Exhibit 1
SHAREHOLDERS' AGREEMENT
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SHAREHOLDERS' AGREEMENT ("Agreement") dated as of February 10, 1997, among
the persons whose signatures appear on the execution pages of this Agreement
(capitalized and other terms used herein and not otherwise defined shall have
the meanings set forth in Section 1 hereof).
W I T N E S S E T H:
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WHEREAS, immediately prior to the completion of the Initial Public
Offering, the parties hereto will own the number of shares (the "Shares") of
Common Stock, or options to acquire the number of shares of Common Stock, set
forth opposite such party's name on Schedule A attached hereto and incorporated
herein by this reference; and
WHEREAS, in order to assure the harmonious management of the affairs of the
Company, each of the parties hereto desires to enter into this Agreement upon
the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises, the mutual covenants,
representations, warranties and agreements set forth in this Agreement, and of
other good and valuable consideration, the receipt, sufficiency and adequacy of
which is hereby acknowledged, the parties hereto, intending legally to be bound,
hereby covenant and agree as follows:
ARTICLE I
Definitions; Etc.
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1.1 Definitions. Except as otherwise herein expressly provided, the
following terms and phrases shall have the meanings set forth below:
"Xxxxx" means the collective reference to (i) Xxxxxxx X. Xxxxx; (ii)
the Xxxxxxx X. Xxxxx Revocable Trust; (iii) the Xxxxxxx X. Xxxxx Grantor Annuity
Trust #1; (iv) the Xxxxxxx X. Xxxxx Grantor Annuity Trust #2; (v) the ARA Trust;
(vi) the DLA Trust; and (vii) any Affiliates of Xxxxxxx X. Xxxxx who or which
acquire Shares pursuant to Section 3.2 of this Agreement.
"Affiliate" means, as to any Person (i) any corporation, partnership,
limited liability company, joint venture, trust or individual directly or
indirectly through one or more intermediaries controlled by or under common
control with such Person, or which controls directly or indirectly through one
or more intermediaries, such Person; (ii) a trust which has as its
principal income beneficiaries or remaindermen such Person or any direct or
indirect holder of such Person, or members of the immediate family of such
Person or direct or indirect holder of such Person; and (iii) any members of the
immediate family of such Person or a member of the immediate family of any
direct or indirect holder of such Person. For purposes of this definition, (i)
no Person, solely by virtue of his, her or its direct or indirect ownership of
Shares, shall be deemed to be an Affiliate of another Person; (ii) the terms
"control", "controlled" and "common control with" mean the ability, whether by
the direct or indirect ownership of voting securities or other equity interest,
by contract or otherwise, to elect a majority of the directors of a corporation,
to select the managing partner of a partnership, or otherwise to select, or have
the power to remove and then select, a majority of those Persons exercising
governing authority over an entity; and (iii) the term "immediate family" means
spouses (but not former spouses), children, stepchildren and grandchildren,
including relationships arising from legal adoption.
"Agreement" means this Shareholders' Agreement, as originally executed
and as amended, modified, supplemented or restated from time to time, as the
context requires.
"Board of Directors" means the board of directors of the Company.
"Common Stock" means the Common Stock, $0.01 par value, of the
Company, or any other shares of capital stock of the Company into which such
stock shall be reclassified or changed (by operation of law or otherwise). If
the Common Stock has been so reclassified or changed, or if the Company pays a
dividend or makes a distribution on its Common Stock in shares of capital stock,
or subdivides (or combines) its outstanding shares of Common Stock into a
greater (or smaller) number of shares of Common Stock, a share of Common Stock
shall be deemed to be such number of shares of capital stock and amount of other
securities to which a holder of a share of Common Stock outstanding immediately
prior to such reclassification, exchange, dividend, distribution, subdivision or
combination would be entitled.
"Dispose" or "Disposition" (and any derivatives thereof) mean and
refer to (i) a voluntary or involuntary (including in connection with death,
divorce, bankruptcy or otherwise) sale, assignment, transfer, conveyance,
pledge, hypothecation or other disposition of Shares, and (ii) any agreement,
contract or commitment to do any of the foregoing.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Gellein" means the collective reference to (i) Xxxxxxx X. Xxxxxxx,
Xx.; (ii) the Xxxxxxx X. Xxxxxxx, Xx. Revocable Trust;
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(iii) the Xxxxxxx X. Xxxxxxx, Xx. Grantor Retained Annuity Trust; the Xxxxxxx
Xxxxx Xxxxxxx Irrevocable Trust; (v) the Xxxxx Xxxxx Xxxxxxx Irrevocable Trust;
(vi) and any Affiliates of Xxxxxxx X. Xxxxxxx who or which acquire Shares
pursuant to Section 3.2 of this Agreement.
