EXHIBIT 99.1
STOCKHOLDERS AGREEMENT
This is an agreement dated the 21 day of November, 1985 by and among
Tennessee Restaurant Company, a Delaware corporation ("TRC"), Holiday Inns,
Inc., a Tennessee corporation ("HI"), Bass Investment Limited Partnership, a
Texas limited partnership ("Bass"), ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ("▇▇▇▇▇"), ▇▇▇▇ ▇▇▇▇▇
("Irons"), and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇"). HI, Bass, Smith, Irons, ▇▇▇▇▇▇▇
and any other person who holds any capital stock of TRC subject to this
Agreement are hereinafter referred to together as "Stockholders."
TRC has the authority to issue One Million (1,000,000) shares of common
stock, $.01 par value per share (the "Common Stock"), of which Fifty Eight
Thousand Two Hundred (58,200) shares are on the date hereof issued and
outstanding. All of the issued and outstanding Common Stock is held among the
Stockholders on the date hereof as follows:
Name Number of Shares
---- ----------------
HI 46,020
Bass 5,820
▇▇▇▇▇ 5,820
Irons 270
▇▇▇▇▇▇▇ 270
For good and valuable consideration, the receipt and
sufficiency of which being hereby acknowledged, the parties hereto agree as
follows:
SECTION 1
TERM OF AGREEMENT; APPLICATION; CERTAIN DEFINITIONS; ETC.
SECTION 1.1. THREE STAGES OF APPLICATION.
This Agreement contains agreements concerning the governance of TRC and
each TRC Subsidiary and the ownership of shares of the Common Stock during
three possible stages. The three stages are:
(i) Stage One - the period of time beginning the date hereof and
continuing until the earlier to commence of Stage Two or
Stage Three;
(ii) Stage Two - in the event the Primary Option is exercised, the
period of time beginning the closing under the Primary Option
and continuing until the termination of this Agreement; and
(iii) Stage Three - the period of time beginning on the date the
Primary Option expires without being exercised and continuing
until the termination of this Agreement.
SECTION 1.2. TERM OF AGREEMENT.
(a) The provisions of Section 2 shall remain in effect until November
20, 1995.
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(b) The provisions of Section 3 shall remain in effect until November
20, 1989.
(c) The provisions of Section 4 and of the remainder of this Agreement
shall remain in effect until terminated by their own terms, by mutual written
agreement of all parties hereto, by amendment of this Agreement pursuant to
the terms hereof, or until such earlier time as may be required by the Rule
Against Perpetuities.
SECTION 1.3 CERTAIN DEFINITIONS.
For for purposes of this Agreement, the following terms shall have tthe
following meanings:
(a) "Class B Stock" shall mean (i) the 5,820 shares of Common Stock
originally held by Bass, (ii) any shares of Common Stock from time to time
issued or exchanged in respect thereof in connection with a stock dividend,
stock split or corporate reorganization or otherwise, and (iii) any stock
into which such Common Stock may from time to time be changed, in any such
case whether held by Bass or any of its transferees or assigns.
(b) "Class H Stock" shall mean (i) the 46,020 shares of Common Stock
originally held by HI, (ii) any shares of Common Stock from time to time
issued or exchanged in respect thereof in connection with a stock dividend,
stock split or corporate reorganization or otherwise, and (iii) any stock
into which such Common Stock may from time to time be changed, in any such
case whether held by HI or any of its transferees or assigns.
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(c) "Class S Stock" shall mean (i) the 5,820 shares of Common Stock
originally held by ▇▇▇▇▇, (ii) any shares of Common Stock from time to time
issued or exchanged in respect thereof in connection with a stock dividend,
stock split or corporate reorganization or otherwise, and (iii) any stock into
which such Common Stock may from time to time be changed, in any such case
whether held by ▇▇▇▇▇ or any of his heirs, transferees or assigns.
(d) "Commission", as defined in Section 7.1(a).
(e) "Employment Shares", as defined in Section 8.14.
(f) "Fair Market Value" of Common Stock, unless otherwise qualified
herein, shall mean the price in terms of a cash transaction at which the
Common Stock would change hands between a willing buyer and a willing seller,
neither being under any compulsion to buy or sell, assuming that TRC is a
going concern and taking into consideration the rights and obligations
associated with the shares of Common Stock being valued (including without
limitation the rights and obligations under this Agreement such as the right
of the holder of such shares to benefit from the exercise of the Primary
Option and the rights and obligations of the holder of such shares under the
governance provisions referred to in Section 2 of this Agreement), but
disregarding any "control premium" or other premium or discount associated
with the status of the holder of
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such shares as a majority or minority stockholder of TRC. Whenever the terms
of this Agreement shall require the determination of the Fair Market Value of
Common Stock, the Fair Market Value shall be determined in accordance with
the following procedures:
(i) Each person having an interest as a buyer or seller in the
shares to be valued ("Interested Party") shall select a representative who
shall, within ten (10) days of deliverance of notice of the event giving
rise to the need to determine the Fair Market Value (the "Notice Date"),
meet with the representatives of the other Interested Parties for the
purpose of attempting to reach an accord on the Fair Market Value of the
Common Stock then being valued.
(ii) In the event such representatives cannot agree as to the Fair
Market Value, then within thirty (30) days after the Notice Date, the
Interested Parties shall agree on one investment banker who will be
charged with determining as promptly as possible the Fair Market Value of
the Common Stock then being valued.
(iii) If the Interested Parties are unable to agree on an investment
banker within such thirty (30) day period, then each Interested Party
shall designate in writing one investment banker within forty-five (45)
days of the Notice
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Date. Such investment bankers shall determine and agree upon a Fair
Market Value of the Common Stock as promptly as possible.
(iv) In the event such investment bankers are unable to agree
upon the Fair Market Value within thirty (30) days of their appointment,
then such investment bankers shall select one or two additional investment
bankers (whichever number of additional investment bankers is necessary to
result in an odd number of investment bankers participating in the
determination) within ten (10) days of the expiration of such thirty (30)
day period (or earlier if such original investment bankers deem such
earlier action to be appropriate). Such original investment bankers and
such additional investment banker(s) shall determine its or their
opinion(s) of the Fair Market Value of the Common Stock as promptly as
possible. The highest and lowest valuations shall then be disregarded
until there is but one determined value remaining, which shall constitute
the Fair Market Value.
(v) In the event any Interested Party fails to designate its
investment banker representative within the time periods provided above,
then the investment banker(s) designated by the other Interested Party(s)
shall serve as the only investment banker(s) for purposes of the
determination of Fair Market Value.
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(vi) Whenever the Fair Market Value of Common Stock is determined
pursuant to this Agreement, each Interested Party shall bear the expense of
the participation of the investment banker selected by it, and all Interested
Parties shall share equally the expense of the participation of the
independent investment banker(s), if any, selected by the original investment
bankers, or a single investment banker if only one is chosen. Notwithstanding
the above, if any Interested Party pursuant to this Agreement shall elect not
to go forward with a transaction with respect to which the Fair Market Value
of Common Stock was determined, then the Interested Party so electing shall
bear the entire expense of the determination of Fair Market Value in
connection therewith, together with reasonable expenses incurred by the other
Interested Parties in connection with the abandoned transaction.
(vii) Whenever the purchase price of Common Stock under this Agreement
is the Fair Market Value of such stock as of a certain date (other than with
respect to the Stage Three ▇▇▇▇▇ Put Option or the Stage Three Bass Put
Option), the purchase price shall bear interest from such date until paid at
the rate of interest announced from time to time by Citibank, N.A., New York,
New York, as being its prime or base rate of interest. Such interest will be
payable on the date such purchase price is payable.
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(g) "First Refusal Option Committee", as defined in Section 5.3(b).
(h) "FMV Shares", as defined in Section 8.14.
(i) "Indemnitee", as defined in Section 7.4.
(j) "Indemnifying Party", as defined in Section 7.4.
(k) "Interested Party", as defined in Section 1.3(f)(i).
(l) "Involuntary Termination of Employment" of ▇▇▇▇▇ shall mean (i)
▇▇▇▇▇'▇ death, (ii) ▇▇▇▇▇'▇ Permanent Disability, (iii) ▇▇▇▇▇'▇ firing,
removal or other termination by TRC or ▇▇▇▇▇▇▇ Restaurants, Inc. ("Perkins")
as chairman or chief executive officer of TRC or Perkins, without ▇▇▇▇▇'▇
consent, (iv) the material reduction, without ▇▇▇▇▇'▇ consent, of ▇▇▇▇▇'▇
total compensation package, including benefits, or (v) the material
reduction, without ▇▇▇▇▇'▇ consent, of ▇▇▇▇▇'▇ responsibilities, functions,
duties, or authority from those typically associated with or enjoyed by a
chief executive officer of a major restaurant chain.
(m) "Notice Date", as defined in Sections 1.3(f)(i), 4.1(c), 4.2(c),
4.3(c), 4.4(a) and 4.5(a).
(n) "Option Stockholders", as defined in Section 6.1.
(o) "Permanent Disability" of ▇▇▇▇▇ shall mean ▇▇▇▇▇'▇ inability, by
reason of physical or mental injury, illness or condition, to perform his
responsibilities or authority as chief executive officer of TRC or any TRC
Subsidiary for a
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period of at least one hundred fifty (150) consecutive days. The
determination of whether ▇▇▇▇▇ suffers a Permanent Disability shall be made
by the TRC Board acting promptly, reasonably and in good faith. The date of
▇▇▇▇▇'▇ Permanent Disability for purposes of this Agreement shall be the date
of such determination by the TRC Board.
(p) "Primary Option", as defined in Section 3.1.
(q) "Primary Option Committee", as defined in Section 3.7.
(r) "Primary Option Price", as defined in Section 3.2.
(s) "Primary Option Public Offering", as defined in Section 3.9.
(t) "Primary Option Shares", as defined in Section 3.1.
(u) "Proxy Shares", as defined in Section 2.4.
(v) "Public Offering", as defined in Section 7.1(a).
(w) "Registration Shares", as defined in Section 7.1(a).
(x) "Registration Statement", as defined in Section 7.1(a).
(y) "Second Offer", as defined in Section 6.3(c).
(z) "Second Offeree", as defined in Section 6.3(c).
(aa) "Securities Act", as defined in Section 7.1(a).
(bb) "Selling Stockholder", as defined in Section 7.3.
(cc) "Stage One Bass Put Option", as defined in Section 4.3(a).
(dd) "Stage One ▇▇▇▇▇ Call Option", as defined in Section 4.2(a).
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(ee) "Stage One ▇▇▇▇▇ Call Option Committee", as defined in Section
4.2(f).
(ff) "Stage One ▇▇▇▇▇ Put Option", as defined in Section 4.1(a).
(gg) "Stage Three Bass Put Option", as defined in Section 4.5(a).
(hh) "Stage Three Bass Put Option Sale", as defined in Section 4.5(c).
(ii) "Stage Three Bass Waiting Period", as defined in Section 4.5(a)
(jj) "Stage Three ▇▇▇▇▇ Put Option", as defined in Section 4.4(a).
(kk) "Stage Three ▇▇▇▇▇ Put Option Sale", as defined in Section 4.4(c).
(ll) "Stage Three ▇▇▇▇▇ Waiting Period", as defined in Section 4.4(a).
(mm) "Stockholder Employment Agreements" as defined in Section 8.14.
(nn) "TRC Board" shall mean the board of directors of TRC.
(oo) "TRC Subsidiary" shall mean each corporation in which TRC
beneficially owns capital stock possessing more than fifty (50) percent of
the voting power with respect to the election of directors. The parties
hereby acknowledge that as of the date hereof neither Xian Foods Corporation,
Cookie Factory of America, Inc., nor The French ▇▇▇▇▇, Inc. is a TRC
Subsidiary.
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(pp) "TRC Subsidiary Board" shall mean the board of directors of any TRC
Subsidiary.
(qq) "Transferring Stockholder", as defined in Sections 5.1(b) and (c).
(rr) "Two Year Restriction Period", as defined in Section 5.1(a).
(ss) "Underwriter", as defined in Section 7.1(a).
(tt) "Voluntary Termination of Employment" of ▇▇▇▇▇ shall mean (i)
▇▇▇▇▇'▇ willful resignation, quitting, abandonment or termination of his
services as chief executive officer of TRC, or (ii) ▇▇▇▇▇'▇ material
disregard of his duties and responsibilities as chief executive officer of
TRC, which in either case is not the result of, and not under circumstances
contemplated by, Section 1.3(l) above.
SECTION 2
GOVERNANCE
SECTION 2.1. MEMBERSHIP ON BOARDS OF DIRECTORS.
(a) At all times that the provisions of this Section 2 are in effect,
TRC and each of the Stockholders shall take all actions necessary to cause
the TRC Board and each TRC Subsidiary Board to consist of the following:
(i) Throughout Stages One and Two - three directors of whom one
shall be designated by the holder(s)
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of the Class H Stock, one shall be designated by the holders(s)
of the Class B Stock, and one shall be designated by the holder(s)
of the Class S Stock; provided, however, that for such time as
▇▇▇▇▇ is a holder of Class S Stock and is able to serve as a
director, the third director shall be ▇▇▇▇▇.
