STOCKHOLDERS AGREEMENT
THIS AGREEMENT is made as of January 24, 1994 by and between USAI
Acquisition Corp., a Delaware corporation (the "Company"), Golder, Thoma,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ Fund IV Limited Partnership, an Illinois limited partnership
(the "Investor"), ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("▇▇▇▇▇▇"), ▇▇▇▇▇▇ ▇▇▇▇▇▇ ("▇▇▇▇▇▇") and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ("▇▇▇▇▇"). ▇▇▇▇▇▇, ▇▇▇▇▇▇ and ▇▇▇▇▇ are collectively
referred to herein as the "Executives" and individually as an "Executive."
The Investor and the Executives are collectively referred to herein as the
"Stockholders" and individually as a "Stockholder." Capitalized terms used
but not otherwise defined herein are defined in Section 8 hereof.
The Investor will purchase shares of the Company's Common Stock,
par value $.01 per share (the "Common Stock"), and the Company's Preferred
Stock, par value $.01 per share (the "Preferred Stock"), pursuant to an
Equity Purchase Agreement dated as of the date hereof (the "Equity Purchase
Agreement") between the Investor and the Company.
In a related transaction to be completed subsequent to the date
hereof under an acquisition agreement (the "Acquisition Agreement") among the
Company, the Executives and certain other parties thereto, the Executives
will exchange certain shares of common stock of Western Rock, Inc. for shares
of Common Stock and shares of the Company's Preferred Stock.
Pursuant to senior management agreements dated as of the date
hereof (the "Management Agreements") between the Company and each of ▇▇▇▇▇▇
and Stone, such Executives will purchase shares of Common Stock.
Pursuant to a consultant stock agreement dated as of the date
hereof (the "Consultant Agreement") between the Company and ▇▇▇▇▇▇, ▇▇▇▇▇▇
will purchase shares of Common Stock.
The Preferred Stock and the Common Stock are collectively referred
to herein as the "Stock." The Common Stock and the Preferred Stock currently
held, or hereafter acquired, by each Executive are referred to herein as
"Executive Stock." The execution and delivery of this Agreement is a
condition to the Investor's purchase of the Stock pursuant to the Equity
Purchase Agreement.
In consideration of the mutual covenants contained herein and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties to this Agreement hereby agree as follows:
1. BOARD OF DIRECTORS.
(a) From and after the Closing (as defined in the Equity Purchase
Agreement) and until the provisions of this Section 1 cease to be effective,
each Stockholder shall vote all of its, his or her Stockholder Shares and any
other voting securities of the Company over which such Stockholder has voting
control and shall take all other necessary or desirable actions within its,
his or her control (whether in its, his or her capacity as a stockholder,
director, member of a board committee or officer of the Company or otherwise,
and including, without limitation, attendance at meetings in person or by
proxy for purposes of obtaining a quorum and execution of written consents in
lieu of meetings), and the Company shall take all necessary and desirable
actions within its control (including, without limitation, calling special
board and stockholder meetings), so that:
(i) the authorized number of directors on the Company's board of
directors (the "Board") shall be established at seven directors;
(ii) the following persons shall be elected to the Board
(A) two representatives designated by the Investor (the
"Investor Directors"), who shall initially be ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇;
(B) Two members of the Company's management designated by the
Executives, determined by a vote of the Executives owning a majority
of Stockholder Shares held by all Executives (the "Executive
Directors"), who shall initially be ▇▇▇▇▇▇ and Stone; and
(C) three representatives chosen jointly by the Investor and
▇▇▇▇▇▇ (the "Outside Directors"); provided that such representative
shall not be a member of the Company's management or an employee or
officer of the Company or its subsidiaries; provided further that if
the Investor and ▇▇▇▇▇▇ are unable to agree on the Outside Directors
within 30 days after the date hereof and, in the future, within 30
days after the date for electing the Outside Directors, the Investor,
in its sole discretion, shall designate the Outside Directors;
(iii) the removal from the Board (with or without cause) of the
Investor Directors, the Executive Directors or the Outside Directors shall
be only upon the written request of the person or persons originally
entitled to designate such director pursuant to Section 1(a)(ii) above
(including removal of the Outside Director at any time by the Investor);
provided that if either ▇▇▇▇▇▇ or ▇▇▇▇▇ ceases to be an employee of the
Company and its subsidiaries, such Executive shall be removed as a director
promptly after his employment ceases; and
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(iv) in the event that any representative designated hereunder for any
reason ceases to serve as a member of the Board during his term of office,
the resulting vacancy on the Board shall be filled by a representative
designated by the person or persons originally entitled to designate such
director pursuant to Section 1(a)(ii) above.
