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STOCKHOLDERS' AGREEMENT
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AMONG
GETTY IMAGES, INC.,
GETTY INVESTMENTS L.L.C.,
XXXX XXXXX,
XXXXXXXX XXXXX,
CREDITON LIMITED,
OCTOBER 1993 TRUST,
PDI, L.L.C.,
XXXX XXXXXXXX,
AND
XXXX XXXXXXXX
Dated as of February __, 1998
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms. . . . . . . . . . . . . . . . . 1
SECTION 1.02. Other Defined Terms. . . . . . . . . . . . . . . . . . 4
ARTICLE II
BOARD REPRESENTATION
SECTION 2.01. Board Representation . . . . . . . . . . . . . . . . . 4
ARTICLE III
TRANSFERS OF SHARES
SECTION 3.01. Agreement Not to Sell. . . . . . . . . . . . . . . . . 5
SECTION 3.02. Restrictions on Transfer . . . . . . . . . . . . . . . 6
SECTION 3.03. Rights of First Refusal. . . . . . . . . . . . . . . . 6
SECTION 3.04. Transferees to Execute Agreement . . . . . . . . . . . 11
SECTION 3.05. Improper Sale or Encumbrance . . . . . . . . . . . . . 12
SECTION 3.06. Legends . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE IV
MISCELLANEOUS
SECTION 4.01. Expenses.. . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 4.02. Notices. . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 4.03. Public Announcements.. . . . . . . . . . . . . . . . . 14
SECTION 4.04. Headings.. . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 4.05. Severability.. . . . . . . . . . . . . . . . . . . . . 14
SECTION 4.06. Entire Agreement.. . . . . . . . . . . . . . . . . . . 15
SECTION 4.07. Assignment.. . . . . . . . . . . . . . . . . . . . . . 15
SECTION 4.08. No Third Party Beneficiaries.. . . . . . . . . . . . . 15
SECTION 4.09. Amendment; Waiver; Termination . . . . . . . . . . . . 15
(i)
TABLE OF CONTENTS
(Continued)
Page
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SECTION 4.10. Governing Law; Dispute Resolution. . . . . . . . . . . 15
SECTION 4.11. Counterparts.. . . . . . . . . . . . . . . . . . . . . 16
SECTION 4.12. Specific Performance.. . . . . . . . . . . . . . . . . 16
SECTION 4.13. All Shares Subject to this Agreement.. . . . . . . . . 16
(ii)
STOCKHOLDERS' AGREEMENT (this "AGREEMENT") dated as of February 9,
1998 among Getty Images, Inc., a Delaware corporation ("GETTY IMAGES"), and
(a) Getty Investments L.L.C. ("GETTY INVESTMENTS"), Xxxx Xxxxx, Xxxxxxxx Xxxxx,
Crediton Limited and October 1993 Trust and (b) PDI, L.L.C. ("PDI"), Xxxx
Xxxxxxxx and Xxxx Xxxxxxxx (each of the foregoing (except Getty Images) being a
"STOCKHOLDER" and collectively, the "STOCKHOLDERS").
WHEREAS, Getty Images, Getty Communications plc, a public limited
company organized under the laws of England and Wales ("GETTY COMMUNICATIONS"),
Photodisc, Inc. a Washington corporation ("PHOTODISC"), and Print Merger, Inc.,
a Washington corporation and a wholly owned subsidiary of Getty Images ("MERGER
SUB") entered into the Merger Agreement dated as of September 15, 1997 (the
"MERGER AGREEMENT"), which provides, upon the terms and subject to the
conditions thereof, for the merger of Merger Sub and PhotoDisc; and
WHEREAS, it is a condition to the consummation of the transactions
contemplated under the Merger Agreement that the parties hereto enter into this
Agreement;
NOW, THEREFORE, in consideration of the forgoing and the mutual
agreements and covenants hereinafter set forth, the parties hereto hereby agree
as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. CERTAIN DEFINED TERMS. As used in this agreement, the
following terms have the following meanings:
"AFFILIATE" means, with respect to any specified Person, any other
Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such specified
Person.
"BENEFICIAL OWNER" or "BENEFICIALLY OWN" has the meaning given such
term in Rule 13d-3 under the Exchange Act, PROVIDED that beneficial ownership
under Rule 13d-3(d)(1)(i) shall be determined based on whether a Person has a
right to acquire beneficial ownership within 60 days or thereafter.
"CASH EQUIVALENTS" means (a) marketable direct obligations issued or
unconditionally guaranteed by the United States government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof, (b)
marketable direct obligations issued by any state of the United States or any
political subdivision of any such state or any public
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instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having the highest rating obtainable
from any of Standard & Poor's Corporation, Xxxxx'x Investors Service, Inc. or
Duff & Xxxxxx Credit Rating Co. or (c) commercial paper maturing not more than
one year from the date of issuance thereof and, at the time of acquisition,
having the highest rating obtainable from either Standard & Poor's Corporation
or Xxxxx'x Investors Service, Inc.
