Exhibit 4.8
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STOCKHOLDERS' AGREEMENT
Dated as of May 8, 1998
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions................................ 2
ARTICLE II
GENERAL PROVISIONS RELATING TO TRANSFER OF
SHARES AND VOTING TRUST CERTIFICATES
SECTION 2.01. General Restrictions....................... 6
SECTION 2.02. Condition to Restricted Transfers;
Non-Conforming Transfers................. 6
ARTICLE III
TRANSFERS OF SHARES BY THE H&F INVESTORS
SECTION 3.01. Restrictions on Transfers.................. 7
ARTICLE IV
TRANSFERS OF SHARES AND VOTING TRUST CERTIFICATES
BY THE MANAGEMENT INVESTORS AND THE MANAGEMENT VOTING TRUST
SECTION 4.01. Right of First Refusal of the Company
and the H&F Investors.................... 8
SECTION 4.02. Transfer of Payments by the Management
Voting Trust to the Management
Investors ............................... 10
ARTICLE V
GOVERNANCE AND MANAGEMENT OF CORPORATION
.
SECTION 5.01. Board of Directors......................... 10
SECTION 5.02. Delaware Statute........................... 11
ARTICLE VI
MISCELLANEOUS
SECTION 6.01. Termination................................ 11
SECTION 6.02. Legend..................................... 12
SECTION 6.03. Binding Effect; Successors................. 12
SECTION 6.04. Amendment and Waiver....................... 12
SECTION 6.05. Governing Law.............................. 12
SECTION 6.06. Specific Performance....................... 12
SECTION 6.07. Unenforceability........................... 13
SECTION 6.08. Headings................................... 13
SECTION 6.09. Copies on File............................. 13
SECTION 6.10. Notices.................................... 13
SECTION 6.11. Waiver and Consent......................... 14
SECTION 6.12. Recapitalizations, Exchanges, Etc.
Affecting the Company's Stock............ 14
SECTION 6.13. Counterparts............................... 14
ii
STOCKHOLDERS' AGREEMENT (the "Agreement") dated as of
May 8, 1998, by and among the H&F Investors, the Management
Investors and the Management Voting Trust (as such terms are
defined herein) (with each of the foregoing parties, together
with such additional signatories as may be deemed added from time
to time pursuant to Section 2.02 hereof, being referred to herein
as the "Stockholders") and Young & Rubicam Inc., a Delaware
corporation (the "Company").
WHEREAS, the Stockholders, together with certain other
stockholders, collectively own all of the outstanding shares of
common stock, par value $.01 per share, of the Company (the
"Common Stock"), and, together with such other stockholders, are
parties to a Stockholders' Agreement (the "Prior Agreement")
dated as of December 12, 1996 providing for, among other things,
the rights of the parties thereto to hold and dispose of the
Common Stock, the voting of the Common Stock, the governance and
management of the Company and certain other matters;
WHEREAS, in connection with an initial public offering
by the Company, and a secondary offering by the H&F Investors and
certain other stockholders (collectively the "Offerings"), the
parties to the Prior Agreement wish to amend and restate the
Prior Agreement, to eliminate certain stockholders as parties
thereto, to eliminate a number of provisions set forth therein,
and to restate other provisions as set forth herein;
WHEREAS, by a letter agreement of even date herewith,
the parties to the Prior Agreement are, among other things, (1)
acknowledging that it does not restrict the sale of Common Stock
in the Offerings or prohibit the parties thereto from entering
into agreements to effect such Offerings and (2) acknowledging
the termination of such Prior Agreement, effective as of the
closing of the Offerings;
WHEREAS, effective upon the closing of the Offerings,
this Agreement shall become effective and shall supersede the
Prior Agreement in all respects;
WHEREAS, by a letter agreement of even date herewith,
the parties to the HFCP Voting Trust Agreement (as defined
herein) are acknowledging its termination effective as of the
closing of the Offerings;
WHEREAS, concurrently with the execution and delivery
of the Prior Agreement, (a) each of the Initial Management
Investors (as defined therein), the Company, certain predecessors
of the Company and certain voting trustees entered into a voting
trust agreement, dated as of December 12, 1996 (the "Management
Voting Trust Agreement"), pursuant to which each of the Initial
Management Investors assigned and transferred all of the Common
Stock held by such Initial Management Investor to a voting trust
created by the Management Voting Trust Agreement (the "Management
Voting Trust") and agreed to deposit into the Management Voting
Trust any shares of Common Stock which such Initial Management
Investor thereafter acquired (including pursuant to the exercise
of any options or any distribution from the Restricted Stock
Trust), (b) the Management Voting Trust delivered or caused to be
delivered to each Initial Management Investor voting trust
certificates representing the Common Stock so deposited by
such Initial Management Investor and agreed to deliver voting
trust certificates with respect to all shares of Common Stock and
other securities subsequently deposited into the Management
Voting Trust (all such voting trust certificates, the "Voting
Trust Certificates");
WHEREAS, pursuant to the irrevocable unanimous written
consent of the voting trustees, effective twenty-four months
after the closing of the Offerings, the Management Voting Trust
will terminate, unless terminated earlier in accordance with its
terms;
WHEREAS, pursuant to the Management Voting Trust
Agreement, the Management Voting Trust has authority to take
certain actions on behalf of the Initial Management Investors
under the Prior Agreement and has authority to take certain
actions hereunder on behalf of the Management Investors,
including entering into this Agreement;
NOW, THEREFORE, in consideration of the premises and
the mutual representations, warranties, covenants and agreements
hereinafter set forth, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. For all purposes of this
Agreement, the following terms shall have the meanings set forth
below:
"Affiliate" has the meaning set forth in Rule 12b-2
under the Exchange Act.