(ii) Throughout Stage Three - three directors all of whom shall be
designated by the holder(s) of the Class H Stock.
Notwithstanding the above, (x) if the Notice Date of the Stage One ▇▇▇▇▇
Put Option, the Stage One ▇▇▇▇▇ Call Option, or the Stage One Bass Put Option
occurs, or (y) if during Stage One or Stage Two all of the Common Stock of
either Bass or ▇▇▇▇▇ is purchased by TRC (or proportionately by the other
Stockholders as provided herein), or (z) after ▇▇▇▇▇'▇ Involuntary
Termination of Employment but before the Stage One ▇▇▇▇▇ Call Option becomes
exercisable TRC delivers to ▇▇▇▇▇ a written commitment to exercise the Stage
One ▇▇▇▇▇ Call Option in the event the Stage One ▇▇▇▇▇ Put Option is not
exercised and closed (subject to the last sentence of Section 4.2(d) hereof),
then upon the occurrance of any such event described in (x), (y) or (z)
above, TRC and the remaining Stockholders immediately shall take all actions
necessary (including without
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limitation obtaining director resignations, if necessary) to permit the
holder(s) of the Class H Stock to designate two of the three directors on the
TRC Board and each TRC Subsidiary Board and to permit the holder(s) of the
Class B Stock or the holder(s) of the Class S Stock (whichever class of
Common Stock is not being sold pursuant to such put or call option or
otherwise as set forth above) to designate the third such director; provided,
however, if pursuant to the terms of this Agreement the Stage One ▇▇▇▇▇ Put
Option, the Stage One ▇▇▇▇▇ Call Option, or the Stage One Bass Put Option, as
the case may be, is not closed, then TRC and the Stockholders immediately
shall take all actions necessary to permit the holder(s) of the Class H
Stock, the holder(s) of the Class S Stock and the holder(s) of the Class B
Stock each to designate one of the three directors on the TRC Board and each
TRC Subsidiary Board during Stages One and Two.
(b) On the date hereof the TRC Board and each of the TRC Subsidiary
Boards consist of the following persons:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (Class H Stock designee)
▇▇▇▇▇ ▇. ▇▇▇▇▇ (Class B Stock designee)
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (Class S Stock designee).
(c) If at the time of notice of any meeting of stockholders of TRC or
any TRC Subsidiary to be convened for the purpose, in whole or in part, of
electing one or more
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members of the TRC Board or the TRC Subsidiary Board, as the case may be, a
director designated by the holder(s) of the Class H Stock, the holder(s) of
the Class B Stock, or the holder(s) of the Class S Stock shall have resigned
or otherwise ceased to be a director, then at least ten (10) days prior to
such meeting the holder(s) of the Class H Stock, the holder(s) of the Class B
Stock, or the holder(s) of the Class S Stock, as the case may be, shall
provide TRC (or the TRC Subsidiary if appropriate) with the name of the
designee to fill any vacancy formerly held by the director such holder(s) had
designated. If all members of the TRC Board or the TRC Subsidiary Board, as
the case may be, are to be elected at such meeting, then at least ten (10)
days prior to such meeting the holder(s) of the Class H Stock, the holder(s)
of the Class B Stock, and the holder(s) of the Class S Stock shall provide
TRC (or the TRC Subsidiary, as the case may be) with the name of its or their
designee to serve on the applicable board of directors upon election at such
meeting. If the holder(s) of the Class H Stock, the holder(s) of the Class B
Stock, or the holder(s) of the Class S Stock do not provide TRC (or the TRC
Subsidiary, as the case may be) with the name of its or their designee, the
designee of such holder(s) will be deemed to be the individual who was most
recently designated by such holder(s). In any case, TRC and each of the
Stockholders shall take all actions
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necessary to cause the election of the various designees as members of the
appropriate board of directors.
(d) If at any time the person(s) designating any director shall request
either (1) the removal of such director, or (2) the election of a new
designee to fill a vacancy created by the departure of such director, TRC and
each Stockholder shall take all actions necessary to cause the immediate
removal of such designee, if requested, and the election of such new designee
to the appropriate board of directors.
SECTION 2.2. SPECIAL AGREEMENT OF TRC REGARDING TRC SUBSIDIARIES.
Subject to the laws of the jurisdiction in which any TRC Subsidiary is
incorporated, TRC agrees to vote its shares of common stock of each TRC
Subsidiary in favor of (i) the adoption of Bylaws for the TRC Subsidiary
substantially identical in form and substance to the Bylaws of TRC in effect
from time to time during the effectiveness of this Section 2, and (ii) the
election, as chairman and chief executive officer of the TRC Subsidiary, of
the person(s) from time to time holding such offices in TRC. In the event the
laws of the jurisdiction of incorporation of any TRC Subsidiary would
frustrate or conflict with the objectives set forth in (i) or (ii) above, TRC
and the Stockholders hereby agree to take any and all actions necessary to
realize, to the extent reasonable, the intent of such objectives.
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SECTION 2.3. SPECIAL PROVISIONS REGARDING THE CHAIRMAN AND CHIEF EXECUTIVE
OFFICER OF TRC.
(a) The chairman and chief executive officer of TRC shall be elected by
the stockholders of TRC and may be removed from office by the stockholders of
TRC at any time, with or without cause. The parties hereto acknowledge that
during such time as HI holds in excess of fifty (50) percent of the Common
Stock, HI will by virtue of this provision have the exclusive power and
authority to elect and remove the chairman and the chief executive officer of
TRC from office, with or without cause. No stockholder shall have any
liability to any person or entity solely by reason of exercising such
authority.
(b) In the event of ▇▇▇▇▇'▇ Voluntary Termination of Employment or his
Involuntary Termination of Employment, certain options with respect to his
shares of Common Stock shall become effective as set forth in Section 4,
below.
SECTION 2.4. HI PROXIES GRANTED TO BASS AND ▇▇▇▇▇.
HI shall on the date hereof grant an irrevocable limited proxy to Bass
and an irrevocable limited proxy to ▇▇▇▇▇, substantially in the forms
attached hereto as Exhibit 2.4, to enable Bass and ▇▇▇▇▇ during Stage One to
vote 26,800 of HI's shares of Common Stock (the "Proxy Shares") in any matter
submitted to a vote of the stockholders of TRC (OTHER THAN the election or
removal of the chairman or chief executive officer of TRC) on a pro rata
basis such that the number of the Proxy
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Shares to be voted by Bass (rounded to the nearest whole number) shall bear
to the total number of Proxy Shares the same relation as the number of shares
of Common Stock owned by Bass bears to the total number of shares of Common
Stock owned by both Bass and ▇▇▇▇▇, and ▇▇▇▇▇ shall be entitled to vote the
remainder of the Proxy Shares. No transfer by HI of the Proxy Shares shall
affect the validity or effectiveness of the proxies granted hereby, and any
Proxy Shares so transferred will be subject to the proxies described herein.
Upon the commencement of Stage Two or Stage Three, the irrevocable limited
proxies granted pursuant to this Section 2.4 shall automatically terminate
and be of no further force and effect. In the event ▇▇▇▇▇ ceases to be the
chief executive officer of TRC prior to the commencement of Stage Two or
Stage Three, the irrevocable limited proxy granted to ▇▇▇▇▇ pursuant to this
Section 2.4 shall thereupon automatically terminate and be of no further
force and effect. The intent of the provisions of this Section 2.4 is to
provide for equal shareholder voting among ▇▇▇▇▇, HI and Bass during Stage
One on all matters other than the election and removal of the chairman and
chief executive officer of TRC or as otherwise provided in this Agreement.
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SECTION 3
PRIMARY OPTION
SECTION 3.1. GRANT OF PRIMARY OPTION.
HI hereby grants to TRC an option (the "Primary Option") to purchase
40,200 shares of the Class H Stock (the "Primary Option Shares") for the
price and upon the terms and conditions set forth below in this Section 3.
SECTION 3.2. PRIMARY OPTION PRICE.
Unless otherwise provided herein, the price (the "Primary Option Price")
of the Primary Option Shares upon exercise of the Primary Option shall be
$32,200,000. In the event during Stage One more than fifty (50) percent of
the stock or assets of Holiday Corporation is acquired in a transaction not
approved by a majority of the disinterested directors of Holiday Corporation,
the Primary Option Price will be discounted from the last day for exercise of
the Primary Option to the date of any exercise calculated using a twelve (12)
percent discount rate; provided the Primary Option is exercised within six
(6) months of the closing of such acquisition.
SECTION 3.3. TRANSFER OF PRIMARY OPTION SHARES.
No transfer of shares of Class H Stock during Stage One shall affect the
validity or effectiveness of the Primary Option or reduce HI's obligation to
deliver the Primary Option Shares upon closing of the Primary Option. Any
notice given to
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TRC or the other Stockholders of the desire of any holder of Class H Stock to
sell, transfer, pledge or otherwise encumber shares of Class H Stock pursuant
to Section 5 of this Agreement or otherwise shall include an indication as to
whether all or any portion of such shares constitute Primary Option Shares.
SECTION 3.4. TERM OF PRIMARY OPTION.
The Primary Option shall expire at 12:01 A.M., Memphis, Tennessee time,
on November 21, 1989. Any and all rights and obligations connected with the
Primary Option shall terminate and expire if the Primary Option has not
closed by 12:01 A.M., Memphis, Tennessee time, on November 21, 1989. Time is
of the essence.
SECTION 3.5. EXERCISE OF PRIMARY OPTION.
The Primary Option may be exercised at any time during the term of the
Primary Option for all, but not less than all, of the Primary Option Shares,
by written notice to the holder(s) of the Primary Option Shares. Subject to
the limitations of Section 3.4, in the event at any time the Primary Option
is exercised and fails to close within the time specified in Section 3.6, the
Primary Option may again be exercised at any time during the term of the
Primary Option.
SECTION 3.6. CLOSING UPON EXERCISE.
(a) The closing of the purchase upon exercise of the Primary Option
shall be held at the offices of HI in Memphis,
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Tennessee thirty (30) days after notice of exercise is given, or at such
other place or such other time (no later than sixty (60) days after notice of
exercise) as HI and the Primary Option Committee shall select.
(b) At such closing each holder of the Primary Option Shares shall
deliver a certificate or certificates representing the Primary Option Shares
duly endorsed for transfer to TRC together with full warranties of title and
a written representation that such holder owns such Primary Option Shares
free and clear of any liens, claims, or encumbrances except as may be created
by this Agreement.
(c) At such closing the seller(s) of the Primary Option Shares shall
receive the Primary Option Price in immediately available funds.
(d) If the Primary Option is exercised and is not closed as provided in
this Section 3.6, then the holders of the Class S Stock and Class B Stock
(proportionate to Common Stock ownership) shall reimburse TRC and the holders
of the Class H Stock for all reasonable expenses incurred by them as a result
of such exercise of the Primary Option.
SECTION 3.7. COMMITTEE.
Simultaneously with the execution and delivery hereof, the TRC Board has
by resolution established the Primary Option Committee of the TRC Board (the
"Primary Option Committee")
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with exclusive authority to exercise the Primary Option and to take such
other actions as may be required to enable TRC to consummate the purchase of
the Primary Option Shares, including without limitation Significant Director
Actions (as defined in the Bylaws of TRC), subject, however, to Section 3.8,
below. The Primary Option Committee shall at all times consist of the
director(s) of TRC other than the director(s) designated by the holder(s)
of the Class H Stock or by HI. Any action taken by the Primary Option
Committee shall require the unanimous vote of the members thereof. A copy of
such resolution of the TRC Board is attached hereto as Exhibit 3.7.
SECTION 3.8. UNDERTAKING OF THE PARTIES.
In accordance with the parties' contractual obligations as set forth in
this Agreement, the parties agree and acknowledge that if the Primary Option
is exercised (i) the holder(s) of the Primary Option Shares will be paid
$32,200,000 (as adjusted pursuant to Section 3.2, above) in immediately
available funds at closing; (ii) the holder(s) of the Class H Stock will
immediately after the exercise of the Primary Option own at least one-third
(1/3), or in the event there are no shares of Class B Stock or no shares of
Class S Stock outstanding at such time, at least one-half (1/2), of the
outstanding Common Stock, as reasonably adjusted to reflect the dilution of
shares held by the holder(s) of the Class H Stock, the holder(s) of the
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Class B Stock, or the holder(s) of the Class S Stock at the time of the
exercise of the Primary Option due to (A) the issuance of shares to ▇▇▇▇▇▇▇
and Irons pursuant to their Stockholder Employment Agreements and any
repurchases by TRC pursuant to such agreements or (B) the issuance of shares
of capital stock pursuant to a Primary Option Public Offering made in
accordance with Section 3.9, below; (iii) the Primary Option Shares, upon
consummation of the Primary Option, will be retired and returned to the status
of authorized but unissued shares; and (iv) TRC will immediately after the
consummation of the Primary Option own the businesses and substantially all
the fixed assets it owned immediately prior to the exercise of the Primary
Option (except to the extent a Primary Option Public Offering involves the
sale of shares of capital stock of a TRC Subsidiary). The Stockholders will
take all actions reasonably requested by the Primary Option Committee to
cause the Primary Option to be exercised in such a manner as to provide the
holder(s) of the Class H Stock or the holder(s) of the Primary Option Shares,
as the case may be, with the economic consequences contemplated by the first
sentence of this Section 3.8, including without limitation, executing
consents (stockholder and other) for, voting for and granting approvals (as a
stockholder and otherwise) of, and otherwise approving, assisting and
promoting transactions reasonably proposed by the
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Primary Option Committee to exercise the Primary Option, such as mergers,
liquidations, transfers of assets, and financing arrangements (including
without limitation secured debt financing and a Primary Option Public
Offering); provided that HI will not be required to assume or incur any
additional liabilities as a result of the exercise of the Primary Option.
