EXHIBIT 1
AGREEMENT, dated as of July 25, 1997, by and among Insituform
Technologies, Inc., a Delaware corporation (the "Company"); Xxxxxx Xxxxxxxxx
("Xx. Xxxxxxxxx"), Xxxxx X. Xxxxxxxxx ("Xxx. Xxxxxxxxx"), The Xxxxxx and Xxxxx
Xxxxxxxxx Family Fund (the "Fund"), Xxxxxx X. Xxxxxxxxx ("Xx. Xxxxxxxxx"), and
Xanadu Investments, L.P. ("Xanadu"; Xx. Xxxxxxxxx, Xxx. Xxxxxxxxx, the Fund, Xx.
Xxxxxxxxx and Xanadu may be collectively referred to herein as the "Dissident
Group"); Xxxx X. Xxxxxxxxx (Mr. "Xxxxxxxxx"); Xxxxxxx X. Xxxxxxxxxx ("Xx.
Xxxxxxxxxx"); Xxxxxxx X. Xxxxxx ("Xx. Xxxxxx"); Xxxxx Xxxxxxxx ("Xx. Xxxxxxxx");
Xxxxxxx Xxxxxx ("Xx. Xxxxxx"); and Xxxxxxx X. Xxxxx, Xx. ("Xx. Xxxxx"; the
Company, Xx. Xxxxxxxxx, Xxx. Xxxxxxxxx, the Fund, Xx. Xxxxxxxxx, Xanadu, Xx.
Xxxxxxxxx, Xx. Xxxxxxxxxx, Xx. Xxxxxx, Xx. Xxxxxxxx, Xx. Xxxxxx and Xx. Xxxxx
may be collectively referred to herein as the "parties" and may be individually
referred to herein as a "party").
WHEREAS, the Company and the Dissident Group wish to end the pending
proxy contest between them and to change the composition of the Board of
Directors of the Company (the "Board of Directors"); and
WHEREAS, in furtherance of the foregoing, and prior to the election of
directors at the 1997 Annual Meeting (as defined below), the Company and the
Dissident Group wish to eliminate the classification of the Board of Directors
and the arrangements for electing "groups" of directors referred to in Section
7.3 of the Agreement and Plan of Merger dated as of May 23, 1995 among the
Company, ITI Acquisition Corp., and Insituform Mid-America, Inc. (the "Merger
Agreement");
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein the parties hereto agree as follows:
Section 1. DIRECTOR RESIGNATIONS. Prior to or contemporaneously with
the execution and delivery hereof by the parties hereto, the Company shall have
received the irrevocable resignations of Xxxxxx Xxxx, Xxxxx Xxxxxxxx, Xxxxx X.
Xxxxxxx, Xxxxxxx Xxxxxx and Xxxxx X. Xxxxxxx from the Board of Directors, to be
effective no later than the succession to office of the directors elected at the
1997 Annual Meeting (as hereinafter defined). Any appointment to the Board of
Directors from the date hereof until the succession to office of the directors
elected at the 1997 Annual Meeting shall be subject to such director's
contemporaneous execution and delivery to the Company of his irrevocable
resignation effective as aforesaid.
