Exhibit M
AMENDED AND RESTATED SHAREHOLDERS' AGREEMENT
This Amended and Restated Shareholders' Agreement (this
"Agreement"), among The Xxxxxxx Xxxxx Group, Inc., a Delaware corporation ("GS
Inc."), and the Covered Persons (hereinafter defined) listed on Appendix A
hereto, as such Appendix A may be amended from time to time pursuant to the
provisions hereof.
WITNESSETH:
WHEREAS, the Covered Persons are beneficial owners of shares of
Common Stock, par value $0.01 per share, of GS Inc. (the "Common Stock").
WHEREAS, GS Inc. entered into the Original Shareholders' Agreement
(hereinafter defined) in connection with the initial public offering of GS Inc.
to address certain relationships among the parties thereto with respect to the
voting and disposition of shares of Common Stock and various other matters, and
to give to the Shareholders' Committee (hereinafter defined) the power to
enforce their agreements with respect thereto.
WHEREAS, the Shareholders' Committee, GS Inc. and a majority of the
outstanding Voting Interests (as defined in the Original Shareholders'
Agreement) desire to amend certain provisions of the Original Shareholders'
Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements, covenants and provisions herein contained, the parties hereto agree
to amend and restate the Original Shareholders' Agreement in its entirety as
follows:
ARTICLE I
DEFINITIONS AND OTHER MATTERS
Section 1.1 Definitions. The following words and phrases as used
herein shall have the following meanings, except as otherwise expressly provided
or unless the context otherwise requires:
(a) This "Agreement" shall have the meaning ascribed to such term
in the Recitals.
(b) A "beneficial owner" of a security includes any person who,
directly or indirectly, through any contract, arrangement, understanding,
relationship or otherwise has or shares: (i) voting power, which includes
the power to vote, or to direct the voting of, such security and/or (ii)
investment power, which includes the power to dispose, or to direct the
disposition of, such security, but for purposes of this Agreement a person
shall not be deemed a beneficial owner of (A) Common Stock solely by
virtue of the application of Exchange Act Rule 13d-3(d) or Exchange Act
Rule 13d-5, (B) Common Stock
solely by virtue of the possession of the legal right to vote securities
under applicable state or other law (such as by proxy or power of
attorney) or (C) Common Stock held of record by a "private foundation"
subject to the requirements of Section 509 of the Code. "Beneficially own"
and "beneficial ownership" shall have correlative meanings.
(c) "Code" shall mean the United States Internal Revenue Code of
1986, as amended from time to time, and the applicable rulings and
regulations thereunder.
(d) "Common Stock" shall have the meaning ascribed to such term in
the Recitals.
(e) "Company" shall mean GS Inc., together with its Subsidiaries.
(f) "Continuing Provisions" shall have the meaning ascribed to
such term in Section 7.1(b).
(g) "Covered Persons" shall mean the Participating Managing
Directors, whose names are listed on Appendix A hereto, and all persons
who may become Participating Managing Directors, whose names will be added
to Appendix A hereto.
(h) "Covered Shares" shall, with respect to each Covered Person,
equal the sum of the number of shares of Common Stock determined by the
following calculation, which calculation shall be made, and the sum shall
be determined, each time, after a Covered Person's Participation Date and
with respect to an award (other than an award in connection with GS Inc.'s
initial public offering or any acquisition by GS Inc. (unless otherwise
determined by the Shareholders' Committee)) under a Xxxxxxx Sachs
Compensation Plan, such Covered Person:
(i) receives Common Stock underlying an award of restricted stock
units,
(ii) becomes vested in an award under the Defined Contribution Plan
with respect to fiscal 1999 or 2000 only, or
(iii) exercises a stock option.
As of each such relevant event, the calculation, unless otherwise
determined by the Shareholders' Committee, shall be:
(A) such Covered Person's "gross" number of shares of Common Stock
underlying such restricted stock units, Defined Contribution Plan
awards or stock options, as applicable (i.e., the gross number is
determined before any deductions, including any deductions for
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withholding taxes, fees, commissions or the payment of any amount in
respect of exercise),
minus
(B) the sum of :
(1) with respect to the exercise of any stock option, a
number of shares of Common Stock (subject to rounding)
having a fair market value equal to the exercise price
of such option (determined based on the closing price of
the Common Stock on the trading day immediately
preceding the date of exercise), but not including any
amount in respect of fees, commissions, taxes or other
charges, and
(2) with respect to any relevant event, the product of:
(a) the "gross" number of shares of Common Stock
underlying the awards as described in Clause (A)
above, less the number of shares of Common Stock
determined in Clause (B)(1) above, if any, and
(b) the Specified Tax Rate.
With respect to any other type of award that may be granted under a
Xxxxxxx Xxxxx Compensation Plan from time to time, the timing and manner
of the calculation of Covered Shares in connection with such awards shall
be as determined by the Shareholders' Committee.
(i) "Defined Contribution Plan" shall mean The Xxxxxxx Sachs
Defined Contribution Plan adopted by the Board of Directors of GS Inc.,
and approved by the stockholders of GS Inc., on May 7, 1999, as amended or
supplemented from time to time, and any successors to such Plan.
(j) "Designated Senior Officers" shall mean each Participating
Managing Director who at the time in question has been appointed to a
Designated Title.
(k) "Designated Title" shall have the meaning ascribed to such
term in Section 7.2(g) hereof.
(l) "Effective Date" shall mean the close of business on June 22,
2004.
(m) "Employees' Profit Sharing Plan" shall mean The Xxxxxxx Xxxxx
Employees' Profit Sharing Retirement Income Plan, as amended or
supplemented from time to time, and any successors to such Plan.
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(n) "Exchange Act" shall mean the United States Securities
Exchange Act of 1934, as amended from time to time.
