EXHIBIT 10.26
EXECUTION COPY
AMENDMENT TO CONTRIBUTION AGREEMENT
This AMENDMENT (the "Amendment") to the Contribution Agreement, dated as of
June 7, 1999 (as in effect on the date hereof, but without giving effect to this
Amendment, the "Agreement"), by and between Luminant Worldwide Corporation, a
Delaware corporation (f/k/a Clarant Worldwide Corporation and referred to herein
as "Luminant"), and Young & Rubicam Inc., a Delaware corporation (the
"Contributor"), is made and entered into as of September 2, 1999.
RECITALS
A. Luminant and Contributor have determined that it is in their best
interests to revise the Agreement.
B. Luminant and Contributor desire to amend the Agreement on the terms and
subject to the conditions set forth herein.
C. All of the Other Founding Companies and their stockholders or members
have simultaneously executed and delivered amendments to each of their
respective Other Agreements.
NOW, THEREFORE, in consideration of the agreements set forth herein, and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto hereby agree as follows:
1. Capitalized terms used but not defined herein shall have the meanings
ascribed to them in the Agreement. The term "Shares" means shares of Luminant
Common Stock. "Non-Voting Shares" means shares of Luminant non-voting Common
Stock and "Voting Shares" means shares of Luminant voting Common Stock. The term
"Initial Holdings" means the number of Shares issued to Contributor at the
Closing. All defined terms in the Agreement using the word "Clarant" are hereby
revised to use the word "Luminant."
2. The Agreement is amended to provide that the references in the Agreement to
"this Agreement" or "the Agreement" (including indirect references such as
"hereunder," "hereby," "herein" and "hereof") shall be deemed to be references
to the Agreement as amended hereby. To the extent that any provisions of the
Agreement as in effect prior to the effectiveness of this Amendment conflict
with or contradict the provisions of this Amendment, the provisions of this
Amendment shall control and shall supersede such inconsistent provisions.
3. Article 3 is hereby amended by adding a new Section 3.4 and Section 3.5 to
read as follows:
3.4 SALE AND PURCHASE OF NON-VOTING SHARES AT IPO. At the closing of
the IPO, Luminant agrees to sell to Contributor and Contributor agrees to
purchase from Luminant, in a private placement, Non-Voting Shares, at the
IPO price per share, with an aggregate value equal to fifteen million
dollars ($15,000,000). The placement fee for the transaction described in
this Section 3.4 shall not exceed four percent (4.0%) and shall be paid by
Luminant. The demand and piggyback registration rights provided for in
Section 17.1 shall apply to the shares described in this Section 3.4;
PROVIDED, THAT, in addition to the Demand Registration right provided to
Contributor in Section 17.1(b), Contributor shall have the additional right
to effect one Demand Registration solely with respect to the shares
described in this Section 3.4 at any time during the six-month period
beginning on the date that is twelve (12) months after the Closing Date,
and any shares described in this Section 3.4 that are not included in such
Demand Registration may be included in a Demand Registration that occurs
after the date that is eighteen (18) months after the Closing Date as
described in Section 17.1(b) or in any other registration as permitted by
Section 17.1(a). In the event Contributor is required at any time to file a
notification and report form under the HSR Act with respect to the Shares
acquired pursuant to the Agreement, as amended hereby, Luminant shall pay
the applicable filing fee for Contributor and Contributor's reasonable
expenses in connection with such filing.
3.5 ISSUANCE OF NON-VOTING COMMON STOCK; CONVERSION OF VOTING SHARES
AND NON-VOTING SHARES.
(a) Except as specifically provided for in Sections 3.4, 3.5(b) and
3.5(d) hereof, all shares of Luminant Common Stock issued or transferred to
the Contributor pursuant to this Agreement, or in connection with the
transactions contemplated hereunder, shall be Voting Shares.
(b) To the extent that any issuance or transfer of Shares hereunder
(including any issuance or transfer pursuant to Section 3.1 or 3.3 hereof,
or any issuance upon the exercise of the option described in Section
10.8(i) hereof) would cause Contributor to directly or indirectly own in
excess of eighteen percent (18%) of the issued and outstanding Voting
Shares, Luminant shall, in lieu of issuing that number of Voting Shares
which would result in such excess, issue to Contributor an equal number of
NonVoting Shares.
(c) Luminant hereby agrees to notify Contributor if Luminant, or if,
to Luminant's knowledge, any other Person, takes any action or fails to
take any action which would (i) cause Contributor to own in excess of
eighteen percent (18%) of the issued and outstanding Voting Shares or (ii)
if Contributor at the time owns Non-Voting Shares,
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cause Contributor to own less than eighteen percent (18%) of the issued and
outstanding Voting Shares.
(d) Contributor shall have the option to convert at any time, on a
one-to-one basis, (i) any number of its Voting Shares into Non-Voting
Shares and (ii) any number of its Non-Voting Shares into Voting Shares;
PROVIDED, HOWEVER, Contributor shall not have the right to convert any
Non-Voting Shares into Voting Shares if such conversion would result in
Contributor owning in excess of eighteen percent (18%) of the issued and
outstanding Voting Shares.
