EXHIBIT 10.5
FORM OF
STOCKHOLDERS AGREEMENT
BY AND AMONG
CERTAIN STOCKHOLDERS OF
CORNELL CORRECTIONS, INC.
SEPTEMBER 15, 1997
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT, executed September __, 1997 but effective as of
the Effective Date, by and among (a) Xxxxx X. Xxxxxxx ("Xxxxxxx") and (b)
Concord Partners; Concord Partners II, L.P.; and Concord Partners Japan Limited
(collectively, the "Concord Group"). Cornell and the Concord Group are also
collectively referred to herein as the "Holders."
WITNESSETH:
WHEREAS, the Holders and certain other stockholders of Cornell
Corrections, Inc., a Delaware corporation (the "Company"), entered into that
certain Stockholders Agreement dated as of October 8, 1996 (the "Existing
Stockholders Agreement"), which Existing Stockholders Agreement is anticipated
to terminate in accordance with its terms if a secondary offering (the
"Offering") of the Company's Common Stock is consummated;
WHEREAS, the Holders desire to enter into this Agreement effective as of
the Effective Date;
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein and for other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree,
effective as of the date hereof, as follows:
Section 1. DEFINITIONS. The following shall have (unless otherwise
provided elsewhere in this Agreement) the following respective meanings (such
meanings being equally applicable to both the singular and plural form of the
terms defined).
"AGREEMENT" means this Stockholders Agreement, including all amendments,
modifications and supplements and any exhibits or schedules to any of the
foregoing, and shall refer to the Agreement as the same may be in effect at the
time such reference becomes operative.
"COMMON STOCK" means the Common Stock, par value $.001 per share, of the
Company.
Section 2. CERTIFICATE OF INCORPORATION; BY-LAWS; DIRECTORS.
(a) The Company has previously furnished to the Holders copies of the
Restated Certificate of Incorporation of the Company and the Amended and
Restated Bylaws of the Company (collectively, the "Charter Documents"). From and
after the date hereof, each Holder shall vote all shares of Common Stock
beneficially held by him or it (including any shares of Common Stock hereafter
acquired or owned by such Holder), at any regular or special meeting of
stockholders of the Company and shall otherwise take all actions necessary to
ensure that the Charter Documents do not, at any time, conflict with the
provisions of this Agreement.
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(b) From and after the date hereof, each Holder shall vote all shares of
Common Stock beneficially held by him or it (including any shares of Common
Stock hereafter acquired or owned by such Holder), at any regular or special
meeting of stockholders of the Company called for the purpose of filling
positions on the Board of Directors of the Company and shall vote for and
otherwise take all actions necessary to ensure that the following members are
elected to the Board of Directors of the Company: (i) one individual designated
by Xxxxx X. Xxxxxxx (the "Xxxxxxx Nominee") and (ii) one individual designated
by Concord Group (the "Concord Nominee").
(c) If, prior to his or her election to the Board of Directors of the
Company pursuant to Section 2(b) hereof, any nominee shall be unable or
unwilling to serve as a director of the Company, the entity designating such
nominee shall be entitled to nominate a replacement who shall then be the
Cornell Nominee or Concord Nominee, as the case may be, for the purposes of this
Section 2. If, following election to the Board of Directors of the Company
pursuant to Section 2(b) hereof, any Cornell Nominee or Concord Nominee shall
resign or be removed or be unable to serve for any reason prior to the
expiration of his or her term as a director of the Company, then the person or
entity designating such nominee may, at any time thereafter, notify the other
Holder in writing of a replacement, and the remaining Cornell Nominee and
Concord Nominee, as applicable, and Cornell and Concord Group, shall use their
respective best efforts to elect to the Board of Directors of the Company such
replacement nominee to fill the unexpired term of the prior nominee.
(d) Each Holder hereby agrees to use such Holder's best efforts to call,
or cause the appropriate officers and directors of the Company to call, a
special or annual meeting of stockholders of the Company and to vote all of the
shares of Common Stock owned or controlled by such Holder for the removal (with
or without cause) of any nominee designated and elected pursuant to Section 2(b)
hereof if the person or entity designating such nominee shall have given written
notice to each of the other Holders of its desire to have such nominee removed.
(e) Each Holder hereby agrees that, except as provided in Section 2(d)
hereof, he or it shall not vote to remove any director who is a Cornell Nominee
or Concord Nominee without Cause (as such term is hereinafter defined). For the
purposes of this Section 2(e) only, "Cause" shall mean (i) the commission by a
director of an act of fraud or embezzlement against the Company or any of its
subsidiaries or (ii) a conviction for a felony (or a plea of NOLO CONTENDERE
thereto) or guilty plea of such director with respect to a felony.