(o) A reference to an "Exchange Act Rule" shall mean such rule or
regulation of the SEC under the Exchange Act, as in effect from time to
time or as replaced by a successor rule thereto.
(p) "General Transfer Restrictions" shall have the meaning
ascribed to such term in Section 2.1(a) hereof.
(q) "Xxxxxxx Sachs Compensation Plan" shall mean the Defined
Contribution Plan, the Stock Incentive Plan or any other deferred
compensation or employee benefit plan of GS Inc. adopted by the Board of
Directors of GS Inc. and specified by the Shareholders' Committee as a
Xxxxxxx Xxxxx Compensation Plan (other than the Employees' Profit Sharing
Plan).
(r) "GS Inc." shall have the meaning ascribed to such term in the
Recitals.
(s) "Original Shareholders' Agreement" shall mean the
Shareholders' Agreement adopted by the Board of Directors of GS Inc. on
May 7, 1999, as amended or supplemented from time to time up to but
excluding the Effective Date.
(t) "Participation Date" is the date on which a Covered Person
became a Participating Managing Director for purposes of Section 2.1(a)
hereof or was appointed to a Designated Title for purposes of Section
2.1(b) hereof. In the event a Participating Managing Director ceases to be
a Participating Managing Director, or a Designated Senior Officer ceases
to be a Designated Senior Officer, and then such person again becomes a
Participating Managing Director or Designated Senior Officer, as
applicable, such person's Participation Date shall be determined by the
Shareholders' Committee (or any person authorized thereby).
(u) "Participating Managing Director" shall mean a Managing
Director of the Company who at the time in question participates in the
Partner Compensation Plan, the Restricted Partner Compensation Plan or any
other compensation or benefit plan specified by the Shareholders'
Committee.
(v) "Partner Compensation Plan" shall mean The Xxxxxxx Sachs
Partner Compensation Plan adopted by the Board of Directors of GS Inc.,
and approved by the stockholders of GS Inc., on May 7, 1999, as amended or
supplemented from time to time, and any successors to such Plan.
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(w) A "person" shall include, as applicable, any individual,
estate, trust, corporation, partnership, limited liability company,
unlimited liability company, foundation, association or other entity.
(x) "Preliminary Vote" shall have the meaning ascribed to such
term in Section 4.1(a) hereof.
(y) "Restricted Partner Compensation Plan" shall mean The Xxxxxxx
Xxxxx Restricted Partner Compensation Plan adopted by the Board of
Directors of GS Inc. on January 16, 2003 and approved by the stockholders
of GS Inc. on April 1, 2003, as amended or supplemented from time to time,
and any successors to such Plan.
(z) "Restricted Person" shall mean any person who is not (i) a
Covered Person or (ii) a director, officer or employee of the Company
acting in such person's capacity as a director, officer or employee.
(aa) "SEC" shall mean the United States Securities and Exchange
Commission.
(bb) "Shareholders' Committee" shall mean the body constituted to
administer the terms and provisions of this Agreement pursuant to Article
V hereof.
(cc) "Sole Beneficial Owner" shall mean a person who is the
beneficial owner of shares of Common Stock, who does not share beneficial
ownership of such shares of Common Stock with any other person (other than
pursuant to this Agreement or applicable community property laws) and who
is the only person (other than pursuant to applicable community property
laws) with a direct economic interest in such shares of Common Stock. The
interest of a spouse or a domestic partner in a joint account, and an
economic interest of the Company as pledgee, shall be disregarded for this
purpose.
(dd) "Special Transfer Restrictions" shall have the meaning
ascribed to such term in Section 2.1(b) hereof.
(ee) "Specified Tax Rate" shall mean the rate determined from time
to time by the Shareholders' Committee (or any person authorized thereby),
in its sole discretion, to be applicable to the calculation of Covered
Shares.
(ff) "Stock Incentive Plan" shall mean The Xxxxxxx Sachs Amended
and Restated Stock Incentive Plan adopted by the Board of Directors of GS
Inc. on January 16, 2003 and approved by the stockholders of GS Inc. on
April 1, 2003, as amended or supplemented from time to time, and any
predecessors or successors to such Plan.
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(gg) "Subsidiary" shall mean any person in which GS Inc. owns,
directly or indirectly, a majority of the equity economic or voting
ownership interest.
(hh) "Transfer Restrictions" shall mean the General Transfer
Restrictions and the Special Transfer Restrictions.
(ii) "vote" shall include actions taken or proposed to be taken by
written consent.
(jj) "Voting Shares" shall have the meaning ascribed to such term
in Section 4.1(a).
Section 1.2 Gender. For the purposes of this Agreement, the words
"he," "his" or "himself" shall be interpreted to include the masculine, feminine
and corporate, other entity or trust form.
ARTICLE II
LIMITATIONS ON TRANSFER OF SHARES
Section 2.1 Transfer Restrictions.
(a) Each Covered Person agrees that for so long as he is a Covered
Person, he shall at all times be the Sole Beneficial Owner of at least
that number of shares of Common Stock which equals 25% of his Covered
Shares (the "General Transfer Restrictions").
(b) Each Designated Senior Officer agrees that for so long as he
is a Designated Senior Officer, he shall at all times be the Sole
Beneficial Owner of at least that number of shares of Common Stock which
equals 75% of his Covered Shares (the "Special Transfer Restrictions");
provided, however, that the same Covered Shares may be used to satisfy
both the Special Transfer Restrictions and the General Transfer
Restrictions.
Section 2.2 Holding of Common Stock in GS Inc. Brokerage Accounts or
in Custody and in Nominee Name; Entry of Stop Transfer Orders.