(e) Except for voting rights, the Non-Voting Shares shall have the
same rights, entitlements and preferences as any other class of Luminant
Common Stock. The parties acknowledge and agree that the value of each
Non-Voting Share is equal to the value of each Voting Share, and that any
Non-Voting Shares issued to Contributor in lieu of Voting Shares pursuant
to this Section 3.5, or converted from Voting Shares pursuant to this
Section 3.5, shall be treated as Voting Shares for all other purposes under
this Agreement and the transactions contemplated hereby.
(f) Prior to the closing of the IPO, Luminant shall have amended
Article IV of its Articles of Incorporation by adding the following
provision:
"At the option of the holder of Non-Voting Common Stock, each share of
NonVoting Common Stock held by such holder may be converted at any
time on a share for share basis into Common Stock."
5. Article 5 is hereby amended by adding the following new Section 5.3:
Section 5.3 ACCREDITED INVESTOR. Contributor is an "accredited investor" as
defined in Rule 501(a) of Regulation D promulgated under the 0000 Xxx.
6. Section 10.3(b) is hereby amended by deleting "ten (10)" on the third line
and inserting "eleven (11)."
7. Section 10.8(i) is amended to provide that Luminant shall grant to
Contributor, in consideration for this Section 10.8, at the Closing, an option
to purchase one million eight hundred thousand (1,800,000) shares of Luminant
Common Stock at an exercise price equal to the IPO price per share of Luminant
Common Stock. Further, EXHIBIT 10.8(i) is hereby amended to reflect such
increase in the shares of Luminant Common Stock subject to the option.
8. Article 10 is hereby amended by adding the following new Section 10.10:
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10.10 FORM S-8 FILING. Within thirty (30) days after the Closing,
Luminant shall file a registration statement on Form S-8 pursuant to which
the issuance of Shares upon the exercise of options will be registered.
Persons holding the "Vested Options" in Luminant identified on Addendum A
and Addendum B to EXHIBIT 3.1 shall be prohibited from exercising the
Vested Options for a period of thirty (30) days following the Closing.
9. Section 12.1(b) is hereby amended by deleting "December 31, 1999" on the
fourth line and inserting "October 15, 1999."
10. The third sentence of Section 17.1(a) is hereby deleted in its entirety
and replaced with the following:
In addition, subject to Section 17.1(b)(v), if Luminant is advised in
writing in good faith by any managing underwriter of an underwritten
offering of the securities being offered pursuant to any registration
statement under this Section 17.1(a) that the number of Shares offered by
any Persons is greater than the number of Shares that can be offered
without adversely affecting the offering, Luminant may reduce the number of
Shares to be offered by first reducing the number of Shares to be offered
by Persons other than Luminant, the Contributor and the members and
stockholders of the Other Founding Companies, and second by reducing pro
rata the number of Shares to be offered by Luminant, the Contributor and
the members and stockholders of the Other Founding Companies; PROVIDED
HOWEVER that in no event shall the Shares to be offered by Luminant be
reduced to less than fifty percent (50%) of the offering; FURTHER PROVIDED
that if the number of Shares to be offered by Luminant is already less than
or equal to fifty percent (50%) of the offering, then the number of Shares
to be offered by Luminant shall not be reduced. Subject to the foregoing,
the reduction in the Shares offered by Luminant and the Contributor and the
stockholders and members of the Other Founding Companies shall be effected
on a pro rata basis; provided that to the extent that the Contributor or a
member or stockholder of a Founding Company has sold (in that or a previous
offering), or is being provided the right to sell, fifteen percent (15%) or
more of its, his or her Initial Holdings pursuant to any registration under
this Section 17.1(a), such holder's rights to be included in the offering
shall be subordinate to the rights of Luminant, the Contributor and the
members and stockholders of the Other Founding Companies.
11. Section 17.1(b) is hereby amended by adding the following new subsection
17.1(b)(v):
(v) Notwithstanding any other provision contained in this Article 17 or any
provision contained in any of the Other Agreements, any Shares sought to be
registered by Contributor shall not be subject to reduction under Section
17.1(a) in any underwritten offering resulting from the exercise by
Contributor of its Demand Registration rights under either Section 3.4 or
this Section 17.1(b).
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12. Section 17.1(b)(iii) is hereby amended in its entirety and replaced with
the following:
Luminant shall be obligated to effect one Demand Registration for
Contributor pursuant to this Section 17.1(b) and one Demand Registration
for Contributor pursuant to Section 3.4.
13. EXHIBIT 3.1 is deleted in its entirety and replaced with the EXHIBIT 3.1
attached hereto.
14. EXHIBIT 3.3 is deleted in its entirety and replaced with the EXHIBIT 3.3
attached hereto.
15. Except as herein provided, the Agreement shall remain unchanged and in full
force and effect.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective authorized officers or representatives, as of
the date first above written.
LUMINANT WORLDWIDE CORPORATION
By: /s/ Xxxxxxxxx X. Xxxxxx
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Name: Xxxxxxxxx X. Xxxxxx
Title: Chief Executive Officer
YOUNG & RUBICAM INC.
By: /s/ Xxxxx Blondy
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Name: Xxxxx Blondy
Title: Authorized Signatory
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