(f) In order to effectuate the provisions of this Section 2, the Holders
hereby agree that when any action or vote is required to be taken by such
Holders pursuant to this Agreement, such Holders shall use their respective best
efforts to call, or cause the appropriate officers and directors of the Company
to call, a special or annual meeting of stockholders of the Company, as the case
may be, to effectuate such stockholder action.
Section 3. EFFECTIVE DATE. This Agreement shall become effective only upon
the occurrence of (i) the closing of the Offering and (ii) the termination of
the Existing Stockholders
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Agreement. If the Effective Date has not occurred prior to December 31, 1997,
this Agreement shall become null and void and be of no force or effect.
Section 4. TERMINATION.
(a) This Agreement will terminate at the end of the day on October 7,
2000.
(b) This Agreement will terminate (but in no event later than October 7,
2000) if any Holder owns less than 350,000 shares of Common Stock of the
Company. Ownership for such purpose shall be determined in accordance with Rule
13d-3 of the Rules and Regulations under the Securities Exchange Act of 1934, as
amended. Such number of shares of Common Stock shall be proportionately adjusted
to reflect any increase or decrease in the number of issued shares of Common
Stock resulting from a consolidation of shares or the payment of a stock
dividend (but only on the Common Stock), a stock split, a reverse stock split or
any other increase or decrease in the number of such shares effected without
receipt of consideration by the Company.
Section 5. SPECIFIC PERFORMANCE. Each of the Holders acknowledges and
agrees that in the event of any breach of this Agreement, the non-breaching
party or parties would be irreparably harmed and could not be made whole by
monetary damages. It is accordingly agreed that the Holders shall waive the
defense in any action for specific performance that a remedy at law would be
adequate and that the Holders, in addition to any other remedy to which they may
be entitled at law or in equity, shall be entitled to compel specific
performance of this Agreement.
Section 6. MISCELLANEOUS.
(a) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not control or affect the meaning or construction of
any provisions hereof.
(b) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
understanding of the parties hereto in respect of the subject matter contained
herein, and there are no restrictions, promises, representations, warranties,
covenants, or undertakings with respect to the subject matter hereof, other than
those expressly set forth or referred to herein. This Agreement supersedes all
prior agreements and understandings between the parties hereto with respect to
the subject matter hereof.
(c) NOTICES. Any notice, demand, request, consent, approval, declaration,
delivery or other communication hereunder to be made pursuant to the provisions
of this Agreement shall be sufficiently given or made if in writing and (i)
delivered in person with receipt acknowledged, (ii) sent by registered or
certified mail, return receipt requested, postage prepaid, (iii) sent by
overnight courier with guaranteed next day delivery or (iv) sent by telex or
telecopier to the party to whom directed at the following address:
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1. If to Cornell, to him at:
Xxxxx X. Xxxxxxx
Cornell Corrections, Inc.
0000 Xxxxxxx, Xxxxx 000X
Xxxxxxx, Xxxxx 00000
(000) 000-0000 Facsimile
2. If to any Concord Group entity, to it at:
SBC Warburg Dillon Read Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx
(000) 000-0000 Facsimile
or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration, delivery or other communication hereunder shall
be deemed to have been duly given or served on the date on which personally
delivered, with receipt acknowledged, three (3) business days after the same
shall have been deposited in the United States mail, one business day after sent
by overnight courier or on the day telexed or telecopied.
(d) APPLICABLE LAW. The laws of the State of New York shall govern the
interpretation, validity and performance of the terms of this Agreement,
regardless of the law that might be applied under applicable principles of
conflicts of laws.
(e) SEVERABILITY. The invalidity or unenforceability of any provision of
this Agreement in any jurisdiction shall not affect the validity, legality or
enforceability of the remainder of this Agreement in such jurisdiction or the
validity, legality or enforceability of this Agreement, including any provision,
in any other jurisdiction, it being intended that all rights and obligations of
the parties hereunder shall be enforceable to the fullest extent permitted by
law.
(f) SUCCESSOR, ASSIGNS, TRANSFEREES. The provisions of this Agreement
shall be binding upon and accrue to the benefit of the parties hereto and their
respective heirs, successors and permitted assigns.
(g) AMENDMENTS; WAIVERS. This Agreement may not be amended, modified or
supplemented and no waivers of or consent to departures from the provisions
hereof may be given unless consented to in writing by the Concord Group and
Cornell.
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(h) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Stockholders
Agreement as of the date first above written.
XXXXX X. XXXXXXX
CONCORD PARTNERS
By:
Title:
CONCORD PARTNERS II, L.P.
By:
Title:
CONCORD PARTNERS JAPAN LIMITED
By:
Title:
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