VOTING AGREEMENT
VOTING AGREEMENT (this "Agreement"), dated as of August 3, 1994, by and
among ▇▇▇▇▇ Financial, a California corporation (the "Corporation"); ▇▇▇▇▇
▇. ▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇
▇▇▇▇▇▇ III (individually a "Shareholder" and collectively the
"Shareholders"); and each of the Purchasers (individually an "Investor" and
collectively the "Investors") listed on Schedule 1.01 to the Series A
Preferred Stock Purchase Agreement dated as of the date hereof among the
Corporation and the Purchasers (the "Stock Purchase Agreement").
WHEREAS, the Shareholders beneficially own an aggregate of 386,419 shares
of Common Stock, no par value, of the Corporation (the "Common Stock");
WHEREAS, the Investors are acquiring an aggregate of 941,177 shares of
Series A Preferred Stock, no par value, of the Corporation (the "Series A
Preferred Stock") pursuant to the terms of the Stock Purchase Agreement;
and
WHEREAS, one of the conditions to the investment by the Investors is the
execution of a voting agreement relating to the election of members to the
Corporation's Board of Directors (the "Board of Directors") and any
committees thereof.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and the investment by the Investors under the Stock
Purchase Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
ARTICLE 1.
ELECTION OF DIRECTORS
Section 1.01. ELECTION OF DIRECTORS. At any time at which stockholders
of the Corporation will have the right to or will vote for or consent in
writing to the election of directors of the Corporation, the Investors and
the Shareholders hereby agree to vote all shares of capital stock of the
Corporation presently owned or hereafter acquired by them, or over which
they have voting control, in favor of the following actions, and the Corporation
shall use its best efforts to nominate for election to the Board of
Directors those persons set forth below:
(a) to cause and maintain the election to the Board of Directors
of two (2) Qualified Representatives of the Conning Funds, initially ▇▇▇▇ ▇.
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (the Conning Directors");
(b) to cause and maintain the election to the Board of Directors
of one (1) Qualified Representative of the Investors other than the Conning
Funds, initially ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (the "Non-Conning Director", and
together with the Conning Directors, the "Investor Directors");
(c) to cause and maintain the election to the Board of Directors
of two (2) Qualified Representatives who are not at the time of their
election or during their tenure on the Board of Directors officers,
employees, representatives or agents of the Corporation or any of its
subsidiaries or affiliates and not otherwise affiliated with any party
hereto, selected by a majority of the Shareholders, initially ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (the "Independent Directors");
(d) to cause and maintain the election to the Board of Directors
of four (4) persons each of whom is an employee or officer of the
Corporation selected by a majority of the Shareholders, initially ▇▇▇▇▇ ▇.
▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (the
"Management Directors");
(e) to fix the number of directors of the Corporation at nine (9);
and
(f) to fix the term of each director at one (1) year.
Section 1.02. COMMITTEES. The Board of Directors shall establish an
Executive Committee, an Executive Compensation and Stock Option Committee and
an Audit Committee. The Corporation, the Investors and the Shareholders
agree to cause the Board of Directors to ensure that the Executive
Compensation and Stock Option Committee shall consist of not more than three
(3) members, and to nominate and appoint thereto, and maintain as a member
thereof, at least one Investor Director selected by the holders of at least
51% of the outstanding shares of Series A Preferred Stock and at least one
Independent Director. The Corporation, the Investors and the
Shareholders agree to cause the Board of Directors to ensure that the
Audit Committee shall consist of not more than three (3) members, and to
nominate and appoint thereto, and maintain as a member thereof, one Investor
Director selected by the holders of at least 51% of the outstanding shares of
Series A Preferred Stock and two Independent Directors.