SECTION 3.9. PRIMARY OPTION PUBLIC OFFERING.
(a) At any time during the period commencing on November 21, 1988 and
ending upon the commencement of Stage Two or Stage Three, the Primary Option
Committee may cause TRC to file or to cause a TRC Subsidiary to file a
Registration Statement (as defined in Section 7.1(a) except that for purposes
of this Section 3.9 "Registration Statement" shall be deemed to include a
registration statement for shares of any capital stock or other securities
and not solely common stock) in connection with a Public Offering (as defined
in Section 7.1(a) except that for purposes of this Section 3.9 "Public
Offering" shall be deemed to include an offering of shares of any capital
stock or other securities and not solely common stock) pursuant to which TRC
or a TRC Subsidiary shall either (i) issue shares of capital stock (common
and/or preferred) or other securities of TRC, or (ii) issue or sell shares of
capital stock (common and/or preferred) or other securities of any TRC
Subsidiary, in either case for an amount not in excess
- 23 -
of $32,200,000, the proceeds of which offering shall be used exclusively (x)
for the purchase of the Primary Option Shares pursuant to the exercise of the
Primary Option, or (y) for the purpose of repaying indebtedness incurred
during the period described above for the sole purpose of purchasing the
Primary Option Shares pursuant to the exercise of the Primary Option;
provided that in the case of (y) above, such Public Offering is commenced no
later than thirty (30) days following the date notice of exercise of the
Primary Option is delivered (the "Primary Option Public Offering"). The
substance and content of any Registration Statement and any related
prospectus, notification or the like filed or used in connection with the
Primary Option Public Offering must be reviewed and approved by all three
members of the TRC Board; provided, however, that the director(s) designated
by the holder(s) of the Class H Stock shall not unreasonably withhold
approval thereof. In the event of the proposed filing of such a Registration
Statement, the Stockholders shall cause TRC to take all action reasonably
requested by the Primary Option Committee in order to consummate the Primary
Option Public Offering. No Stockholder shall have any rights under Section
7.1 of this Agreement in connection with the Primary Option Public Offering.
(b) In the event of a Primary Option Public Offering, the indemnity set
forth in Section 7.4 of this Agreement shall apply.
- 24 -
(c) TRC shall pay all of the expenses in connection with the Primary
Option Public Offering, if any.
(d) In the event a Registration Statement filed pursuant to this
Section 3.9 becomes effective, the Primary Option Committee shall give
written notice of the exercise of the Primary Option (if not previously
given) as promptly as possible but in no event more than ninety (90) days
after the effective date of such Registration Statement, and the Primary
Option shall close in accordance with Section 3.6, above.
SECTION 4
PUT AND CALL OPTIONS APPLICABLE IN CERTAIN EVENTS
SECTION 4.1. STAGE ONE ▇▇▇▇▇ PUT OPTION.
(a) In the event of ▇▇▇▇▇'▇ Involuntary Termination of Employment
during Stage One, then for a period of six (6) months thereafter ▇▇▇▇▇ shall
have one option to sell to TRC all of ▇▇▇▇▇'▇ shares of Common Stock (but not
less than all of such shares) for the purchase price and upon the terms as
set forth below (the "Stage One ▇▇▇▇▇ Put Option"). To exercise the Stage One
▇▇▇▇▇ Put Option, ▇▇▇▇▇ must give written notice to TRC of ▇▇▇▇▇'▇ intent to
exercise the option within said six (6) month period.
- 25 -
(b) In the event TRC is unable, after diligent attempt to obtain
financing, to purchase all of ▇▇▇▇▇'▇ shares of Common Stock pursuant to the
Stage One ▇▇▇▇▇ Put Option, then Bass and HI shall, within ninety (90) days
after the determination of the Fair Market Value, each purchase one-half
(1/2) of such shares that TRC is unable to purchase, unless Bass has
exercised the Stage One Bass Put Option, in which event HI alone shall
purchase such number of shares of ▇▇▇▇▇'▇ Common Stock that TRC is unable to
purchase pursuant to the Stage One ▇▇▇▇▇ Put Option. Notwithstanding the fact
that HI and Bass may be purchasers of shares under the Stage One ▇▇▇▇▇ Put
Option, for purposes of determining the Fair Market Value, TRC and ▇▇▇▇▇
shall be the only Interested Parties.
(c) The aggregate purchase price to be paid for ▇▇▇▇▇'▇ shares of
Common Stock sold pursuant to the Stage One ▇▇▇▇▇ Put Option shall be the
Fair Market Value of such shares as of the end of the month immediately
preceding the month in which the notice of exercise of the Stage One ▇▇▇▇▇
Put Option is delivered (the "Notice Date").
(d) At any time after the determination of the Fair Market Value of the
shares subject to the Stage One ▇▇▇▇▇ Put Option and prior to the closing of
the Stage One ▇▇▇▇▇ Put Option, ▇▇▇▇▇ may elect in writing not to close the
Stage One ▇▇▇▇▇ Put Option. In such event, the Stage One ▇▇▇▇▇ Put Option
will be
- 26 -
extinguished and there shall be no further Stage One ▇▇▇▇▇ Put Option.
(e) The closing of the purchase upon exercise of the Stage One ▇▇▇▇▇ Put
Option shall be held at the offices of TRC in Memphis, Tennessee thirty (30)
days after the determination of the Fair Market Value, or at such other place
or such other time (no later than forty-five (45) days after such
determination) as TRC and ▇▇▇▇▇ shall select. At such closing, ▇▇▇▇▇ shall
deliver a certificate or certificates representing his shares of Common Stock
duly endorsed for transfer to the purchaser(s) together with full warranties
of title and a written representation that ▇▇▇▇▇ owns such shares free and
clear of any liens, claims or encumbrances except as may be created by this
Agreement. At closing, ▇▇▇▇▇ shall receive the purchase price from the
purchaser(s) in immediately available funds. No person other than the
purchaser(s) shall have any obligation or liability to pay any portion of the
purchase price under the Stage One ▇▇▇▇▇ Put Option.
SECTION 4.2. STAGE ONE ▇▇▇▇▇ CALL OPTION.
(a) In the event of ▇▇▇▇▇'▇ Voluntary Termination of Employment during
Stage One, then for a period of six (6) months thereafter (or in the event of
▇▇▇▇▇'▇ Involuntary Termination of Employment during Stage One and the
failure by ▇▇▇▇▇ to exercise and close the Stage One ▇▇▇▇▇ Put Option,
- 27 -
then for a period of sixty (60) days following the expiration of six (6)
months after ▇▇▇▇▇'▇ Involuntary Termination of Employment) TRC shall have
one option to buy all of the outstanding shares of Class S Stock (but not
less than all of such shares) for the purchase price and upon the terms as
set forth below (the "Stage One ▇▇▇▇▇ Call Option"). To exercise the Stage
One ▇▇▇▇▇ Call Option, TRC must give written notice to the holder(s) of the
Class S Stock of TRC's intent to exercise the option within the applicable
option period.
(b) In the event TRC exercises the Stage One ▇▇▇▇▇ Call Option, but is
unable, after diligent attempt to obtain financing (or due to an inability to
take any necessary Significant Director Action), to purchase all of the Class
S Stock pursuant thereto, then Bass and HI shall, within ninety (90) days
after the determination of the Fair Market Value, each purchase one-half
(1/2) of such number of shares of Class S Stock that TRC is unable to
purchase, unless Bass has exercised the Stage One Bass Put Option or Bass
elects not to purchase any Class S Stock, in which event HI alone shall
purchase such number of shares of Class S Stock that TRC is unable to
purchase pursuant to the Stage One ▇▇▇▇▇ Call Option. Notwithstanding the
fact that HI and Bass may be purchasers under the Stage One ▇▇▇▇▇ Call
Option, for purposes of determining the Fair Market Value, TRC and the
holder(s) of the Class S Stock shall be the only Interested Parties.
- 28 -
(c) The aggregate purchase price to be paid for the shares of Class S
Stock sold pursuant to the Stage One ▇▇▇▇▇ Call Option shall be the Fair
Market Value of such shares as of the end of the month immediately preceding
the month in which the notice of exercise of the Stage One ▇▇▇▇▇ Call Option
is delivered (the "Notice Date").
(d) At any time after the determination of the Fair Market Value of the
shares subject to the Stage One ▇▇▇▇▇ Call Option and prior to the closing of
the Stage One ▇▇▇▇▇ Call Option, TRC may elect in writing not to close the
Stage One ▇▇▇▇▇ Call Option. In such event, the Stage One ▇▇▇▇▇ Call Option
will be extinguished and there shall be no further Stage One ▇▇▇▇▇ Call
Option. Also, in the event the Primary Option is consummated after the Notice
Date but before the closing of the Stage One ▇▇▇▇▇ Call Option, the Stage One
▇▇▇▇▇ Call Option will be extinguished.
(e) The closing of the purchase upon exercise of the Stage One ▇▇▇▇▇
Call Option shall be held at the offices of TRC in Memphis, Tennessee thirty
(30) days after the determination of the Fair Market Value or at such other
place or such other time (no later than forty-five (45) days after such
determination) as TRC and ▇▇▇▇▇ shall select. At such closing, each holder of
the Class S Stock shall deliver a certificate or certificates representing
his or its shares of Class S Stock duly endorsed
- 29 -
for transfer to the purchaser(s) together with full warranties of title and a
written representation that such person owns such shares free and clear of
any liens, claiming or encumbrances except as may be created by this
Agreement. At closing, the holder(s) of the Class S Stock shall receive the
purchase price from the purchaser(s) in immediately available funds. No
person other than the purchaser(s) shall have any obligation or liability to
pay any portion of the purchase price under the Stage One ▇▇▇▇▇ Call Option.
(f) Simultaneously with the execution and delivery hereof, the TRC Board
has by resolution established the Stage One ▇▇▇▇▇ Call Option Committee of
the TRC Board (the "Stage One ▇▇▇▇▇ Call Option Committee") with exclusive
authority to exercise the Stage One ▇▇▇▇▇ Call Option and to take such other
actions as may be required to consummate the purchase of shares of Class S
Stock pursuant to the Stage One ▇▇▇▇▇ Call Option. The Stage One ▇▇▇▇▇ Call
Option Committee shall at all times consist of the director(s) of TRC elected
by the holder(s) of the Class H Stock. A copy of such resolution of the TRC
Board is attached hereto as Exhibit 4.2.
SECTION 4.3. STAGE ONE BASS PUT OPTION.
(a) In the event of ▇▇▇▇▇'▇ Involuntary Termination of Employment during
Stage One, other than his death or Permanent Disability and other than an
Involuntary Termination of
- 30 -
Employment of ▇▇▇▇▇ to which Bass agrees in writing, then for a period of six
(6) months thereafter, Bass shall have one option to sell to TRC all of Bass'
shares of Common Stock (but not less than all of such shares) for the
purchase price and upon the terms as are set forth below (the "Stage One Bass
Put Option"). To exercise the Stage One Bass Put Option, Bass must give
written notice to TRC of Bass' intent to exercise the option within such six
(6) month period.
(b) In the event TRC is unable, after diligent attempt to obtain
financing, to purchase all of Bass' shares of Common Stock pursuant to the
Stage One Bass Put Option, then HI shall, within ninety (90) days after
determination of the Fair Market Value, purchase all of Bass' shares that TRC
is unable to purchase. Notwithstanding the fact that HI may be a purchaser
under the Stage One Bass Put Option, for purposes of determining the Fair
Market Value, TRC and Bass shall be the only Interested Parties.
(c) The aggregate purchase price to be paid for Bass' shares of Common
Stock sold pursuant to the Stage One Bass Put Option shall be the Fair Market
Value of such shares as of the end of the month immediately preceding the
month in which the notice of exercise of the Stage One Bass Option is
delivered (the "Notice Date").
- 31 -
(d) At any time after the determination of the Fair Market Value of the
shares subject to the Stage One Bass Put Option and prior to the closing of
the Stage One Bass Put Option, Bass may elect in writing not to close the
Stage One Bass Put Option. In such event, the Stage One Bass Put Option will
be extinguished and there shall be no further Stage One Bass Put Option.
Also, in the event the Primary Option is consummated after the Notice Date
but before the closing of the Stage One Bass Put Option, the Stage One Bass
Put Option will be extinguished.