"CASHLESS EXERCISE OF OPTIONS" means sales of Shares of Common Stock
in connection with the simultaneous exercise of options to purchase Shares of
Common Stock to the extent required to pay the applicable exercise price.
"COMMON STOCK" means the common stock, par value $0.01 per share, of
Getty Images.
"CONTROL" (including the terms "CONTROLLED BY" and "UNDER COMMON
CONTROL WITH"), with respect to the relationship between or among two or more
Persons, means the possession, directly or indirectly or as trustee or executor,
of the power to direct or cause the direction of the affairs or management of a
Person, whether through the ownership of voting securities, as trustee or
executor, by contract or otherwise. Control shall be conclusively presumed when
any Person directly or indirectly owns 50% or more of the voting securities of
another Person.
"ENCUMBRANCE" means any security interest, pledge, mortgage, lien,
charge, adverse claim, preferential arrangement or restriction or other
encumbrance of any kind.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"GETTY GROUP" means Getty Investments, Xxxx Xxxxx, Xxxxxxxx Xxxxx,
Crediton Limited and October 1993 Trust, and any other Person constituting a
Permitted Transferee of the foregoing Persons under clauses (ii), (iii) or (iv)
of the definition of Permitted Transferee.
"GROUP" means either the Getty Group or the Torrance Group.
"MARKETABLE SECURITIES" means securities that are (a) (i) securities
of or other interests in any Person that are traded on a national securities
exchange or reported on by the National Association of Securities Dealers
Automated Quotation System or (ii) debt securities on market terms of an issuer
that has debt or equity securities that are so traded or so reported on and in
which a nationally recognized securities firm has agreed to make a market, and
(b) not subject to restrictions on transfer as a result of any applicable
contractual provisions or the provisions of the Securities Act or, if subject to
such restrictions under the
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Securities Act, are also subject to registration rights reasonably acceptable to
the Person receiving such securities.
"PERMITTED TRANSFEREE" means (i) Getty Images or any Subsidiary, (ii)
in the case of any Stockholder who is a natural person, a Person to whom shares
of Common Stock are transferred from such Stockholder by gift, will or the laws
of descent and distribution, (iii) any other member of the Getty Group or the
Torrance Group, as the case may be (and any Permitted Transferee of such Group),
(iv) any "affiliate" of any Stockholder, including, without limitation, any
trust, partnership or limited liability company that a Stockholder controls or
is a beneficiary of, or any Person that is a member or a beneficiary of any
Stockholder or a beneficiary of any such trust, and any partnership or limited
liability company controlled by two or more of such trusts or beneficiaries of
such trust or trusts, or (v) with respect only to the taking of an Encumbrance
on Shares, any commercial bank or other financial institution that lends funds
to a Stockholder on condition of taking such Encumbrance in such Stockholder's
Shares.
"PERSON" means any individual, partnership, firm, corporation,
association, trust, unincorporated organization, joint venture or other entity,
as well as any syndicate or group that would be deemed to be a person under
Section 13(d)(3) of the Exchange Act.
"RULE 144 TRANSACTION" means any Sale of Shares within the volume
limitations of Rule 144(e) under the Securities Act (as in effect on the date
hereof) (or, if the seller is entitled to rely upon paragraph (k) of Rule 144,
within two times the volume limitations of Rule 144(e) that would have applied
if the seller was not entitled to rely upon paragraph (k) of Rule 144) to a
Person who, to the knowledge of the seller, does not beneficially own more than
5% of the then outstanding Common Stock.
"SALE" means any sale, assignment, transfer, distribution, gift or
other disposition of shares or of a participation therein, whether voluntarily
or by operation of law.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"SHARE" means any share of Common Stock and any securities issued in
respect thereof.
"SUBSIDIARY" means any and all corporations, partnerships, joint
ventures, associations and other entities controlled by Getty Images directly or
indirectly through one or more intermediaries.
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"TORRANCE GROUP" means PDI, Xxxx Xxxxxxxx and Xxxx Xxxxxxxx, and any
other Person constituting a Permitted Transferee of the foregoing Persons under
clauses (ii), (iii) or (iv) of the definition of Permitted Transferee.
"THIRD PARTY" means, with respect to any Stockholder, any other Person
(other than a Permitted Transferee of such Stockholder).