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In the event that the Corporation is (i) unable to redeem the Series A
Preferred Stock on the Redemption Date set forth in Section 7 of the
Certificate of Designation or (ii) unable to make each and every payment
under the Redemption Notes issued pursuant to Section 7(b) of the Certificate
of Designation on the due date thereof, the Corporation, the Investors and
the Shareholders agree to cause the Board of Directors to establish a
Recapitalization Committee and to nominate and appoint to, and maintain as
members of, the Recapitalization Committee, two Investor Directors
(including one Conning Director who shall be chairperson of the
Recapitalization Committee and one Non-Conning Director) and one Management
Director. The Recapitalization Committee shall be responsible for
formulating proposals for submission to the Board of Directors to
recapitalize or reorganize the Corporation (including, but not limited to,
a sale of the Corporation, an initial public offering of Common Stock or
a private sale of securities of the Corporation) in a manner which will
enable the Corporation to effect the transactions required to be effectuated
pursuant to Section 7 of the Certificate of Designation; provided that the
Board of Directors, and not the Recapitalization Committee, shall be
responsible for adopting and implementing proposals formulated by the
Recapitalization Committee but shall have no obligation hereunder to adopt
such proposals.
Section 1.03. VACANCIES AND REMOVAL. Each of the directors designated
in Section 1.01 shall be elected at any annual or special meeting of
stockholders (or by written consent in lieu of a meeting of stockholders)
and shall serve until his successor is elected and qualified or until his
earlier resignation or removal.
Any Conning Director may be removed during his term of office, without
cause, by and only by the affirmative vote or written consent of the holders
of at least 51% of the outstanding shares of Series A Preferred Stock then
held by the Conning Funds.
The Non-Conning Director may be removed during his term of office,
without cause, by and only by the affirmative vote or written consent of the
holders of at least 51% of the outstanding shares of Series A Preferred Stock
then held by the Investors other than the Conning Funds.
Any Management Director may be removed during his term of office,
without cause, by and only by the affirmative vote or written consent of a
majority of the Shareholders.
Any Independent Director may be removed during his term of office,
without cause, by and only by the affirmative vote or written consent of a
majority of the Shareholders subject to the reasonable acceptance of the
holders of at least 51% of the outstanding shares of Series A Preferred
Stock then held by the Investors.
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Any vacancy in the office of a Conning Director may be filled by and
only by the affirmative vote or written consent of the holders of at least
51% of the outstanding shares of Series A Preferred Stock then held by the
Conning Funds.
Any vacancy in the office of a Non-Conning Director may filled by and
only by the affirmative vote or written consent of the holders of at least
51% of the outstanding shares of Series A Preferred Stock then held by the
Investors other than the Conning Funds.
Any vacancy in the office of the Management Director may be filled by
and only by the vote or written consent of a majority of the Shareholders.
Any vacancy in the office of the Independent Director may be filled by
and only by such person as may be approved by a majority of the Shareholders
subject to the reasonable acceptance of the holders of at least 51% of the
outstanding shares of Series A Preferred Stock then held by Investors.
Pending any vote or written consent of holders of capital stock provided
for in this Section, any vacancy in the office of a Conning Director may be
filled by and only by a nominee of the Conning Funds and elected by the
vote of the other Conning Director, any vacancy in the office of a
Non-Conning Director may be filled by and only by a nominee of the Investors
other than the Conning Funds and elected by the vote of the Conning
Directors, any vacancy in the office of a Management Directors may be filled
by and only by the vote of the other Management Directors, and any vacancy in
the office of an Independent Director may be filled by and only by the vote
of a majority of the Management Directors subject to the reasonable
acceptance of a majority of the Investor Directors.
Section 1.04. QUALIFIED REPRESENTATIVE. The term "Qualified
Representative" shall mean an individual nominated in good faith who by
virtue of his or her business experience and reputation will be expected to
add value to the Corporation and, in the case of the Independent Directors,
shall be acceptable to the holders of at least 51% of outstanding shares of
Series A Preferred Stock, such acceptance not to be unreasonably withheld,
and, in the case of the Investor Directors, shall be acceptable to a
majority of the Shareholders, such acceptance not to be unreasonably
withheld. The Shareholders acknowledge and agree that any officer or partner
of Conning & Company, Saugatuck Capital Company and RFE Associates IV, L.P.
shall satisfy the requirements to serve as a Qualified Representative.
4
ARTICLE 2.