Section 2. SPECIAL MEETING OF THE BOARD OF DIRECTORS. As soon as
possible after the date hereof, the President of the Company shall call a
meeting of the Board of Directors (the "Special Board Meeting") at which the
following items shall be submitted for approval:
(a) the amendment of Article SIXTH of the Company's Certificate
of Incorporation to eliminate classification of the Board of Directors, and
submission of the proposed amendment for approval to the holders (the
"Stockholders") of the shares of class A common stock, par value $.01 per
share ("Common Stock"), of the Company, at the Company's 1997 Annual
Meeting of Stockholders to be held on August 21, 1997, or such later date
as shall be determined by the Company solely in order to facilitate
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effectuation of the provisions of Section 2(f) hereof (the "1997 Annual
Meeting"), such amendment to be subject to and effective upon completion of
all Required Actions (as hereinafter defined), other than any Required
Action described under this paragraph (a) (for purposes hereof, "Required
Actions" shall mean, collectively: (w) the approval by the Stockholders at
the 1997 Annual Meeting of the matters described in Sections 2(a) , 2(c)
and, if required, 2(b) hereof; (x) the election at the 1997 Annual Meeting,
subject to the completion of all Required Actions, of the New Directors (as
hereinafter defined); (y) the approval by the Board of Directors at the
Special Board Meeting of the matters described in Sections 2(a), (c), (d),
(e) and (g) hereof; and (z) compliance with Section 4(b) hereof);
(b) the amendment of Article III, Section 2 of the Company's
ByLaws to reduce the size of the Board of Directors from thirteen directors
to eight directors, provided that the size of the Board of Directors shall
increase automatically to nine directors upon the election or appointment
of the Additional Nominee (as hereinafter defined) to the Board of
Directors and, if such amendment is not approved by at least 80% of the
members of the Board of Directors, submission of the proposed amendment of
the Company's By-Laws for approval by Stockholders holding a majority of
the shares of Common Stock at the 1997 Annual Meeting, such amendment to be
subject to and effective upon completion of all Required Actions, other
than any Required Action described under this paragraph (b);
(c) the cancellation of the arrangements set forth in Section 7.3
of the Merger Agreement, and the amendment of Article SIXTH of the
Company's Certificate of Incorporation to provide that, subsequent to the
succession to office following the 1997 Annual Meeting of the New
Directors, vacancies in the Board of Directors will be filled as set forth
in this Agreement, such cancellation and amendment to be subject to and
effective upon completion of all Required Actions, other than any Required
Action described under this paragraph (c);
(d) the amendment of Article III of the Company's By-Laws to add
a new Section 14 to be entitled "NOTICE AND APPROVAL OF CERTAIN ACTIONS,"
which would provide that, notwithstanding any other provision of the
Company's ByLaws (and except for the implementation of Sections 2(a), (b),
(c) and (e) and Section 6 hereof): (i) in the event that any director
proposes to bring before any regular or special meeting of the Company's
Board of Directors any proposal relating to any amendment of the Company's
Certificate of Incorporation or By-Laws or this Agreement, or any change in
the structure, composition (other than such director's resignation) or
governance of the Board of Directors (any such action shall be referred to
herein as a "Special Action"), such director must provide written notice
thereof (including a reasonably detailed description of such proposal) to
each member of the Board of Directors at least seven days prior to the date
of the directors' meeting at which the Special Action is to be proposed;
and (ii) the taking of any Special Action by the Board of Directors must be
approved by a majority of all directors then serving; provided, however,
that no Special Action which would have any effect prior to the 1999 Annual
Meeting (as hereinafter
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defined) may be taken if such Special Action would conflict with, have the
effect of modifying or otherwise frustrating any provision of this
Agreement, including, without limitation, any amendment to Article SIXTH of
the Company's Certificate of Incorporation or Article III Section 2 of the
Company's By-Laws, as such provisions will be in effect pursuant to this
Agreement following the 1997 Annual Meeting;
(e) the amendment of Article IV Section 4B of the Company's
ByLaws to provide that, notwithstanding any other provision of the
Company's By-Laws, the Vice Chairman of the Board, acting in any capacity,
shall not have the power to call any special meeting of Stockholders;
(f) (i) the approval at the 1997 Annual Meeting of new nominees
for election to the Board of Directors (the "New Nominees"), which New
Nominees will consist of Xx. Xxxxxxxxx, Xx. Xxxxxxxxx, Xx. Xxxxxxxxxx, Xx.
Xxxxxx, Xx. Xxxxxxxxx, Xx. Xxxxxxxx, Xx. Xxxxx and Xx. Xxxxxx, each of whom
will serve for an initial term of one year and until such time as his
successor has been duly elected and qualified, and the submission of such
nominees at the 1997 Annual Meeting with the recommendation of the Board of
Directors for election as directors by the Stockholders, such election and
succession to office to be subject to and effective upon the completion of
all Required Actions;
provided, however, that in the event that any of the New Nominees
is unable at the 1997 Annual Meeting to stand for election for any
reason, his replacement shall be designated as follows: (i) Xx.
Xxxxxxxxx shall have the right to designate a replacement for Xx.
Xxxxxxxxx and Xx. Xxxxxxxxx shall have the right to designate a
replacement for Xx. Xxxxxxxxx, (ii) Xx. Xxxxx shall have the right to
designate a replacement for Xx. Xxxxxx and Xx. Xxxxxx shall have the
right to designate a replacement for Xx. Xxxxx, (iii) Xx. Xxxxxxxxx
shall have the right to designate a replacement for Xx. Xxxxxxxx and
Xx. Xxxxxxxx shall have the right to designate a replacement for Xx.
Xxxxxxxxx, (iv) the Committee (as hereinafter defined) shall have the
right to designate a replacement for Xx. Xxxxxxxxxx (except that in
the event that the Committee does not select a replacement for Xx.
