Exhibit (c)
VOTING TRUST AGREEMENT
AGREEMENT, made this 26th day of August, 1997, among CD RADIO INC.,
a Delaware corporation (the "Company"), XXXXXXX XXXXXXXXX ("DF"), a stockholder
of the Company and XXXXX XXXXXXXXX (hereinafter called the "Trustee").
RECITALS
WHEREAS, the Company intends to make through Xxxxxxx Xxxxx & Co. (i)
an offer registered under the Securities Act of 1933, as amended, to exchange
shares of a new class of its preferred stock for all outstanding shares of its
5% Delayed Convertible Preferred Stock, par value $.001 per share (the "Exchange
Offer"), (ii) an underwritten public offering of its common stock, par value
$.001 per share ("Common Stock") (the "Stock Offering"), and (iii) an
underwritten public offering of senior debt securities of the Company (the "Debt
Offering", and together with the Exchange Offer and the Stock Offering, the
"Offers); and
WHEREAS, DF owns 2,834,500 shares of Common Stock (the "Current
Shares") and XXXXXX X. XXXXXXXXX ("RMF") is the husband of DF; and
WHEREAS, in order to assist the Company in marketing and completing
the Offerings and for other consideration, DF has agreed to enter into this
Agreement and to deposit the Xxxxxxxxx Securities (as defined below) into the
trust created hereby; and
WHEREAS, DF agrees to deposit, or cause the deposit into the trust
created hereby of the Current Shares and any other shares of capital stock of
the Company ("Other Shares") that may hereafter be acquired or beneficially
owned by any of RMF, DF, members of RMF's or DF's immediate family or any entity
in which any of RMF, DF or members of RMF's or DF's immediate family have,
directly or indirectly, a controlling interest or, on a best efforts basis, more
than 25% of such entity's equity or debt (the "Xxxxxxxxx Affiliates", acting as
a group or severally as the context requires), including, without limitation,
any shares of capital stock of the Company that may be issued upon exercise of
any rights, warrants or options to purchase, or other securities convertible
into, Common Stock (collectively with the Current Shares and the Other Shares,
the "Xxxxxxxxx Securities"); and
WHEREAS, in order to induce the Trustee to act hereunder, the
Company has agreed to indemnify the Trustee for his services hereunder; and
WHEREAS, in the interests of all the stockholders of the Company,
the parties hereto are desirous of creating a trust;
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NOW, THEREFORE, the parties hereby agree as follows:
1. The Xxxxxxxxx Affiliates shall forthwith, and from time to time
in the future if any of the Xxxxxxxxx Affiliates acquires additional Xxxxxxxxx
Securities, endorse in blank and assign and deliver to the Trustee all
certificates for the Xxxxxxxxx Securities and shall do all things necessary for
the transfer of the Xxxxxxxxx Securities to the Trustee on the books of the
Company. The Trustee shall issue and deliver in exchange therefor voting trust
certificates for the Xxxxxxxxx Securities so transferred to the Trustee in
substantially the form attached hereto as APPENDIX I.
2. (a) The Trustee shall hold the Xxxxxxxxx Securities so
transferred to him in trust hereunder for the benefit of the Xxxxxxxxx
Affiliates, under the terms and conditions set forth herein.
(b) Notwithstanding any provision hereof, each of the
Xxxxxxxxx Affiliates shall have the right to sell, assign, transfer or pledge
any or all of the Xxxxxxxxx Securities to unaffiliated third parties and the
Trustee shall use his reasonable efforts to cause any Xxxxxxxxx Securities so
sold, assigned, transferred or hypothecated to be transferred promptly to the
purchaser, assignee, transferee or pledgee thereof against delivery of the
voting trust certificates representing the Xxxxxxxxx Securities; PROVIDED in the
case of a pledge that the pledgee shall not have any right to vote the Xxxxxxxxx
Securities. Xxxxxxxxx Securities sold, assigned, transferred or hypothecated to
an affiliate of any of the Xxxxxxxxx Affiliates shall
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remain in trust hereunder subject to the terms of this Agreement. Xxxxxxxxx
Securities sold or transferred to third parties not affiliated with the
Xxxxxxxxx Affiliates shall be released from the trust upon such sale or
transfer. A third party shall be deemed "affiliated" for purposes of this
Section 2(b) if such third party (i) is controlled by, controls or is under
common control with RMF, DF or a member of the immediate family of RMF or DF,
(ii) is retained by RMF, DF or a member of the immediate family of RMF or DF as
consultant generally operating at the direction of such person, (iii) is
employed, directly or indirectly, by RMF, DF, a member of the immediate family
of RMF or DF or a person controlled by, controlling or under common control with
RMF or DF, or (iv) has made a substantial business investment of any nature in
any entity with RMF, DF or a member of the immediate family of RMF or DF. The
term "substantial business investment" refers to investments by a third party
comprising more than 5% of the equity or debt of a company, partnership or joint
venture (other than the Company) in which RMF, DF or an affiliate of RMF or DF
has an investment of at least 5%.