"Initial Public Offering" means the sale by the Company of
approximately 4,625,000 shares of Common Stock to the public pursuant to an
underwritten offering.
"X. Xxxxxxx Trust" means the collective reference to (i) Xxxxxx X.
Xxxxxxx; (ii) JGG Holdings Trust; (iii) the Xxxxxx X. Xxxxxxx Grantor Annuity
Trust; (iv) the Xxxxxxxxx Male Gift Trust; (v) the Xxxxxx Xxxxxxx Gift Trust;
(vi) the Xxxxx Xxxxx Gift Trust; and (vii) and any Affiliates of Xxxxxx X.
Xxxxxxx who or which acquire Shares pursuant to Section 3.2 of this Agreement.
"Lien" means any mortgage or deed of trust, pledge, hypothecation,
assignment, deposit arrangement, security interest, lien, charge, easement
(other than any easement not materially impairing usefulness or marketability),
encumbrance, preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement having substantially the
same economic effect as any of the foregoing).
"Old Agreements" means any and all Stock Restriction and Shareholders'
Agreements (or any similar document or instrument together with all amendments,
restatements, modifications and supplements thereto) entered into between or
among any of the Shareholders relating to any corporation which will be a
subsidiary of the Company after giving effect to the Initial Public Offering,
including, without limitation, Vistana Capital Holdings, Inc., Vistana Capital
Management, Inc., VCH Communications, Inc., VCH Financial Services, Inc., VCH
Trademark, Inc., WE4 Fun, Inc., Vistana International, Inc., Vistana WGV
Holdings, Inc., VCH Administration, Inc., VCH Oaks, Inc., VCM Oaks, Inc., VCH
Sales, Inc., Vacation Management Services, Inc., VCH Consulting, Inc., VCH
Systems, Inc., Vistana OP Investment, Inc., Vistana WGV, Inc. and VCH
Contracting, Inc., each subsidiaries of the Company, among such subsidiary of
the Company and certain of the Shareholders.
"Person" means any individual, partnership, limited liability company,
corporation, trust or other entity.
"Proxy" has the meaning ascribed thereto in the Exchange Act and
Regulation 14A promulgated by the SEC under the Exchange Act.
"SEC" means the Securities and Exchange Commission.
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"Securities Act" means the Securities Act of 1933, as amended.
"Shareholder" or "Shareholders" means each of the parties hereto,
together with their respective permitted successors and assigns, and any other
Persons, who or which acquire Shares and become parties to this Agreement.
"Shareholder Option Agreements" means those certain agreements dated
as of February 10, 1997 among certain of the Shareholders and certain executives
of the Company.
1.2 Other Defined Terms. The following terms are defined in the Section
of this Agreement directly opposite such terms:
Term Section
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Acceptance Notice 3.3(e)
Cash Consideration 3.3(a)
Company preamble
Notice Period 3.3(c)
Notification Notice 3.3(f)
Offered Price 3.3(b)
Offered Shares 3.3(b)
Other Shareholders 3.3(b)
Selling Holder 3.3(b)
Shares recitals
Subscribing Shareholders 3.3(c)
Tag-Along Offer 3.3(e)
Tag Closing 3.3(e)
Taggers 3.3(e)
Tagged Shares 3.3(e)
Transferee 3.3(b)
Transfer Notice 3.3(b)
Transferee Acceptance Notice 3.3(e)
Transferee Offer 3.3(b)
Transferee Rejection Notice 3.3(e)
1.3 "Exhibit, Etc." References to an "Exhibit" or to a "Schedule" are,
unless otherwise specified, to one of the Exhibits or Schedules attached to this
Agreement, and references to an "Article" or a "Section" are, unless otherwise
specified, to one of the Articles of Sections of this Agreement.
ARTICLE II
Voting of Shares
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2.1 Certain Voting Requirements. Whenever the Board of Directors solicits
a Proxy, each Shareholder will, during the term of this Agreement and so long as
such Shareholder owns any Shares, or acquires the power to vote any Shares, vote
(or cause to be
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voted) all of such Shareholder's Shares in accordance with the recommendation of
the Board of Directors in connection with such Proxy solicitation; provided,
however, no Shareholder shall be required to vote (or cause to be voted) such
Shareholder's Shares in accordance with this Section 2.1 in the event that both
Xxxxxxx X. Xxxxxxx, Xx. and Xxxxxxx X. Xxxxx disagree with the recommendation of
the Board of Directors in connection with any Proxy solicitation and deliver
written notice to each of the Shareholders to such effect prior to the date
votes are taken on such action. Any Shareholder who or which has voted (or cause
to be voted) such Shareholder's Shares in accordance with the recommendation of
the Board of Directors in connection with a Proxy solicitation prior to
receiving the written notice referred to in the preceding sentence, may rescind
any relevant Proxy theretofore given by such Shareholder.