"Agreement" has the meaning set forth in the
introductory paragraph hereof.
"Beneficial Ownership" and "beneficially own" and
similar terms have the meaning ascribed thereto in Rule 13d-3
under the Exchange Act.
"Board" means the Board of Directors of the Company.
"Company" has the meaning set forth in the introductory
paragraph hereof.
"Common Stock" has the meaning set forth in the first
recital paragraph hereof.
"Contribution Agreement" means the Contribution
Agreement, dated October 30, 1996, among the H&F Investors, the
Company and certain other parties.
"Derivative Security," with respect to a Person, means
all options, warrants or other rights to acquire, or obligations
to issue, shares of capital stock of, equity interests in, or
partnership interests in, such Person, or similar securities or
contractual obligations the value of which is derived from the
value of an equity interest in such Person, or securities
convertible into
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or exchangeable for capital stock of, equity interests in,
partnership interests in, or similar securities or contractual
obligations of, such Person.
"Executive Options" means the options to acquire
Common Stock issued as such under the Company's Stock Option
Plan.
"Exchange Act" means the Securities Exchange Act of
1934, as amended, and the regulations promulgated thereunder.
"H&F Designees" has the meaning set forth in Section
5.01(a) hereof.
"H&F Investors" means, collectively, HFCP, H&F Orchard
Partners III, L.P., a California limited partnership, H&F
International Partners III, L.P., a California limited
partnership, together with any transferee of Shares from any of
the foregoing in a Restricted Transfer permitted under Articles
II and III who is required thereunder to become a party hereto.
"HFCP" means ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Capital Partners III,
L.P., a California limited partnership.
"HFCP Options" means the options to purchase Common
Stock issued to the H&F Investors in connection with the
Contribution Agreement.
"HFCP Voting Trust Agreement" means the voting trust
agreement dated as of December 12, 1996 by and among the Company,
certain predecessors of the Company, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and the H&F
Investors.
"Initial Management Investors" means each of the
Persons listed on Schedule 3 to the Prior Agreement.
"Management Investors" means the Initial Management
Investors, together with any individuals who became or become
holders of Shares after December 12, 1996 (other than
the HFCP Investors, their Affiliates and permitted transferees)
who became or were or are required to become parties to the Prior
Agreement or this Agreement and the Management Voting Trust
Agreement in accordance with the terms hereof and thereof, but
excludes (i) any Person who was a party to the Management Voting
Trust Agreement, but has ceased to be a party in accordance with
the terms thereof and (ii) any Person that is not an employee of
the Company or its subsidiaries.
"Management Voting Trust" has the meaning set forth in
the sixth recital paragraph hereof.
"Management Voting Trust Agreement" has the meaning
set forth in the sixth recital paragraph hereof.
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"Money Market Preferred Stock" means the money market
preferred stock, without par value, of the Company.
"Non-Conforming Transfer" has the meaning set forth in
Section 2.02(b) hereof.
"Non-Conforming Transferee" has the meaning set forth
in Section 2.02(b) hereof.
"Non-Restricted Transfer" has the meaning set forth in
Section 2.01.
"Notice of Proposed Transfer" has the meaning set forth
in Section 3.01(a) hereof.
"Options" means Executive Options and Roll-Over
Options.