SECTION 1.02. OTHER DEFINED TERMS. The following terms shall have
the meanings defined for such terms in the Sections set forth below:
Term Section
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Accepting Party 3.03(b)
Board 2.01(a)
Notice of Acceptance 3.03(b)
Offer 3.03(a)
Offered Shares 3.03(a)
Offer Notice 3.03(a)
Offer Price 3.03(a)
Other Stockholders 3.03(a)
Prospective Seller 3.03(a)
Prospective Transferee 3.04(a)
Restricted Period 3.01(a)
ARTICLE II
BOARD REPRESENTATION
SECTION 2.01. BOARD REPRESENTATION. (a) Each of the Getty Group and
the Torrance Group shall have the right to nominate one director to the Board of
Directors of Getty Images (the "BOARD") whenever such class of directors is
subject to an election; PROVIDED, HOWEVER, that the Torrance Group shall not
have such right for so long as Xxxx Xxxxxxxx is an employee of Getty Images and
a member of the Board; and PROVIDED FURTHER, that such right shall terminate
with respect to either the Torrance Group or the Getty Group, as the case may
be, once such Group beneficially owns fewer than the greater of (i) 3,000,000
shares of Common Stock (subject to equitable adjustment in the event of stock
splits, stock dividends and similar events) and (ii) such number of shares of
Common Stock as is equal to 2% of the then outstanding shares of Common Stock.
Such right shall be in addition to any other voting rights that each Stockholder
may have with respect to its Shares.
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(b) For so long as the Getty Group has the right to nominate one
director to the Board pursuant to Section 2.01(a), the Getty Group shall also
have the right to appoint the Chairman of the Board from among the directors of
Getty Images; PROVIDED, HOWEVER, that the Getty Group shall not have such right
for so long as either Xxxx Xxxxxxxx or Xxxx Xxxxx is the Chairman or a
Co-Chairman of the Board.
(c) The Stockholders agree to take such actions within their control
as are necessary to implement the agreements set forth in Sections 2.01(a) and
2.01(b), including the voting of their respective Shares in favor of the Board
nominees designated by the Getty Group and the Torrance Group in accordance with
this Section 2.01.
(d) Getty Images shall include as a nominee for the Board recommended
by the Board the person designated by each of the Getty Group and the Torrance
Group in accordance with Section 2.01(a) and shall nominate such person and use
its reasonable best efforts to cause the election of such person, unless the
Board of Directors of Getty Images, in the exercise of its fiduciary duties,
reasonably shall determine that such person is not qualified to serve on the
Board. If the Board reasonably determines that such designee is not so
qualified, the Group designating such nominee shall have the opportunity to
specify one additional designee who shall be so included as a nominee subject to
the qualification set forth in the immediately preceding sentence.
(e) In the event that a vacancy is created at any time by the death,
disability, resignation or removal of any director nominated by the Getty Group
or the Torrance Group, the nominating Group shall have the right to designate a
replacement director to fill such vacancy (provided that such Group would be
entitled at that time to nominate a director pursuant to Section 2.01(a)) and
Getty Images and the Stockholders agree to take such actions within their
control as are necessary to implement the agreements set forth in this Section
2.01(e).
(f) To the extent not already proposed pursuant to Exhibit 7.11 of
the Merger Agreement, Xxxx Xxxxxxxx may propose to the Board of Directors of
Getty Images non-employees with appropriate industry experience to fill two
vacancies on the Board of Directors of Getty Images as of the date hereof. The
Board of Directors of Getty Images shall consider any proposed appointee in good
faith.
ARTICLE III
TRANSFERS OF SHARES
SECTION 3.01. AGREEMENT NOT TO SELL. (a) Except with the prior
written consent of Getty Images, no Stockholder shall sell any Shares until the
earlier of (i) the date
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six months after the date of this Agreement and (ii) the time of the
effectiveness of a registration statement filed by Getty Images under the
Securities Act pursuant to which stockholders of Getty Images sell Shares (such
period being the "RESTRICTED PERIOD"); PROVIDED, HOWEVER, that during the
Restricted Period, the Getty Group or the Torrance Group, as the case may be,
may each sell up to 200,000 Shares in a Rule 144 Transaction or in a Cashless
Exercise of Options.
(b) After the expiration of the Restricted Period, no Stockholder
shall, directly or indirectly, make or solicit any Sale of, or create, incur,
solicit or assume any Encumbrance with respect to, any Share, except in
compliance with the Securities Act and this Agreement.
