxxx Xx.
000 X. Xxxxxxxx
Xxxxxxx, XX 00000
---------------------------------------
Xxxxxxx X. Xxxxxx Xx.
00 Xxxxxx Xxxx
Xxxxxxx, XX 00000
----------------------------------------
Xxxxx Xxxxxx
0 Xxxxxxx Xxxxx
Xxxxxxxxxx Xxxxxxxx, XX 00000
Westwood Stockholders
--------------------------------------
Xxxxxxxxx X. Xxxxxxxx
00 Xxxxxxxx Xxxxx
Xxxxxx Xxxxx, XX 00000
--------------------------------------
Xxxxxx X. Xxxxxxxx
000 Xxxxxxx Xxxxx
Xxxxx Xxxxx
Xxxxxxxxx Xxxx, XX 00000
---------------------------------------
Xxxxx Xxxxxxxx
00 Xxxxxxxx Xxxxx
Xxxxxx Xxxxx, XX 00000
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