3. The Trustee shall surrender to the proper officers of the Company
for cancellation all certificates of stock which shall be assigned and delivered
to him as hereinbefore provided, and in their stead shall procure new
certificates to be issued to him as Trustee under this Agreement.
4. (a) The Trustee shall have only the powers set forth in this
Agreement.
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(b) With respect to all Xxxxxxxxx Securities held in trust by
the Trustee hereunder, the Xxxxxxxxx Affiliates shall severally retain the
entire economic and beneficial ownership rights therein, including without
limitation the right to receive dividends and distributions on the Xxxxxxxxx
Securities and the right to direct the Trustee in any order whatsoever to sell,
assign, transfer, encumber or grant any option therein to or in favor of any
person other than RMF, DF or another Xxxxxxxxx Affiliate or agree to do any such
thing, except that the Trustee shall have the exclusive and absolute right in
respect of such Xxxxxxxxx Securities to vote (in person, by proxy, by written
consent or otherwise) the Xxxxxxxxx Securities at all times during the term of
this Agreement, including without limitation the right to vote at any election
of directors and in favor of or in opposition to any resolution, any
dissolution, liquidation, merger or consolidation of the Company, any sale of
all or substantially all the Company's assets, any issuance or authorization of
securities, or any action of any character whatsoever which may be presented at
any meeting or require the consent of stockholders of the Company. Xxxxx
Xxxxxxxxx as Trustee shall vote the Xxxxxxxxx Securities in his discretion. In
the case of his incapacity, the successor Trustee or Trustees shall at all times
vote in respect of any action as follows: (i) if the matter concerned is the
election of directors, then the Trustees shall vote the entire number of shares
held by the trust created hereunder for each director (or nominee for director)
by multiplying the total number of votes held by the trust by a fraction, the
numerator of which is the number of votes cast in respect of shares of the
Company other than Xxxxxxxxx Securities (the "Nonaffiliated Votes") for such
person and the denominator of which is the sum of the total number of votes
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represented by all shares casting any votes in the election of directors; (ii)
where the matter under Delaware law or the Certificate of Incorporation or the
Bylaws of the Company requires at least an absolute majority of a all
outstanding shares of common stock of the Company in order to be effected, then
the Trustees shall vote all of the Xxxxxxxxx Securities in this manner as the
majority of all Nonaffiliated Votes are cast for or against the matter; and
(iii) on all other matters, including without limitation any amendment of this
Agreement for which a stockholders vote is required under Section 9 hereof, the
Trustees shall at all times vote all of the Xxxxxxxxx Securities for or against
the matter in the same manner in favor of or in opposition to such matter as
Nonaffiliated Votes are cast for or against the matter. If any calculation of
votes under the preceding sentence would require a fractional vote, the Trustees
shall vote the next lower number of whole shares. Notwithstanding the foregoing,
the Trustee or the Trustees shall vote the Xxxxxxxxx Securities against any
proposal to elect RMF, DF, any other Xxxxxxxxx Affiliate or any other person
affiliated with RMF or DF (as defined in Section 2(b) above) as an officer or
director of the Company. The Trustee shall use all reasonable commercial efforts
to ensure, with respect to the Xxxxxxxxx Securities held in trust hereunder,
that all of the Xxxxxxxxx Securities are counted as being present for the
purposes of any quorum required for stockholder action of the Company and to
vote as set forth above.