2.2 Restrictions on Other Agreements. No Shareholder shall grant any
proxy or enter into or agree to be bound by any voting trust with respect to the
Shares nor shall any Shareholder enter into any agreement or arrangements of any
kind with any Person with respect to the Shares on terms inconsistent with the
provisions of this Agreement (whether or not such agreements and arrangements
are with other Shareholders or holders of Common Stock that are not parties to
this Agreement), including, without limitation, agreements or arrangements with
respect to the acquisition, Disposition or voting of Shares.
ARTICLE III
Dispositions of Shares
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3.1 General Disposition Restriction. Each Shareholder covenants and
agrees that it will not, and will not cause or allow any of its Affiliates to,
Dispose or cause the Disposition of Shares or any interest therein except in
accordance with the terms and conditions of this Article III. Any attempted
Disposition not in accordance with the terms and conditions of this Article III
shall be null and void and of no force or effect.
3.2 Dispositions to Affiliates. Notwithstanding anything to the contrary
contained in this Article III, (i) each of the parties constituting Gellein may
Dispose of all or a portion of its Shares to an Affiliate of Xxxxxxx X. Xxxxxxx,
Xx.; (ii) each of the parties constituting X. Xxxxxxx Trust may Dispose of all
or a portion of its Shares to an Affiliate of Xxxxxx X. Xxxxxxx; and (iii) each
of the parties constituting Xxxxx may Dispose of all or a portion of its Shares
to an Affiliate of Xxxxxxx X. Xxxxx; provided, however, that (a) such Shares
shall remain subject to all of the terms and conditions of this Agreement in the
hands of such Affiliate, and (b) such Affiliate shall first deliver to the other
Shareholder(s) a written agreement, reasonably satisfactory in form
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and substance to the nontransferring Shareholder(s), (x) assuming and agreeing
to be bound by all the terms and conditions of this Agreement and to be a
Shareholder hereunder; (y) providing that such Affiliate will retransfer all of
its right, title and interest in the Shares to the original transferring
Shareholder free and clear of all Liens prior to the time at which it ceases to
be an Affiliate of such transferring Shareholder; and (z) containing a power of
attorney from such Affiliate to the transferring Shareholder granting to such
transferring Shareholder the power, on behalf of such Affiliate, to vote such
Shares for all purposes and to make any election on behalf of such Affiliate
under this Agreement, and agreeing that such Affiliate will be legally bound by
such elections and agreements as if it had made or executed the same. A
Disposition pursuant to this Section 3.2 shall not relieve the transferring
Shareholder of any of its obligations under this Agreement.
3.3 Right of First Refusal/Tag Along Rights.
(a) The provisions of this Section 3.3 shall apply only to a
Transferee Offer, the consideration for which is stated solely in United States
Dollars and which is payable solely in cash or by promissory note payable solely
in cash ("Cash Consideration"). No Shareholder may Dispose of any Shares for
consideration other than Cash Consideration without obtaining the prior written
consent of the other Shareholders, which consent may be given or withheld, with
or without cause, in the sole and absolute discretion of such other
Shareholders. The provisions of this Section 3.3 shall not apply to any Shares
(i) Disposed of by a Shareholder in the Initial Public Offering (or pursuant to
the Underwriters' related over-allotment option), (ii) Disposed of pursuant to
an exercise of an Option granted under a Shareholder Option Agreement, or (iii)
contemplated to be Disposed of pursuant to Section 3.4.
(b) If any Shareholder (hereinafter referred to as a "Selling
Holder") proposes to sell or otherwise Dispose of all or any portion of the
Selling Holder's Shares to a non-Affiliate, the Selling Holder will give notice
(hereinafter referred to as a "Transfer Notice") in writing to the Company and
to the other Shareholders, other than the Shareholders which are Affiliates of
the Selling Holder (such other Shareholders being referred to herein as the
"Other Shareholders"), (i) describing the number of Shares proposed to be
Disposed of (the "Offered Shares"), (ii) specifying the proposed Cash
Consideration therefor (the "Offered Price") or the other consideration
therefor, (iii) irrevocably offering to sell the Offered Shares to the Other
Shareholders at the Offered Price at a closing pursuant to Section 3.3(f), and
(iv) attaching to the Transfer Notice an unconditional, bona fide offer (the
"Transferee Offer") from an identified non-Affiliate (the "Transferee") to
purchase the Offered Shares at the Offered Price (it being understood that the
Transfer
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Notice shall confirm the identity of the ultimate beneficial owner of the
Transferee).