"Outstanding Shares" as of a given time means the sum
of (a) the number of shares of Common Stock then issued and
outstanding (including all shares of Common Stock held in the
Restricted Stock Trust) and (b) the number of shares of Common
Stock issuable upon exercise of (1) the HFCP Options and the
Roll-Over Options and (2) all other options, warrants and rights
to acquire, and the conversion of any securities convertible
into, shares of Common Stock, to the extent such rights to
acquire shares of Common Stock are then exercisable. When
calculating the percentage of the Outstanding Shares owned by a
specified Person, such Person shall be deemed to own all shares
of Common Stock beneficially owned by such Person (A) assuming
the exercise of all of such Person's options, warrants and rights
to acquire, and the conversion by such Person of any securities
convertible into, shares of Common Stock only to the extent such
rights to acquire shares of Common Stock are then exercisable by
such Person and (B) in the case of any Management Investor,
assuming such Management Investor beneficially owns all shares of
Common Stock allocated to him or her under the Restricted Stock
Trust, whether or not then vested. For purposes of calculating
the percentage owned by the Management Voting Trust, the
Management Voting Trust shall be deemed to own all shares of
Common Stock (including all shares of Common Stock required to be
deposited thereunder upon exercise of vested options) then
subject to the Management Voting Trust.
"Person" means any individual or corporation, company,
incorporated or unincorporated association or organization,
limited liability company, partnership, estate, trust, joint
venture or other entity of any kind, including any pension,
profit sharing or other benefit plan or trust, and any
governmental authority.
"Restricted Stock" means the Common Stock issued by
the Company pursuant to the Restricted Stock Plan to the
Restricted Stock Trust on December 12, 1996.
"Restricted Stock Plan" means the Restricted Stock
Plan in the form attached to the Contribution Agreement as
Exhibit 6.
"Restricted Stock Trust" has the meaning set forth in
the Contribution Agreement.
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"Restricted Stock Trust Agreement" means the
Restricted Stock Trust Agreement in the form attached to the
Contribution Agreement as Exhibit 7.
"Restricted Transfer" has the meaning set forth in
Section 2.01 hereof.
"Roll-Over Options" means the options to acquire
Common Stock issued as Roll-Over Options under the Stock Option
Plan.
"Shares" shall mean (a) all shares of Common Stock
issued and outstanding as of, and from and after, December 12,
1996 through the date hereof (including without limitation, all
shares of Restricted Stock), together with any other shares of
Common Stock or other capital stock of the Company entitling the
record owner thereof to vote in elections of directors generally
which are issued by the Company during the life of this Agreement
to any Person who is, by the terms of this Agreement or
otherwise, required to subject such shares to this Agreement, and
(b) any economic interest in such shares, whether or not
constituting Beneficial Ownership of such shares (including,
without limitation, the HFCP Options, Roll-Over Options,
Executive Options, interests in the Restricted Stock Trust, and
any other options, warrants or rights to acquire such shares).
"Stock Option Plan" means the Stock Option Plan in the
form attached to the Contribution Agreement as Exhibit 8, setting
forth the terms and conditions upon which Roll-Over Options and
Executive Options may be granted to key employees of the Company.
"Stockholders" has the meaning set forth in the
introductory paragraph hereof.
"Termination Percentage" has the meaning set forth in
Section 3.01.
"Transfer" has the meaning set forth in Section 2.01
hereof.
"Ultimate General Partner" means H&F Investors III,
Inc., a California corporation, as managing general partner of
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Associates III, L.P., a California limited
partnership, as managing general partner of H&F Investors III, a
California general partnership, as general partner of each of the
H&F Investors which is a partnership.
"Voting Trust Certificates" has the meaning set forth
in the sixth recital paragraph hereof.
"Voting Trustees" has the meaning set forth in the
Management Voting Trust Agreement.
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ARTICLE II
GENERAL PROVISIONS RELATING TO
TRANSFER OF SHARES AND VOTING TRUST CERTIFICATES
SECTION 2.01. General Restrictions. Each Stockholder
agrees with each other Stockholder and the Company that, during
the time periods when the restrictions on transfer specified in
Articles III and IV hereof apply to such Stockholder, such
Stockholder shall not directly or indirectly sell, transfer,
assign, pledge, hypothecate or otherwise encumber or dispose of
any Shares (or any related Voting Trust Certificates) (each, a
"Transfer") except in compliance with the restrictions in
Articles III and IV; provided, however, that no Shares or any
related Voting Trust Certificates shall, in any event, be
Transferred if such Transfer would violate any United States
federal or state or foreign securities laws. A Transfer that is
not subject to Article III or Article IV, in the sense that it
does not require compliance with the procedures set forth
therein, is referred to herein as a "Non-Restricted Transfer". A
Transfer that is permitted after the procedures set forth in
Article III or Article IV have been complied with is referred to
as a "Restricted Transfer".