(c) The Trustee may vote with respect to all the Xxxxxxxxx
Securities held hereunder in person or by such person or persons as it may from
time
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to time select as their proxy; PROVIDED that the Trustee shall at all times do
so in conformity with the provisions of Section 4(b) hereof.
(d) The Trustee shall have no authority to sell or otherwise
dispose of or to pledge, encumber or hypothecate, any of the stock deposited
pursuant to the provisions of this Agreement, unless directed to do so by the
Xxxxxxxxx Affiliates as provided in Section 2(b) above.
5. To the fullest extent permitted by law, the Trustee shall not be
liable for any vote cast, or consent given by him, or for any other action
hereunder taken or omitted by him hereunder, in good faith, or in the absence of
gross negligence or willful misconduct. To the fullest extent permitted by law,
the Trustee shall not be liable in acting on any notice, request, consent,
certificate, instruction, or other paper or document or signature reasonably
believed to be genuine and to have been signed by the proper party. The Trustee
may consult with legal counsel (reasonably competent for the purpose) and, to
the fullest extent permitted by law, any act or omission undertaken by the
Trustee in good faith in accordance with the opinion of such legal counsel shall
not result in any liability of the Trustee.
6. The Trustee shall collect and receive all dividends that may
accrue upon the shares of stock subject to this trust, and shall distribute the
same to the Xxxxxxxxx Affiliates in accordance with their respective ownership
interests, except
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that dividends payable in capital stock of the Company shall be held in trust as
additional Xxxxxxxxx Securities hereunder.
7. In the event of any Trustee dying or resigning or refusing or
becoming unable to act (any of which is deemed incapacity), a successor Trustee,
which shall be a bank incorporated under the laws of Canada or any of the
Provinces thereof having a capital and surplus of at least $500,000,000 CDN,
shall be appointed by the Board of Directors of the Company, and any Trustee so
appointed shall thereupon be vested with all the duties, powers, and authority
of a Trustee hereunder as if originally named herein. No successor Trustee shall
be liable for actions or omissions of any other Trustee.
8. This Agreement and the trust created herein shall become
effective on the closing of the first of the Offers and shall terminate upon the
fifth anniversary of the closing date. This Agreement is subject to any required
regulatory approvals. Until termination of this Agreement and the trust created
herein as provided above, such trust will be irrevocable. Upon the termination
of this Agreement, the Trustee shall assign and transfer to the Xxxxxxxxx
Affiliates in accordance with their respective ownership interests all the
Xxxxxxxxx Securities remaining in trust hereunder.
9. The Company and its stockholders are hereby expressly made third
party beneficiaries of this Agreement and, accordingly, to the fullest extent
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permitted by law, this Agreement may not be amended without the prior written
consent of the Company, acting by unanimous vote of its Board of Directors, and
approval of the Company's stockholders acting by the affirmative vote of
two-thirds of the total voting power of the capital stock of the Company
generally entitled to vote on matters submitted to a stockholder vote; PROVIDED,
HOWEVER, that the parties hereto may enter into any amendment of this Agreement,
without regard to this Section 9, and the parties agree to enter into any such
amendment, if such amendment is in the opinion of legal counsel to the Company
and DF necessary or appropriate to maintain technical compliance of the terms of
this agreement with the laws of the State of Delaware.
10. The Trustee is expressly authorized to incur and pay such
reasonable expenses and charges, to employ and pay such agents, attorneys and
counsel, and to incur and pay such other charges and expenses as the Trustee may
deem reasonably necessary and proper for administering this Agreement. All such
charges and expenses shall be paid by the Company. The Company hereby agrees to
indemnify any Trustee serving hereunder against any loss or liability, including
attorneys' fees, incurred in serving as voting trustee hereunder, to the fullest
extent permitted by law.
11. (a) Except as provided in Section 8 above, all of the covenants
and agreements contained in this Agreement shall be binding upon, and
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inure to the benefit of, the respective parties and their successors, assigns,
heirs, executors, administrators and other legal representatives, as the case
may be.
(b) This Agreement, and the rights of the parties hereto,
shall be governed by and construed in accordance with the laws of the State of
Delaware.
(c) This Agreement may be executed in one or more
counterparts, each of which will be deemed an original but all of which together
shall constitute one and the same instrument.