(e) The closing of the purchase upon exercise of the Stage One Bass Put
Option shall be held at the offices of TRC in Memphis, Tennessee thirty (30)
days after the determination of the Fair Market Value or at such other place
or such other time (no later than forty-five (45) days after such
determination) as TRC and Bass shall select. At such closing, Bass shall
deliver a certificate or certificates representing its shares of Common Stock
duly endorsed for transfer to the purchaser(s) together with full warranties
of title and a written representation that Bass owns such shares free and
clear of any liens, claims or encumbrances except as may be created by this
Agreement. At closing, Bass shall receive the purchase price from the
purchaser(s) in immediately available funds. No person other than the
purchaser(s) shall have any obligation or
- 32 -
liability to pay any portion of the purchase price under the Stage One Bass
Put Option.
SECTION 4.4. STAGE THREE ▇▇▇▇▇ PUT OPTION.
(a) At any time during Stage Three, ▇▇▇▇▇ shall have one option to sell
to TRC all of ▇▇▇▇▇'▇ shares of Common Stock (but not less than all of such
shares) for the purchase price and upon the terms as set forth below (the
"Stage Three ▇▇▇▇▇ Put Option"). To exercise the Stage Three ▇▇▇▇▇ Put
Option, ▇▇▇▇▇ must give written notice to TRC of ▇▇▇▇▇'▇ intent to exercise
the option. Any such notice given prior to the commencement of Stage Three
will be deemed given on the day on which Stage Three commences. The date of
such notice of exercise (the "Notice Date") shall ▇▇▇▇ the beginning of a
twelve-month period during which, except as noted below in Section 4.4(d),
the Stage Three ▇▇▇▇▇ Put Option may not be consummated (the "Stage Three
▇▇▇▇▇ Waiting Period").
(b) The aggregate purchase price to be paid for ▇▇▇▇▇'▇ shares of Common
Stock sold pursuant to the Stage Three ▇▇▇▇▇ Put Option shall be the Fair
Market Value of such shares as of the end of the month immediately preceding
the Notice Date.
(c) At any time during the Stage Three ▇▇▇▇▇ Waiting Period, HI may
contract to sell all of its shares of Common Stock and all of ▇▇▇▇▇'▇ shares
of Common Stock to any party, free and clear of the Stage Three ▇▇▇▇▇ Put
Option (the "Stage
- 33 -
Three ▇▇▇▇▇ Put Option Sale"). If the purchase price per share pursuant to
the Stage Three ▇▇▇▇▇ Put Option Sale is equal to or greater than ninety (90)
percent of the Fair Market Value per share of the shares subject to the Stage
Three ▇▇▇▇▇ Put Option, as determined in accordance with Section 4.4(b)
above, then ▇▇▇▇▇ shall be obligated to sell all of his shares of Common
Stock in the Stage Three ▇▇▇▇▇ Put Option Sale, and if the Stage Three ▇▇▇▇▇
Put Option Sale is consummated, the Stage Three ▇▇▇▇▇ Put Option will be
extinguished and there shall be no further Stage Three ▇▇▇▇▇ Put Option. In
the event the purchase price per share pursuant to the Stage Three ▇▇▇▇▇ Put
Option Sale is less than ninety (90) percent of the Fair Market Value per
share of the shares subject to the Stage Three ▇▇▇▇▇ Put Option, as
determined in accordance with Section 4.4(b) above, then ▇▇▇▇▇ may, but shall
not be obligated to, sell all or a portion of his shares of Common Stock
pursuant to the Stage Three ▇▇▇▇▇ Put Option Sale, and if the Stage Three
▇▇▇▇▇ Put Option Sale is consummated, the Stage Three ▇▇▇▇▇ Put Option shall
be extinguished and there shall be no further Stage Three ▇▇▇▇▇ Put Option.
If the purchase price pursuant to the Stage Three ▇▇▇▇▇ Put Option Sale
consists in whole or in part of consideration other than cash, and ▇▇▇▇▇
sells shares of Common Stock pursuant thereto, then, at ▇▇▇▇▇'▇ election, TRC
shall at the closing of the Stage Three ▇▇▇▇▇ Put
- 34 -
Option Sale purchase from ▇▇▇▇▇ his portion of such non-cash consideration
for an amount in cash or publicly traded securities (not subject to resale
restrictions applicable to ▇▇▇▇▇) equal to the then present value of ▇▇▇▇▇'▇
portion of such non-cash consideration.
At any time during the Stage Three ▇▇▇▇▇ Waiting Period, TRC may
contract to sell substantially all of its assets or to merge, consolidate or
enter into any other business combination with another entity in a
transaction wherein the Stockholders will receive consideration for their
shares of Common Stock in a manner similar to that in a sale of stock. In
such event, ▇▇▇▇▇ and Bass shall cooperate fully to effect such transaction.
If the consideration to be received by ▇▇▇▇▇ in connection with such a
transaction consists in whole or in part of consideration other than cash,
then, at ▇▇▇▇▇'▇ election, TRC shall at the closing of such transaction pay
or otherwise arrange for the payment to ▇▇▇▇▇ of an amount in cash or
publicly traded securities (not subject to resale restrictions applicable to
▇▇▇▇▇) equal to the then present value of ▇▇▇▇▇'▇ proportionate share of such
non-cash consideration. Upon the consummation of such event during the Stage
Three ▇▇▇▇▇ Waiting Period, the Stage Three ▇▇▇▇▇ Put Option shall be
extinguished and there shall be no further Stage Three ▇▇▇▇▇ Put Option.
- 35 -
(d) If within the thirty (30) day period following the determination of
the Fair Market Value in accordance with Section 4.4(b) above, HI has not
begun actively to pursue a Stage Three ▇▇▇▇▇ Put Option Sale, or TRC has not
begun actively to pursue a sale of assets or business combination as
described above, the closing of the purchase upon exercise of the Stage Three
▇▇▇▇▇ Put Option shall be held at the offices of TRC in Memphis, Tennessee
forty (40) days after the determination of the Fair Market Value in
accordance with Section 4.4(b) above, or at such other place or such other
time (no later than sixty (60) days after such determination) as TRC and
▇▇▇▇▇ shall select. If HI or TRC, as the case may be, does not succeed
within the Stage Three ▇▇▇▇▇ Waiting Period in closing a Stage Three ▇▇▇▇▇
Put Option Sale or a sale of assets or business combination as described
above, then the closing of the purchase upon exercise of the Stage Three
▇▇▇▇▇ Put Option shall be held at the offices of TRC in Memphis, Tennessee
ten (10) days after the expiration of the Stage Three ▇▇▇▇▇ Waiting Period,
or at such other place or at such other time (no more than thirty (30) days
after the expiration of the Stage Three ▇▇▇▇▇ Waiting Period) as TRC and
▇▇▇▇▇ shall select. At closing, ▇▇▇▇▇ shall deliver a certificate or
certificates representing his shares of Common Stock duly endorsed for
transfer to TRC together with full warranties of title and a
- 36 -
written representation that ▇▇▇▇▇ owns such shares free and clear of any
liens, claims or encumbrances except as may be created by this Agreement. At
closing, ▇▇▇▇▇ shall receive the purchase price from TRC in immediately
available funds. No person other than TRC shall have any obligation or
liability to pay any portion of the purchase price under the Stage Three
▇▇▇▇▇ Put Option.
SECTION 4.5. STAGE THREE BASS PUT OPTION.
(a) At any time during Stage Three, Bass shall have one option to sell
to TRC all of Bass' shares of Common Stock (but not less than all of such
shares) for the purchase price and upon the terms as set forth below (the
"Stage Three Bass Put Option"). To exercise the Stage Three Bass Put Option,
Bass must give written notice to TRC of Bass' intent to exercise the option.
Any such notice given prior to the commencement of Stage Three will be deemed
given on the day on which Stage Three commences. The date of such notice of
exercise (the "Notice Date") shall ▇▇▇▇ the beginning of a twelve-month
period during which, except as noted below in Section 4.5(d), the Stage Three
Bass Put Option may not be consummated (the "Stage Three Bass Waiting
Period").
(b) The aggregate purchase price to be paid for Bass' shares of Common
Stock sold pursuant to the Stage Three Bass Put Option shall be the Fair
Market Value of such shares as of the end of the month immediately preceding
the Notice Date.
- 37 -
(c) At any time during the Stage Three Bass Waiting Period, HI may
contract to sell all of its shares of Common Stock and all of Bass' shares of
Common Stock to any party, free and clear of the Stage Three Bass Put Option
(the "Stage Three Bass Put Option Sale"). If the purchase price per share
pursuant to the Stage Three Bass Put Option Sale is equal to or greater than
ninety (90) percent of the Fair Market Value per share of the shares subject
to the Stage Three Bass Put Option, as determined in accordance with Section
4.5(b) above, then Bass shall be obligated to sell all of its shares of
Common Stock in the Stage Three Bass Put Option Sale, and if the Stage Three
Bass Put Option Sale is consummated, the Stage Three Bass Put Option will be
extinguished and there shall be no further Stage Three Bass Put Option. In
the event the purchase price per share pursuant to the Stage Three Bass Put
Option Sale is less than ninety (90) percent of the Fair Market Value per
share of the shares subject to the Stage Three Bass Put Option, as determined
in accordance with Section 4.5(b) above, then Bass may, but shall not be
obligated to, sell all or a portion of its shares of Common Stock pursuant to
the Stage Three Bass Put Option Sale, and if the Stage Three Bass Put Option
Sale is consummated the Stage Three Bass Put Option shall be extinguished and
there shall be no further Stage Three Bass Put Option. If the purchase price
pursuant to the Stage Three Bass
- 38 -
Put Option Sale consists in whole or in part of consideration other than cash,
and Bass sells shares of Common Stock pursuant thereto, then, at Bass'
election, TRC shall at the closing of the Stage Three Bass Put Option Sale
purchase from Bass Bass' portion of such non-cash consideration for an amount
in cash or publicly traded securities (not subject to resale restrictions
applicable to Bass) equal to the then present value of Bass' portion of such
non-cash consideration.
At any time during the Stage Three Bass Waiting Period, TRC may contract
to sell substantially all of its assets or to merge, consolidate or enter
into any other business combination with another entity in a transaction
wherein the Stockholders will receive consideration for their shares of
Common Stock in a manner similar to that in a sale of stock. In such event,
▇▇▇▇▇ and Bass shall cooperate fully to effect such transaction. If the
consideration to be received by Bass in connection with such a transaction
consists in whole or in part of consideration other than cash, then, at Bass'
election, TRC shall at the closing of such transaction pay or otherwise
arrange for the payment to Bass of an amount in cash or publicly traded
securities (not subject to resale restrictions applicable to Bass) equal to
the then present value of Bass' proportionate share of such non-cash
consideration. Upon the consummation of such event during the Stage Three
Bass Waiting
- 39 -
Period, the Stage Three Bass Put Option shall be extinguished and there shall
be no further Stage Three Bass Put Option.
(d) If within the thirty (30) day period following the determination of
the Fair Market Value in accordance with Section 4.5(b) above, HI has not
begun actively to pursue a Stage Three Bass Put Option Sale or TRC has not
begun actively to pursue a sale of assets or business combination as
described above, the closing of the purchase upon exercise of the Stage Three
Bass Put Option shall be held at the offices of TRC in Memphis, Tennessee
forty (40) days after the determination of the Fair Market Value in
accordance with Section 4.5(b) above, or at such other place or such other
time (no later than sixty (60) days after such determination) as TRC and Bass
shall select. If HI or TRC, as the case may be, does not succeed within the
Stage Three Bass Waiting Period in closing a Stage Three Bass Put Option Sale
or a sale of assets or business combination as described above, then the
closing of the purchase upon exercise of the Stage Three Bass Put Option
shall be held at the offices of TRC in Memphis, Tennessee ten (10) days after
the expiration of the Stage Three Bass Waiting Period, or at such other place
or at such other time (no more than thirty (30) days after the expiration of
the Stage Three Bass Waiting Period) as TRC and Bass shall select. At such
closing, Bass shall deliver a certificate or certificates
- 40 -
representing its shares of Common Stock duly endorsed for transfer to TRC
together with full warranties of title and a written representation that Bass
owns such shares free and clear of any liens, claims or encumbrances except as
may be created by this Agreement. At closing, Bass shall receive the purchase
price from TRC in immediately available funds. No person other than TRC shall
have any obligation or liability to pay any portion of the purchase price
under the Stage Three Bass Put Option.
SECTION 5
RESTRICTIONS AND RIGHTS ON TRANSFER OF COMMON STOCK
SECTION 5.1. TWO YEAR RESTRICTION, RIGHT OF FIRST REFUSAL AND PROCEDURES.
(a) Until the expiration of two (2) years from the date of this
Agreement (the "Two Year Restriction Period") no Stockholder may sell,
transfer, pledge or otherwise encumber any Common Stock to any person without
the prior written consent of TRC reflecting the unanimous approval of all
members of the TRC Board. Notwithstanding the above, any Stockholder may
during the Two Year Restriction Period or afterwards (i) sell or transfer his
or its shares of Common Stock in any transaction described in Section 5.9(ii)
or 5.9(vii) below, or (ii) pledge his or its shares of Common Stock (a) to
TRC pursuant to the Value Guaranty Agreement of even date herewith
- 41 -
between ▇▇▇▇▇ and TRC, or (b) to secure or otherwise guarantee the purchase
by TRC of the Primary Option Shares upon exercise of the Primary Option;
provided that in the case of any such pledge described in this subsection
(ii)(b) such Stockholder shall first have made the offers hereinafter
described in Section 5.7 and such offers shall not have been accepted.