(c) The Other Shareholders may offer to accept for purchase all, or,
subject to Section 3.3(d), any portion of the Offered Shares (such Other
Shareholders being referred to herein as the "Subscribing Shareholders"), at the
Offered Price, by giving written notice to the Selling Holder within 10 business
days, or 30 business days in the event that the aggregate Offered Price exceeds
$500,000, from the date of the Transfer Notice (the "Notice Period"). In the
event that the Subscribing Shareholders offer to accept for purchase an
aggregate number of Offered Shares that exceeds the total number of Offered
Shares described in the Transfer Notice, then each such Subscribing Shareholder
shall be entitled to purchase a number of Offered Shares that is equal to the
product of (i) the number of Offered Shares, multiplied by (ii) a fraction, the
numerator of which is the number of Offered Shares sought to be purchased by
such Subscribing Shareholder and the denominator of which is the number of
Offered Shares sought to be purchased by all Subscribing Shareholders.
(d) In the event the Subscribing Shareholders do not offer to accept
for purchase all the Offered Shares in the relevant time period described above,
then the Selling Holder shall have the right for 60 days after the expiration of
the Notice Period to sell to the Transferee the Offered Shares for Cash
Consideration equal to or greater than, and on other terms and conditions that
are no more favorable to the Transferee than, as set forth in the Transferee
Offer (which time period shall be extended (x) in order to secure all approvals
of regulatory bodies and similar authorities that are required to effectuate
such transfer, in which case the closing shall be conducted no later than 10
business days after the receipt of all such approvals (it being understood that
the parties shall use their reasonable best efforts to obtain any such approvals
within the time periods contemplated hereby), or (y) for the number of days for
which any Tag-Along Offer is outstanding (it being understood that the extension
referred to in this clause (y) shall terminate on the date of either the
Transferee Acceptance Notice or the Transferee Rejection Notice, if an
Acceptance Notice is given, or on the date which is 10 business days from the
date of the Tag-Along Offer, if no Acceptance Notice is given)).
(e) (i) Notwithstanding anything to the contrary in this Section
3.3, the Selling Holder shall not consummate the Disposition of the Offered
Shares to the Transferee as is otherwise permitted by Section 3.3(d) above
unless the Transferee, as part of the Transferee Offer, has offered to each
Other Shareholder the opportunity to sell to the Transferee a number of
such Other Shareholder's Shares equal to the product of (i) the number of
Shares owned by such Other Shareholder, multiplied by (ii) a fraction, the
numerator of which is the number of Offered Shares and the denominator of
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which is the number of Shares owned by the Selling Holder (assuming, for
purposes of determining the aggregate number of Shares then owned by an
Other Shareholder or the Selling Holder, that all outstanding options to
acquire Common Stock are not exercised, and that the underlying Common
Stock is not outstanding), for the same Cash Consideration per share and on
the same other terms and conditions as set forth in the Transferee Offer
(the "Tag-Along Offer"); provided, however, that no Tag-Along Offer need be
made if the Offered Shares constitute less than 5% of the outstanding
Common Stock determined on a primary basis in accordance with generally
accepted accounting principles with reference to the Company's Quarterly
Report on Form 10-Q, or 10-K, whichever is more recent (or any successor
forms), for the Company's most recently completed fiscal quarter or year,
as applicable, prior to the date of the Transfer Notice (it being agreed
that Dispositions of Shares by a Selling Holder and its Affiliates during a
six month period to a single purchaser or group of purchasers acting
together or under common control are to be aggregated in determining
whether 5% of the outstanding Common Stock is being sold).
(ii) The Other Shareholders may accept such Tag-Along Offer and
sell to the Transferee any number of Shares up to the maximum amount
allowed by Section 3.3(e)(i)(any such Other Shareholders offering to sell
Shares to the Transferee being herein termed "Taggers", and such Shares
being herein termed "Tagged Shares") by giving written notice (hereinafter
referred to as an "Acceptance Notice") to the Transferee (it being
understood that the Tag-Along Offer shall state the manner by which
communications to the Transferee shall be effected) within 10 business days
from the date of the Tag-Along Offer.