Xxxxxxxxxx within ten business days after notice that he is unable to
stand for election, his replacement shall be selected by the
Independent Nominator (as hereinafter defined), who shall be
instructed to select a designee who meets the criteria set forth in
clauses (i) and (ii) of Section 6 of this Agreement) and (v) the Board
of Directors of the Company shall have the right to designate a
replacement for Xx. Xxxxxx; and
provided, further, that Xx. Xxxxx (or in the event of his death,
incompetence or resignation from the Board of Directors, Xx. Xxxxxx,
the latter with full powers to designate his successor from the then
members of the Board in the event of his death, incompetence or
resignation from the Board of Directors) shall also have the right to
select one additional nominee (the "Additional Nominee"), subject to
the approval of Xx. Xxxxxxxxx (or in the event of his death,
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incompetence or resignation from the Board of Directors, Xx.
Xxxxxxxxx, the latter with full powers to designate his successor from
the then members of the Board in the event of his death, incompetence
or resignation from the Board of Directors); except that (1) such
approval may not be "unreasonably withheld" and (2) if such approval
is withheld, the grounds therefore must be stated in writing by Xx.
Xxxxxxxxx in reasonable detail (an approval under this Section 2(f)
shall be deemed to be "unreasonably withheld" if (1) it is delayed or
delivered more than five business days after Xx. Xxxxxxxxx is notified
of the proposed Additional Nominee and receives biographical
information regarding the proposed Additional Nominee or (2) such
approval is withheld for any reason other than the proposed Additional
Nominee (x) demonstrably having a material financial or a close
personal or familial relationship with another director or affiliate
of a director, (y) not being qualified to serve as a director or (z)
having refused to execute a counterpart of this Agreement as
contemplated by Section 9(m) hereof), and if Xx. Xxxxx deems that Xx.
Xxxxxxxxx'x approval of any proposed Additional Nominee has been
unreasonably withheld upon the grounds referred to in clause (y)
immediately preceding, the matter shall forthwith be referred to
arbitration by the Independent Nominator (as hereinafter defined)
whose decision as to whether the proposed Additional Nominee is
qualified to serve as a director as aforesaid shall be dispositive and
binding; and
(ii) If such Additional Nominee has been approved, or such approval
has been unreasonably withheld, as provided in Section 2(f)(i) hereof (and,
if approval has been withheld upon the grounds referred to in clause (y)
immediately preceding, such approval has been determined by the Independent
Nominator to have been unreasonably withheld) prior to the date of the 1997
Annual Meeting, the Additional Nominee shall be recommended by the Company
for election at the 1997 Annual Meeting, and the 1997 Annual Meeting may be
adjourned by the Company, if necessary, for a reasonable period to prepare
revised proxy materials which would include information with respect to the
Additional Nominee (the persons to be presented to the Stockholders at the
1997 Annual Meeting in accordance with this Section 2(f) shall be
collectively referred to herein as the "New Directors"). If the Additional
Nominee has not been presented to the Stockholders for election as a
director at the 1997 Annual Meeting, Xx. Xxxxx shall have the right
thereafter to select the Additional Nominee during a period ending two
months after the date hereof and (x) if such selection is approved, or such
approval is unreasonably withheld, as provided in Section 2(f)(i) hereof
(and, if approval is withheld upon the grounds referred to in clause (y) of
Section 2(f)(i) hereof, such approval has been determined by the
Independent Nominator to have been unreasonably withheld), the Additional
Nominee shall be appointed to the Board of Directors promptly thereafter
and shall thereafter be deemed a New Director and (y) if such selection (or
any selection pursuant to this clause (y)) is not approved as aforesaid,
Xx. Xxxxx shall be entitled to an additional period expiring two months
after the date on which such non-approval has been finally determined to
select another proposed Additional Nominee in accordance with this Section
2(f); provided, however, that in the event Xx. Xxxxx fails to select a
proposed Additional Nominee within two months after the date hereof or, if
applicable,
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within any extension of such period: (1) the Additional Nominee shall be
selected by the Committee (as hereinafter defined) from a list of three
candidates provided by the Independent Nominator (as defined below) each of
whom (i) shall have appropriate qualifications to serve on the Company's
Board of Directors and (ii) to whom none of the criteria set forth in
clauses (x)-(y) of the last parenthetical phrase of Section 2(f)(i) hereof