(b) After the expiration of the Two Year Restriction Period and in the
event Stage Three has not commenced, no Stockholder (or in the event Stage
Three has commenced, no Stockholder other than HI) shall sell or transfer any
Common Stock, except as provided in Section 5.9, unless the Stockholder
desiring to make the sale or transfer (the "Transferring Stockholder") shall
have first made the offers to sell hereinafter described in Section 5.2 and
such offers shall not have been accepted in their entirety. Any sale, except
a sale permitted under Section 5.9, shall be for a consideration paid
exclusively in money, whether as cash at closing or on a deferred basis.
(c) After the expiration of the Two Year Restriction Period and in the
event Stage Three has not commenced, no Stockholder (or in the event Stage
Three has commenced, no Stockholder other than HI) shall pledge or otherwise
encumber any Common Stock, except as provided in Sections 5.9, unless the
Stockholder desiring to make the pledge or encumbrance (the
- 42 -
"Transferring Stockholder") shall have first made the offers hereinafter
described in Section 5.7 and such offers shall not have been accepted.
SECTION 5.2. FIRST REFUSAL OFFER IN THE CASE OF A PROPOSED SALE.
Subject to Section 5.1 above, if the Transferring Stockholder desires to
sell or transfer shares to another Stockholder or to a third party, the
Transferring Stockholder shall first make an offer to sell all of the shares
that it desires to sell or transfer (but not less than all of such shares) to
TRC or the other Stockholders or both for the purchase price per share and on
the terms hereinafter set forth. This offer shall be in writing and shall
specify the nature of the sale or transfer in which the Transferring
Stockholder desires to engage, including the name or names of the other party
or parties to such proposed transaction and the purchase price and payment
terms. TRC shall have the first opportunity to respond to the Transferring
Stockholder's offer. TRC may accept the offer as to all of the shares, or may
accept the offer as to less than all of the shares provided the other
Stockholders accept the offer as to all of the remainder of the offered
shares. If TRC rejects the offer or fails to accept the offer in writing
within thirty (30) days after receipt thereof, or if TRC elects to purchase
some but not all of the shares of Common Stock offered by the
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Transferring Stockholder, then the Transferring Stockholder shall, within
five (5) days, make an offer (i) in the event State Three has commenced, to
HI or, (ii) in the event Stage Three has not commenced, to HI and the other
Stockholders, to sell all of such shares of Common Stock that TRC did not
elect to purchase (but not less than all of such shares) for the purchase
price per share and on the terms hereinafter set forth. The other
Stockholders shall have a period of sixty (60) days during which to respond
to such offer to them. If all of the shares of Common Stock offered by the
Transferring Stockholder are not accepted for purchase by TRC or such offeree
Stockholders or both, then all such shares shall be released from the
restrictions contained in Section 5.1(b) hereof as provided in Section 5.8
below. If more than one Stockholder elects to purchase, the purchasing
Stockholders shall participate pro rata in the purchase, such that the total
number of shares of Common Stock to be purchased by a participating
Stockholder shall bear to the total number of shares being purchased by all
participating Stockholders the same relation as the number of shares of
Common Stock owned by such participating Stockholder bears to the total
number of shares of Common Stock owned by all Stockholders participating in
the purchase, and the number of shares to be purchased by each participating
Stockholder shall be rounded to the nearest
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whole number. For example, if Stockholder A, who owns 10 shares prior to the
purchase, and Stockholder B, who owns 25 shares prior to the purchase, both
were to participate in the purchase of 50 shares of Common Stock of the
Transferring Stockholder, Stockholder A would be entitled to purchase 14
(14.25/50 = 10/35) of such shares, and Stockholder B would be entitled to
purchase 36 (35.75/50 = 25/35) of such shares.
SECTION 5.3. PURCHASE BY TRC; FIRST REFUSAL OPTION COMMITTEE.
(a) If a Transferring Stockholder offers to sell its Common Stock to TRC
pursuant to Section 5.2, then the Transferring Stockholder agrees to take all
action in its power necessary to enable TRC to complete such purchase,
including without limitation, to vote its shares of Common Stock that are
offered for sale in accordance with the vote of the majority of shares of
Common Stock cast by the other Stockholders at any meeting of stockholders of
TRC to approve any corporate action that may be required to be taken by TRC
or its officers or directors in order to enable TRC to accept the offer and
purchase any or all of the shares of Common Stock offered by the Transferring
Stockholder.
(b) Simultaneously with the execution and delivery hereof, the TRC Board
has by resolution established the First Refusal Option Committee of the TRC
Board (the "First Refusal Option Committee") with exclusive authority to
exercise any option of
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first refusal available to TRC pursuant to this Section 5 and to take such
other actions as may be required to enable TRC to consummate the transactions
necessary in connection therewith, including without limitation Significant
Director Actions (as defined in the bylaws of TRC). The First Refusal Option
Committee shall at all times consist of the director(s) of the TRC Board
other than the director(s) designated by the Transferring Stockholder or its
transferees. Any action taken by the First Refusal Option Committee shall
require the unanimous vote of all of the members thereof. A copy of such
resolution of the TRC Board is attached hereto as Exhibit 5.3.
SECTION 5.4. PURCHASE PRICE AND TERMS.
The purchase price for each share of Common Stock sold pursuant to
Section 5.2 and the terms of payment therefor, shall be the same as the
purchase price and terms of payment set forth in the offer made to the
Transferring Stockholder, except that (i) neither TRC or HI shall be required
to grant any security interest or provide any collateral to assure payment of
a deferred purchase price, if any, other than a pledge of the shares
purchased, and (ii) if the consideration to be paid to the Transferring
Stockholder consists in whole or in part of property (rather than cash), the
purchaser(s) may transfer cash or other property of equivalent value to the
Transferring Stockholder in payment for his or its shares.
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SECTION 5.5. ACCEPTANCE OF OFFERS.
Any offer may be accepted within the time provided for acceptance of
such offer in Section 5.2 hereof by giving written notice of acceptance to
the person making the offer. An offer shall be deemed to be rejected unless
written notice of acceptance of the offer has been received by the person
making the offer prior to the expiration of the time for acceptance set forth
in Section 5.2.
SECTION 5.6. CLOSING OF PURCHASE.
If all of the shares of Common Stock included in the offers made by the
Transferring Stockholder pursuant to Section 5.2 are accepted for purchase,
then such shares shall be sold by the Transferring Stockholder to TRC, the
other Stockholders, or any combination thereof, as the case may be, accepting
such offers. The closing of the purchase or purchases shall take place no
later than thirty (30) days after the date of the notice of the last
acceptance of an offer made pursuant to Section 5.2 at the principal office
of TRC or at such other place as the Transferring Stockholder and the
purchasers may agree. The purchase price for all shares of Common Stock sold
pursuant to Section 5.2 hereof shall be paid in accordance with the terms for
payment determined as set forth in Section 5.4 above. The Transferring
Stockholder shall represent and warrant to the purchaser(s) that it is
conveying title to such
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shares, with full warranties of title, free and clear of any liens, claims,
or encumbrances except as may be created by this Agreement.
SECTION 5.7. FIRST REFUSAL OFFER IN THE CASE OF A PROPOSED PLEDGE OR
ENCUMBRANCE.
If, during the period described in Section 5.1(c), the Transferring
Stockholder desires to pledge or otherwise encumber shares of Common Stock to
another Stockholder or to a third party, the Transferring Stockholder shall
first make an offer to TRC and the other Stockholders or both to allow such
offerees or any combination thereof to perform the obligations of the proposed
pledgee to the Transferring Stockholder in connection with which the
Transferring Stockholder's shares of Common Stock are proposed to be pledged
or encumbered, on the same terms and conditions as such obligations would be
performed by the proposed pledgee. A first refusal offer made pursuant to
this Section 5.7 shall be subject to the same procedural requirements as are
applicable to a first refusal offer made pursuant to Section 5.2, including
without limitation all time limitations, except that (i) references to the
terms "purchase price" and "payment terms" shall be deemed to mean terms of
the proposed pledge or encumbrance and the underlying obligations of the
proposed pledgee, and (ii) whenever a first refusal offer is made pursuant to
this Section 5.7 regarding a pledge or encumbrance proposed to be
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made in connection with the exercise of a first refusal option under Section
5.2 hereof or in connection with the exercise of the Primary Option, then the
time limits applicable to the first refusal offer made under this Section 5.7
shall be reduced by fifty (50) percent.
SECTION 5.8. EFFECT OF FAILURE TO EXERCISE RIGHT OF FIRST REFUSAL;
OBLIGATIONS OF TRANSFEREE.
If fewer than all of the shares of Common Stock included in the first
refusal offer made by the Transferring Stockholder pursuant to Section 5.2
above are accepted for purchase by TRC and the Stockholders (or if, in the
case of a first refusal offer made pursuant to Section 5.7 involving a pledge
or encumbrance of shares, fewer than all of the shares included in such first
refusal offer are accepted for pledge to TRC or the Stockholders or both),
then all of the shares included in such first refusal offer shall be released
from the first refusal restrictions set forth in Section 5.1(b) or (c). Upon
the release of the shares of Common Stock desired to be sold, transferred,
pledged or encumbered by the Transferring Stockholder from the first refusal
restrictions set forth in Section 5.1(b) or (c), the Transferring Stockholder
may consummate the sale, transfer, pledge or encumbrance of such shares as
set forth in its offer described in Section 5.2 or Section 5.7, as the case
may be, to such described third party or parties and on the terms and
conditions therein described.
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Any shares transferred to any Stockholder or any third party pursuant to the
terms of this Section 5 shall remain subject to all of the terms and
conditions of this Agreement and shall be treated in the hands of the
transferee for purposes of this Agreement exactly as they would have been
treated if in the hands of the Transferring Stockholder, including without
limitation, with respect to all rights and options granted by this Agreement;
provided, however, that any rights or obligations in this Agreement that are
personal to ▇▇▇▇▇, HI or Bass shall not apply to such other transferee. Any
third party or parties purchasing shares of Common Stock pursuant to this
Agreement shall be required to execute a counterpart of this Agreement. If a
Transferring Stockholder shall fail to complete the proposed sale, transfer,
pledge or encumbrance within fifty-five (55) days following the expiration of
the time provided in this Agreement for acceptance of the final first refusal
offer made pursuant to Section 5.2 or Section 5.7, then such shares of Common
Stock shall again be subject to all of the first refusal restrictions of
Section 5.1(b) or (c).
SECTION 5.9. EXCEPTIONS.
Notwithstanding the restrictions on sales, transfers, pledges or
encumbrances of shares of Common Stock contained in the Sections 5.1(b) and
(c) above, the following transfers shall be permitted:
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(i) Provided such transfer shall not constitute an arms-length
transfer for value, any individual Stockholder shall have the
right to sell, give or otherwise transfer his shares of Common
Stock to his spouse or lineal descendants, any trust for his
benefit or the benefit of his spouse or lineal descendants, any
partnership in which all interests are held by such individual
Stockholder or his spouse or lineal descendants (or any trust
for the benefit of such persons) or any corporation in which
such Stockholder is the direct or beneficial owner of one
hundred (100) percent of the issued and outstanding stock;
provided, however, that (A) any such trust or partnership shall
have no terms inconsistent with the obligations of a Stockholder
under this Agreement, (B) each of the trustees of any such
trust, partners of any such partnership and directors of any
such corporation acquiring any such Common Stock shall agree in
writing with TRC that no interest in such trust or partnership
or shares in such corporation may be transferred to any person
other than such individual Stockholder or his spouse or lineal
descendants or a trust
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for their benefit, and (C) TRC shall receive an opinion of
counsel satisfactory to TRC that each of such agreements and
this Agreement is valid and enforceable according to its terms
with respect to the shares of Common Stock transferred to such
trust, partnership or corporation.
(ii) Any individual Stockholder's shares of Common Stock may be
transferred to his personal representative upon his death for
purposes of administration of his estate or upon his
incompetency for purposes of the protection and management of
his assets; but such personal representative may not transfer
such shares other than as provided in this Section 5.
(iii) Any Stockholder may transfer his or its shares of Common
Stock to any person pursuant to a sale in connection with a
Public Offering under the Securities Act in accordance with
Section 7.1 or Section 7.2 of this Agreement.
(iv) Provided such transfer shall not constitute an arms-length
transfer for value, Bass may transfer its shares of Common
Stock to any entity that directly, or indirectly through one or
more intermediaries, controls or is controlled by, or
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is under common control with Bass (on the condition precedent
that Bass and such affiliated entity agree in writing with TRC,
if requested by TRC or any Stockholder, to maintain such
relationship with Bass).
(v) HI, during the time that Section 5 first refusal restrictions
are applicable to shares of Common Stock held by it, may
transfer its shares of Common Stock (A) to its parent
corporation or to any wholly-owned subsidiary of HI or of such
parent corporation (on the condition precedent that such parent
corporation agrees in writing with TRC, if requested by TRC or
any Stockholder, to maintain such transferee as a direct or
indirect wholly-owned subsidiary of such parent corporation);
or (B) in connection with (x) its acquisition by merger or
consolidation with another person, or (y) the acquisition by
another person of substantially all of the business, properties
or assets of HI.