(b) The Company shall pay acceptable directors fees and all
reasonable out-of-pocket expenses incurred by each director in connection with
attending regular and special meetings of the Board and any committee thereof.
(c) The rights of each Executive under this Section 1 shall terminate
at such time as the such Executive is, in the case of ▇▇▇▇▇▇ and Stone, no
longer employed by the Company or its subsidiaries and, in the case of ▇▇▇▇▇▇,
no longer a consultant to the Company or its subsidiaries.
(d) The provisions of this Section 1 shall terminate automatically
and be of no further force and effect upon the tenth anniversary of the date
hereof (unless extended by the parties hereto in accordance with the Delaware
General Corporation Law).
(e) If any party fails to designate a representative to fill a
directorship pursuant to the terms of this Section 1, the election of a person
to such directorship shall be accomplished in accordance with the Company's
bylaws and applicable law.
2. CONFLICTING AGREEMENTS. Each Stockholder represents that he has
not granted and is not a party to any proxy, voting trust or other agreement
which is inconsistent with or conflicts with the provisions of this Agreement,
and no holder of Stockholder Shares shall grant any proxy or become party to any
voting trust or other agreement which is inconsistent with or conflicts with the
provisions of this Agreement.
3. RESTRICTIONS ON TRANSFER OF EXECUTIVE STOCK.
(a) RETENTION OF EXECUTIVE STOCK. Until the seventh anniversary of
the date of this Agreement, no Executive shall sell, transfer, assign, pledge or
otherwise dispose of any interest in any shares of Executive Stock, except
pursuant to an Exempt Transfers (as defined in Section 3(b) below) other than
sales to the public pursuant to Rule 144 promulgated under the Securities Act or
any similar rule then in force.
(b) TRANSFER OF EXECUTIVE STOCK. No Executive shall sell, transfer,
assign, pledge or otherwise dispose of (whether with or without consideration
and whether voluntarily or involuntarily or by operation of law) any interest in
any shares of Executive Stock (a "Transfer"), except pursuant to (i) the
provisions of Section 3 of the Management Agreements or of the Consultant
Agreement, a Public Sale or a Sale of the Company
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("Exempt Transfers") or (ii) the provisions of this Section 3; provided that
in no event shall any Transfer of Executive Stock pursuant to this Section 3
be made for any consideration other than cash payable upon consummation of
such Transfer or in installments over time. Prior to making any Transfer
other than an Exempt Transfer, Executive will give written notice (the "Sale
Notice") to the Company and the Investor. The Sale Notice will disclose in
reasonable detail the identity of the prospective transferee(s), the number
of shares to be transferred and the terms and conditions of the proposed
transfer. Executive will not consummate any Transfer until 110 days after
the Sale Notice has been given to the Company and to the Investor, unless the
parties to the Transfer have been finally determined pursuant to this Section
3 prior to the expiration of such 110-day period. The date of the first to
occur of such events is referred to herein as the "Authorization Date."
(c) FIRST REFUSAL RIGHTS. Subject to Section 3(a) above, the
Company may elect to purchase all (but not less than all) of the shares of
Executive Stock to be transferred upon the same terms and conditions as those
set forth in the Sale Notice by delivering a written notice of such election
to Executive and the Investor within 60 days after the Sale Notice has been
given to the Company. If the Company has not elected to purchase all of the
Executive Stock to be transferred, the Investor may elect to purchase all
(but not less than all) of the Executive Stock to be transferred upon the
same terms and conditions as those set forth in the Sale Notice by giving
written notice of such election to Executive within 90 days after the Sale
Notice has been given to the Investor. If neither the Company nor the
Investor elects to purchase all of the shares of Executive Stock specified in
the Sale Notice, Executive may transfer the shares of Executive Stock
specified in the Sale Notice, at a price and on terms no more favorable to
the transferee(s) thereof than specified in the Sale Notice during the 60-day
period immediately following the Authorization Date. Any shares of Executive
Stock not transferred within such 60-day period will be subject to the
provisions of this Section 3(c) upon subsequent transfer. The Company may
pay the purchase price for such shares by offsetting amounts outstanding
under any bona fide debts owed by Executive to the Company.
(d) CERTAIN PERMITTED TRANSFERS. The restrictions contained in
this Section 3 will not apply with respect to transfers of shares of
Executive Stock (a) pursuant to applicable laws of descent and distribution
or (b) among Executive's Family Group, provided that such restrictions will
continue to be applicable to the Executive Stock after any such transfer and
the transferees of such Executive Stock have agreed in writing to be bound by
the provisions of this Agreement.