would apply; (2) in the event that both members of the Committee are unable
to select a nominee from the list provided by the Independent Nominator
within ten business days after receipt of such list, the members of the
Committee shall each eliminate one candidate from the list; and (3) the
remaining candidate shall then become the Additional Nominee (and if any
Additional Nominee is determined in accordance with the foregoing
provisions of this Section 2(f) and is subsequently unable to serve, a
substitute Additional Nominee shall be determined pursuant to such
provisions); and
(g) the amendment of the Agreement dated October 25, 1995, as
previously amended November 18, 1996, between the Company and Xx. Xxxxxxxxx
("the Vice Chairmanship Agreement") as follows:
(i) the reference under Section IIA of the Vice Chairmanship Agreement
to "December 9, 1998" shall be extended for an additional year to read
"December 9, 1999" (such extension of the Term, as defined under the Vice
Chairmanship Agreement, shall be referred to herein as the "Extension
Period");
(ii) no compensation pursuant to Section IIIA of the Vice Chairmanship
Agreement shall be paid to Xx. Xxxxxxxxx during the Extension Period; and
(iii) all other terms of the Vice Chairmanship Agreement shall
continue to apply during the Extension Period, including, but not limited
to, the continued provision to Xx. Xxxxxxxxx of (x) office arrangements and
secretarial services at the Company's head offices which are equivalent to
those presently being provided to him under Section IIIB of the Vice
Chairmanship Agreement and (y) health benefits and the use of an automobile
as provided in such Section IIIB;
; and, subject to the applicable approvals thereof hereinabove set forth, the
parties hereby agree to the implementation of the foregoing provisions. Xx.
Xxxxxxxxx and Xx. Xxxxxxxxx shall have the right to review the forms of the
proposed amendments to the Company's Certificate of Incorporation and By-Laws
described in Sections 2(a) - (e) hereof, and to the Vice Chairmanship Agreement
described in Section 2(g) hereof, prior to the submission of such amendments for
approval by the Board of Directors of the Company and the Company shall give due
consideration to any modifications to such proposed forms reasonably requested
by Xx. Xxxxxxxxx and Xx. Xxxxxxxxx.
Section 3. Revised Proxy Materials. The Company agrees that, as
promptly as practicable after the date of the Special Board Meeting, it shall
prepare and file with the Securities and Exchange Commission (the "SEC") revised
proxy materials pursuant to which the Board of Directors will: (a) propose and
recommend for approval of the Stockholders the amendments to the Company's
Certificate of Incorporation described in Sections 2(a) and (c)
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hereof, and, if required to be submitted to them hereunder, the amendment to the
Company's ByLaws described in Section 2(b) hereof, and (b) nominate and
recommend the New Directors for election to the Board of Directors, such
election, and their succession to office, to be subject to and effective upon
the completion of the Required Actions as provided herein. Each party hereto
will cooperate with and assist the Company in the preparation of the revised
proxy materials described in this Section 3. The Company agrees that Xx.
Xxxxxxxxx and Xx. Xxxxxxxxx shall have the right to review and reasonably
approve the revised proxy materials prior to the initial filing thereof with the
SEC. The Company shall have the right to postpone the 1997 Annual Meeting for
such reasonable period of time as may be necessary to permit clearance of
revised proxy materials with the SEC and/or to permit adequate opportunity for
the timely mailing of such revised proxy materials to the Stockholders.
Section 4. 1997 ANNUAL MEETING OF STOCKHOLDERS. (a) Each party to this
Agreement (other than the Company) (i) shall cause all shares of Common Stock
beneficially owned (within the meaning of Regulation 13D and Rules 13d-3 and
13d-5 under the Securities Exchange Act of 1934 (the "Exchange Act")) by such
party to be voted at the 1997 Annual Meeting in favor of (x) the amendments to
the Company's Certificate of Incorporation described in Section 2(a) and (c)
hereof and, if required to be submitted to the Stockholders hereunder, the
amendment to Company's By-Laws described in Section 2(b) of this Agreement, and
(y) the election as aforesaid of the New Directors to the Board of Directors and
(ii) shall not bring any business before the 1997 Annual Meeting except as
expressly contemplated hereby.
(b) If all Required Actions have been completed (other than the
Required Action referred to in this Section 4(b)), as promptly as practicable
thereafter the Company shall duly file with the Secretary of State of Delaware a
Certificate of Amendment to its Certificate of Incorporation setting forth the
amendments that are referred to in Sections 2(a) and 2(c) hereof.