SECTION 3.02. RESTRICTIONS ON TRANSFER. Each Stockholder agrees that
it will not, directly or indirectly, make or solicit any Sale of, or create,
incur, solicit or assume any Encumbrance with respect to, any Share beneficially
owned by such Stockholder other than (i) any Sale to a Permitted Transferee or
the granting of any Encumbrance to a Permitted Transferee, (ii) any Sale that is
made in compliance with the procedures, and subject to the limitations, set
forth in Section 3.03 or any Sale made to any Third Party after the termination
of Section 3.03 pursuant to subparagraph (g) thereof, (iii) any Sale pursuant to
a public offering of shares of Common Stock pursuant to an effective
registration statement under the Securities Act in which, to the knowledge of
the selling Stockholder, no one Person shall purchase more than five percent of
the then outstanding shares of Common Stock, or (iv) any Sale pursuant to a Rule
144 Transaction or in a Cashless Exercise of Options. Notwithstanding the
foregoing, except as otherwise expressly provided in this Agreement, all Sales
permitted by the foregoing clauses (i) through (iv) shall be subject to, and
shall not be made other than in compliance with, the provisions of Sections
3.01, 3.04, 3.05 and 3.06.
SECTION 3.03. RIGHTS OF FIRST REFUSAL. (a) If at any time any
Stockholder receives from or otherwise negotiates with a Third Party a bona fide
offer to purchase for cash, Cash Equivalents or Marketable Securities or other
securities reasonably subject to valuation in the manner set forth in Section
3.03(b)(ii) below (for purposes of this Section 3.03, an "OFFER") any of the
Shares owned or held by such Stockholder, and such Stockholder intends to sell
such Shares to such Third Party, such Stockholder (for purposes of this Section
3.03, the "PROSPECTIVE SELLER") shall provide Getty Images and each of the other
Stockholders in the Group in which the Prospective Seller is not a member (for
purposes of this Section 3.03, the "OTHER STOCKHOLDERS") written notice of such
offer (for purposes of this Section 3.03, an "OFFER NOTICE"). The Offer Notice
shall identify the Third Party making the Offer, the number of Shares with
respect to which the Prospective Seller has such an Offer (for purposes of this
Section 3.03, the "OFFERED SHARES"), the consideration per Share at which a sale
is proposed to be made (for purposes of this Section 3.03, the "OFFER PRICE"),
and all other material terms and conditions of the Offer, including, without
7
limitation, a description of any non-cash consideration sufficiently detailed to
permit valuation thereof, as well as a copy of the Offer, if available and
permitted pursuant the terms thereof. For avoidance of doubt, the Offer Price
may be expressed as an amount correlated to the price of the publicly traded
Common Stock determined as of a particular date or over a particular period.
(b) (i) The receipt of an Offer Notice by Getty Images and the
Other Stockholders from a Prospective Seller shall constitute an offer by such
Prospective Seller to sell to Getty Images and each Other Stockholder all (but
not less than all) of the Offered Shares at the Offer Price per Share in cash
(subject to the valuation procedures set forth in Section 3.03(b)(ii) below if
the Offer Price includes any non-cash consideration). Such offer shall be
irrevocable for 10 days after receipt of such Offer Notice by Getty Images and
each Other Stockholder. During such 10-day period, Getty Images and each Other
Stockholder shall, subject to the priorities set forth in Section 3.03(b)(iii),
have the right to accept such offer as to any or all of the Offered Shares by
giving a written notice of acceptance (for purposes of this Section 3.03, a
"NOTICE OF ACCEPTANCE") to the Prospective Seller prior to the expiration of
such 10-day period (for purposes of this Section 3.03, Getty Images or any Other
Stockholder so accepting such offer being an "ACCEPTING PARTY"). In the event
that within five days prior to the expiration of such 10-day period the
Prospective Seller shall not have received Notices of Acceptance for all of the
Offered Shares, the Prospective Seller shall notify each Accepting Party of such
fact and shall provide each Accepting Party an opportunity to submit an
additional Notice of Acceptance for any such remaining Offered Shares prior to
the expiration of such 10-day period. In the event that after the expiration of
such 10-day period (as may be extended pursuant to Section 3.03(b)(ii)(B)) the
Prospective Seller shall not have received Notices of Acceptance for all of the
Offered Shares, the Prospective Seller shall have the right to reject any or all
Notices of Acceptance theretofore received and to sell Shares in accordance with
Section 3.03(d).
(ii) If the Offer Price specified in the Offer Notice includes any
Cash Equivalents, Marketable Securities or other securities reasonably subject
to valuation in the manner set forth below, such Offer Price shall be deemed to
be the amount of any cash included in the Offer Price plus the value (as jointly
determined by two nationally recognized investment banking firms, one of whom
shall have been selected by Getty Images and other of whom shall have been
selected by the Prospective Seller) of such non-cash consideration included in
the Offer Price. For this purpose:
(A) the parties shall use their best efforts to cause any
determination of the value of any such non-cash consideration included in
the Offer Price to be made within three business days after the date of
receipt of the Offer Notice by Getty Images and the Other Stockholders. If
the firms selected by Getty Images and the Prospective Seller are unable to
agree upon the value of any such non-cash consideration within such
three-day period, the value of such non-cash consideration
8
shall be deemed to be the average of the valuations determined by each
investment bank; and
(B) notwithstanding Section 3.03(b)(i), the date by which Getty
Images and the Other Stockholders must exercise their rights of first
refusal under this Section 3.03 shall be extended until three days after
the determination of the value of such non-cash consideration.