(vi) Any transfer pursuant to Section 5.10 below.
(vii) Any sale or transfer of shares pursuant to the exercise of the
Primary Option, the Stage One ▇▇▇▇▇ Put Option, the Stage One
▇▇▇▇▇ Call
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Option, the Stage One Bass Put Option, the Stage Three ▇▇▇▇▇
Put Option, the Stage Three Bass Put Option, any option to
buy or sell shares of Common Stock pursuant to Section 6 of
this Agreement, or any option to buy or sell shares of Common
Stock pursuant to the Stockholder Employment Agreements.
In the event of the transfer of Common Stock pursuant to this Section
5.9 (other than Subsection 5.9(iii)), the shares of stock so transferred
shall remain subject to the terms and conditions of this Agreement and shall
be treated in the hands of the transferee for purpose of this Agreement
exactly as they would have been treated if in the hands of the transferor,
including without limitation, with respect to all rights and options granted
by this Agreement. The transferee of such shares shall be required to
execute a counterpart of this Agreement.
SECTION 5.10. TAG ALONG RIGHTS.
Except in connection with transfers made pursuant to Section 5.9(i),
(ii), (iii), (iv), (v), or (vii) above, in the event any Stockholder (other
than Irons or ▇▇▇▇▇▇▇) at any time reaches an agreement with any person by
which such Stockholder will transfer to such person shares of Common Stock
(in accordance with the terms of this Agreement), the other
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Stockholders (other than Irons or ▇▇▇▇▇▇▇) shall be given written notice of
such proposed transaction and the option to elect in writing within ten (10)
days of such notice to participate pro rata in such transfer (on the terms
established) such that the total number of shares of Common Stock to be
transferred by a participating Stockholder (rounded to the nearest whole
number) shall bear to the total number of shares to be transferred the same
relation as the number of shares of Common Stock owned by such participating
Stockholder bears to the total number of shares of Common Stock owned by all
Stockholders participating in the transfer. In the event of such election,
such Stockholders must comply with the terms of such transaction.
SECTION 6
BUY-SELL OPTIONS
SECTION 6.1. MANNER OF OFFER.
At any time after the commencement of Stage Two, Smith, Bass, or HI (the
"Option Stockholders") may offer to the other Option Stockholders both to
sell all of the offeror's shares of Common Stock and to buy all of the
offerees' shares of Common Stock. Such offer must be in writing and must
contain the following:
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(i) a statement of intention to make an offer under this Section 6.1;
(ii) a statement that the purchase price per share of the shares of Common
Stock subject to the offer shall be the Fair Market Value determined as
of the last day of the month immediately preceding the offer, or such
greater amount as may be selected by the offeror; provided, however,
that at any time after the determination of the Fair Market Value of
Common Stock subject to an offer made hereunder and prior to the
closing of a purchase hereunder, the offeror may elect not to go
forward with its offers to buy or sell, and the offers shall be deemed
not to have been made;
(iii) a statement that the purchase price of the shares of Common Stock
subject to the offer shall be payable in immediately available funds at
closing; and
(iv) a statement that such offer is both an offer to sell all the shares of
Common Stock owned by the offeror and an offer to buy all the shares of
Common Stock owned by the offerees.
SECTION 6.2. TERM OF OFFER; FAILURE TO EXERCISE EITHER OFFER.
The offeror's offer shall be irrevocable for the longer of
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(i) ninety (90) days, or (ii) the expiration of thirty (30) days after the
determination of the purchase price, and the offerees may, on or before the
expiration of such longer period accept either the offer to sell or the offer
to buy. If either or both offerees fail to accept either the offer to sell or
the offer to buy, the offeror shall have the option, but not the obligation,
to buy the shares of Common Stock of the non-responding offeree(s) as set
forth in Sections 6.3(c), (d) and (e) below.
SECTION 6.3. MANNER OF ACCEPTANCE.
(a) If both offerees elect to accept the offeror's offer to buy, the
offeror must buy, and each offeree must sell to the offeror, all of the
shares of Common Stock owned by such selling offeree.
(b) If both offerees elect to accept the offeror's offer to sell, the
offeror must sell all of his shares of Common Stock, and each offeree shall
be required to buy from the offeror that portion of the offeror's shares of
Common Stock as the number of shares of Common Stock owned by such buying
offeree bears to the total number of shares of Common Stock owned by him and
the other buying offeree.
(c) If either, but not both, of the offerees accepts the offeror's offer
to sell (either because one offeree accepted the offeror's offer to buy or
because one offeree failed to
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accept either the offeror's offer to buy or the offeror's offer to sell), the
offeror must sell all of his shares of Common Stock to the offeree accepting
the offer to sell, and the offeror's offer to buy shall become null and void.
The offeree accepting the offeror's offer to sell, must buy all of the
offeror's shares of Common Stock and must immediately offer (the "Second
Offer") to buy all of the shares of Common Stock owned by the other offeree
who did not accept the original offeror's offer to sell (the "Second
Offeree"). The Second Offer shall be on the same terms as the original
offeror's offer to buy. If the Second Offeree fails to accept the Second
Offer within five (5) days, the Second Offer shall expire, at which time the
maker of the Second Offer shall have the right, exercisable on or before the
fifteenth (15th) day after the expiration of such five (5) day period, to buy
all of the shares of Common Stock of the Second Offeree, and if such right is
exercised, the Second Offeree shall be required to sell, in accordance with
the terms of the Second Offer and the provisions of this Section 6.
(d) If one of the offerees accepts the offeror's offer to buy and the
other offeree fails to accept either the offeror's offer to buy or offer to
sell, then the offeror shall buy, and the selling offeree shall sell to the
offeror, all of the selling offeree's shares of Common Stock. The offeror
shall
- 58 -
then have the right, exercisable on or before the fifteenth (15th) day after
the expiration of the initial option period, to buy all the shares of Common
Stock of the non-responding offeree, and if the offeror exercises such right,
the non-responding offeree shall be required to sell to the offeror all of
his shares of Common Stock in accordance with the terms of the offer and the
provisions of this Section 6.
(e) If neither offeree accepts either of the offeror's offers to sell or
to buy within the option period, the offeror shall have the right,
exercisable on or before the fifteenth (15th) day after the expiration of the
option period, to buy all of the shares of Common Stock of both the
non-responding offerees (but not less than all of such shares), and if the
offeror exercises such right, the non-responding offerees shall be required
to sell such shares to the offeror, in accordance with the terms of the offer
and the provisions of this Section 6.
(f) Examples illustrating the hypothetical situations set forth in
Section 6.3(a) through (e) above are set forth on Exhibit 6.3 hereto.
SECTION 6.4. ASSIGNMENT OF OPTION.
Any Stockholder/offeree accepting an offer of the Stockholder/offeror to
sell and thereby incurring the obligation to buy shares of Common Stock under
this Section 6,
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shall have the right to assign to TRC the right and obligation to buy such
shares from the selling Stockholder on the same terms and conditions as set
forth in the original offer from the selling Stockholder, provided each other
Stockholder purchasing shares of Common Stock pursuant to Section 6 agrees to
such assignment and provided TRC shall have the ability to assume and carry
out such assigned rights and obligations.
SECTION 6.5. CLOSING.
The closing of any purchase or sale pursuant to this Section 6 shall be
held at the time and place and on the date specified by the buyer(s) by
written notice to the seller(s), which date shall be on or before the later
of (i) forty (40) days after the determination of the Fair Market Value of
the shares to be purchased, or (ii) ten (10) days after the date the last
such option to purchase or sell has been exercised. At closing the seller(s)
shall tender all documents, duly executed, necessary to convey the shares of
Common Stock being sold, with full warranties of title and a written
representation that such Common Stock is free and clear of any liens, claims
or encumbrances, except as may be created by this Agreement, and the buyer(s)
shall tender the purchase price therefor in immediately available funds.
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SECTION 7
REGISTRATION RIGHTS
SECTION 7.1. PIGGYBACK REGISTRATION RIGHTS.
(a) If TRC proposes to file a Registration Statement in connection with
a Public Offering (as defined below) other than a Primary Option Public
Offering, TRC will provide written notice thereof to the Stockholders at
least sixty (60) days prior to the filing of the Registration Statement. For
purposes of this Agreement, "Registration Statement" shall mean a
registration statement on the appropriate form in order to register shares of
Common Stock under the Securities Act of 1933, as amended ("Securities Act")
(otherwise than in connection with the registration of shares of Common Stock
issuable pursuant to an employee stock option, stock purchase or similar plan
or pursuant to a merger, exchange offer or in a transaction of the type
specified in Rule 145(a) under the Securities Act); "Public Offering" shall
mean the offering of shares of Common Stock pursuant to a Registration
Statement, including a Registration Statement filed pursuant to Section 7.2
hereof; and "Underwriter" or "Underwriters" shall mean, in the case of a
Public Offering under Section 7.1, an underwriter selected by TRC or, in the
case of a Public Offering initiated under Section 7.2, an underwriter
selected by TRC and the
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Selling Stockholder, if any, owning the greatest number of shares of Common
Stock to be included in the offering. At the written request of any
Stockholder delivered to TRC within fifteen (15) days after the receipt of
such notice from TRC, which request shall state the number of shares of
Common Stock held by such Stockholder that such Stockholder wishes to sell
under the Registration Statement (shares of Common Stock held by any
Stockholder that are requested to be offered and sold pursuant to this
Section 7.1 together with shares of Common Stock that are requested to be
offered and sold pursuant to Section 7.2 are herein referred to as
"Registration Shares"), TRC agrees, subject to Section 7.1(b), to use its
best efforts to cause all of the Registration Shares to be registered under
the Securities Act on such Registration Statement to the extent and under the
conditions such registration is permissible under the Securities Act and the
rules and regulations of the Securities and Exchange Commission (the
"Commission") thereunder.
(b) A Stockholder's right to request TRC to include such Stockholder's
Registration Shares in a Public Offering pursuant to Section 7.1(a) is
subject to the following conditions. If, in an underwritten Public Offering
(whether or not TRC proposes to sell Common Stock), the managing
Underwriter(s) thereof advise TRC in writing that in their opinion the number
of
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shares of Common Stock requested to be included in such Public Offering
exceeds the number which can reasonably be sold in such Public Offering, TRC
will include in such registration (i) first, the shares that TRC proposes to
sell, and (ii) second, the Registration Shares that the Stockholders propose
to sell pro rata among such Stockholders on the basis of the number of shares
of Common Stock held by the Stockholders at the time the Registration
Statement is filed.
SECTION 7.2. DEMAND REGISTRATION RIGHTS.
(a) At any time after any Public Offering of Common Shares has been
made, Bass, ▇▇▇▇▇ or HI may, by written notice, request TRC to file on one
occasion each a Registration Statement in order to register all (or any
portion, as determined by such Stockholder) of the shares of Common Stock
owned by such Stockholder for resale pursuant to a Public Offering. Upon
receipt of such notice, TRC shall promptly (and in any event within ninety
(90) days) use its best efforts to file such Registration Statement under the
Securities Act with respect to such Stockholder's Registration Shares subject
to the following:
(i) If TRC has commenced taking action with respect to any
financing, acquisition, reorganization or other transaction or
development material to TRC, and in the reasonable and good faith
opinion of
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the TRC Board, filing a Registration Statement would not be in
the best interests of TRC, TRC may delay filing the
Registration Statement until the earlier of (A) the
termination of activities with respect to any such transaction
or development, or (B) the consummation or abandonment of any
agreement with respect to such transaction or development, or
(C) one hundred twenty (120) days following TRC's receipt of
such Stockholder's notice pursuant to this Section 7.2.
(ii) If filing a Registration Statement could require TRC to
undergo a special interim audit, and in the reasonable and
good faith opinion of the TRC Board, the cost of such special
interim audit would exceed $50,000, TRC may delay filing a
Registration Statement until ninety (90) days after the close
of the fiscal year in which the request by such Stockholder
for registration of shares of Common Stock is made, unless
such Stockholder agrees to reimburse TRC for the cost of such
special interim audit.
In the event that TRC elects to delay filing a Registration Statement in
accordance with this Section 7.2, it will promptly notify the requesting
Stockholder thereof. The requesting
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Stockholder may, within twenty (20) days following receipt of such notice,
decide to withdraw its request that TRC file a Registration Statement, in
which case the withdrawn request will not count as such Stockholder's
exercise of its right to request TRC to file a Registration Statement
pursuant to this Section 7.2.
(b) A Stockholder's right under Section 7.1(a) to request TRC to
include such Stockholder's Registration Shares in a Public Offering pursuant
to Section 7.2(a) is subject to the following conditions. If, in an
underwritten Public Offering (whether or not TRC proposes to sell Common
Stock), the managing Underwriter thereof advise TRC in writing that in its
opinion the number of shares of Common Stock requested to be included in
such Public Offering exceeds the number which can reasonably be sold in such
Public Offering, TRC will include in such registration (i) first, the
Registration Shares that the initiating Stockholder and the other
Stockholders propose to sell pro rata among such Stockholders on the basis of
the number of shares of Common Stock held by such Stockholders at the time
the Registration Statement is filed, and (ii) second, the shares, if any,
that TRC proposes to sell.