(a) Each Covered Person understands and agrees that all shares of
Common Stock beneficially owned by him (other than shares of Common Stock
held of record by a trustee in a Xxxxxxx Xxxxx Compensation Plan or the
Employees' Profit Sharing Plan) shall, as determined by the Shareholders'
Committee from time to time, be held either in a brokerage account with a
Subsidiary in his name or in the custody of a custodian (and registered in
the name of a nominee for such Covered Person). If shares of Common Stock
are required to be held in the custody of a custodian as provided in this
Section 2.2(a), each Covered Person agrees (i) to assign, endorse and
register for
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transfer into such nominee name or deliver to such custodian any such
shares of Common Stock which are not so registered or so held, as the case
may be, and (ii) that the form of the custody agreement and the identity
of the custodian and nominee must be satisfactory in form and substance to
the Shareholders' Committee and GS Inc.
(b) For such time as shares of Common Stock are required to be
held in the custody of a custodian in accordance with Section 2.2(a),
whenever the nominee holder shall receive any dividend or other
distribution upon any shares of Common Stock other than in shares of
Common Stock, the Shareholders' Committee will give or cause to be given
notice or direction to the applicable nominee and/or custodian referred to
in paragraph (a) to permit the prompt distribution of such dividend or
distribution to the beneficial owner of such shares of Common Stock, net
of any tax withholding amounts required to be withheld by the nominee,
unless the distribution of such dividend or distribution is restricted by
the terms of another agreement between the Covered Person and the Company
known to the Shareholders' Committee.
(c) Each Covered Person agrees and consents to the entry of stop
transfer orders against the transfer of shares of Common Stock subject to
Transfer Restrictions except in compliance with this Agreement.
(d) The Shareholders' Committee (or any person authorized
thereby) shall develop procedures for releasing from the Transfer
Restrictions all shares of Common Stock of each Covered Person who ceases
to be a Covered Person.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PARTIES
Each Covered Person severally represents and warrants for himself
that:
(a) Such Covered Person has (and, with respect to shares of
Common Stock to be acquired, will have) good, valid and marketable title
to the shares of Common Stock subject to the General Transfer Restrictions
set forth in Section 2.1(a) (or, with respect to Designated Senior
Officers, subject to the Special Transfer Restrictions set forth in
Section 2.1(b)), free and clear of any pledge, lien, security interest,
charge, claim, equity or encumbrance of any kind, other than pursuant to
this Agreement, an agreement with the Company by which such Covered Person
is bound and to which the shares of Common Stock are subject or as
permitted by the policies of GS Inc. in effect from time to time;
(b) Such Covered Person has (and, with respect to shares of
Common Stock to be acquired, will have) the right to vote pursuant to
Section 4.1 of this Agreement all shares of Common Stock of which the
Covered Person is the Sole Beneficial Owner; and
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(c) (if the Covered Person is other than a natural person, with
respect to subsections (i) through (x), and if the Covered Person is a
natural person, with respect to subsections (iv) through (x) only):
(i) such Covered Person is duly organized and validly
existing in good standing under the laws of the
jurisdiction of such Covered Person's formation;
(ii) such Covered Person has full right, power and authority
to enter into and perform this Agreement;
(iii) the execution and delivery of this Agreement and the
performance of the transactions contemplated herein have
been duly authorized, and no further proceedings on the
part of such Covered Person are necessary to authorize
the execution, delivery and performance of this
Agreement; and this Agreement has been duly executed by
such Covered Person;
(iv) the person signing this Agreement on behalf of such
Covered Person has been duly authorized by such Covered
Person to do so;
(v) this Agreement constitutes the legal, valid and binding
obligation of such Covered Person, enforceable against
such Covered Person in accordance with its terms
(subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights
and to general equity principles);
(vi) neither the execution and delivery of this Agreement by
such Covered Person nor the consummation of the
transactions contemplated herein conflicts with or
results in a breach of any of the terms, conditions or
provisions of any agreement or instrument to which such
Covered Person is a party or by which the assets of such
Covered Person are bound (including without limitation
the organizational documents of such Covered Person, if
such Covered Person is other than a natural person), or
constitutes a default under any of the foregoing, or
violates any law or regulation;
(vii) such Covered Person has obtained all authorizations,
consents, approvals and clearances of all courts,
governmental agencies and authorities, and any other
person,
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if any (including the spouse of such Covered Person with
respect to the interest of such spouse in the shares of
Common Stock of such Covered Person if the consent of
such spouse is required), required to permit such
Covered Person to enter into this Agreement and to
consummate the transactions contemplated herein;
(viii) there are no actions, suits or proceedings pending, or,
to the knowledge of such Covered Person, threatened
against or affecting such Covered Person or such Covered
Person's assets in any court or before or by any
federal, state, municipal or other governmental
department, commission, board, bureau, agency or
instrumentality which, if adversely determined, would
impair the ability of such Covered Person to perform
this Agreement;
(ix) the performance of this Agreement will not violate any
order, writ, injunction, decree or demand of any court
or federal, state, municipal or other governmental
department, commission, board, bureau, agency or
instrumentality to which such Covered Person is subject;
and
(x) no statement, representation or warranty made by such
Covered Person in this Agreement, nor any information
provided by such Covered Person for inclusion in a
report filed pursuant to Section 6.3 hereof or in a
registration statement filed by GS Inc. contains or will
contain any untrue statement of a material fact or omits
or will omit to state a material fact necessary in order
to make the statements, representations or warranties
contained herein or information provided therein not
misleading.
Each Covered Person severally agrees for himself that the foregoing
provision of this Article III shall be a continuing representation and covenant
by him during the period that he shall be a Covered Person, and he shall take
all actions as shall from time to time be necessary to cure any breach or
violation and to obtain any authorizations, consents, approvals and clearances
in order that such representations shall be true and correct during that period.