(iii) Getty Images and each Other Stockholder shall be entitled to
accept such offer from the Prospective Seller in the following order of
priority:
FIRST, Getty Images shall be entitled to accept such offer for any or
all of the Offered Shares;
SECOND, if Getty Images shall not have accepted such offer for all the
Offered Shares, each Other Stockholder shall be entitled to
accept such offer for any or all of the remaining Offered
Shares (PROVIDED, HOWEVER, that if Notices of Acceptance are
received from Other Stockholders in respect of more than the
number of remaining Offered Shares, each Other Stockholder
shall be entitled to accept such offer for not more than the
portion of the remaining Offered Shares determined on a pro
rata basis based on the ratio of the number of Shares then
owned by such Other Stockholder to the number of Shares then
owned by all Other Stockholders who have submitted Notices of
Acceptance); and
THIRD, if Getty Images and one or more of the Other Stockholders have
not accepted such offer for all the Offered Shares, each Other
Stockholder shall then be entitled to accept such offer for not
more than the portion of the remaining Offered Shares
determined on a pro rata basis based on the ratio of the number
of Offered Shares specified in such Other Stockholder's Notice
of Acceptance in respect of which such Other Stockholder shall
not be entitled to accept the Prospective Seller's offer as a
result of the application of the proviso contained in clause
SECOND above to the number of Offered Shares specified in all
such Other Stockholders' Notices of Acceptance in respect of
which such Other Stockholders shall not be entitled to accept
the Prospective Seller's offer as a result of the application
of the proviso contained in clause SECOND above (it being
understood that each such Other Stockholder shall be entitled
to indicate its interest in accepting more than its pro rata
share of the remaining Offered Shares and to accept the
Prospective Seller's offer with respect to (A) such additional
Offered Shares if all the Offered Shares are not otherwise
accepted pursuant to
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clauses FIRST, SECOND and THIRD or (B) such Offered Shares that
remain unsold as described in Section 3.03(d)(ii) below).
If Getty Images or any Other Stockholder so accepts the Prospective
Seller's offer, such Accepting Party will purchase for cash from the Prospective
Seller, and the Prospective Seller will sell to such Accepting Party, such
number of Offered Shares as to which such Accepting Party shall have accepted
the Prospective Seller's offer (which must total, as to all Accepting Parties,
all of the Offered Shares). The price per Share to be paid by such Accepting
Party shall be the Offer Price specified in the Offer Notice, payable in
accordance with the terms of the Offer by the Prospective Seller specified in
Section 3.03(b)(i) (or in cash if the Offer Price includes any non-cash
consideration, subject to the valuation procedures set forth in Section
3.03(b)(ii)). The Notice of Acceptance shall specify (i) such Accepting Party's
Acceptance of the Prospective Seller's offer and (ii) the number of Offered
Shares to be purchased by such Accepting Party. If, collectively, the Accepting
Parties shall not have accepted the Prospective Seller's offer as to all of the
Offered Shares, the Prospective Seller shall have the right to reject any or all
Notices of Acceptance theretofore received and to sell Shares in accordance with
Section 3.03(d).
(c) The consummation of any such purchase by and sale to any
Accepting Party shall take place on such date, not later than 20 days after
receipt of the latest Notice of Acceptance timely received by the Prospective
Seller, as such Accepting Party and the Prospective Seller shall select. Upon
the consummation of such purchase and sale, the Prospective Seller shall,
against delivery by the relevant Accepting Party of the Offer Price multiplied
by the number of Shares being purchased by such Accepting Party, (i) deliver to
the Accepting Party certificates evidencing the Offered Shares purchased and
sold, duly endorsed in blank or accompanied by written instruments of transfer
in form and substance satisfactory to such Accepting Party and duly executed by
the Prospective Seller, and (ii) shall assign all its rights under this
Agreement with respect to the Offered Shares purchased and sold pursuant to an
instrument of assignment reasonably satisfactory to such Accepting Party.