(iii) In the event any of the Taggers accept the Tag-Along Offer
and the Transferee does not agree to purchase the Offered Shares and all
Tagged Shares (which rejection must be by written notice (such notice
referred to herein as the "Transferee Rejection Notice") to the Selling
Holder and all Taggers and made within 10 business days from the end of the
relevant Notice Period), then no Offered Shares or Tagged Shares shall be
sold to the Transferee; provided, however, in the event any of the Taggers
accept the Tag-Along Offer and the Transferee agrees to purchase the
Offered Shares and all Tagged Shares (which acceptance must be by written
notice (hereinafter referred to as the "Transferee Acceptance Notice") to
the Selling Holder and all Taggers and made within 10 business days from
the end of the relevant Notice Period), the closing with respect to the
Offered Shares shall be at the same time as the closing for the Tagged
Shares (such closing being referred to herein as the "Tag Closing") and:
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(A) Not later than 7 days after the date of the Transferee
Acceptance Notice, the Taggers shall deliver to the Selling Holder (x)
a stock certificate or certificates evidencing the appropriate number
of Tagged Shares, together with an appropriate assignment separate
from the stock certificate duly executed in a proper form to effect
the transfer of such Tagged Shares to the Transferee on the books and
records of the Company and (y) a limited power-of-attorney authorizing
the Selling Holder to effect the sale of the Tagged Shares pursuant to
the terms of the Transferee Offer (the failure of a Tagger to comply
with the provisions of this Section 3.3(e)(iii)(A) shall be deemed to
be a waiver of the Tagger's rights hereunder);
(B) Simultaneously with the Tag Closing, the Selling Holder
shall (x) deliver notice thereof to the Taggers, (y) cause the
Transferee to remit to the Taggers the total sales price of the Tagged
Shares sold pursuant hereto and (z) furnish such other evidence of the
Tag Closing as may be reasonably requested in writing by the Taggers;
and
(C) If, by the Tag Closing, the Selling Holder shall not have
completed the sale to the Transferee of the Tagged Shares and the
Offered Shares, the Selling Holder shall return to the Taggers (x) the
stock certificates and assignments of certificates with respect to the
Tagged Shares and (y) the related limited power-of-attorney, in each
case which the Taggers delivered to the Selling Holder pursuant to
clause (A) above (upon the Taggers' receipt of such materials, all the
restrictions on transfer contained in this Section 3.3 shall again be
in effect).
(f) (i) In the event that the Subscribing Shareholders have offered
to accept for purchase all of the Offered Shares, upon determination of the
manner in which the Offered Shares are to be sold in accordance with
Sections 3.3(c), the Subscribing Shareholders (or a Subscribing Shareholder
on behalf of the Subscribing Shareholders) will give notice (hereinafter
referred to as the "Notification Notice") to the Selling Holder to such
effect and inform the Selling Holder that such Offered Shares shall be
transferred to the Subscribing Shareholder(s) at the Offered Price. Such
Notification Notice shall also specify the place and time of the closing at
which such Selling Holder's Offered Shares shall be transferred. Such
closing shall in no case occur earlier than the 5th business day following
the Notification Notice or later than the 10th business day following the
Notice Period, unless it is necessary to conduct the closing later than
either the 10th business day in order
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to secure all approvals of regulatory bodies and similar authorities that
are required to effectuate such transfer, in which case the closing shall
be conducted no later than 10 business days after the receipt of all such
approvals (it being understood that the parties shall use their reasonable
best efforts to obtain any such approvals within the time periods
contemplated hereby).
(ii) At the closing, the Subscribing Shareholder(s) to whom the
Selling Holder's Offered Shares are being sold shall deliver the Offered
Price in the form set forth in the Transferee Offer to the Selling Holder.
(iii) At the closing, the Selling Holder shall deliver to the
Subscribing Shareholder(s) to whom the Selling Holder's Offered Shares are
being sold a certificate executed by or on behalf of the Selling Holder
dated as of the closing date and in form and substance satisfactory to the
Subscribing Shareholder(s) to whom the Selling Holder's Offered Shares are
being transferred to the effect that:
(A) The Selling Holder, if other than a natural Person, is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization;
(B) The Selling Holder has full power, authority (or capacity)
and legal right to make and perform its obligations under the
transactions contemplated by this Section 3.3;
(C) The sale of the Offered Shares will not conflict with or
result in a breach or violation of any of the terms or provisions of,
or constitute a default under, or result in the creation or imposition
of any Lien upon any of the Offered Shares pursuant to the terms of,
any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Selling Holder or any of its
Affiliates is a party or by which the Selling Holder or any of its
Affiliates is bound or to which any of the property or assets of the
Selling Holder or any of its Affiliates is subject, nor will such
action result in any violation of the provisions of the certificate of
incorporation or by-laws (or equivalent corporate governing
instruments) of the Selling Holder or any statute or any order, rule
or regulation of any court or governmental agency or body having
jurisdiction over the Selling Holder or any of its Affiliates or any
of their properties.
(D) No consent, approval, authorization, order, registration or
qualification of any third party or any
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court or governmental agency or body is required for the sale of the
Offered Shares.
(E) There are no legal or governmental proceedings pending to
which the Selling Holder or any of its Affiliates is a party or, to
the Selling Holder's knowledge, threatened, which question the
validity of this Agreement or the sale of the Offered Shares pursuant
to this Section 3.3(f).
(F) Upon payment of the Offered Price, good and valid title to
the Offered Shares, free and clear of all Liens, will be transferred
by the Selling Holder.