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ARTICLE IV
VOTING AGREEMENT
Section 4.1 Preliminary Vote of Covered Persons; Voting Procedures.
(a) Prior to any vote of the stockholders of GS Inc., there shall
be a separate, preliminary vote, on each matter upon which a stockholder
vote is proposed to be taken (each, a "Preliminary Vote"), of all of the
shares of Common Stock of which a Covered Person is the Sole Beneficial
Owner (excluding shares of Common Stock held by the trust underlying the
Employees' Profit Sharing Plan) and the shares of Common Stock held by the
trust underlying a Xxxxxxx Sachs Compensation Plan and allocated to a
Covered Person (collectively, the "Voting Shares").
(b) Other than in elections of directors, every Voting Share shall
be voted in accordance with the vote of the majority of the votes cast on
the matter in question by the Voting Shares in the Preliminary Vote.
(c) In elections of directors, every Voting Share shall be voted
in favor of the election of those persons, equal in number to the number
of such positions to be filled, receiving the highest numbers of votes
cast by the Voting Shares in the Preliminary Vote.
Section 4.2 Irrevocable Proxy and Power of Attorney.
(a) By his signature hereto, each Covered Person hereby gives the
Shareholders' Committee, with full power of substitution and
resubstitution, an irrevocable proxy to vote or otherwise act with respect
to all of the Covered Person's Voting Shares as of the relevant record
date or other date used for purposes of determining holders of Common
Stock entitled to vote or take any action, as fully, to the same extent
and with the same effect as such Covered Person might or could do under
any applicable laws or regulations governing the rights and powers of
stockholders of a Delaware corporation, as follows:
(i) such proxy shall be voted in connection with such matters as
are the subject of a Preliminary Vote as provided in this
Agreement in accordance with such Preliminary Vote;
(ii) the holder of such proxy shall be authorized to vote on such
other matters as may come before a meeting of stockholders of
GS Inc. or any adjournment thereof and as are related,
directly or indirectly, to the matter which was the subject
of the Preliminary Vote as the holder of such proxy sees fit
in
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his discretion but in a manner consistent with the
Preliminary Vote; and
(iii) the holder of such proxy shall be authorized to vote on such
other matters as may come before a meeting of stockholders of
GS Inc. or any adjournment thereof (including matters related
to adjournment thereof) as the holder of such proxy sees fit
in his discretion but not to cast any vote under this clause
(iii) which is inconsistent with the Preliminary Vote or
which would achieve an outcome that would frustrate the
intent of the Preliminary Vote. Each Covered Person hereby
affirms that this proxy is given as a term of this Agreement
and as such is coupled with an interest and is irrevocable.
It is further understood and agreed by each Covered Person that this proxy may
be exercised by the holder of such proxy with respect to all Voting Shares of
such Covered Person for the period beginning on the Effective Date and ending on
the earlier of (a) the date this Agreement shall have been terminated pursuant
to Section 7.1(a) hereof or, (b) in the case of a Covered Person, Section 7.1(b)
hereof.
(b) By his signature hereto, each Covered Person appoints the
Shareholders' Committee, with full power of substitution and
resubstitution, his true and lawful attorney-in-fact to direct, in
accordance with the provisions of this Article IV, the voting of any
Voting Shares held of record by any other person but beneficially owned by
such Covered Person (including Voting Shares held by the trust underlying
any Xxxxxxx Xxxxx Compensation Plan and allocated to such Covered Person),
granting to such attorneys, and each of them, full power and authority to
do and perform each and every act and thing whatsoever that such attorney
or attorneys may deem necessary, advisable or appropriate to carry out
fully the intent of Section 4.1 and Section 4.2(a) as such Covered Person
might or could do personally, hereby ratifying and confirming all acts and
things that such attorney or attorneys may do or cause to be done by
virtue of this power of attorney. It is understood and agreed by each
Covered Person that this appointment, empowerment and authorization may be
exercised by the aforementioned persons with respect to all Voting Shares
of such Covered Person, and held of record by another person, for the
period beginning on the Effective Date and ending on (a) the earlier of
the date this Agreement shall have been terminated pursuant to Section
7.1(a) hereof or, (b) in the case of a Covered Person, Section 7.1(b)
hereof.
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ARTICLE V
SHAREHOLDERS' COMMITTEE
Section 5.1 Membership. The Shareholders' Committee shall at all
times consist of all of those individuals who are both Covered Persons and
members of the Board of Directors of GS Inc. and who agree to serve as members
of the Shareholders' Committee.
Section 5.2 Additional Members. If there are less than three
individuals who are both Covered Persons and members of the Board of Directors
of GS Inc. and who agree to serve as members of the Shareholders' Committee, the
Shareholders' Committee shall consist of each such individual plus such
additional individuals who are Covered Persons and who are selected pursuant to
procedures established by the Shareholders' Committee as shall assure a
Shareholders' Committee of not less than three members who are Covered Persons.
Section 5.3 Determinations of and Actions by the Shareholders'
Committee.
(a) All determinations necessary or advisable under this
Agreement (including determinations of beneficial ownership) shall be made
by the Shareholders' Committee, whose determinations shall be final and
binding. The Shareholders' Committee's determinations under this Agreement
and actions (including waivers) hereunder need not be uniform and may be
made selectively among Covered Persons (whether or not such Covered
Persons are similarly situated).
(b) Each Covered Person recognizes and agrees that the members of
the Shareholders' Committee in acting hereunder shall at all times be
acting in their capacities as members of the Shareholders' Committee and
not as directors or officers of the Company and in so acting or failing to
act shall not have any fiduciary duties to the Covered Persons as a member
of the Shareholders' Committee by virtue of the fact that one or more of
such members may also be serving as a director or officer of the Company
or otherwise.