SECTION 2.02. Condition to Restricted Transfers;
Non-Conforming Transfers. (a) During the time periods when
restrictions on transfer apply to a Stockholder, no Restricted
Transfer of Shares or any related Voting Trust Certificates by
such Stockholder, other than Transfers to the Company, shall be
effective unless, as a condition to any such Restricted Transfer,
each transferee that is not a party hereto shall, prior to such
Transfer, agree in writing to be bound by all of the provisions
of this Agreement applicable to the transferor and no such
transferee shall be permitted to make any Transfer other than in
accordance with the terms of this Agreement. Each such transferee
shall thereafter be deemed to be a Stockholder hereunder and
shall have the benefit of, and be subject to, all of the
obligations and limitations with respect to such transferred
Shares and related Voting Trust Certificates, as the case may be
(including, without limitation, the restrictions on Transfers) to
the same extent as the original transferor under this Agreement.
The foregoing provisions of this Section 2.02(a) shall not apply
to a Transfer which is a Non-Restricted Transfer.
(b) Any purported Transfer of Shares or related Voting
Trust Certificates (1) other than a Non-Restricted Transfer or a
Restricted Transfer which complies with this Agreement or (2) in
a Restricted Transfer to a transferee who is not or does not
become a Stockholder pursuant to Section 2.02(a) (each, a "Non-
Conforming Transferee," and each such transfer, a "Non-Conforming
Transfer") shall be null and void. The Company and the Management
Voting Trust shall not register, recognize or give effect to any
such Non-Conforming Transfer, and the Company and the Management
Voting Trust, as the case may be, shall continue to recognize on
their respective books and records the transferor of such Shares
or related Voting Trust Certificates as the holder thereof.
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ARTICLE III
TRANSFERS OF SHARES BY THE H&F INVESTORS
SECTION 3.01. Restrictions on Transfers. (a) (1) Prior
to the termination of the Management Voting Trust, if (A) Shares
subject to the Management Voting Trust represent at least 20% of
the Outstanding Shares and (B) the H&F Investors propose to
Transfer Shares to a Person who, as a result thereof, would
(together with its Affiliates) own Shares representing a
percentage of the Outstanding Shares which is greater than the
percentage of the Outstanding Shares subject to the Management
Voting Trust, or
(2) After termination of the Management Voting Trust,
and (A) prior to the first anniversary of such termination, if
the H&F Investors propose to Transfer Shares to a Person who, as
a result thereof, would (together with its Affiliates) own Shares
representing a percentage of the Outstanding Shares that is
greater than the percentage equal to the greater of (i) 20% and
(ii) the percentage of the Outstanding Shares subject to the
Management Voting Trust upon termination thereof (the
"Termination Percentage") less five percent (5%), and (B) from
and after the first anniversary of such termination until
December 12, 2002, if the H&F Investors propose to Transfer
Shares to a Person who, as a result thereof, would (together with
its Affiliates) own Shares representing a percentage of the
Outstanding Shares which is greater than the greater of (i) 20%
and (ii) a percentage which is the Termination Percentage less
10%,
then, in any such case set forth in (1) or (2) above,
such Transfer can be made only if:
(I) the H&F Investors give written notice to the
Company of the proposed Transfer (specifying the proposed
transferee and the terms of the proposed Transfer) (such
notice, the "Notice of Proposed Transfer"); and
(II) the Company fails to arrange for and complete
the sale of all of the Shares subject to the proposed
Transfer to one or more third parties (including pursuant
to a secondary public offering) at a price to the H&F
Investors at least equal to the price specified in the
Notice of Proposed Transfer within 180 days following the
date of the Notice of Proposed Transfer (it being
understood that the H&F Investors shall be permitted to
withdraw a Notice of Proposed Transfer, at any time during
such period, in which case the Company shall not arrange
for the sale of, or sell, such Shares); and
(III) the Management Voting Trust (if it has not
theretofore terminated) or the Company (after termination
of the Management Voting Trust) thereafter consents in
writing to such Transfer, which consent shall not be
unreasonably withheld (and shall either be given or
withheld no later than 10 days after the earlier of: such
time as the Company concludes that it does not intend to
arrange for a sale under subsection (II) of this Section
3.01(a) or, the expiration of such 180-day period).