(iv) The Selling Holder shall pay, and shall indemnify the
Subscribing Shareholder(s) to whom the Selling Holder's Offered Shares are
being transferred, against, any stamp, transfer or similar tax that is
payable in respect of the transfer of the Selling Holder's Offered Shares
pursuant to any of Sections 3.3(c). The amount of any such tax which has
not been paid by the Selling Holder may be deducted from any amount
otherwise payable to the Selling Holder.
3.4 Dispositions of Shares Pursuant to Registration Statements and Rule
144.
(a) Shares that shall have been registered under the Securities Act
in contemplation of a publicly distributed firm commitment underwriting of a
specified number of Shares, including an estimated price and commission
arrangement, may be Disposed of pursuant to such effective registration
statement if the registration statement with respect to the sale of such Shares
shall have become effective under the Securities Act. Before filing any
registration statement with respect to any contemplated underwritten offering of
Shares pursuant to this Section 3.4(a), the Selling Holder shall notify the
Other Shareholders thereof in writing, providing the Other Shareholders the
details thereof in writing, including the number of shares to be offered, the
minimum purchase price and the expected discount and commissions. The Other
Shareholders shall have 10 days from the receipt of such notice to elect to
purchase for cash all of such Shares from the Selling Holder at the specified
minimum purchase price. In the event the Other Shareholders elect to purchase
all of such Shares, the Selling Holder shall sell such Shares to the Other
Shareholders and the Other Shareholders shall purchase all of such Shares from
the Selling Holder at a closing to be held 30 days after the notice of the
election to purchase. Such notice of the election to purchase shall be
accompanied by a deposit of 5% of the purchase price. In the event the Other
Shareholders do not elect to purchase the Shares or fail to make an election
within the applicable time period, the Seller shall be free to effect the sale
of all of such Shares in accordance with the terms and conditions
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set forth in its notice provided that such sale is effected at a price less than
the specified minimum purchase price less 10%.
(b) Shares may be sold pursuant to Rule 144 (or any similar provision
which replaces Rule 144) under the Securities Act. Before effecting any sale of
Shares pursuant to this Section 3.4(b), the Selling Holder shall notify the
Other Shareholders thereof in writing, providing the Other Shareholders a copy
of the applicable Form 144 (or the information required by such form) and
specifying the minimum purchase price. The Other Shareholders shall have three
business days from the receipt of such notice to elect to purchase for cash all
or a portion of such Shares from the Selling Holder at such minimum purchase
price. In the event the Other Shareholders elect to purchase all or a portion of
such Shares, the Selling Holder shall sell such Shares to the Other Shareholders
and the Other Shareholders shall purchase such Shares from the Selling Holder at
a closing within six business days after the notice of the election to purchase.
In the event the Other Shareholders do not elect to purchase the Shares or fails
to make an election with the applicable time period, the Selling Holder shall be
free to effect the sale of some or all of such Shares under Rule 144 in
accordance with the terms and conditions set forth in its notice at a price not
less than the minimum purchase price less 10%.
(c) All Shares to be purchased by the Other Shareholders pursuant to
this Section 3.4 shall be allocated among the Other Shareholders as they shall
agree (it being understood that if the Other Shareholders are unable to so
agree, all such allocations among the Other Shareholders shall be made pro rata
basis determined in accordance with each such Other Shareholder's ownership of
Common Stock determined on a fully-diluted basis in accordance with generally
accepted accounting principles with reference to the Company's Quarterly Report
on Form 10-Q, or 10-K, whichever is more recent (or any successor forms), for
the Company's most recently completed fiscal quarter or year, as applicable,
prior to the proposed Disposition).
3.5 Limitation of Rights. Upon exercise of a right specified in either
Section 3.3 or Section 3.4, no further exercise of rights provided for by such
provisions may be initiated until the expiration of all periods of time therein
specified (other than rights granted to a party in connection with either of
such provisions to the extent that proceedings are in progress thereunder).
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ARTICLE IV
Miscellaneous
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4.1 Endorsement on Certificates. Each of the Shareholders agree that a
legend substantially to the following effect shall be placed on every
certificate evidencing ownership of Shares owned by it:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE TRANSFERRED,
SOLD OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION THEREUNDER OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT. THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS
SUBJECT TO THE CONDITIONS SPECIFIED IN A SHAREHOLDERS' AGREEMENT, DATED AS
OF FEBRUARY 10, 1997 WHICH RESTRICTS THE TRANSFERABILITY HEREOF AND A
REGISTRATION RIGHTS AGREE MENT (COPIES OF WHICH ARE ON FILE WITH THE
SECRETARY OF THE ISSUER HEREOF). ANY TRANSFER IN VIOLATION OF SUCH
RESTRICTIONS SHALL BE NULL, VOID AND OF NO EFFECT WHATSOEVER. NO TRANSFER
OF SUCH SECURITIES WILL BE ON THE BOOKS OF THE ISSUER HEREOF UNLESS
ACCOMPANIED BY EVI DENCE OF COMPLIANCE WITH THE TERMS OF SUCH SHAREHOLDERS'
AGREEMENT."