(c) If TRC so requests, it shall not be required to effect a Public
Offering under Section 7.2 for a period not to exceed nine (9) months
immediately following the date any other Public
- 65 -
Offering was commenced. If any Stockholder initiating a Public Offering under
this Section 7.2 so requests, TRC shall not and shall not be required to
initiate another Public Offering under either Section 7.1 of Section 7.2 for
a period not to exceed ninety (90) days immediately following the date on
which such first Public Offering initiated pursuant to this Section 7.2 was
commenced.
SECTION 7.3. PROCEDURES.
Whenever TRC shall include Registration Shares owned by a Stockholder
("Selling Stockholder") in a Registration Statement, TRC shall:
(i) promptly prepare and file with the Commission a Registration
Statement on an appropriate form with respect to the
Registration Shares (as well as any necessary amendments or
supplements thereto), and use its best efforts to cause the
Registration Statement to become promptly effective.
(ii) furnish to each Selling Stockholder copies of the
Registration Statement and any amendments or supplements
thereto and any prospectus forming a part thereof prior to
filing;
(iii) notify each Selling Stockholder, promptly after TRC shall
receive notice thereof, of the time
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when the Registration Statement became effective or when any
amendment or supplement to any prospectus forming a part of
the Registration Statement has been filed;
(iv) notify each Selling Stockholder promptly of any request by
the Commission for the amending or supplementing of such
Registration Statement or prospectus or for additional
information;
(v) advise each Selling Stockholder, after TRC shall receive
notice or obtain knowledge thereof, of the issuance of any
order by the Commission suspending the effectiveness of any
Registration Statement or amendment thereto or of the
initiation or threatening of any proceeding for that purpose,
and promptly use its best efforts to prevent the issuance of
any stop order or to obtain its withdrawal promptly if such
stop order should be issued;
(vi) prepare and file with the Commission such amendments and
supplements to the Registration Statement and the prospectus
forming a part thereof as may be necessary to keep the
Registration Statement effective for the lesser of (A) a
period of time necessary to permit each
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Selling Stockholder pursuant to the Registration Statement to
dispose of all of such Registration Shares, (B) nine (9) months
and (C) the maximum period of time permitted by law to keep
effective a registration statement, and comply with the
provisions of the Securities Act with respect to the
disposition of all shares of Common Stock covered by such
Registration Statement during such period in accordance with
the intended methods of disposition by each Selling Shareholder
set forth in the Registration Statement;
(vii) use its best efforts to register or qualify such Registration
Shares under such other securities or blue sky laws of such
jurisdictions as determined by the managing Underwriter after
consultation with TRC (or if there is no Underwriter, as
determined by TRC) and do any and all other acts and things
which may be reasonably necessary or advisable to enable each
Selling Stockholder to consummate the disposition in such
jurisdictions of the Registration Shares; provided that TRC
will not be required (except for the State of Tennessee) to (A)
qualify
- 68 -
generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this paragraph, (B)
subject itself to taxation in any such jurisdiction or (C)
consent to general service of process in any such jurisdiction;
(viii) notify each Selling Stockholder, during any period when a
prospectus is required to be delivered under the Securities
Act, of the happening of any event as a result of which the
prospectus contains an untrue statement of a material fact or
omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading,
and, at the request of each Selling Stockholder, prepare a
supplement or amendment to such prospectus so that such
prospectus will not contain an untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading;
(ix) use its best efforts to cause all Registration Shares to be
listed on at least one securities exchange or the NASDAQ System
and comply with the
- 69 -
applicable requirements of such exchange or the NASDAQ System
and the applicable rules and regulations under the Securities
and Exchange Act of 1934;
(x) provide a transfer agent and registrar for all such
Registration Shares not later than the effective date of the
Registration Statement;
(xi) enter into such customary agreements (including an underwriting
agreement in customary form) and take all such other actions as
the Selling Stockholder or the Underwriter(s), if any,
reasonably request in order to expedite or facilitate the
disposition of the Registration Shares (including, without
limitation, effecting a stock split or a combination of shares);
(xii) make available for inspection by each Selling Stockholder, any
Underwriter participating in any disposition pursuant to such
Registration Statement, and any attorney, accountant or other
agent retained by each Selling Stockholder or such Underwriter,
all financial and other records, pertinent corporate documents
and properties of TRC, and cause TRC's officers, directors and
employees to supply all information
- 70 -
reasonably requested by each Selling Stockholder, or an
underwriter, attorney, accountant or agent in connection with
such Registration Statement;
(xiii) use its best efforts to cause Registration Shares covered by
such Registration Statement to be promptly registered with or
approved by such other governmental agencies or authorities as
may be necessary to enable each Selling Stockholder to
consummate the disposition of such Registration Shares;
(xiv) obtain a cold comfort letter from TRC's independent public
accountants in customary form and covering such matters of the
type customarily covered by cold comfort letters; and
(xv) cause TRC's counsel to provide customary legal opinions in
connection with such Registration Statement.
SECTION 7.4. INDEMNIFICATION.
TRC will indemnify and hold harmless each Stockholder, the officers,
directors, partners and partners of partners of such Stockholder, and each
Underwriter of shares of Common Stock sold pursuant to Section 3.9, 7.1 or
7.2 (and any person who controls such Stockholder or any such Underwriter
within the meaning of Section 15 of the Securities Act) against all
- 71 -
claims, losses, damages, liabilities and expenses resulting from any untrue
statement or alleged untrue statement of a material fact contained in a
Registration Statement or in any related prospectus, notification or the like
and from any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as the same may have been based on information
furnished in writing to TRC by such Stockholder or such Underwriter expressly
for use therein and use in accordance with such writing. Each Stockholder, by
acceptance of the registration provisions provided herein, agrees to furnish
to TRC such information concerning such Stockholder and the proposed sale or
distribution as shall, in the opinion of counsel for TRC, be necessary in
connection with any such registration or qualification of any shares of stock
proposed to be made pursuant to Section 3.9, 7.1 or 7.2 and to indemnify and
hold harmless TRC, its officers and directors, each of its Underwriters and
the other Stockholders (and any person who controls TRC or such Underwriters
or such other Stockholders within the meaning of Section 15 of the Securities
Act and the officers, directors, partners and partners of partners of such
Stockholders) against all claims, losses, damages, liabilities and expenses
resulting from any untrue statement or alleged
- 72 -
untrue statement of a material fact furnished in writing to TRC by such
Stockholder expressly for use in connection with such registration or
qualification and used in accordance with such writing and from any omission
therefrom or alleged omission therefrom of a material fact needed to be
furnished or necessary to make the information furnished not misleading.
If any party (the "Indemnitee") receives notice of any claim or the
commencement of any action or proceeding with respect to which any other
party (or parties) is obligated to provide indemnification (the "Indemnifying
Party") pursuant to this Section 7.4, the Indemnitee shall promptly give the
Indemnifying Party notice thereof. If the Indemnitee does not promptly give
this notice, the Indemnifying Party shall not be obligated to provide
indemnification hereunder to the extent that the liability for which such
indemnification is claimed could have been avoided or mitigated if the
Indemnitee had promptly given notice to the Indemnifying Party. The
Indemnifying Party may compromise, defend or settle, at such Indemnifying
Party's own expense and by such Indemnifying Party's own counsel, any such
matter involving the asserted liability of the Indemnitee. If the
Indemnifying Party chooses to defend any claim, the Indemnitee shall make
available to the Indemnifying Party any books, records or other documents
within its control that are necessary or appropriate for such defense.
SECTION 7.5. EXPENSES.
TRC shall pay all of the expenses in connection with a
- 73 -
Public Offering in which a Selling Stockholder participates in accordance
with Section 7.1 or 7.2, including, without limitation, costs of complying
with federal and state securities laws and regulations, attorneys' and
accounting fees of TRC, printing expenses and federal and state filing fees,
except that transfer taxes, underwriting commissions, fees and expenses
incurred by the Selling Stockholders and fees and disbursements of counsel
(if any) to the Selling Stockholders will be borne by the Selling
Stockholders.
SECTION 8
MISCELLANEOUS
SECTION 8.1. ISSUANCE OF ADDITIONAL COMMON STOCK.
Except in connection with a Public Offering initiated by TRC described
in Sections 3.9 or 7.1 hereof, TRC agrees not to issue, and the Stockholders
agree not to cause TRC to issue, additional shares of Common Stock to any
persons or entities who are not parties to this Agreement unless (i) such
issuance is in accordance with the Bylaws of TRC, (ii) such persons agree in
writing to be bound by the terms and conditions of this Agreement, and (iii)
the stock certificates representing such shares bear the legend set forth in
Section 8.6 of this Agreement, with such additions or deletions as may be
- 74 -
determined appropriate by counsel to TRC.
SECTION 8.2. NEW STOCKHOLDERS.
Any shares of Common Stock transferred by a Stockholder to a person or
entity not presently a party to this Agreement (except with respect to
transfers pursuant to a Public Offering) shall remain subject to the terms,
conditions and restrictions of this Agreement.
SECTION 8.3. SPECIFIC PERFORMANCE.
In any action or proceeding to enforce the provisions of this Agreement,
any person (including TRC) against whom such action or proceeding is brought
hereby waives the claim or defense therein that the plaintiff or claimant has
an adequate remedy at law, and such person shall not urge in any such action
or proceeding the claim or defense that such remedy at law exists. The
provisions of this Section 8.3, however, shall not prevent any party from
seeking a remedy at law in connection with any breach of this Agreement.
SECTION 8.4. NOTICES.
Any and all notices, designations, consents, offers, acceptances, or any
other communications provided for in this Agreement shall be given in writing
by personal delivery or by telegram, telex, air courier, or registered or
certified mail which shall be addressed, in the case of TRC or any corporate
Stockholder, to its principal executive office to the attention
- 75 -
of the Secretary, and in the case of an individual Stockholder to his
residence address or such other address as may be designated by such
person. All notices hereunder shall be deemed to have been given on
the date received; provided that with respect to any notices given by
registered or certified mail, such notices shall be deemed to have
been given on the third (3rd) business day following mailing of such
notices by certified or registered mail.
SECTION 8.5. AMENDMENTS.
No change, amendment, or modification of this Agreement shall be
valid unless it is in writing and signed by TRC and the holders of at
least ninety-five (95) percent of the issued and outstanding Common
Stock. In the event of an initial Public Offering (as defined in
Section 7.1(a) or Section 3.9), the parties hereto agree not to
withhold consent unreasonably to any amendment to this Agreement
necessary to effect such Public Offering.
SECTION 8.6. LEGEND ON STOCK CERTIFICATES.
Upon the execution of this Agreement, the certificates
representing the shares of Common Stock subject hereto shall be
surrendered to TRC and endorsed substantially as follows:
"The shares represented by this certificate are
subject to the provisions contained in a
Stockholders Agreement dated the 21 day of
November, 1985, between and among TRC and the
holders of Common Stock thereof, a copy of which
- 76 -
is on file in the office of TRC. No transfer or
encumbrance of the shares represented hereby may
be made except in accordance with such Agreement."
After endorsement, the certificates shall be returned to the
Stockholders who shall, subject to the terms of this Agreement, be
entitled to exercise all rights of ownership of such Common Stock.
All certificates for Common Stock hereinafter newly issued or
transferred shall bear the same endorsement, unless such endorsement
is inapplicable with respect to such shares pursuant to the terms of
this Agreement. At such time as the restrictions of this Agreement
cease to apply to any shares of Common Stock, the certificates
representing such shares may be surrendered to TRC for removal of the
above endorsement and, if necessary, new certificates shall be issued
in replacement thereof.
SECTION 8.7. WAIVERS.
Nothing contained in this Agreement shall prevent the waiver of
the provisions of this Agreement by the parties hereto. No party to
this Agreement, however, shall be deemed to have waived any of its
rights under this Agreement unless such waiver shall be in writing
and signed by such party. A waiver on any one occasion shall not be
construed as a bar to
- 77 -
or waiver of any right on any future occasion.
SECTION 8.8. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of
which shall be an original but all of which together shall constitute one and
the same instrument.
SECTION 8.9. BENEFIT AND ASSIGNMENT.
All of the terms, covenants, agreements and conditions contained in this
Agreement shall be binding upon and inure to the benefit of all of the
parties hereto, and their respective heirs, executors, administrators,
successors and permitted assigns. Other than as provided herein, no party
hereto shall have the right to assign any of its rights and obligations under
this Agreement without the prior written consent of each of the other parties.
SECTION 8.10. GOVERNING LAW.
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware.
SECTION 8.11. CONFLICT WITH BY-LAWS.
In the event of any conflict between the terms and provisions of this
Agreement and the terms and provisions of the Bylaws of TRC, the terms and
provisions of this Agreement shall control.
SECTION 8.12. GENDER.
As used in this Agreement, the masculine or neuter gender shall be
construed to mean the masculine, feminine or neuter
- 78 -
gender, as appropriate.
SECTION 8.13. COMPLIANCE WITH SECURITIES LAWS.
Any transfer of shares of Common Stock otherwise permitted or required
by this Agreement shall be in compliance with applicable state and federal
securities laws, and TRC may require an opinion of counsel of the transferor
as to such compliance.