(e) TERMINATION OF RESTRICTIONS. The restrictions on the Transfer
of shares of Executive Stock set forth in this Section 3 will continue with
respect to each share of Executive Stock until
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the date on which such Executive Stock has been transferred in a transaction
permitted by this Section 3 (except in a transaction contemplated by Section
3(d)); provided that in any event such restrictions will terminate on the
first to occur of a Change of Control, Sale of the Company or a Qualified
Public Offering.
4. LEGEND. Each certificate evidencing Stockholder Shares and
each certificate issued in exchange for or upon the transfer of any
Stockholder Shares (if such shares remain Stockholder Shares as defined
herein after such transfer) shall be stamped or otherwise imprinted with a
legend in substantially the following form:
"The securities represented by this certificate are subject
to restrictions of transfer and other agreements set forth
in a Stockholders Agreement dated as of January 24, 1994,
among the issuer of such securities (the "Company") and
certain of the Company's stockholders. A copy of such
Stockholders Agreement will be furnished without charge by
the Company to the holder hereof upon written request."
The Company shall imprint such legend on certificates evidencing Stockholder
Shares outstanding prior to the date hereof. The legend set forth above
shall be removed from the certificates evidencing any shares which cease to
be Stockholder Shares in accordance with Section 8 hereof.
5. PUBLIC OFFERING. In the event that the Board and the Investor
approve an initial public offering and sale of Stock (a "Public Offering")
pursuant to an effective registration statement under the Securities Act, the
holders of Stock shall take all necessary or desirable actions in connection
with the consummation of the Public Offering. In the event that such Public
Offering is an underwritten offering and the managing underwriters advise the
Company in writing that in their opinion the capital stock structure shall
adversely affect the marketability of the offering, each holder of Stock
shall consent to and vote for a recapitalization, reorganization and/or
exchange of the Stock into securities that the managing underwriters, the
Board and the Investor find acceptable and shall take all necessary or
desirable actions in connection with the consummation of the
recapitalization, reorganization and/or exchange; provided that the resulting
securities reflect and are consistent with the rights and preferences set
forth in the Company's Certificate of Incorporation as in effect immediately
prior to such Public Offering.
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6. SALE OF THE COMPANY.
(a) If the Board and the holders of a majority of the shares of
Common Stock then outstanding approve a Sale of the Company (an "Approved
Sale"), each holder of Stock shall vote for, consent to and raise no
objections against such Approved Sale. If the Approved Sale is structured as
(i) a merger or consolidation, each holder of Stock shall waive any
dissenters' rights, appraisal rights or similar rights in connection with
such merger or consolidation or (ii) a sale of stock, each holder of Stock
shall agree to sell all of his Stock and rights to acquire Stock on the terms
and conditions approved by the Board and the holders of a majority of the
Common Stock then outstanding. Each holder of Stock shall take all necessary
or desirable actions in connection with the consummation of the Approved Sale
as requested by the Company.
(b) The obligations of the holders of Stock with respect to the
Approved Sale of the Company are subject to the satisfaction of the following
conditions: (i) upon the consummation of the Approved Sale, each holder of a
class of Stock shall receive the same form of consideration and the same
amount of consideration per share as any other holders of such class of
stock; (ii) if any holders of a class of Stock are given an option as to the
form and amount of consideration to be received, each holder of such class of
Stock shall be given the same option; and (iii) each holder of then currently
exercisable rights to acquire shares of a class of Stock shall be given an
opportunity to either (A) exercise such rights prior to the consummation of
the Approved Sale and participate in such sale as holders of such class of
Stock or (B) upon the consummation of the Approved Sale, receive in exchange
for such rights consideration equal to the amount determined by multiplying
(1) the same amount of consideration per share of a class of Stock received
by holders of such class of Stock in connection with the Approved Sale less
the exercise price per share of such class of Stock of such rights to acquire
such class of Stock by (2) the number of shares of such class of Stock
represented by such rights.