Section 5. TERMINATION OF PROXY CONTEST. The members of the Dissident
Group (a) shall immediately terminate all activities with respect to their
solicitation of proxies in connection with the 1997 Annual Meeting or any
adjournment thereof, (b) shall not, directly or indirectly solicit any proxies
or participate in any "solicitation" of any "proxy" (as such terms are defined
in Rule 14a-1 under the Exchange Act) with respect to matters to be presented at
the 1997 Annual Meeting and shall not become a "participant" (as such term is
used in Rule 14a-11 under the Exchange Act) in any election contest relating to
the 1997 Annual Meeting, (c) shall promptly terminate all agreements and
understandings supporting Xx. Xxxxxxxxx'x inclusion in, and shall promptly
remove Xx. Xxxxxxxxx from, the "group" referred to in the amendment to the
Schedule 13D dated as of June 11, 1997 filed by members of the Dissident Group
(the "Dissident 13D Group"; the Dissident Group after compliance with this
clause (c) being referred to as the "Xxxxxxxxx Group"), (d) shall promptly file
an amendment to such Schedule 13D, and to any and all other statements filed by
any member of the Dissident 13D Group pursuant to Section 13(d) of the Exchange
Act, to reflect the termination of the proxy contest and the other provisions of
this Agreement (including eliminating references to any plan or proposal
referred to in paragraph (d) of Item 4 of Schedule 13D under the Exchange Act),
and (e) shall not take any other actions inconsistent with the matters
contemplated hereby. The Company shall bear the reasonable out-of-pocket costs
and expenses, not to exceed $150,000, of the Dissident 13D
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Group incurred in connection with their activities prior to the date hereof with
respect to their solicitation of proxies in connection with the 1997 Annual
Meeting, which the members thereof currently estimate at $125,000. Such amounts
shall be paid by the Company within five business days after receipt of
appropriate evidence of such costs and expenses.
Section 6. ELECTION OF DIRECTORS AFTER 1997 ANNUAL MEETING. If during
the period commencing with the succession to office of the New Directors
following the 1997 Annual Meeting and ending immediately prior to the Company's
1999 Annual Meeting of Stockholders (the "1999 Annual Meeting") at which
directors are elected, any director then in office resigns or is unable to serve
for any reason, such vacancy shall be filled only with a designee chosen by both
members of a Nominating Committee of the Board of Directors (the "Committee")
consisting of Xx. Xxxxx (or, in the event of his death, incompetence or
resignation from the Board of Directors, Xx. Xxxxxx, the latter with full power
to designate his successor in the event of his death, incompetence or
resignation from the Board of Directors) and Xx. Xxxxxxxxx (or, in the event of
his death, incompetence or resignation from the Board of Directors, Xx.
Xxxxxxxxx, the latter with full power to designate his successor in the event of
his death, incompetence or resignation from the Board of Directors), subject to
the confirmation of the Board of Directors that such person possesses no
characteristics that would disqualify him under applicable law from serving as a
director, and thereafter the Company shall nominate and recommend such designee
for election to the Board of Directors; provided, however, that in the event
that Xx. Xxxxx and Xx. Xxxxxxxxx (or their respective successors, if applicable)
are unable to agree upon a designee to fill a vacancy on the Board of Directors
within 30 days after such vacancy has been created, the matter shall be referred
to Directorship, 0 Xxxxx Xxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000 (the
"Independent Nominator"), who shall be instructed to provide the Nominating
Committee with a list of three candidates (i) who have appropriate
qualifications to serve on the Company's Board of Directors and (ii) to whom
none of the criteria set forth in clauses (x) - (y) of the last parenthetical
phrase of Section 2(f)(i) hereof would apply. In the event that both members of
the Committee are unable to select a designee from the list provided by the
Independent Nominator within five business days after receipt of such list, the
members of the Committee shall each eliminate one candidate from the list and
the remaining candidate shall then become the designee. The fees, if any, of the
Independent Nominator shall be paid by the Company. At the Company's 1998 Annual
Meeting of Stockholders (the "1998 Annual Meeting"), the Company will nominate
and recommend for election as directors of the Company the New Directors then in
office and any director chosen pursuant to the foregoing provisions of this
Section 6 (such persons nominated by the Company shall be referred to herein as
the "Company Nominees") and during the period commencing with the succession to
office of the New Directors following the 1997 Annual Meeting and ending with
the 1999 Annual Meeting, the Company will not nominate or recommend for election
as a director any person who is not a Company Nominee.