SECTION 8.14. IRONS AND ▇▇▇▇▇▇▇ SHARES.
(a) For purposes of this Agreement, the "FMV Shares" at any time are the
"Employment Shares" which, at the time of determination, are "vested" (as
such terms are defined in the Employment Agreements of even date herewith
between TRC, on the one hand, and ▇▇▇▇▇▇▇ and Irons, on the other hand (the
"Stockholder Employment Agreements")) and which TRC has the right to purchase
pursuant to Paragraph 4(g) of the Stockholder Employment Agreements.
(b) In the event of any Voluntary Termination (as defined in the
Stockholder Employment Agreements) prior to July 1, 1988 of either ▇▇▇▇▇▇▇ or
Irons, ▇▇▇▇▇ will (irrespective of TRC's exercise or decision not to exercise
the right to purchase the FMV Shares of ▇▇▇▇▇▇▇ or Irons, as the case may be,
pursuant to Paragraph 4(g) of the Stockholder Employment Agreements) within
sixty (60) days after such Voluntary Termination do one of the following (at
▇▇▇▇▇'▇ election): (i) pay cash to TRC in an amount equal to the Fair Market
Value (as defined in and
- 79 -
determined pursuant to, the Stockholder Employment Agreements) of the FMV
Shares of ▇▇▇▇▇▇▇ or Irons, as the case may be; (ii) transfer to each of HI
and Bass (for a purchase price of $.01 per share) a number of shares of
Common Stock equal to one-third of the number of the FMV Shares of ▇▇▇▇▇▇▇ or
Irons, as the case may be; or (iii) deliver to TRC any combination of cash
pursuant to clause (i) and shares pursuant to clause (ii) above.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
Attest TENNESSEE RESTAURANT COMPANY
/s/ [Illegible] By: /s/ ▇. ▇. ▇▇▇▇▇
--------------------------- -------------------------------
Secretary President
[CORPORATE SEAL]
STOCKHOLDERS:
Attest: HOLIDAY INNS, INC.
/s/ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ By: /s/ ▇. ▇. ▇▇▇▇▇▇▇▇
--------------------------- ------------------------------
Assistant Secretary Title: Vice President
------------------------
[CORPORATE SEAL]
(Signatures continued next page)
- 80 -
EXHIBIT 2.4
Forms of Irrevocable Limited Proxies to ▇▇▇▇▇ and Bass
IRREVOCABLE LIMITED PROXY TO ▇▇▇▇▇
The capitalized terms used herein, unless otherwise indicated, shall
have the same meanings assigned to such terms in that certain Stockholders
Agreement, dated November ___, 1985, by and among Tennessee Restaurant
Company ("TRC") and its stockholders (the "Stockholders Agreement").
Pursuant to Section 212 of the General Corporation Law of the State of
Delaware, HI hereby grants to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (the "Proxy Holder") an
irrevocable limited proxy to vote (which shall include the right to take part
in and consent to any stockholder action), in the absolute discretion of the
Proxy Holder, at any duly convened meeting of the stockholders of TRC or in
any consent action of stockholders of TRC, 13,400 shares of the Common Stock
of TRC that the undersigned would otherwise be entitled to vote, with respect
to any matter submitted to a vote of the stockholders of TRC or any matter
submitted to a vote of the stockholders of TRC or any matter that is the
subject of a consent action; provided, however, that this irrevocable limited
proxy expressly does not apply to, or entitle the Proxy Holder to vote with
respect to, the election to or removal from office of the chairman or chief
executive officer of TRC.
This irrevocable limited proxy shall expire on the earliest of (i)
November ___, 1995, (ii) the commencement of Stage Two or Stage Three, (iii)
the termination for any reason of the Proxy Holder as chairman or chief
executive officer of TRC prior to the commencement of Stage Two or Stage
Three, or (iv) the termination of the Stockholders Agreement.
This irrevocable proxy is coupled with an interest sufficient in law to
support an irrevocable proxy, and shall be and remain in full force and
effect until its expiration in accordance with the terms hereof. This
irrevocable limited proxy may not be assigned by the Proxy Holder to any
person.
IN WITNESS WHEREOF, the undersigned has caused this irrevocable limited
proxy to be executed and delivered by its duly authorized officer this ___
day of November, 1985.
HOLIDAY INNS, INC.
By:
------------------------------------
Title:
---------------------------------
Sworn to and subscribed
before me this ____
day of November, 1985.
-----------------------------------
Notary Public
My commission expires:
-----------------------------------
Witness
EXHIBIT 2.4, CONTINUED
IRREVOCABLE LIMITED PROXY TO BASS
The capitalized terms used herein, unless otherwise indicated, shall
have the same meanings assigned to such terms in that certain Stockholders
Agreement, dated November __, 1985, by and among Tennessee Restaurant Company
("TRC") and its stockholders (the "Stockholders Agreement").
Pursuant to Section 212 of the General Corporation Law of the State of
Delaware, HI hereby grants to Bass Investment Limited Partnership (the "Proxy
Holder") an irrevocable limited proxy to vote (which shall include the right
to take part in and consent to any stockholder action), in the absolute
discretion of the Proxy Holder, at any duly convened meeting of the
stockholders of TRC, or in any consent action of stockholders of TRC, 13,400
shares of the Common Stock of TRC that the undersigned would otherwise be
entitled to vote, with respect to any matter submitted to a vote of the
stockholders of TRC or any matter that is the subject of a consent action;
provided, however, that this irrevocable limited proxy expressly does not
apply to, or entitle the Proxy Holder to vote with respect to, the election
to or removal from office of the chairman or chief executive officer of TRC.
This irrevocable limited proxy shall expire on the earliest of (i)
November 1, 1995, (ii) the commencement of Stage Two or Stage Three, or (iii)
the termination of the Stockholders Agreement.
This irrevocable proxy is coupled with an interest sufficient in law to
support an irrevocable proxy, and shall be and remain in full force and
effect until its expiration in accordance with the terms hereof. This
irrevocable limited proxy may not be assigned by the Proxy Holder to
any person.
IN WITNESS WHEREOF, the undersigned has caused this irrevocable limited
proxy to be executed and delivered by its duly authorized officer this ____
day of November, 1985.
HOLIDAY INNS, INC.
By:
---------------------------
Title:
------------------------
Sworn to and subscribed
before me this ______
day of November, 1985.
--------------------------------
Notary Public
My commission expires:
--------------------------------
Witness
EXHIBIT 3.7
Resolution Establishing Primary Option Committee
WHEREAS, the Corporation and its stockholders have entered into a
Stockholders Agreement dated November ___, 1985 (the "Stockholders
Agreement"); and
WHEREAS, Section 3.7 of the Stockholders Agreement contemplates the
establishment of a committee of the Board of Directors of the Corporation to
be known as the Primary Option Committee;
NOW THEREFORE, BE IT RESOLVED, that there be and hereby is established a
committee of the Board of Directors of the Corporation to be known as the
Primary Option Committee which shall consist at all times of the director(s)
of the Corporation other than the director(s) designated by the holder(s) of
the Class H Stock, as defined in the Stockholders Agreement, or by Holiday
Inns, Inc. The Primary Option Committee shall have the exclusive authority to
exercise the Primary Option, as defined in the Stockholders Agreement, and to
take such other actions (including without limitation Significant Director
Actions, as defined in the Bylaws of the Corporation) as may be required to
enable the Corporation to consummate the purchase of the Primary Option
Shares, as defined in the Stockholders Agreement, in accordance with the
Stockholders Agreement, including without limitation Section 3.8 thereof. Any
action taken by the Primary Option Committee shall require the unanimous vote
of all of the members thereof.
EXHIBIT 4.2
Resolution Establishing Stage One ▇▇▇▇▇ Call Option Committee
WHEREAS, the Corporation and its stockholders have entered into a
Stockholders Agreement dated November ___, 1985 (the "Stockholders
Agreement"); and
WHEREAS, Section 4.2 of the Stockholders Agreement contemplates the
establishment of a committee of the Board of Directors of the Corporation to
be known as the Stage One ▇▇▇▇▇ Call Option Committee;
NOW THEREFORE, BE IT RESOLVED, that there be and hereby is established a
committee of the Board of Directors of the Corporation to be known as the
Stage One ▇▇▇▇▇ Call Option Committee which shall consist at all times of the
director(s) of the Corporation designated by the holder(s) of the Class H
Stock, as defined in the Stockholders Agreement. The Stage One ▇▇▇▇▇ Call
Option Committee shall have the exclusive authority to exercise the Stage One
▇▇▇▇▇ Call Option, as defined in the Stockholders Agreement, and to take such
other actions (other than Significant Director Actions, as defined in the
Bylaws of the Corporation) as may be required to enable the Corporation to
consummate the purchase of the Class S Stock, as defined in the Stockholders
Agreement, pursuant to the exercise of the Stage One ▇▇▇▇▇ Call Option.
EXHIBIT 5.3
Resolution Establishing First Refusal Option Committee
WHEREAS, the Corporation and its stockholders have entered into a
Stockholders Agreement dated November ___, 1985 (the "Stockholders
Agreement"); and
WHEREAS, Section 5.3 of the Stockholders Agreement contemplates the
establishment of a committee of the Board of Directors of the Corporation to
be known as the First Refusal Option Committee;
NOW THEREFORE, BE IT RESOLVED, that there be and hereby is established a
committee of the Board of Directors of the Corporation to be known as the
First Refusal Option Committee which shall consist at all times of the
director(s) of the Corporation other than the director(s) designated by the
Transferring Stockholder, as defined in the Stockholders Agreement, or its
transferees. The First Refusal Option Committee shall have the exclusive
authority to exercise any option of first refusal available to the
Corporation pursuant to Section 5 of the Stockholders Agreement and to take
such other actions (including without limitation Significant Director
Actions, as defined in the Bylaws of the Corporation) as may be required to
enable the Corporation to consummate the transactions necessary in connection
therewith. Any action taken by the First Refusal Option Committee shall
require the unanimous vote of all of the members thereof.
EXHIBIT 6.3
BUY-SELL OPTION HYPOTHETICAL ILLUSTRATIONS
Assumptions:
Prior to exercise of any Buy/Sell Option:
Stockholder X holds 10 shares
Stockholder Y holds 10 shares
Stockholder Z holds 10 shares
OFFER AND RESPONSE RESULT AFTER EXERCISE
-----------------------------------------------------------------------------
Y
| X would hold 30 shares
a) \/ Sell Y would hold 0 shares
X ----------- > Z would hold 0 shares
Buy/Sell /\ Sell
|
Z
-----------------------------------------------------------------------------
Y
| X would hold 0 shares
b) \/ Buy Y would hold 15 shares
X ----------- > Z would hold 15 shares
Buy/Sell /\ Buy
|
Z
-----------------------------------------------------------------------------
OFFER AND RESPONSE RESULT AFTER EXERCISE
-----------------------------------------------------------------------------
Y
| X would hold 0 shares
c) \/ Buy Y would hold 30 shares
X ----------- > Z would hold 0 shares
Buy/Sell /\ Sell
|
Z
OR
Y
| X would hold 0 shares
\/ Buy If Y opts to buy Z's 10 shares,
X ----------- > then Y would hold 30
Buy/Sell /\ No Response shares and Z would hold
| 0 shares.
Z If Y does NOT opt to buy
Z's 10 shares, Y would
own 20 shares and Z would
continue to own 10 shares.
-----------------------------------------------------------------------------
Y Y would hold 0 shares
|
\/ Sell If X opts to buy Z's 10
X ----------- > shares, X would hold 30
Buy/Sell /\ No Response shares and Z would hold
| 0 shares.
Z
If X does NOT opt to buy Z's
shares, X would hold 20
shares and Z would continue
to hold 10 shares.
-----------------------------------------------------------------------------
Y If X opts to buy both Y's
| 10 shares AND Z's 10
\/ No Response shares, X would hold 30
X ----------- > shares and Y and Z would
Buy/Sell /\ No Response each hold 0 shares.
|
Z If X does not opt to buy all
of Y's shares AND all of
Z's shares, X would continue
to own 10 shares and Y and
Z would each continue to
own 10 shares.
-----------------------------------------------------------------------------
BASS INVESTMENT LIMITED PARTNERSHIP
By: BMA Limited Partnersip,
General Partner
By: /s/ Dort ▇. ▇▇▇▇▇▇▇, III
------------------------------
Dort ▇. ▇▇▇▇▇▇▇, III,
General Partner
/s/ ▇. ▇. ▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇
------------------------------------
▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-81-
BASS INVESTMENT LIMITED PARTNERSHIP
By: BMA Limited Partnersip,
General Partner
By: /s/ Dort ▇. ▇▇▇▇▇▇▇, III
------------------------------
Dort ▇. ▇▇▇▇▇▇▇, III,
General Partner
/s/ ▇. ▇. ▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇
------------------------------------
▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
BASS INVESTMENT LIMITED PARTNERSHIP
By: BMA Limited Partnership,
General Partner
By: /s/ Dort ▇. ▇▇▇▇▇▇▇, III
------------------------------------
Dort ▇. ▇▇▇▇▇▇▇, III,
General Partner
/s/ ▇. ▇. ▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