(c) The Shareholders' Committee shall act through a majority vote
of its members and such actions may be taken in person at a meeting (in
person or telephonically) or by a written instrument signed by all of the
members.
Section 5.4 Certain Obligations of the Shareholders' Committee. The
Shareholders' Committee shall be obligated (a) to attend as proxy, or cause a
person designated by it and acting as lawful proxy to attend as proxy, each
meeting of the stockholders of GS Inc. and to vote or to cause such designee to
vote the Voting Shares over which it has the power to vote in accordance with
the results of the Preliminary Vote
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as set forth in Section 4.1, and (b) to develop procedures governing Preliminary
Votes and other votes and actions to be taken pursuant to this Agreement.
ARTICLE VI
OTHER AGREEMENTS OF THE PARTIES
Section 6.1 Standstill Provisions. Each Covered Person agrees that
such Covered Person shall not, directly or indirectly, alone or in concert with
any other person:
(a) make, or in any way participate in, any "solicitation" of
"proxies" (as such terms are defined in Exchange Act Rule 14a-1) relating
to any securities of the Company to or with any Restricted Person;
(b) deposit any shares of Common Stock in a voting trust or
subject any shares of Common Stock to any voting agreement or arrangement
that includes as a party any Restricted Person;
(c) form, join or in any way participate in a group (as
contemplated by Exchange Act Rule 13d-5(b)) with respect to any securities
of the Company (or any securities the ownership of which would make the
owner thereof a beneficial owner of securities of the Company (for this
purpose as determined by Exchange Act Rule 13d-3 and Exchange Act Rule
13d-5)) that includes as a party any Restricted Person;
(d) make any announcement subject to Exchange Act Rule
14a-1(l)(2)(iv) to any Restricted Person;
(e) initiate or propose any "shareholder proposal" subject to
Exchange Act Rule 14a-8;
(f) together with any Restricted Person, make any offer or
proposal to acquire any securities or assets of GS Inc. or any of its
Subsidiaries or solicit or propose to effect or negotiate any form of
business combination, restructuring, recapitalization or other
extraordinary transaction involving, or any change in control of, GS Inc.,
its Subsidiaries or any of their respective securities or assets;
(g) together with any Restricted Person, seek the removal of any
directors or a change in the composition or size of the board of directors
of GS Inc.;
(h) together with any Restricted Person, in any way participate in
a call for any special meeting of the stockholders of GS Inc.; or
(i) assist, advise or encourage any person with respect to, or
seek to do, any of the foregoing.
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Section 6.2 Expenses.
(a) GS Inc. shall be responsible for all expenses of the members
of the Shareholders' Committee incurred in the operation and
administration of this Agreement, including expenses of proxy solicitation
for and tabulation of the Preliminary Vote, expenses incurred in preparing
appropriate filings and correspondence with the SEC, lawyers',
accountants', agents', consultants', experts', investment banking and
other professionals' fees, expenses incurred in enforcing the provisions
of this Agreement, expenses incurred in maintaining any necessary or
appropriate books and records relating to this Agreement and expenses
incurred in the preparation of amendments to and waivers of provisions of
this Agreement.
(b) Each Covered Person shall be responsible for all expenses
incurred by him in connection with compliance with his obligations under
this Agreement, including expenses incurred by the Shareholders' Committee
or GS Inc. in enforcing the provisions of this Agreement relating to such
obligations.
Section 6.3 Filing of Schedule 13D or 13G.
(a) In the event that a Covered Person is required to file a
report of beneficial ownership on Schedule 13D or 13G with respect to the
shares of Common Stock beneficially owned by him (for this purpose as
determined by Exchange Act Rule 13d-3 and Exchange Act Rule 13d-5), such
Covered Person agrees that, unless otherwise directed by the Shareholders'
Committee, he will not file a separate such report, but will file a report
together with the other Covered Persons, containing the information
required by the Exchange Act, and he understands and agrees that such
report shall be filed on his behalf by the Shareholders' Committee, any
member thereof or any person authorized thereby. Such Covered Person shall
cooperate fully with the other Covered Persons and the Shareholders'
Committee to achieve the timely filing of any such report and any
amendments thereto as may be required, and such Covered Person agrees that
any information concerning him which he furnishes in connection with the
preparation and filing of such report will be complete and accurate.
(b) By his signature hereto, each Covered Person appoints the
Shareholders' Committee and each member thereof, with full power of
substitution and resubstitution, his true and lawful attorney-in-fact to
execute such reports and any and all amendments thereto and to file such
reports with all exhibits thereto and other documents in connection
therewith with the SEC, granting to such attorneys, and each of them, full
power and authority to do and perform each and every act and thing
whatsoever that such attorney or attorneys may deem necessary, advisable
or appropriate to carry out fully the
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intent of this Section 6.3 as such Covered Person might or could do
personally, hereby ratifying and confirming all acts and things that such
attorney or attorneys may do or cause to be done by virtue of this power
of attorney. Each Covered Person hereby further designates such attorneys
as such Covered Person's agents authorized to receive notices and
communications with respect to such reports and any amendments thereto. It
is understood and agreed by each Covered Person that this appointment,
empowerment and authorization may be exercised by the aforementioned
persons for the period beginning on May 7, 1999 and ending on the date
such Covered Person is no longer subject to the provisions of this
Agreement (and shall extend thereafter for such time as is required to
reflect, and only to reflect, that such Covered Person is no longer a
party to this Agreement).
Section 6.4 Adjustment upon Changes in Capitalization; Adjustments
upon Changes of Control; Representatives, Successors and Assigns.