Section 7. No Proxy Contests or Other Stockholder Actions. During the
period commencing on the date hereof and ending immediately prior to the 1999
Annual Meeting, each party to this Agreement (other than the Company):
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(a) shall cause all shares of capital stock of the Company which
have the right to vote generally in the election of directors,
including, without limitation, shares of Common Stock (collectively,
"Voting Stock"), that are beneficially owned (within the meaning of
Regulation 13D and Rules 13d-3 and 13d-5 under the Exchange Act) by
such party (i) to be present, in person or by proxy, at all meetings
of Stockholders so that all such shares may be counted for the purpose
of determining if a quorum is present at such meetings, (ii) to be
voted as provided in Section 4 and in favor of the election of the
Company Nominees to the Board of Directors at the 1998 Annual Meeting,
and (iii) to be voted in favor of persons nominated and recommended by
the Company in any other election of directors;
(b) shall not directly or indirectly (except through the Company
pursuant to due authorization) solicit any proxies or consents with
respect to Voting Stock or in any way participate in any
"solicitation" of any "proxy" with respect to shares of Voting Stock
(as such terms are defined in Rule 14a-1 under the Exchange Act) or
become a "participant" in any election contest with respect to the
Company (as such term is used in Rule 14a-11 under the Exchange Act)
or request or induce or attempt to induce any other person to take any
such actions or attempt to advise, counsel or otherwise influence in
any way any person with respect to the voting of Voting Stock;
provided however that this Section 6(b) shall not apply to actions
taken in advance of the 1999 Annual Meeting with respect to actions to
be taken at the 1999 Annual Meeting, including, without limitation,
the election of directors;
(c) shall not (i) form, join or otherwise participate in any
"group" (within the meaning of Section 13(d)(3) of the Exchange Act or
Rule 13d-5 thereunder) with respect to any Voting Stock (a "13D
Group"), (ii) otherwise act in concert with any other person for the
purpose of holding or voting Voting Stock, or (iii) file any amendment
to any Schedule 13D that relates to a plan or proposal referred to in
paragraphs (d) or (g) of Item 4 of Schedule 13D or that contains any
statement that is in any way inconsistent with the provisions of the
Agreement; provided that this clause (c) shall not apply to any
arrangements that are reflected in the Company's proxy statement dated
June 6, 1997, without reference to any supplement or amendment thereto
(the "1997 Proxy Statement") or to any 13D Group formed for the
purposes of conducting a solicitation or otherwise taking action with
respect to actions to be taken at the 1999 Annual Meeting, including,
without limitation, the election of directors, and clause (i) (with
respect to participation) and clause (ii) of this paragraph (c) shall
not apply to the Xxxxxxxxx Group;
(d) shall not deposit any Voting Stock in a voting trust or
subject any Voting Stock to any arrangement or agreement with respect
to the voting of such Voting Stock or other agreement having similar
effect, except that this clause (d) shall not apply to any
arrangements that are reflected in the 1997 Proxy Statement;
(e) except as expressly contemplated hereby, shall not make any
proposal (including any proposal pursuant to Rule 14a-8 under the
Exchange Act) or bring any business before any meeting of Stockholders
and, other than actions proposed or taken at
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any meeting of the Board of Directors, shall not take or seek to take
any action in the name or on behalf of the Company except pursuant to
the performance of any responsibilities attendant to any office in the
Company held by such party or pursuant to a resolution adopted by the
Board of Directors;
(f) shall not call, request the call, or seek to call, any
special meeting of Stockholders; and
(g) shall not enter into any discussions, negotiations,
arrangements or understandings with any other person with respect to
any of the foregoing matters referred to in this Section 7;
provided, however, that clauses (b), (c) and (d) and (insofar as it relates to
clauses (b), (c) or (d), clause (g) of this Section 7), shall not prevent any
party hereto from taking any of the actions referred to in such clauses to the
extent (but solely to the extent) that such actions are taken in response to any
"Extraordinary Proposal" (as hereinafter defined) that is set forth in any
preliminary or definitive proxy statement filed by the Company with the SEC; and
provided further that, notwithstanding the first three lines of this Section 7,
if any directors other than the Company Nominees are elected at the 1998 Annual
Meeting as the result, directly or indirectly, of a breach of this Agreement or
any failure to vote in favor of matters specified herein, by any party or
parties hereto, the obligations of such breaching or non-voting party or
parties, and its affiliates (as defined in Rule 12b-2 under the Exchange Act),
under this Section 7 shall not terminate at the time specified above but shall
terminate on December 31, 1999. For purposes hereof, an "Extraordinary Proposal"
shall mean any proposal of the Company other than a proposal regarding any of
the matters referred to in clauses (1) - (4) of Rule 14a-6(a) under the Exchange
Act, as in effect on the date of this Agreement, and other than the matters to
be voted upon pursuant to Section 4 hereof.