(d) In the event that:
(i) Getty Images and each Other Stockholder shall have received an Offer
Notice from a Prospective Seller but the Prospective Seller shall not
have received from Getty Images and one or more Other Stockholders
Notices of Acceptance as to all the Offered Shares prior to the
expiration of the 10-day period following receipt of such Offer Notice
(as may be extended pursuant to Section 3.03(b)(ii)(B)) or
(ii) (x) an Accepting Party shall have given a Notice of Acceptance
to the Prospective Seller but shall have failed to
consummate, other than as a
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result of the fault of the Prospective Seller, a purchase of
the Offered Shares with respect to which such Notice of
Acceptance was given within 20 days after receipt of the
Notice of Acceptance by the Prospective Seller and
(y) one or more Other Stockholders shall not have indicated an
interest upon any such failure to buy such Shares as
provided in clause (B) of the parenthetical phrase following
clause THIRD of Section 3.03(b)(iii) and shall not have
indicated that they are prepared to purchase such Shares
within five days of their receipt of a notice of such
failure from the Prospective Seller and
(z) Getty Images shall not have indicated an interest in
purchasing such Shares as have not been purchased pursuant
to the immediately preceding clause (y) and shall not have
been prepared to purchase such Shares at the offer price
originally specified in the Offer Notice relating to such
Shares within five days of its receipt of a notice from the
Prospective Seller that such Shares have not been purchased
pursuant to the immediately preceding clause (y),
such Prospective Seller shall have the right to reject any or all Notices of
Acceptance theretofore received, and nothing in this Section 3.03 shall limit
the right of the Prospective Seller to make thereafter a sale of the Offered
Shares so long as all the Offered Shares that are sold or otherwise disposed of
by the Prospective Seller (which number of Offered Shares shall be not less than
the number of Offered Shares specified in such Offer Notice) are sold for cash
or the Offer Consideration (A) within 90 days after the date of receipt of such
Offer Notice by Getty Images and the Other Stockholders, (B) at an amount not
less than the Offer Price included in such Offer Notice, (C) to the Third Party
making the Offer and (D) in compliance with applicable securities laws.
(e) In the event that Getty Images and the Other Stockholders
shall have received an Offer Notice from a Prospective Seller but the
Prospective Seller shall not have received Notices of Acceptance for all the
Offered Shares prior to the expiration of the 10-day period following receipt of
such Offer Notice by Getty Images and the Other Stockholders (as may be extended
pursuant to Section 3.03(b)(ii)(B)) and such Prospective Seller shall not have
sold the remaining Offered Shares before the expiration of the 90-day period in
accordance with paragraph (d) above, then such Prospective Seller shall not give
another Offer Notice for a period of 90 days from the last day of such 90-day
period.
(f) Anything in this Section 3.03 or in Section 3.02 to the
contrary notwithstanding, the provisions of this Section 3.03 will not be
applicable to any Sale or Encumbrance described in Sections 3.02(i), (iii) or
(iv).
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(g) The provisions of Sections 2.01(e) and 2.01(d) and Article
III shall terminate and be of no further force and effect with respect to either
the Getty Group or the Torrance Group, as the case may be, on and after the date
on which such Group collectively beneficially owns fewer than the greater of (i)
3,000,000 shares of Common Stock (subject to equitable adjustment in the event
of stock splits, stock dividends and similar events); and (ii) such number of
shares of Common Stock as is equal to 2% of the then outstanding shares of
Common Stock.
SECTION 3.04. TRANSFEREES TO EXECUTE AGREEMENT. (a) Each
Stockholder agrees that it will not, directly or indirectly, make any Sale of,
or create, incur or assume any Encumbrance with respect to, any Shares
beneficially owned by such Stockholder, unless prior to the consummation of any
such Sale or the creation, incurrence or assumption of any such Encumbrance, the
Person to whom such Sale is proposed to be made or the Person in whose favor
such Encumbrance is proposed to be created, incurred or assumed (a "PROSPECTIVE
TRANSFEREE") (i) executes and delivers to Getty Images and each Stockholder an
agreement, in form and substance reasonably satisfactory to Getty Images,
whereby such Prospective Transferee confirms that, with respect to the Shares
that are the subject of such Sale or Encumbrance, it shall be deemed to be a
"Stockholder" for purposes of this Agreement and agrees to be bound by all the
terms of this Agreement, and (ii) unless such Prospective Transferee is an
institutional investor, delivers to Getty Images an opinion of counsel,
satisfactory in form and substance to Getty Images, to the effect that such Sale
or Encumbrance is being conducted in compliance with applicable securities laws
and that the agreement referred to above that is delivered by such Prospective
Transferee is a legal, valid and binding obligation of such Prospective
Transferee enforceable against such Prospective Transferee in accordance with
its terms, subject to the effect of any applicable bankruptcy, reorganization,
insolvency, moratorium or similar laws affecting creditor's rights generally and
subject, as to enforceability, to the effect of general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law). Upon the execution and delivery by such Prospective
Transferee of the agreement referred to in clause (i) of the preceding sentence
and, if required, the delivery of the opinion of counsel referred to in clause
(ii) of the preceding sentence, such Prospective Transferee shall be deemed a
"Stockholder" for purposes of this Agreement and shall have the rights and be
subject to the obligations of a Stockholder under this Agreement, in each case
with respect to the Shares that were transferred to it by a Stockholder
hereunder or in respect of which such Encumbrance shall have been created,
incurred or assumed.