(a) In the event of any change in the outstanding Common Stock by
reason of stock dividends, stock splits, reverse stock splits, spin-offs,
split-ups, recapitalizations, combinations, exchanges of shares and the
like, the term "Common Stock" shall refer to and include the securities
received or resulting therefrom, but only to the extent such securities
are received in exchange for or in respect of Common Stock. Upon the
occurrence of any event described in the immediately preceding sentence,
the Shareholders' Committee shall make such adjustments to or
interpretations of the restrictions of Section 2.1 (and, if it so
determines, any other provisions hereof) as it shall deem necessary,
advisable or appropriate or desirable to carry out the intent of such
provisions. If the Shareholders' Committee deems it necessary, advisable
or appropriate, any such adjustments may take effect from the record date,
the "when issued trading date", the "ex dividend date" or another
appropriate date.
(b) In the event of any business combination, restructuring,
recapitalization or other extraordinary transaction involving GS Inc., its
Subsidiaries or any of their respective securities or assets as a result
of which the Covered Persons shall hold voting securities of a person
other than GS Inc., the Covered Persons agree that this Agreement shall
also continue in full force and effect with respect to such voting
securities of such other person formerly representing or distributed in
respect of Common Stock, and the terms "Common Stock," "Covered Shares"
and "Voting Shares," and "GS Inc." and "Company," shall refer to such
voting securities formerly representing or distributed in respect of
shares of Common Stock of GS Inc. and such other person, respectively.
Upon the occurrence of any event described in the immediately preceding
sentence, the Shareholders' Committee shall make such adjustments to or
interpretations of the restrictions of Section 2.1 (and, if it so
determines, any other provisions hereof) as it shall deem necessary,
advisable or appropriate to carry out the intent of such provisions.
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If the Shareholders' Committee deems it necessary, advisable or
appropriate, any such adjustments may take effect from the record date or
another appropriate date.
(c) This Agreement shall be binding upon and inure to the benefit
of the respective legal representatives, successors and assigns of the
Covered Persons (and GS Inc. in the event of a transaction described in
Section 6.4(b) hereof); provided, however, that a Covered Person may not
assign this Agreement or any of his rights or obligations hereunder
without the prior written consent of GS Inc., and any assignment without
such consent by a Covered Person shall be void; and provided further that
no assignment of this Agreement by GS Inc. or to a successor of GS Inc.
(by operation of law or otherwise) shall be valid unless such assignment
is made to a person which succeeds to the business of GS Inc.
substantially as an entirety.
Section 6.5 Further Assurances. Each Covered Person agrees to
execute such additional documents and take such further action as may be
reasonably necessary to effect the provisions of this Agreement.
Section 6.6 Promotions to Designated Senior Officer. Each
Participating Managing Director who is a party to this Agreement agrees to be
bound by the Special Transfer Restrictions in place at such time as he may be
promoted to Designated Senior Officer, notwithstanding that such Special
Transfer Restrictions could be materially different than the Special Transfer
Restrictions in place on the later of the Effective Date or such person's
Participation Date.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Term of the Agreement; Termination of Certain
Provisions.
(a) The term of this Agreement shall continue until the first to
occur of January 1, 2050 and such time as this Agreement is terminated by
the affirmative vote of not less than 66 2/3% of the outstanding Covered
Shares.
(b) Unless this Agreement is previously terminated pursuant to
Section 7.1(a) hereof, (i) any Covered Person who ceases to be a Covered
Person for any reason other than death shall no longer be bound by the
provisions of this Agreement (other than Sections 5.3, 6.2, 6.3, 6.5, 7.4,
7.5, 7.6, 7.8 and 7.10 (the "Continuing Provisions")), and such Covered
Person's name shall be removed from Appendix A to this Agreement, and (ii)
any Designated Senior Officer who ceases to hold a Designated Title shall
no longer be bound by the provisions of Section 2.1(b) hereof.
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(c) Unless this Agreement is theretofore terminated pursuant to
Section 7.1(a) hereof, the estate of any Covered Person who ceases to be a
Covered Person by reason of death shall from and after the date of such
death be bound only by the Continuing Provisions, and such Covered
Person's name shall be removed from Appendix A to this Agreement.
(d) Any person who is a Covered Person under the Original
Shareholders' Agreement but who is not a Covered Person (as defined
herein) as of the Effective Date shall no longer be bound by the
provisions of this Agreement (other than the Continuing Provisions) and
such person's name shall be removed from Appendix A hereto, provided that
it is understood that any such person who becomes a Covered Person after
the Effective Date shall be bound by the provisions of this Agreement upon
his appointment as a Participating Managing Director and that his name
shall be added to Appendix A hereto.
Section 7.2 Amendments.
(a) Except as provided in this Section 7.2, provisions of this
Agreement may be amended only by the affirmative vote of the holders of a
majority of the outstanding Covered Shares.
(b) This Section 7.2(b), Section 7.1(a) and Section 7.3(a)(i) may
be amended only by the affirmative vote of the holders of 66 2/3% of the
outstanding Covered Shares. Any amendment of any other provision of this
Agreement that would have the effect, in connection with a tender or
exchange offer by any person other than the Company as to which the Board
of Directors of GS Inc. is recommending rejection, of permitting transfers
which would not be permitted by the terms of this Agreement as then in
effect shall also require the affirmative vote of the holders of 66 2/3%
of the outstanding Covered Shares.
(c) This Section 7.2(c), Article V, Section 7.3(b) and any other
provision the amendment (or addition) of which has the effect of
materially changing the rights or obligations of the Shareholders'
Committee hereunder may be amended (or added) either (i) with the approval
of the Shareholders' Committee and the affirmative vote of the holders of
a majority of the Covered Shares or (ii) by the affirmative vote of the
holders of 66 2/3% of the outstanding Covered Shares.
