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Exhibit 10.20
Shareholders Agreement
This Shareholders Agreement (the "Agreement") is entered into
this 30th day of June, 1995, between USA Waste Services, Inc., a Delaware
corporation (the "Company"); Xxxxxx X. Xxxxxxxxx, Xx. and Xxxx X. Xxxxx (Xxxxxx
X. Xxxxxxxxx, Xx., and Xxxx X. Xxxxx are referred to collectively herein as
the "Company Stockholders"); Xxxx X. Xxxxxx, Xx. and Xxxxxxxxx X. Xxxxxx (Xxxx
X. Xxxxxx, Xx., Xxxx X. Xxxxxx, Xx. and Xxxxxxxxx X. Xxxxxx are referred to
collectively herein as the "Rangos Family Members") and Xxxx Xxxxxx Development
Corporation, Inc. (together with the Rangos Family Members, the "Rangos
Shareholders").
RECITALS
The Company, Xxxxxxxx Acquisition Corporation, a Delaware
corporation and a wholly owned subsidiary of the Company (the "Subsidiary"),
and Xxxxxxxx Development Company, Inc., a Delaware corporation ("Xxxxxxxx"),
have entered into an Agreement and Plan of Merger dated as of November 28, 1994
(the "Merger Agreement"), pursuant to which the Subsidiary is merging with and
into Xxxxxxxx, with Xxxxxxxx remaining as the surviving corporation and a
wholly- owned subsidiary of the Company (the "Merger").
The Company Stockholders are stockholders and directors of
the Company.
Prior to the Effective Time (as defined in the Merger
Agreement), the Rangos Shareholders have been stockholders and the Rangos
Family Members have been officers and directors of Xxxxxxxx.
After and as a result of the Merger, the Rangos Shareholders
are expected to own, in the aggregate, approximately 21% of the issued and
outstanding shares of common stock, par value $.01 per share (the "Common
Stock"), of the Company.
Pursuant to a Rangos Family Master Agreement dated as of the
date of the Merger Agreement among the Rangos Family Members, the Company
Stockholders and the Company (the "Master Agreement") and entered into as a
condition to the Rangos Family Members agreeing to vote their shares of
Xxxxxxxx in favor of the Merger, the Company, the Company Stockholders and the
Rangos Family Members agreed to enter into an agreement providing the Rangos
Shareholders certain rights to name or participate in the naming of members to
the Board of Directors of the Company, to name certain members to the Executive
Committee of the Board of Directors of the Company, and to require certain
matters to be approved by a two-thirds vote of the Board of Directors of the
Company.
In consideration of the foregoing and the respective
covenants and agreements set forth in this Agreement, the Company, the Company
Stockholders and the Rangos Shareholders agree as follows:
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SECTION 1 TERM.
The term (the "Term") of this Agreement shall commence at the
Effective Time and continue until such time as the aggregate number of shares
of Common Stock beneficially held by the Rangos Shareholders and their
affiliates (as defined below) is less than five percent (5%) of the issued and
outstanding shares of Common Stock. For the purpose of calculating the
percentage of shares of Common Stock held by the Rangos Shareholders and their
affiliates, all shares that the Rangos Shareholders may acquire upon the
exercise or conversion of options, warrants, rights of conversion or other
rights to acquire shares (whether or not exercisable at the time of such
determination) shall be included in the number of shares held by the Rangos
Shareholders and their affiliates and the number of shares issued and
outstanding, but shares that may be acquired by other persons pursuant to such
rights shall not be included in the number of shares issued and outstanding.
For the purposes of this Agreement, an "affiliate" of a person includes (i) if
such person is a natural person, such person's spouse, parents, children,
siblings, mothers and fathers-in-law, sons and daughters-in-law and brothers
and sisters-in-law, any trusts established solely for the benefit of any of the
foregoing and (ii) any partnership, corporation, joint venture, association or
other entity owned and controlled solely by the Rangos Shareholders and any
persons included within the preceding clause(i).
SECTION 2 BOARD OF DIRECTORS.
(a) The Company, the Company Stockholders and the Rangos
Shareholders agree that they shall use their best efforts to cause the Board of
Directors of the Company immediately after the Effective Time to be increased
from eight to nine members and, at all times during the Term of this Agreement,
to cause the Board of Directors to consist of no more than nine members, except
as otherwise may be required pursuant to governing instruments of securities
issued by the Company.