MISCELLANEOUS
Section 2.01. DURATION OF AGREEMENT. This Agreement shall terminate on
the earliest to occur of the following: (a) the time immediately prior to the
time of a Qualified Public Offering, (b) the sixth anniversary of the
effective date of this Agreement, (c) the date upon which each share of
Series A Preferred Stock is redeemed in cash or, with respect to shares
redeemed in exchange for Redemption Notes (as defined in the
Certificate of Designation), the date payment in full is made on such
Redemption Notes and (d) with respect to any Share, the date upon which such
Share is sold free and clear of the restrictions imposed by the Shareholders
Agreement.
Section 2.02. LEGEND. Each certificate representing shares of capital
stock of the Corporation subject to this Agreement shall bear a legend in
substantially the following form, until such time as the shares of capital
stock represented thereby are no longer subject to the provisions hereof:
"The securities represented by this certificate are subject to the
terms and conditions of a certain Voting Agreement, dated as of August
3, 1994, as amended from time to time, among the Corporation and certain
holders of its capital stock. Copies of such Agreement may be obtained
at, no cost by written request made by the holder of record of this
certificate to the Secretary of the Corporation."
Section 2.03. SEVERABILITY: GOVERNING LAW. If any provisions of this
Agreement shall be determined to be illegal or unenforceable by any
court of law, the remaining provisions shall be severable and this Agreement
shall be reformed and construed to the maximum extent possible in
accordance with the essential purposes and intent of this Agreement. This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of California.
Section 2.04. INJUNCTIVE RELIEF. The Shareholders and the Investors
acknowledge and agree that irreparable damage 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 shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically the
terms and provisions hereof in any court of the United States or any state
thereof having jurisdiction, this being in addition to any other remedy to
which they may be entitled at law or equity.
5
Section 2.05. MODIFICATION OR AMENDMENT. This Agreement
constitutes the entire agreement of the parties with respect to the subject
matter hereof and neither this Agreement nor any provision hereof may be
waived, modified, amended or terminated except by a written agreement signed
by (a) a majority of the Shareholders and (b) Investors holding at least 51%
of the outstanding shares of Series A Preferred Stock.
Section 2.06. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original, but all
of which taken together shall constitute one and the same instrument.
Section 2.07. NOTICES. All notices to be given or otherwise made to
any party to this Agreement shall be deemed to be sufficient if
contained in a written instrument, delivered by hand in person, or by
express overnight courier service, or by electronic facsimile
transmission (with a confirming copy sent by U.S. mail, registered or
certified, return receipt requested), or by registered or certified mail,
postage prepaid, return receipt requested, addressed to such party at the
address set forth on Exhibit A hereto or at such other address as may
hereafter be designated in writing by the addressee to the addressor listing
all parties.
All such notices provided in accordance with this Section shall be
deemed delivered upon personal delivery, upon transmission if sent by
telecopier or three (3) days after deposit in the mail or with the courier.
Section 2.08. FURTHER ASSURANCES. From and after the date of this
Agreement, upon the request of any Investor, Shareholder or the Corporation,
the Corporation, the Shareholders and the Investors shall execute and
deliver such instruments, documents and other writings as may be reasonably
necessary or desirable to confirm and carry out and to effectuate
fully the intent and purposes of this Agreement.
Section 2.09. ADDITIONAL PARTIES. The Corporation, Investors, and
Shareholders shall cause the following to occur:
(a) Any person or entity who acquires Series A Preferred Stock
shall become an Investor hereunder, unless at the time of such purchase
such person or entity was a Shareholder or an employee of the
Corporation, in which case such person or entity still remains or becomes
(as the case may be) a Shareholder hereunder; or
(b) Excluding capital stock transferred by the Corporation on its
books not as an issuer, buyer or seller but solely in its capacity as
registrar or transfer agent, prior to the issuance or transfer of any voting
capital stock by any party
6
hereto to any person or entity who at such time, after giving effect to such
issuance or transfer, owns five percent (5%) or more of the outstanding
shares of voting capital stock through any transactions whatsoever such
person or entity shall become a Shareholder hereunder, unless at the
time such person or entity was an Investor.
For the purposes of this Section 2.09 in determining whether a
Shareholder owns, or owns options to acquire, at least 5% of the voting
capital stock of the Corporation, such Shareholder shall be deemed to hold
those shares of voting capital stock transferred by them to, and continued to
be held by, their respective spouses, brothers, sisters, ancestors and lineal
descendants or trusts for their benefit.