(b) Anything in this Section 3.04 or in Section 3.02 to the
contrary notwithstanding, the provisions of this Section 3.04 will not be
applicable to (i) any Sale of Shares pursuant to a public offering of shares of
Common Stock pursuant to an effective registration statement under the
Securities Act, (ii) any Sale of Shares in a Rule 144 Transaction or in a
Cashless Exercise of Options or (iii) any Sale of Shares to a Third Party
12
in accordance with Section 3.03(d) after complying with the right of first
refusal requirements of Section 3.03.
SECTION 3.05. IMPROPER SALE OR ENCUMBRANCE. Any attempt not in
compliance with this Agreement to make any Sale of, or create, incur or assume
any Encumbrance with respect to, any Shares shall be null and void and of no
force and effect, the purported transferee shall have no rights or privileges in
or with respect to Getty Images, and Getty Images shall not give any effect in
Getty Images's stock records to such attempted Sale or Encumbrance.
SECTION 3.06. LEGENDS. (a) For so long as Shares beneficially
owned by a Stockholder are subject to the voting obligations and restrictions on
transfer set forth in Article II and in this Article III, certificates
evidencing such Share shall bear a legend in substantially the following form:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN VOTING
OBLIGATIONS AND RESTRICTIONS ON TRANSFER AS SET FORTH IN A STOCKHOLDERS'
AGREEMENT, DATED AS OF FEBRUARY 9, 1998, AS IT MAY BE AMENDED FROM TIME TO
TIME, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF
GETTY IMAGES. NO REGISTRATION OF TRANSFER OF SUCH SECURITIES WILL BE MADE
ON THE BOOKS OF GETTY IMAGES UNLESS AND UNTIL SUCH RESTRICTIONS SHALL HAVE
BEEN COMPLIED WITH."
(b) In the event that any Shares shall cease to be subject to
the voting obligations or restrictions on transfer set forth in Article II or in
this Article III, Getty Images shall, upon the written request of the holder
thereof, issue to such holder a new certificate evidencing such Shares without
the relevant legend.
ARTICLE IV
MISCELLANEOUS
SECTION 4.01. EXPENSES. Except as otherwise specified in this
Agreement, all costs and expenses, including, without limitation, fees and
disbursements of counsel, financial advisors and accountants, incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such costs and expenses.
SECTION 4.02. NOTICES. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be given or
made (and shall be
13
deemed to have been duly given or made upon receipt) by delivery in person, by
courier service, by cable, by facsimile, by telegram, by telex or by registered
or certified mail (postage prepaid, return receipt requested) to the respective
parties at the following addresses (or at such other address for a party as
shall be specified in a notice given in accordance with this Section 4.02):
(a) if to Getty Images or members of the Getty Group other than Getty
Investments:
Getty Images, Inc.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Facsimile: (0000) 000-0000
Attention: Xxxxxx Xxxxxxx
with a copy to each of:
Getty Communications plc
000 Xxxxxx Xxxxxx
Xxxxxx XX0 0XX Xxxxxxx
Facsimile: (00000) 000-0000
Attention: Xxxx Xxxxx-Xxxxx
Xxxxxxxx Chance
000 Xxxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX Xxxxxxx
Facsimile: (00000) 000-0000
Attention: Xxxxxxx Xxxxxxxx
Xxxxxxxx & Sterling
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxxxxxx X. Xxxxxx
(b) if to Getty Investments:
Getty Investments L.L.C.
0000 Xxxxxxxxx Xxx, Xxxxx 000
Xxxx, Xxxxxx 00000
Facsimile: (000) 000-0000
14
Attention: Xxx X. Xxxxx
Xxxx X. Xxxxxxx
(c) if to members of the Torrance Group:
PhotoDisc, Inc.
0000 Xxxxxx Xxxxxx
0xx Xxxxx
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxxxx
with a copy to:
Xxxxxx & Xxxxx LLP/Xxxxxxx Xxxxxxxx X.X.
0000 Xxxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxx
SECTION 4.03. PUBLIC ANNOUNCEMENTS. No party to this Agreement
shall make, or cause to be made, any press release or public announcement in
respect of this Agreement or the transactions contemplated hereby or otherwise
communicate with any news media without the prior written consent of the other
party (except to the extent that such disclosure is required by law or the rules
of the Nasdaq National Market), and, to the extent practicable, the parties
shall cooperate as to the timing and contents of any such press release or
public announcement.