(b) Immediately after the Effective Time, the Company and
the Company Stockholders shall use their best efforts to cause Xxxx X. Xxxxxx,
Xx. and Xxxxxxxxx X. Xxxxxx to be appointed as directors to fill the vacancies
created as a result of increasing the size of the Board of Directors. During
the Term of this Agreement, the Company and the Company Stockholders shall use
their best efforts to cause the Board of Directors to include at all times two
persons who are designated by the Rangos Shareholders. The initial designees
of the Rangos Shareholders shall be Xxxx X. Xxxxxx, Xx. and Xxxxxxxxx X.
Xxxxxx. If the designees of the Rangos Shareholders are other than Xxxx
Xxxxxx, Xx., Xxxx Xxxxxx, Xx. or Xxxxxxxxx Xxxxxx, such designees must be
reasonably acceptable to the Company. The Company shall, no later than thirty
days prior to the mailing of any proxy or information statement with respect to
a stockholder meeting at which directors are to be elected, notify the Rangos
Shareholders of the date of such mailing; the Rangos Shareholders shall notify
the Company of the names of the persons they designate to serve on the Board of
Directors of the Company pursuant to this Section no later than ten days prior
to the date of such mailing; and the Company and the Company Stockholders shall
use their best efforts to have such designees nominated for election as
directors and elected as directors. The Rangos Shareholders shall notify the
Company of the name of any person they designate to fill a vacancy on the Board
of Directors resulting from the resignation or other removal of a person
previously designated by the Rangos Shareholders no
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later than thirty days after such vacancy is created, and the Company and the
Company Stockholders shall use their best efforts to cause the Board of
Directors to appoint such person as a director of the Company. For purposes of
this Section, the Company may rely on a notice from Xxxx X. Xxxxxx, Xx. as a
notification from the Rangos Shareholders, or on a notice from such other
person as is designated in a writing signed by all Rangos Shareholders.
(c) During the Term of this Agreement, the Company, the
Company Stockholders and the Rangos Shareholders shall use their best efforts
to cause the Board of Directors to include at all times (in addition to the two
persons who are members pursuant to Section 2(b)) four persons who are approved
by at least four members of the Executive Committee of the Board of Directors
of the Company and none of whom is an officer or employee of the Company.
(d) During the term of this Agreement, and subject to the
provisions of clauses (b) and (c) of this Section 2, the Rangos Shareholders
and the Company Stockholders agree to use their best efforts to cause (i) the
election (and re-election during the term of this Agreement) of the individuals
who constitute the initial Board of Directors immediately following the
Effective Time (the "Initial Directors"), and (ii) the selection of and
election of persons nominated (consistent with the provisions of Section 2(c)
above) by a majority of the Initial Directors to fill any vacancies on the
Board of Directors created by the resignation or removal of a designee of the
Rangos Shareholders); provided that any person becoming a director subsequent
to the date hereof whose election, or nomination for election was approved
consistent with the provisions of Section 2(c) above), by a vote of a majority
of the Initial Directors shall be for purposes of this Section 2(d) considered
as though such person were an Initial Director.
SECTION 3 EXECUTIVE COMMITTEE OF THE BOARD OF DIRECTORS OF THE
COMPANY.
(a) The Company and the Company Stockholders agree that
at all times during the Term of this Agreement they shall use their best
efforts to establish and maintain an Executive Committee of the Board of
Directors consisting of five (5) directors.
(b) The Company and the Company Stockholders agree that
at all times during the Term of this Agreement they shall use their best
efforts to cause the Executive Committee of the Board of Directors to include
the two persons designated by the Rangos Shareholders pursuant to Section (b)
of this Agreement.
SECTION 4 APPROVAL OF CERTAIN ACTIONS.
The Company and the Company Stockholders agree to use their
best efforts to cause the Company to amend its by-laws to provide that the
Company shall not, and shall not permit any of its subsidiaries to, take any of
the following actions unless such action has been approved by the affirmative
vote of at least two-thirds (2/3) of the members of the Board of Directors of
the Company.