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(b) A Transfer of Shares by the H&F Investors prior to
December 12, 2002, to any Person who, as a result thereof, would
(together with its Affiliates) own Shares representing a
percentage of the Outstanding Shares that is a smaller percentage
of the Outstanding Shares than the applicable percentage set
forth in subsections (a)(1) or (a)(2), shall be a Non-Restricted
Transfer. The restrictions on Transfer set forth in subsections
(a)(1) and (a)(2) hereof shall terminate immediately on December
12, 2002, whether or not a Notice of Proposed Transfer has
theretofore being given. Transfers of Shares by the H&F Investors
after such date shall not be restricted under Articles II or III,
or otherwise, under this Agreement.
ARTICLE IV
TRANSFERS OF SHARES AND VOTING TRUST CERTIFICATES
BY THE MANAGEMENT INVESTORS AND
THE MANAGEMENT VOTING TRUST
SECTION 4.01. Right of First Refusal of the Company
and the H&F Investors. Prior to termination of the Management
Voting Trust, in the event that a Management Investor or the
Management Voting Trust shall propose to Transfer any Shares (and
any related Voting Trust Certificates) owned or held by them to
any Person who, as a result thereof, together with any related
Transfers by Management Investors or the Management Voting Trust,
would (together with its Affiliates) own more than 20% of the
Outstanding Shares, the Company and the H&F Investors shall each
have a right of first refusal with respect to such a proposed
Transfer, which rights shall be exercised in accordance with the
provisions of subsections (a) through (e) of this Section 4.01.
(a) With respect to any such proposed Transfer, the
Management Investor or the Management Voting Trust shall first
offer to the Company (by written notice to the Company, with a
copy to the H&F Investors) the option to purchase the Shares
(together with any related Voting Trust Certificates) proposed to
be transferred at the same price and upon the same terms and
conditions as are specified in a bona fide written offer from the
proposed transferee.
(b) The offer by such Management Investor or the
Management Voting Trust to the Company shall include a copy of
the written offer from such proposed transferee setting forth all
the details pertaining to any such proposed Transfer to a third
party, including the price, form of consideration and any other
terms and conditions, and the identity of the Person to whom such
Management Investor or the Management Voting Trust is proposing
to Transfer such Shares (and any related Voting Trust
Certificates), including the identity of any Person controlling
such proposed transferee, as well as such evidence of the arm's
length nature of the proposed Transfer, the proposed transferee's
ability to complete the transaction and such other information as
is reasonably requested by the Company or the H&F Investors. If
the Company exercises its right to purchase all or a portion of
the Shares (and any related Voting Trust Certificates) proposed
to be transferred, it shall give notice thereof to the Management
Investor or the Management Voting Trust and the H&F Investors
within 30 days after receipt of such offer. The consideration for
Shares held by a Management Investor or the Management Voting
Trust shall be paid by the
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Company to the Management Voting Trust and then delivered by the
Management Voting Trust to the Management Investor (as
applicable) against delivery of his or her Voting Trust
Certificates, which Voting Trust Certificates shall be canceled.
The closing of any purchase hereunder shall take place at the
offices of the Company (or at any other place as may be
designated by the Company) on a date specified by the Company,
which date shall be within 10 days after the Company's notice of
such election to such Management Investor and specified in such
notice (or, if the Company has elected to purchase less than all
of such Shares, within 10 days after the expiration of the 15-day
period for election by the H&F Investors, specified in Section
4.01(d) hereof). If the terms of the proposed Transfer include
the Transfer of the Shares (and any related Voting Trust
Certificates) for consideration other than cash, the Company will
have the right to exercise its rights hereunder either (A) by
purchasing the Shares (and any related Voting Trust Certificates)
for a substantially equivalent form of consideration of equal
value in the reasonable opinion of the Board, or (B) by
purchasing such Shares (and any related Voting Trust
Certificates) for cash in an amount equal to the fair market
value of such proposed consideration in the reasonable opinion of
the Board.
(c) If the Company does not elect to exercise its
right to purchase the Shares (and any related Voting Trust
Certificates) proposed to be transferred within the 30-day period
provided therefor, or elects to purchase less than all of such
Shares, the H&F Investors shall have the option to purchase all
(but not less than all) of the Shares proposed to be transferred
(and any related Voting Trust Certificates) which the Company has
elected not to purchase, at the same price and upon the same
terms and conditions as the offer made by the Management Investor
or the Management Voting Trust to the Company.