Section 8. Termination of the Agreement. In the event that either (i)
the Stockholders fail to approve the amendments to the Company's Certificate of
Incorporation described in Section 2(a) and (c) hereof and, if required to be
submitted to them hereunder, the amendment to Company's By-Laws described in
Section 2(b) hereof, at the 1997 Annual Meeting, or (ii) the Board of Directors
fails to approve the amendments to the Company's Certificate of Incorporation
described in Sections 2 (a) and (c) hereof or the amendments to the Company's
By-Laws as described in Section 2(d) and (e) hereof or fails to approve the New
Nominees or the Additional Nominee as contemplated hereunder or fails to approve
the matter described in Section 2(g) hereof, this Agreement, and all obligations
of the parties hereunder, shall automatically terminate and the 1997 Annual
Meeting shall be adjourned or postponed and reconvened on or rescheduled to
October 21, 1997; provided that, if any such non-approval by the Stockholders or
the Board of Directors is the result directly or indirectly of a breach of this
Agreement, or any failure to vote in favor in the specified matters, by any
party or parties hereto, the obligations of such breaching or non-voting party
or parties, and its affiliates (defined as aforesaid), hereunder shall not
terminate as provided above in this Section 8 but shall terminate on December
31, 1999, and the 1997 Annual Meeting shall be adjourned and reconvened on such
date as shall be determined by the Board of Directors.
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Section 9. MISCELLANEOUS.
(a) All notices, requests or instruction hereunder shall be in writing
and delivered personally or sent by registered or certified mail, postage
prepaid or by telecopy (or like transmission), as follows:
(1) if to the Company:
000 Xxxxxx 00 Xxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Vice President - General Counsel
Fax: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxx, Esq.
Krugman Xxxxxxxx & Xxxxxxxx LLP
Park 00 Xxxx - Xxxxx Xxx
Xxxxxx Xxxxx, Xxx Xxxxxx 00000
Fax: (000) 000-0000
(2) if to any other party hereto, at its address set forth
in the records of the Company.
Any of the above addresses may be changed at any time by notice given as
provided above; provided, however, that any such notice of change of address
shall be effective only upon receipt. All notices and other communications given
to any party hereto in accordance with the provisions hereof shall be deemed to
have been given on the date of receipt, provided that any notice or other
communication that is received other than during regular business hours of the
recipient shall be deemed to have been given at the opening of business on the
next business day of the recipient.
(b) This Agreement contains the entire agreement between the parties
hereto with respect to the transactions contemplated hereby and, subject to and
effective upon completion of all Required Actions, supersedes and amends all
prior understandings, arrangements and agreements with respect to the subject
matter hereof, including, without limitation, Section 7.3 of the Merger
Agreement and Section 7.3 of the Agreement dated as of July 3, 1992, among the
Company, INA Acquisition Corp. and Insituform Group Limited. No modification
hereof shall be effective unless in writing and signed by the party against
which it is sought to be enforced. The parties hereto may, by written agreement,
make any modification or amendment of this Agreement, but no such modification
or amendment will be effective unless
10
signed by all of the parties hereto. The captions appearing herein are for the
convenience of the parties only and shall not be construed to affect the meaning
of the provisions of this Agreement.
(c) Each of the parties hereto shall use such party's reasonable best
efforts to take such actions as may be necessary or reasonably requested by the
other parties hereto to carry out and consummate the transactions contemplated
by this Agreement. No party to this Agreement shall directly or indirectly (i)
challenge the validity or enforceability of any provision of this Agreement or
the matters contemplated hereby or (ii) commence any lawsuit or other legal
proceeding, or take any other action, that seeks to frustrate the performance of
this Agreement in accordance with its terms.
(d) This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware applicable in the case of agreements made
and to be performed entirely within such State.
(e) Each of the parties hereto recognizes that any breach of the terms
of this Agreement may give rise to irreparable harm for which money damages
would not be an adequate remedy, and accordingly agree that, in addition to
other remedies, any nonbreaching party shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this Agreement and to
enforce the terms and provisions of this Agreement by a decree of specific
performance in any action instituted in any court of the United States or any
state hereof having jurisdiction without the necessity of proving the inadequacy
as a remedy of money damages.