(d) In addition to any other vote or approval that may be
required under this Section 7.2, (i) any amendment to the General Transfer
Restrictions that would make such General Transfer Restrictions materially
more onerous to a Covered Person will not be enforceable against that
Covered Person unless that Covered Person has consented to such amendment
and (ii) any amendment to the Special Transfer Restrictions that would
make such Special
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Transfer Restrictions materially more onerous to a current Designated
Senior Officer will not be enforceable against that Designated Senior
Officer unless that Designated Senior Officer has consented to such
amendment.
(e) In addition to any other vote or approval that may be
required under this Section 7.2, any amendment of this Agreement that has
the effect of changing the obligations of GS Inc. hereunder to make such
obligations materially more onerous to GS Inc. shall require the approval
of GS Inc.
(f) Each Covered Person understands that it is intended that each
Participating Managing Director of the Company will be a Covered Person
under this Agreement or will become a Covered Person upon his appointment
to such position, and each Covered Person further understands that from
time to time certain other persons may become Covered Persons and certain
Covered Persons will cease to be bound by provisions of this Agreement
pursuant to the terms hereof when they cease to be Participating Managing
Directors. Accordingly, this Agreement may be amended by action of the
Shareholders' Committee from time to time and without the approval of any
other person, but solely for the purposes of (i) adding to Appendix A such
persons as shall be made party to this Agreement pursuant to the terms
hereof, such addition to be effective as of the time of such action or
appointment, and (ii) removing from Appendix A such persons as shall cease
to be bound by the provisions of this Agreement pursuant to Sections
7.1(b) or (c) hereof, which additions and removals shall be given effect
from time to time by appropriate changes to Appendix A.
(g) Each Covered Person agrees that the Shareholders' Committee,
without the approval of any other person, may designate positions that may
be held by senior executives of GS Inc. from time to time (each, a
"Designated Title") that will subject such senior executives to the
Special Transfer Restrictions pursuant to Section 2.1(b) hereof.
(h) Section 2.1 may be amended with the approval of the
Shareholders' Committee and GS Inc. without requiring the affirmative vote
of the outstanding Covered Shares to decrease either or both of the
percentages stated therein, provided, however, that in no event shall the
percentage applicable to the Special Transfer Restrictions in Section
2.1(b) ever be less than the percentage applicable to the General Transfer
Restrictions in Section 2.1(a).
Section 7.3 Waivers. The Transfer Restrictions and the other
provisions of this Agreement may be waived only as provided in this Section 7.3.
(a) The holders of the outstanding Covered Shares may waive the
Transfer Restrictions and the other provisions of this Agreement without
the consent of any other person as follows:
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(i) The Transfer Restrictions may be waived, in connection with
any tender or exchange offer by any person other than the
Company as to which the Board of Directors of GS Inc. is
recommending rejection at the time of such waiver, only by
the affirmative vote of the holders of 66 2/3% of the
outstanding Covered Shares;
(ii) The Transfer Restrictions may be waived, in connection with
any tender or exchange offer by any person other than the
Company as to which the Board of Directors of GS Inc. is
recommending acceptance or is not making any recommendation
with respect to acceptance at the time of such waiver, only
by the affirmative vote of the holders of a majority of the
outstanding Covered Shares;
(iii) The Transfer Restrictions may be waived, in connection with
any tender or exchange offer by the Company, by the
affirmative vote of the holders of a majority of the
outstanding Covered Shares; and
(iv) In all circumstances other than those set forth in Sections
7.2 or 7.3(a)(i), (ii) and (iii), the provisions of this
Agreement may be waived only by the affirmative vote of the
holders of a majority of the outstanding Covered Shares;
provided, however, that the holders of the outstanding
Covered Shares may not waive the provisions of this Agreement
in the circumstances set forth in Section 7.3(b).
(b) The Shareholders' Committee may waive the Transfer
Restrictions and the other provisions of this Agreement without the
consent of any other person to permit:
(i) Covered Persons to participate as sellers in underwritten
public offerings of, and stock repurchase programs and tender
or exchange offers by GS Inc. for, Common Stock;
(ii) transfers of Covered Shares to organizations described in
Section 501(c)(3) of the Code, including gifts to "private
foundations" subject to the requirements of Section 509 of
the Code;
(iii) transfers of Covered Shares held in employee benefit plans of
the Company either generally or in particular situations; and
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(iv) particular Covered Persons or all Covered Persons to transfer
Covered Shares in particular situations (such as transfers to
family members, partnerships or trusts), but not generally.
(c) In connection with any waiver granted under this Agreement,
the Shareholders' Committee or the holders of the percentage of Covered
Shares required for the waiver, as the case may be, may impose such
conditions as they determine on the granting of such waivers.
(d) The failure of the Company or the Shareholders' Committee at
any time or times to require performance of any provision of this
Agreement shall in no manner affect the rights at a later time to enforce
the same. No waiver by the Company or the Shareholders' Committee of the
breach of any term contained in this Agreement, whether by conduct or
otherwise, in any one or more instances, shall be deemed to be or
construed as a further or continuing waiver of any such breach or the
breach of any other term of this Agreement.
Section 7.4 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAWS.
Section 7.5 Resolution of Disputes.
(a) The Shareholders' Committee shall have the sole and exclusive
power to enforce the provisions of this Agreement. The Shareholders'
Committee may in its sole discretion request GS Inc. to conduct such
enforcement, and GS Inc. agrees to conduct such enforcement as requested
and directed by the Shareholders' Committee.
(b) Without diminishing the finality and conclusive effect of any
determination by the Shareholders' Committee of any matter under this
Agreement (and subject to the provisions of paragraphs (c) and (d)
hereof), any dispute, controversy or claim arising out of or relating to
or concerning the provisions of this Agreement shall be finally settled by
arbitration in New York City before, and in accordance with the rules then
obtaining of, the New York Stock Exchange, Inc. ("NYSE"), or if the NYSE
declines to arbitrate the matter, the American Arbitration Association
("AAA") in accordance with the commercial arbitration rules of the AAA.