(d) If any provision of this Agreement shall be declared void
or unenforceable by any court or administrative board of competent jurisdiction,
such provision shall be deemed to have been severed from the remainder of the
Agreement and this Agreement shall continue in all respects to be valid and
enforceable. Each of the parties hereto shall take any and all actions necessary
for the enforceability of this Agreement under Delaware Law, including without
limitation any necessary filings or actions required by Section 218 of the
General Corporation Law of Delaware.
(e) Whenever the context of this Agreement shall so require,
the use of the singular number shall include the plural and the use of the
gender shall include all genders.
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IN WITNESS WHEREOF, the Company and DF have hereunto set their
hands and seals, and the Trustee, in token of his acceptance of the trust hereby
created, has hereunto set his hand and seal.
CD RADIO INC.
/s/ Xxxxx Xxxxxxxxx
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By: Xxxxx Xxxxxxxxx
Chairman and Chief Executive Officer
/s/ Xxxxx Xxxxxxxxx
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Xxxxx Xxxxxxxxx
/s/ Xxxxxxx Xxxxxxxxx
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Xxxxxxx Xxxxxxxxx
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CONSENT AND AGREEMENT
I hereby consent to the creation of the voting trust provided for in the
foregoing agreement, and I hereby agree to take all action necessary so as to
effectuate the provisions thereof affecting the Xxxxxxxxx Affiliates and the
Xxxxxxxxx Securities.
/s/ Xxxxxx X. Xxxxxxxxx
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Xxxxxx X. Xxxxxxxxx
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APPENDIX I
VOTING TRUST CERTIFICATE
Registered Holder:___________________ Certificate No.___
THE SALE, ASSIGNMENT, TRANSFER, PLEDGE, HYPOTHECATION OR OTHER
ENCUMBRANCE OF THIS VOTING TRUST CERTIFICATE OR THE COMMON STOCK REFERRED TO
HEREIN IS SUBJECT TO THE RESTRICTIONS, TERMS AND CONDITIONS SET FORTH IN THE
VOTING TRUST AGREEMENT DESCRIBED IN THIS CERTIFICATE AND PURSUANT TO WHICH THIS
CERTIFICATE IS ISSUED. THIS CERTIFICATE AND SUCH COMMON STOCK ARE SUBJECT TO AND
MAY BE TRANSFERRED OR ENCUMBERED ONLY IN ACCORDANCE WITH SUCH AGREEMENT, A
DUPLICATE OF WHICH IS ON FILE WITH THE SECRETARY OF THE CORPORATION.
Voting Trust Certificate
for
______ (__) shares of Common Stock
$0.001 par value per share
of
CD Radio, Inc.
a Delaware corporation
THIS IS TO CERTIFY THAT, upon the termination of a certain Voting
Trust established by a Voting Trust Agreement, dated August 26, 1997 (the
"Agreement"), by and among XXXXXXX XXXXXXXXX (the "Shareholder"), CD RADIO, INC.
a Delaware corporation (the "Company") and XXXXX XXXXXXXXX, as Voting Trustee
(the "Voting Trustee") pursuant to which this certificate has been issued, the
Shareholder, as registered holder of this certificate, will be entitled to
receive certificates, for the shares hereinabove specified (the "SHARES") and,
for the duration of such Agreement, to receive distributions equal to the cash
or property or non-voting stock distributions, if any, received by the Voting
Trustee upon a like number of the Shares standing in its name. Prior to the
termination of the Agreement, the Voting Trustee, with respect to the Shares,
shall possess and be entitled to exercise, in the manner and to the extent
provided in the Agreement, all the rights of every kind of the holder of this
certificate, including the right to vote and to take part in, or to consent to
any corporate or shareholders' action, it being expressly stipulated that no
right to vote, or take part in, or to consent to any corporate or shareholders'
action, shall pass to the registered holder hereof by, or under, this
certificate.
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This certificate is not transferable except as permitted by the
Agreement, and is not valid unless signed by the Voting Trustee. The holder
hereof, by accepting this certificate, manifests its consent that the
undersigned Voting Trustee may treat the registered holder hereof as the true
owner of this certificate for all purposes.
IN WITNESS WHEREOF, the undersigned, the Voting Trustee has caused
this certificate to be signed as of the ____ day of __________ 1997.
XXXXX XXXXXXXXX, as Voting Trustee
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