Execution by such persons or entities and the Corporation of a
counterpart of a signature page of this Agreement and an amendment
adding their names hereto shall be a condition of any acquisition of such
shares by such person or entity.
Section 2.11. BINDING EFFECT. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns, legal representatives and heirs.
Section 2.12. DEFINED TERMS. The terms used herein and not defined
herein shall have the meanings assigned to such terms in the Stock Purchase
Agreement.
Section 2.13. ERISA LIMITATIONS. The obligations of the
Shareholders under this Agreement are personal to them and shall not be
construed as extending to their capacities as representatives of
the ESOP advisory committee or as fiduciaries of the ESOP.
Section 2. 14. CUMULATIVE VOTING LIMITATIONS. Notwithstanding anything
to the contrary contained herein, the holders of the Series A Preferred
Stock shall not be entitled to elect a majority of the directors of the
Corporation through the use of cumulative voting as prescribed under Section
708 of the California General Corporation Code or any successor thereto.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, this Voting Agreement has been executed as of the
date and year first above written.
▇▇▇▇▇ FINANCIAL
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------
Name:
Title:
SHAREHOLDERS:
The ▇▇▇▇ Family Partnership
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------
/s/
----------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/
----------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
/s/
----------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/
----------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇ III
IN WITNESS WHEREOF, this Voting Agreement has been executed as of the
date and year first above written.
▇▇▇▇▇ FINANCIAL
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------
Name:
Title:
SHAREHOLDERS:
The ▇▇▇▇ Family Partnership
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------
▇▇▇▇ ▇. ▇▇▇▇
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------
▇▇▇▇▇ ▇. ▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
/s/
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▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/
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▇▇▇▇▇▇ ▇▇▇▇▇▇ III
(SIGNATURE PAGE TO VOTING AGREEMENT)
CONSENT OF SPOUSES:
Each of us acknowledges that we have read the foregoing
Agreement and each of us knows its contents. Each of us is aware that by its
provisions that all or part of the shares of the Corporation held of record
by any of us and/or our spouses, including our community property
interests in such shares, if any, are subject to certain voting obligations
and restrictions. Each of us hereby agrees that those shares and each of our
interests in them, if any, are subject to the provisions of the Agreement and
that each of us will take no action at any time to hinder the operation of,
or violate, the Agreement.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
/s/ Lily A. ▇▇▇▇▇▇
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Lily A. ▇▇▇▇▇▇
[SIGNATURE PAGE TO VOTING AGREEMENT]
PURCHASERS:
CONNING INSURANCE CAPITAL LIMITED
PARTNERSHIP II
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------
General Partner
CONNING INSURANCE CAPITAL LIMITED
PARTNERSHIP II
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------
General Partner
CONNING INSURANCE CAPITAL LIMITED
PARTNERSHIP II
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------
General Partner
CONNING INSURANCE CAPITAL LIMITED
PARTNERSHIP II
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------
General Partner
SAUGATUCK CAPITAL COMPANY
By:/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
RFE INVESTMENT PARTNERS IV, L.P.
By RFE Associates IV, L.P., its
General Partner
By:/s/ A. ▇▇▇▇ ▇▇▇▇▇
------------------------
A. ▇▇▇▇ ▇▇▇▇▇
[SIGNATURE PAGE TO VOTING AGREEMENT]
EXHIBIT A
▇▇▇▇▇ Financial Conning Insurance Capital
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Limited Partnership II
Suite 300 c/o Conning & Company
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ CityPlace II
Attention: President ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇ Conning Insurance Capital
c/o ▇▇▇▇▇ Financial International Partners II
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ c/o Conning & Company
Suite 300 CityPlace II
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Conning Insurance Capital
c/o ▇▇▇▇▇ Financial Limited Partnership III
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ c/o Conning & Company
Suite 300 CityPlace II
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Conning Insurance Capital
c/o ▇▇▇▇▇ Financial International Partners III
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ c/o Conning & Company
Suite 300 CityPlace II
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇ RFE Investment Partners IV, L.P.
c/o ▇▇▇▇▇ Financial ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Suite 300 Attn: A. ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ III Saugatuck Capital Company
▇/▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Suite 300 Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