(c) Notwithstanding the provisions of paragraph (b), and in
addition to its right to submit any dispute or controversy to arbitration,
the Shareholders' Committee may bring, or may cause GS Inc. to bring, on
behalf of the Shareholders' Committee or on behalf of one or more Covered
Persons, an action or special proceeding in a state or federal court of
competent jurisdiction sitting in the State of Delaware, whether or not an
arbitration
20
proceeding has theretofore been or is ever initiated, for the purpose of
temporarily, preliminarily or permanently enforcing the provisions of this
Agreement and, for the purposes of this paragraph (c), each Covered Person
(i) expressly consents to the application of paragraph (d) to any such
action or proceeding, (ii) agrees that proof shall not be required that
monetary damages for breach of the provisions of this Agreement would be
difficult to calculate and that remedies at law would be inadequate and
(iii) irrevocably appoints each General Counsel of GS Inc., c/o The
Corporation Trust Company, Corporation Trust Center, 0000 Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000 as such Covered Person's agent for service of
process in connection with any such action or proceeding, who shall
promptly advise such Covered Person of any such service of process.
(d) Each Covered Person hereby irrevocably submits to the
exclusive jurisdiction of any state or federal court located in the State
of Delaware over any suit, action or proceeding arising out of or relating
to or concerning this Agreement that is not otherwise arbitrated according
to the provisions of paragraph (b) hereof. This includes any suit, action
or proceeding to compel arbitration or to enforce an arbitration award.
The parties acknowledge that the forum designated by this paragraph (d)
has a reasonable relation to this Agreement, and to the parties'
relationship with one another. Notwithstanding the foregoing, nothing
herein shall preclude the Shareholders' Committee or GS Inc. from bringing
any action or proceeding in any other court for the purpose of enforcing
the provisions of this Section 7.5.
The agreement of the parties as to forum is independent of the
law that may be applied in the action, and they each agree to such forum
even if the forum may under applicable law choose to apply non-forum law.
The parties hereby waive, to the fullest extent permitted by applicable
law, any objection which they now or hereafter may have to personal
jurisdiction or to the laying of venue of any such suit, action or
proceeding brought in any court referred to in paragraph (d). The parties
undertake not to commence any action arising out of or relating to or
concerning this Agreement in any forum other than a forum described in
paragraph (d). The parties agree that, to the fullest extent permitted by
applicable law, a final and non-appealable judgment in any such suit,
action or proceeding in any such court shall be conclusive and binding
upon the parties.
Section 7.6 Relationship of Parties. The terms of this Agreement are
intended not to create a separate entity for United States federal income tax
purposes, and nothing in this Agreement shall be read to create any partnership,
joint venture or separate entity among the parties or to create any trust or
other fiduciary relationship between them.
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Section 7.7 Notices.
(a) Any communication, demand or notice to be given hereunder will
be duly given (and shall be deemed to be received) when delivered in
writing by hand or first class mail or by telecopy to a party at its
address as indicated below:
If to a Covered Person,
c/o The Xxxxxxx Xxxxx Group, Inc.
Xxx Xxx Xxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: General Counsel;
If to the Shareholders' Committee, at
Shareholders' Committee under the Shareholders' Agreement,
c/o The Xxxxxxx Sachs Group, Inc.
Xxx Xxx Xxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: General Counsel;
and
If to GS Inc., at
The Xxxxxxx Xxxxx Group, Inc.
Xxx Xxx Xxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: General Counsel.
GS Inc. shall be responsible for notifying each Covered Person of
the receipt of a communication, demand or notice under this Agreement
relevant to such Covered Person at the address of such Covered Person then
in the records of GS Inc. (and each Covered Person shall notify GS Inc. of
any change in such address for communications, demands and notices).
(b) Unless otherwise provided to the contrary herein, any notice
which is required to be given in writing pursuant to the terms of this
Agreement may be given by telecopy.
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Section 7.8 Severability. If any provision of this Agreement is
finally held to be invalid, illegal or unenforceable, (a) the remaining terms
and provisions hereof shall be unimpaired and (b) the invalid or unenforceable
term or provision shall be deemed replaced by a term or provision that is valid
and enforceable and that comes closest to expressing the intention of the
invalid or unenforceable term or provision.
Section 7.9 Right to Determine Tender Confidentially. In connection
with any tender or exchange offer for all or any portion of the outstanding
Common Stock, subject to compliance with all applicable restrictions on transfer
in this Agreement or any other agreement with GS Inc., each Covered Person will
have the right to determine confidentially whether such Covered Person's Covered
Shares will be tendered in such tender or exchange offer.
Section 7.10 No Third-Party Rights. Nothing expressed or referred to
in this Agreement will be construed to give any person other than the parties to
this Agreement any legal or equitable right, remedy, or claim under or with
respect to this Agreement or any provision of this Agreement. This Agreement and
all of its provisions and conditions are for the sole and exclusive benefit of
the parties to this Agreement and their successors and assigns.
Section 7.11 Section Headings. The headings of sections in this
Agreement are provided for convenience only and will not affect its construction
or interpretation.
Section 7.12 Execution in Counterparts. This Agreement may be
executed in any number of counterparts, each of which shall be deemed an
original, but all such counterparts shall together constitute but one and the
same instrument.
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IN WITNESS WHEREOF, the parties hereto have duly executed or caused
to be duly executed this Agreement.
THE XXXXXXX SACHS GROUP, INC.
By: /s/ Esta X. Xxxxxxx
------------------------------
Name: Esta X. Xxxxxxx
Title: Executive Vice President and
General Counsel
Dated : June 22, 2004
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