4.2 Effectiveness; Termination.
(a) This Agreement shall become effective (the "Effective Date")
concurrently with the completion of the Initial Public Offering. The parties
agree that upon the Effective Date, this Agreement supersedes each of the Old
Agreements in their entirety and that the Old Agreements shall have no further
force and effect whatsoever. Until the Effective Date, the Old Agreements shall
continue in effect.
(b) This Agreement shall terminate and be of no force and effect upon
the earliest to occur of (i) the written agreement of all of the Shareholders to
terminate this Agreement; (ii) the tenth anniversary of the Initial Public
Offering; and (iii) date upon which the parties constituting Xxxxx, on the one
hand, or the parties constituting Gellein and X. Xxxxxxx Trust, on the other,
fail to own five percent of the outstanding Common Stock, determined on a fully
diluted basis in accordance with generally accepted accounting principles with
reference to the Company's Quarterly Report on Form 10-Q, or 10-K, whichever is
more recent (or any successor forms), for the Company's most recently completed
fiscal quarter or year, as applicable, prior to the date of determination.
-13-
4.3 Shares Subject to this Agreement. This Agreement shall apply to (a)
the Shares held by the Shareholders on the date hereof; (b) any Shares issued to
any Shareholder as a result of a share dividend or in addition to or upon
exchange for Shares; (c) any Shares issued to any Shareholder pursuant to such
Shareholder's exercise of an option or warrant; (d) any Shares issued to a
Shareholder upon conversion of Shares; and (e) any Shares otherwise purchased,
acquired or issued to any Shareholder. All certificates evidencing Shares
subject to this Agreement shall contain the restrictive legend set forth in
Section 6.1.
4.4 Further Assurances. From time to time after the date hereof, the
parties will, at their expense, and without further consideration, execute and
deliver such other documents and instruments and take such other actions as may
be reasonably requested to effect the purposes and intent of this Agreement.
4.5 Notices. All notices, consents, requests, instructions, acceptances,
approvals or other communications which may be given hereunder shall be in
writing and shall be deemed to have been duly given, made or served upon
delivery, if delivered in person, or on the first business day after sending, if
sent by recognized expedited delivery service, or on the third business day
after mailing, if mailed by registered or certified mail, first class postage
prepaid, a party at the address specified therefor on Schedule A attached
hereto, or to such other address as any party may from time to time designate to
the other in the manner provided in this Section.
4.6 Pronouns and Headings. As used herein, all pronouns shall include the
masculine, feminine, neuter, singular and plural wherever the context and facts
require such construction. The descriptive headings in the sections of this
Agreement are inserted for convenience of reference only and shall not control
or affect the meaning or construction of any of the provisions hereof.
4.7 Severability. If any provision of this Agreement is held by a court
of competent jurisdiction to be invalid, illegal or unenforceable, such
provision shall be severed and enforced to the extent possible or modified in
such a way as to make it enforceable, and the invalidity, illegality or
unenforceability thereof shall not affect the validity, legality or
enforceability of the remaining provisions of this Agreement.
4.8 Modification; Amendment. No modification or amendment of this
Agreement shall be valid unless the same shall be in writing executed by the
Company and the holders of 66-2/3% of the outstanding Shares then held by
Shareholders.
4.9 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida.
-14-
4.10 Third Party Beneficiaries. Nothing herein expressed or implied is
intended or shall be construed to confer upon or give to any Person or entity
(other than the parties hereto) any rights or remedies under or by reason of
this Agreement, provided, however, that the Company shall be a third party
beneficiary of each Shareholder's obligations under Section 2.1 hereof.
4.11 Binding Effect. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective heirs, personal
representatives, and permitted assigns.
4.12 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
4.13 Equitable Relief. The parties hereto acknowledge and agree that in
the event of any breach of Article II or Sections 3.1, 3.2, 3.3 or 3.4 by any
one of them, the other parties would be irreparably harmed and could not be made
whole by monetary damages. Accordingly, the parties hereto agree (i) to waive
the defense in any action for specific performance that a remedy at law would be
adequate, and (ii) that the parties hereto, 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 Article II or Sections 3.1, 3.2, 3.3 or 3.4 in any
action instituted to enforce it.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
__________________________________________________
Xxxxxxx X. Xxxxxxx, Xx., Trustee of the Xxxxxxx X.