(d) If the H&F Investors exercise their right to
purchase the Shares (and any related Voting Trust Certificates)
proposed to be transferred, they shall give notice thereof within
15 days after the expiration of the 30-day period referred to in
Section 4.01(b) above. The consideration for Shares held by a
Management Investor or the Management Voting Trust shall be paid
by the H&F Investors to the Management Voting Trust and then
delivered by the Management Voting Trust to the Management
Investor (as applicable) against delivery of his or her Voting
Trust Certificates, which Voting Trust Certificates shall be
canceled. The closing of any purchase hereunder shall take place
at the offices of the Company (or at any other place as may be
designated by the H&F Investors) on a date determined by the H&F
Investors within ten (10) days after the H&F Investors' notice of
such election and specified in such notice; provided that, if the
Company has elected to purchase Shares pursuant to subsection (b)
hereof, the closing under this subsection (d) shall be at the
same time and place as the Company's closing as specified in the
Company's notice. If the terms of the proposed Transfer include
the Transfer of the Shares (and any related Voting Trust
Certificates) for consideration other than cash, the H&F
Investors shall have the right to exercise their rights hereunder
either (A) by purchasing the Shares (and any related Voting Trust
Certificates) for a substantially equivalent form of
consideration of equal value in the reasonable opinion of the H&F
Investors, or (B) by purchasing such Shares (and any related
Voting Trust Certificates) for cash in an amount equal to the
fair market value of such proposed consideration in the
reasonable opinion of the H&F Inves tors; provided, however,
that, if the Company has elected to purchase Shares pursuant to
subsection (b) of this Section 4.01, the H&F Investors shall use
the same form of consideration
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(if possible) or, if the Company is using cash (or the H&F
Investors cannot use the alternative form of consideration), pay
the amount of cash determined by the Board to be the fair market
value of the alternative compensation pursuant to the last
sentence of subsection (b) of this Section 4.01.
(e) If the Company and the H&F Investors,
collectively, elect to purchase less than all of the Shares (and
any related Voting Trust Certificates) proposed to be Transferred
by the Management Investor or the Management Voting Trust within
the exercise periods provided therefor, then such elections shall
not be effective and the Management Investor or the Management
Voting Trust may sell all (but not less than all) of such Shares
(and any related Voting Trust Certificates) to the Person
specified in the notice delivered to the Company and the H&F
Investors in accordance with Section 4.01(a); provided that such
sale is made within 90 days after the expiration of the H&F
Investors' 15-day exercise period, at a price and upon terms and
conditions not more favorable to such transferee than those that
were specified in such notice.
SECTION 4.02. Transfer of Payments by the Management
Voting Trust to the Management Investors. All payments made by
the Company or the H&F Investors in respect of any Shares and
Voting Trust Certificates purchased by the Company or the HFCP
Investors pursuant to this Article IV shall be made by the
Company or the H&F Investors, as the case may be, to the
Management Voting Trust, and the Management Voting Trust shall,
upon receipt of such payment, promptly make an identical payment
to the Management Investor holding the Voting Trust Certificates
representing such Shares upon surrender by such Management
Investor of such Voting Trust Certificates to the Management
Voting Trust and such Voting Trust Certificates shall be canceled
upon such surrender.
ARTICLE V
GOVERNANCE AND MANAGEMENT OF CORPORATION
SECTION 5.01. Board of Directors. (a) The Company
shall be managed by its duly elected officers subject to the
overall direction and supervision of the Board. The Company will
take all actions reasonably within its power, including those
actions of the Company specified in Section 5.01(b), to provide
that the Board will include (1) so long as the H&F Investors own
at least 10% of the Outstanding Shares, two individuals
designated by the H&F Investors and (2) so long as the H&F
Investors own at least 5% of the Outstanding Shares, one
individual designated by the H&F Investors (the "H&F Designees").
(b) For so long as the H&F Investors own at least 10%
of the Outstanding Shares, the Company agrees to nominate two H&F
Designees, and for so long as the H&F Investors own at least 5%
of the Outstanding Shares, the Company agrees to nominate one H&F
Designee, in each case for election to the Board. The Company
agrees to recommend to its stockholders that the H&F Designees be
elected to the Board and to cooperate and use all reasonable
efforts to effectuate the election of the H&F Designees to the
Board. For so long as the Management
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Voting Trust is in existence, the Management Voting Trust agrees
to take all such steps (including voting all Shares and all
shares of Money Market Preferred Stock as to which it has voting
power to elect and re-elect individuals as directors, to remove
directors and to fill vacancies) as requested by the H&F
Investors and permitted to be taken by the Management Voting
Trust so as to attempt to assure that the Board includes the H&F
Designee(s) at all times, to the extent required under this
Section 5.01. The H&F Investors shall be free to replace the
members of the Board designated by them, and the Company shall
cooperate and use all reasonable efforts to effectuate any such
replacement requested by the H&F Investors. For so long as the
Management Voting Trust is in existence, the Management Voting
Trust agrees to take all such steps (including voting all Shares
and all shares of Money Market Preferred Stock as to which it has
voting power to elect and re-elect individuals as directors, to
remove directors and to fill vacancies) as requested by the H&F
Investors and permitted to be taken by the Management Voting
Trust to attempt to effectuate any such replacement requested by
the H&F Investors.