(f) This Agreement and all of the provisions hereof shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors, heirs, legal representatives and permitted assigns, but neither this
Agreement nor any of the rights, interests, or obligations hereunder may be
assigned by any of the parties hereto without the prior written consent of the
other parties and any such attempted assignment without consent shall be void.
(g) This Agreement is not intended, and shall not be construed, to
confer any rights or remedies hereunder upon any party other than the parties
hereto and those parties designated as directors pursuant to Section 2(f) or
Section 6, which parties shall be entitled to enforce their rights under such
provisions to which they are entitled to benefits.
(h) Any term or provision of this Agreement that is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms and provisions of this Agreement, or any
such terms in any other jurisdiction. If any provision of this Agreement is so
broad as to be unenforceable, such provision shall be interpreted to be only so
broad as is enforceable.
(i) The Company shall bear the reasonable expenses of each party
hereto in connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby.
11
(j) Each party hereto agrees that, prior to the 1997 Annual Meeting,
the Board of Directors shall not take any action (i) with respect to the grant
of any stock options or other compensation to any director, (ii) that would
conflict with or frustrate any provision of this Agreement or (iii) with respect
to the approval of any merger or business combination involving a change of
control of the Company or any sale of all or substantially all of the assets of
the Company; provided, however that nothing set forth in this Section 9(j) shall
prohibit the Board of Directors from considering prior to the 1997 Annual
Meeting any unsolicited bid involving any merger or sale of all or substantially
all of the assets of the Company that is not known to any of the parties as of
the date hereof.
(k) Xx. Xxxxxxxxx and Xx. Xxxxxxxxx on the one hand, and the Company,
on the other hand hereby agree to release one another from any and all
liabilities, claims and obligations of any kind arising directly or indirectly
from their respective activities in connection with the pending proxy contest
between the Company and the Dissident Group, the preparation for the 1997 Annual
Meeting and the solicitation of proxies therefor, in each case prior to the date
hereof.
(l) This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which taken together shall constitute
one and the same instrument.
(m) On or prior to the date on which the Additional Nominee is
selected in accordance with Section 2(f) hereof, the Additional Nominee shall
execute a counterpart of this Agreement, to be held in escrow and either (i)
released therefrom upon approval of the Additional Nominee in accordance with
Section 2(f) hereof or (ii) canceled in the event such approval is not promptly
obtained.
(n) Each party hereto (other than the Company) is signing this
Agreement in his capacity as a Stockholder and not in his capacity as a director
or officer (except on behalf of the Company), it being understood that this
Agreement is not intended to limit or abridge the fiduciary responsibility of
the directors of the Company.
12
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of the date first above written.
INSITUFORM TECHNOLOGIES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Title: President and Chief
Executive Officer
/s/Xxxxxxx X. Xxxxx, Xx.
-----------------------------------
Xxxxxxx X. Xxxxx, Xx.
/s/Xxxx X. Xxxxxxxxx
-----------------------------------
Xxxx X. Xxxxxxxxx
/s/Xxxxxxx Xxxxxx
-----------------------------------
Xxxxxxx Xxxxxx
/s/Xxxxx Xxxxxxxx
-----------------------------------
Xxxxx Xxxxxxxx
/s/Xxxxxxx X. Xxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxx
13
XANADU INVESTMENTS, L.P.
By:The Xxxxxx Xxxxxxxxx Revocable Trust
By: /s/ Xxxxxx Xxxxxxxxx
......................................
Trustee
By:The Xxxxx X. Xxxxxxxxx Revocable Trust
By: /s/ Xxxxx X. Xxxxxxxxx
......................................
Trustee
/s/Xxxxxx Xxxxxxxxx
............................................
Xxxxxx Xxxxxxxxx
/s/Xxxxx X. Xxxxxxxxx
............................................
Xxxxx X. Xxxxxxxxx
The Xxxxxx and Xxxxx Xxxxxxxxx Family Fund
By: /s/Xxxxxx Xxxxxxxxx
......................................
Xxxxxx Xxxxxxxxx, Trustee
/s/Xxxxxx X. Xxxxxxxxx
............................................
Xxxxxx X. Xxxxxxxxx
/s/Xxxxxxx X. Xxxxxxxxxx
............................................
Xxxxxxx X. Xxxxxxxxxx
14