Xxxxxxx, Xx. Revocable Trust
__________________________________________________
Xxxxxxx X. Xxxxxxx, Xx., Trustee of the Xxxxxxx X.
Xxxxxxx, Xx. Grantor Retained Annuity Trust
__________________________________________________
Xxxxxxx X. Xxxxxxx, Xx., Trustee of the Xxxxxxx
Xxxxx Xxxxxxx Irrevocable Trust
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
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___________________________________________________
Xxxxxxx X. Xxxxxxx, Xx., Trustee of the Xxxxx Xxxxx
Xxxxxxx Irrevocable Trust
___________________________________________________
Xxxxxxx X. Xxxxxxx, Xx., Trustee of JGG Holdings
Trust
___________________________________________________
Xxxxxxx X. Xxxxxxx, Xx., Trustee of the Xxxxxx X.
Xxxxxxx Grantor Annuity Trust
___________________________________________________
Xxxxxxx X. Xxxxxxx, Xx., Trustee of the Xxxxxxxxx
Male Gift Trust
___________________________________________________
Xxxxxxx X. Xxxxxxx, Xx., Trustee of the Xxxxxx
Xxxxxxx Gift Trust
___________________________________________________
Xxxxxxx X. Xxxxxxx, Xx., Trustee of the Xxxxx Xxxxx
Gift Trust
___________________________________________________
Xxxxxxx X. Xxxxx, Trustee of the Xxxxxxx X. Xxxxx
Revocable Trust
___________________________________________________
Xxxxxxx X. Xxxxx, Trustee of the Xxxxxxx X. Xxxxx
Grantor Annuity Trust #1
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
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___________________________________________________
Xxxxxxx X. Xxxxx, Trustee of the Xxxxxxx X. Xxxxx
Grantor Annuity Trust #2
___________________________________________________
Xxx X. Xxxxxx, Trustee of the ARA Trust
___________________________________________________
Xxx X. Xxxxxx, Trustee of the DLA Trust
THE UNDERSIGNED EXECUTE THIS
AGREEMENT SOLELY FOR PURPOSES
OF ARTICLE II HEREOF:
______________________________
Xxxxxxx X. Xxxxxxx, Xx.
______________________________
Xxxxxxx X. Xxxxx
[SIGNATURES CONTINUED FROM PRECEDING PAGE]
-17-
SCHEDULE A
----------
No. of
Name and Address/(1)/ Shares
---------------- ------
Xxxxxxx X. Xxxxxxx, Xx. 3,203,550
Revocable Trust
c/o Xxxxxxx X. Xxxxxxx, Xx.,
Trustee
Xxxxxxx X. Xxxxxxx, Xx. 254,440
Grantor Retained Annuity
Trust
c/o Xxxxxxx X. Xxxxxxx, Xx.,
Trustee
Xxxxxxx Xxxxx Xxxxxxx 42,880
Irrevocable Trust
c/o Xxxxxxx X. Xxxxxxx, Xx.,
Trustee
Xxxxx Xxxxx Xxxxxxx 42,880
Irrevocable Trust
c/o Xxxxxxx X. Xxxxxxx, Xx.,
Trustee
JGG Holdings Trust 3,203,550
c/o Xxxxxxx X. Xxxxxxx, Xx.,
Trustee
Xxxxxx X. Xxxxxxx Grantor 278,700
Annuity Trust
c/o Xxxxxxx X. Xxxxxxx, Xx.,
Trustee
Xxxxxxxxx Male Gift Trust 20,500
c/o Xxxxxxx X. Xxxxxxx, Xx.,
Trustee
Xxxxxx Xxxxxxx Gift Trust 20,500
c/o Xxxxxxx X. Xxxxxxx, Xx.,
Trustee
Xxxxx Xxxxx Gift Trust 20,500
c/o Xxxxxxx X. Xxxxxxx, Xx.,
Trustee
Xxxxxxx X. Xxxxx Revocable Trust 6,854,500
x/x Xxxxxxx X. Xxxxx,
Xxxxxxx
X-0
No. of
Name and Address (continued) Shares
---------------------------- ------
Xxxxxxx X. Xxxxx Grantor Annuity 50,000
Trust #1
c/o Xxxxxxx X. Xxxxx,
Trustee
Xxxxxxx X. Xxxxx Grantor Annuity 60,000
Trust #2
c/o Xxxxxxx X. Xxxxx,
Trustee
ARA Trust 61,500
c/o Xxx X. Xxxxxx,
Trustee
Suite 1800
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
DLA Trust 61,500
c/o Xxx X. Xxxxxx,
Trustee
Suite 1800
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
----------
14,175,000
==========
-------------------
/(1)/ Unless otherwise specified, all addresses are 0000 Xxxxxxx Xxxxxx Xxxxx,
Xxxxxxx, Xxxxxxx 00000.
S-2