SECTION 5.02. Delaware Statute. The Company will not
take any action to amend, eliminate or adopt any provision
inconsistent with, Article XIV of its Amended and Restated
Certificate of Incorporation, a copy of which is included in
Exhibit A, or to rescind, amend, supersede or adopt any
resolution inconsistent with, the Board resolution included in
Exhibit A.
ARTICLE VI
MISCELLANEOUS
SECTION 6.01. Termination. The term of this Agreement
varies provision by provision as follows:
(a) The restrictions on Transfer set forth in
Article III shall terminate on December 12, 2002.
(b) The restrictions on Transfer set forth in
Article IV shall terminate on the date of termination of
the Management Voting Trust.
(c) The restrictions on Transfer set forth in
Article II shall terminate at the time that related
restrictions in Articles III and IV, respectively,
terminate.
(d) The provisions of Article V shall apply so
long as the H&F Investors own at least 5% of the
Outstanding Shares.
(e) The provisions of Article I and Article VI
shall apply until the later of (1) the termination of
Articles II, III and IV pursuant to Sections 6.01(a)
through (c) and (2) the termination of Article V pursuant
to Section 6.01(d).
11
SECTION 6.02. Legend. All certificates representing
Common Stock held by Stockholders shall bear a legend stamped,
typed or otherwise legibly placed on the face or reverse side
thereof substantially in the form set forth below:
NOTICE IS HEREBY GIVEN THAT the securities represented
by this certificate have not been registered under the
Securities Act of 1933, as amended, or the securities
laws of any state of the United States or any non-U.S.
jurisdiction. The securities cannot be offered, sold,
transferred or otherwise disposed of except (1)
pursuant to an effective registration statement or
amendment thereto under such Act and any other
applicable laws or (2) pursuant to an exemption from,
or in a transaction not subject to, the registration
requirements of such Act and such other applicable
laws. The sale, transfer or other disposition of the
securities represented by this certificate and certain
other rights and obligations of the holder of this
certificate are also subject to a Stockholders'
Agreement dated as of May 8, 1998 by and among the
Company and the other parties thereto (copies of which
are available for review at the principal office of
the Company by contacting the Secretary of the
Company).
SECTION 6.03. Binding Effect; Successors. This
Agreement shall be binding upon and inure to the benefit of and
shall be enforceable by the parties hereto and their respective
legal representatives, heirs, legatees, successors and assigns.
The terms and provisions of this Agreement shall become effective
only upon the closing of the Offerings.
SECTION 6.04. Amendment and Waiver. This Agreement may
be amended, modified or supplemented or any term or condition
waived only by a written instrument executed by the parties
hereto; provided, however, that pursuant to the Management Voting
Trust Agreement, each Management Investor has delegated to the
Voting Trustees the authority to act on his or her behalf for
purposes of this Section 6.04.
SECTION 6.05. Governing Law. This Agreement shall be
governed by and construed in accordance with the internal laws of
the State of Delaware, without regard to principles of conflict
of laws, and each Stockholder agrees to submit to personal
jurisdiction and to waive any objection as to venue of the Court
of Chancery in the State of Delaware in connection with any
action arising out of or relating to this Agreement. Service of
process on any party hereto in any action arising out of or
relating to this Agreement shall be effective if served upon such
party by mail in accordance with Section 6.10.
SECTION 6.06. Specific Performance. Each party hereto
agrees that irreparable damages would occur in the event that any
of the provisions of this Agreement were not performed in
accordance with their specific terms, or were otherwise breached.
It is, accordingly, agreed that the parties hereto shall be
entitled to injunctive relief to prevent breaches of the
provisions of this Agreement, and to enforce specifically the
terms and provisions hereof, in addition to any other remedy to
which they may be entitled at law or in equity.
12
SECTION 6.07. Unenforceability. If any provision of
this Agreement is held or deemed to be invalid or unenforceable
to any extent when applied to any Person or circumstance, the
remaining provisions of this Agreement and the enforcement of
such provisions to other Persons or circumstances shall not be
affected, and each provision of this Agreement shall be enforced
to the fullest extent allowed by law.