(1) Approve or enter into any merger of the Company with
or into another entity, or any merger of any other
entity with or into the Company (other than a merger
with a wholly-owned subsidiary of the Company) if
such
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entity has assets having a fair market value (as
determined in good faith by the Board of Directors)
of more than $5,000,000;
(2) Approve or enter into any transaction or series of
related transactions involving the sale or other
transfer of all or substantially all of the assets of
the Company;
(3) Approve the issuance of or issue any shares of, or
rights to acquire shares of, the capital stock of the
Company (other than pursuant to previously approved
employee benefit plans or employee benefit plans
consistent with customary practice in the industry);
(4) Approve or enter into any transaction as a result of
which the Company would acquire, directly or through
a subsidiary of the Company, assets (whether by
purchase, merger or consolidation) for more than
$5,000,000 in consideration (whether the
consideration is in the form of cash, assets or
securities) to be paid, transferred or issued by or
on behalf of the Company or any subsidiary of the
Company;
(5) Approve or enter into any transaction as a result of
which the Company or any subsidiary of the Company
would dispose of assets having a fir market value (as
determined in good faith by the Board of Directors)
of more than $1,000,000;
(6) Approve any amendment to the Certificate of
Incorporation or Bylaws of the Company;
(7) Approve or enter into any transaction as a result of
which the Company or any subsidiary of the Company
would incur indebtedness for borrowed money in excess
of $5,000,000;
(8) Approve or enter into any transaction in which the
Company or any subsidiary of the Company would enter
into a lease of real or personal property involving
annual payments in excess of $1,000,000; or
(9) Approve or substantially modify annual operating and
capital budgets of the Company.
The Company and the Company Stockholders shall use their best efforts to cause
such by-law amendment to be in effect during the Term of this Agreement.
SECTION 5 NOTICE.
All notices called for under this Agreement must be in
writing and will be deemed given if:
(1) delivered personally;
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(2) delivered by facsimile transmission and receipt is
acknowledged verbally or electronically;
(3) telexed; or
(4) mailed by registered or certified mail (return
receipt requested), postage prepaid;
to the parties to this Agreement at the following addresses (or at such other
address for a party as is specified by like notice; provided that notices of a
change of address will be effective only upon receipt of the notice):
To the Company:
USA Waste Services, Inc.
0000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxx X. XxXxxxxx
To the Rangos Shareholders:
Xxxx X. Xxxxxx, Xx.
0000 Xxxxx 000
Xxxxxxx Xxxx, Xxxxxxxxxxxx 00000
SECTION 6 SEVERABILITY.
If any provision of this Agreement is held invalid, such
invalidity will not affect any other provision of the Agreement that can be
given effect without the invalid provision, and to this end, the provisions of
this Agreement are separable.
SECTION 7 ASSIGNMENT.
This Agreement will bind and inure to the benefit of the
parties hereto and their respective successors and permitted assigns, but the
rights of the Rangos Shareholders may not be assigned to any person other than
affiliates of the Rangos Shareholders.
SECTION 8 AMENDMENT.
This Agreement may be modified only by a written instrument
duly executed by all parties to the Agreement and compliance with any provision
or condition contained in this Agreement, or the obtaining of any consent
provided for in this Agreement, may be waived only by written instrument duly
executed by the party to be bound by such waiver.
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SECTION 9 GOVERNING LAW.
The rights of the parties arising under this Agreement shall
be construed and enforced under the laws of the State of Delaware without
giving effect to any choice of law or conflict of law rules.
SECTION 10 COUNTERPARTS.
This Agreement may be executed in two or more counterparts,
each of which will be deemed an original but all of which will constitute one
and the same instrument.
SECTION 11 BEST EFFORTS OBLIGATIONS.
For purposes of this Agreement, the term "best efforts"
shall, (i) with respect to the Rangos Shareholders and the Company
Stockholders, require such persons to take all lawful action in their
capacities as members of the Board of Directors and with respect to the voting
of the shares of Common Stock held by such persons, and (ii) with respect to
the Rangos Shareholders, the Company Stockholders and the Company, require such
person to refrain from taking any action which could reasonably be expected to
frustrate the purposes intended to be accomplished by the best efforts
obligations provided herein.
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IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date set forth in the first paragraph of this Agreement.
USA Waste Services, Inc.
By: Xxxx X. XxXxxxxx
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Xxxx X. XxXxxxxx
Executive Vice President
Xxxx X. Xxxxxx, Xx.
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Xxxx X. Xxxxxx, Xx.
Xxxx X. Xxxxxx, Xx.
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Xxxx X. Xxxxxx, Xx.
Xxxxxxxxx X. Xxxxxx
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Xxxxxxxxx X. Xxxxxx
Xxxx Xxxxxx Development Corporation,
Inc.
By: Xxxx X. Xxxxxx, Xx.
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Xxxxxx X. Xxxxxxxxx, Xx.
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Xxxxxx X. Xxxxxxxxx, Xx.
Xxxx X. Xxxxx
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Xxxx X. Xxxxx
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