SECTION 4.04. HEADINGS. The descriptive headings contained in this
Agreement are for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement.
SECTION 4.05. SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any law or
public policy, all other terms and provisions of this agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner in
order that the transactions
15
contemplated hereby are consummated as originally contemplated to the greatest
extent possible.
SECTION 4.06. ENTIRE AGREEMENT. This Agreement constitutes the
entire agreement of the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and undertakings, both written and
oral, among the parties hereto with respect to the subject matter hereof, except
as otherwise expressly provided herein.
SECTION 4.07. ASSIGNMENT. Except as otherwise expressly provided
herein, this Agreement shall be binding upon and shall inure solely to the
benefit of the parties hereto and their respective successors and permitted
assigns; PROVIDED, HOWEVER, that this Agreement shall not inure to the benefit
of any transferee unless such transferee shall have complied with the terms of
Section 3.04. No Stockholder may assign any of its rights hereunder to any
Person other than a transferee that has complied with the requirements of
Section 3.04 in all respects.
SECTION 4.08. NO THIRD PARTY BENEFICIARIES. Nothing herein, express
or implied, is intended to or shall confer upon any other Person any legal or
equitable right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement.
SECTION 4.09. AMENDMENT; WAIVER; TERMINATION. Any term of this
Agreement may be amended or modified, and the observance of any term may be
waived, only by an instrument in writing signed by Getty Images and Stockholders
in each of the Getty Group and the Torrance Group holding Shares representing a
majority of the Shares then held by Stockholders in such Group; provided,
however, that no modification to Sections 2.01 or 4.09 may be made without the
consent of the party affected thereby. Waiver of any term or condition of this
Agreement shall only be effective if it is in writing and shall not be construed
as a waiver of any subsequent breach or waiver of the same term or condition, or
a waiver of any other term or condition of this Agreement. Each Stockholder
shall be bound by any amendment or waiver authorized by this Section 4.09,
whether or not such Stockholder shall have consented thereto. No failure or
delay by any party in exercising any right, power or privilege under this
Agreement shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by law.
This Agreement may be terminated upon the unanimous written consent of the
Stockholders.
SECTION 4.10. GOVERNING LAW; DISPUTE RESOLUTION. This Agreement
shall be governed by, and construed in accordance with, the laws of the State of
Delaware applicable to contracts executed in and to be performed entirely within
that State. All actions and proceedings arising out of or relating to this
Agreement shall be heard and determined in
16
any Delaware state or federal court sitting in the State of Delaware. In the
event of any dispute, claim or litigation with regard to this Agreement, the
prevailing party shall be entitled to receive from the non-prevailing party, and
the non-prevailing party shall promptly pay, all reasonable fees and expenses of
counsel for the prevailing party incurred in connection with such dispute, claim
or litigation.
SECTION 4.11. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.
SECTION 4.12. SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable damage would occur in the event that any provision of this Agreement
was not performed in accordance with the terms hereof and that the parties shall
be entitled to specific performance of the terms hereof, in addition to any
other remedy at law or in equity.
SECTION 4.13. ALL SHARES SUBJECT TO THIS AGREEMENT. All Shares shall
be held subject to the terms of this Agreement and the Stockholder thereof shall
be deemed a holder for purposes of this Agreement, as follows:
(i) Any Shares hereafter acquired by any Stockholder shall be held
by such Person subject to the provisions of this Agreement and such Person
shall be deemed to be a Stockholder for purposes of such additional Shares;
and
(ii) Any Stockholder who ceases to own any Shares as provided for in
this Agreement shall cease to be a Stockholder for purposes of such Shares
no longer so owned.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first written above by their respective officers
thereunto duly authorized or in their individual capacities, as applicable.
GETTY IMAGES, INC.
By: /s/ Xxxxxxxx Xxxxx
---------------------------
Title: Treasurer
17
GETTY INVESTMENTS L.L.C.
By: /s/ Xxx X. Xxxxx
---------------------------
Title: Officer
/s/ Xxxx Xxxxx
------------------------------
Xxxx Xxxxx
/s/ Xxxxxxxx Xxxxx
------------------------------
Xxxxxxxx Xxxxx
CREDITON LIMITED
By: /s/ X.X. Xxxxxxxx
---------------------------
Title: Director
OCTOBER 1993 TRUST
By: /s/ Authorised Signatory
---------------------------
Title: Authorised Signatory
PDI, L.L.C.
By: /s/ Xxxx Xxxxxxxx
---------------------------
Title:
/s/ Xxxx Xxxxxxxx
------------------------------
Xxxx Xxxxxxxx
/s/ Xxxx Xxxxxxxx
------------------------------
Xxxx Xxxxxxxx