SECTION 6.08. Headings. The headings of Articles and
Sections contained in this Agreement are solely for convenience
of reference, are not part of the agreement of the parties, and
shall not affect the meaning or interpretation of this Agreement.
SECTION 6.09. Copies on File. Copies of this Agreement
and of every agreement amending or supplementing this Agreement
shall be available for review at the Company's principal office
by contacting the Secretary of the Company.
SECTION 6.10. Notices. (a) All notices, requests,
demands or other communications required by or otherwise with
respect to this Agreement shall be in writing and shall be deemed
to have been duly given to any party when delivered by hand, by
messenger, or by a nationally recognized overnight delivery
company, when delivered by telecopy and confirmed by return
telecopy, or when delivered by first-class mail, postage prepaid
and return receipt requested, in each case to the applicable
addresses set forth below:
If to the Company: Young & Rubicam Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the
H&F Investors: H&F Investors III, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Management
Voting Trust: Management Voting Trust
c/o Young & Rubicam Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Voting Trustee Representative
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
13
(or, as to any party, to such other address as such party shall
from time to time designate by written notice to the other
parties). Notices sent by registered or certified mail in
accordance with this Section 6.10 shall be deemed delivered as of
the date posted in the United States mail.
(b) Whenever this Agreement contemplates delivery to,
or action (such as consent, approval or waiver) by (1) the H&F
Investors, delivery to, or action (evidenced in writing) by, the
Ultimate General Partner shall bind the H&F Investors or (2) the
Management Voting Trust, delivery to, or action (evidenced in
writing) by the Voting Trustee representative (set forth in
subsection (a) of this Section 6.10) shall bind the Management
Voting Trust. Whenever the consent, approval or waiver of the H&F
Investors or the Management Voting Trust is required under this
Agreement such Person agrees to act with reasonable promptness to
either grant or deny such request following receipt of written
notice of such request in accordance with Section 6.10 hereof.
SECTION 6.11. Waiver and Consent. Subject to Section
6.04 hereof, any two of the Company, the Ultimate General Partner
and the Management Voting Trust may by notice to the third such
party hereto (a) extend the time for the performance of any of
the obligations or other actions of such third party under this
Agreement; (b) waive compliance with any of the conditions or
covenants of such third party contained in this Agreement; and
(c) waive or modify performance of any of the obligations of such
third party under this Agreement. Except as provided in the
preceding sentence, no action taken pursuant to this Agreement,
including, without limitation, any investigation by or on behalf
of any party, shall be deemed to constitute a waiver by the party
taking such action of compliance with any representations,
warranties, covenants or agreements contained herein. The waiver
by any party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any
preceding or succeeding breach and no failure by any party to
exercise any right or privilege hereunder shall be deemed a
waiver of such party's rights or privileges hereunder or shall be
deemed a waiver of such party's rights to exercise the same at
any subsequent time or times hereunder.
SECTION 6.12. Recapitalizations, Exchanges, Etc.
Affecting the Company's Stock. The provisions of this Agreement
shall apply, to the full extent set forth herein with respect to
the Common Stock and Derivative Securities, to any and all shares
of capital stock, and to any and all Derivative Securities,
respectively, of the Company or any successor or assign of the
Company (whether by merger, consolidation, sale of assets, or
otherwise) which may be issued in respect of, in exchange for, or
in substitution of the Common Stock or such options, as the case
may be.
SECTION 6.13. Counterparts. This Agreement may be
executed in one or more counterparts, each of which shall be
deemed to be an original and all of which together shall be
deemed to constitute one and the same agreement.
14
IN WITNESS WHEREOF, the parties hereto have executed
this Stockholders' Agreement as of the date first above written.
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ CAPITAL
PARTNERS III, L.P.
By its General Partner,
H&F Investors III
By its Managing General Partner,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Associates III, L.P.
By its Managing General Partner,
H&F Investors III, Inc.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President
H&F ORCHARD PARTNERS III, L.P.
By its General Partner,
H&F Investors III
By its Managing General Partner,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Associates III, L.P.
By its Managing General Partner,
H&F Investors III, Inc.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President
H&F INTERNATIONAL PARTNERS III, L.P.
By its General Partner,
H&F Investors III
By its Managing General Partner,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Associates III, L.P.
By its Managing General Partner,
H&F Investors III, Inc.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President
YOUNG & RUBICAM INC., a Delaware
corporation
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Secretary and Assistant
Treasurer
THE MANAGEMENT VOTING TRUST
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Attorney-in-fact
THE MANAGEMENT INVESTORS
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Attorney-in-fact