7. ADDITIONAL ISSUANCES OF COMMON STOCK. The Company will
authorize and reserve for issuance to additional members of management of the
Company and its subsidiaries (as agreed upon by the Stockholders) shares of
Common Stock in an amount equal to 3% of the Company's fully diluted Common
Stock (as adjusted from time to time for stock splits, stock dividends,
recapitalizations and similar events) (the "Additional Shares"). Prior to
issuing any such Additional Shares, the Company shall require such additional
members of management to be bound by the restrictions provided in this
Agreement. In the event that all of the Additional Shares are not issued to
such additional members of management within two years after the date hereof
the Company shall offer any such remaining Additional Shares to the
Executives for purchase on terms substantially the same as set forth in the
Management Agreements
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and the Consultant Agreement, pro rata based on their ownership of Common
Stock at such time.
8. DEFINITIONS.
"EXECUTIVE'S FAMILY GROUP" means Executive's spouse and descendants
(whether natural or adopted) and any trust solely for the benefit of
Executive and/or Executive's spouse and/or descendants.
"EXECUTIVE STOCK" will continue to be Executive Stock in the hands
of any holder other than Executive (except for the Company and the Investor
and except for transferees in a Sale of the Company or Public Sale), and
except as otherwise provided herein, each such other holder of Executive
Stock will succeed to all rights and obligations attributable to Executive as
a holder of Executive Stock hereunder. Executive Stock will also include
shares of the Company's capital stock issued with respect to Executive Stock
by way of a stock split, stock dividend or other recapitalization.
"PUBLIC SALE" means any sale pursuant to a registered public
offering under the Securities Act or any sale to the public pursuant to Rule
144 promulgated under the Securities Act effected through a broker, dealer or
market maker.
"QUALIFIED PUBLIC OFFERING" means the sale in an underwritten
public offering registered under the Securities Act of shares of the
Company's Common Stock.
"SALE OF THE COMPANY" means any transaction or series of
transactions pursuant to which any person or entity acquires (i) capital
stock of the Company possessing the voting power under normal circumstances
to elect a majority of the Board (whether by merger, consolidation,
reorganization, combination, sale or transfer of the Company's capital stock
or otherwise) or (ii) all or substantially all of the Company's assets
determined on a consolidated basis.
"SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time.
"STOCKHOLDER SHARES" means (i) any Stock purchased or otherwise
acquired by any Stockholder, (ii) any equity securities issued or issuable
directly or indirectly with respect to the Stock referred to in clause (i)
above by way of stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization. As to any particular shares constituting Stockholder Shares,
such shares will cease to be Stockholder Shares when they have been (x)
effectively registered under the Securities Act and disposed of in accordance
with the registration statement covering them or (y) sold to the public
through a broker, dealer or market maker pursuant to
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Rule 144 (or any similar provision then in force) under the Securities Act.
9. TRANSFERS; TRANSFERS IN VIOLATION OF AGREEMENT. Prior to
transferring any Stockholder Shares to any person or entity, the transferring
Stockholder shall cause the prospective transferee to execute and deliver to
the Company and the other Stockholders a counterpart of this Agreement. Any
transfer or attempted transfer of any Stockholder Shares in violation of any
provision of this Agreement shall be void, and the Company shall not record
such transfer on its books or treat any purported transferee of such
Stockholder Shares as the owner of such shares for any purpose.
10. AMENDMENT AND WAIVER. Except as otherwise provided herein, no
modification, amendment or waiver of any provision of this Agreement shall be
effective against the Company or the Stockholders unless such modification,
amendment or waiver is approved in writing by the Company, the Investor and
the holders of a majority of the shares of stock held by the Executives. The
failure of any party to enforce any of the provisions of this Agreement shall
in no way be construed as a waiver of such provisions and shall not affect
the right of such party thereafter to enforce each and every provision of
this Agreement in accordance with its terms.
11. SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality or unenforceability
shall not affect any other provision or any other jurisdiction, but this
Agreement shall be reformed, construed and enforced in such jurisdiction as
if such invalid, illegal or unenforceable provision had never been contained
herein.
12. ENTIRE AGREEMENT. Except as otherwise expressly set forth
herein, this document embodies the complete agreement and understanding among
the parties hereto with respect to the subject matter hereof and supersedes
and preempts any prior understandings, agreements or representations by or
among the parties, written or oral, which may have related to the subject
matter hereof in any way.
13. SUCCESSORS AND ASSIGNS. Except as otherwise provided herein,
this Agreement shall bind and inure to the benefit of and be enforceable by
the Company and its successors and assigns and the Stockholders and any
subsequent holders of Stockholder Shares and the respective successors and
assigns of each of them, so long as they hold Stockholder Shares.
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14. COUNTERPARTS. This Agreement may be executed in separate
counterparts each of which shall be an original and all of which taken
together shall constitute one and the same agreement.
15. REMEDIES. The Company, the Investor and the Executives shall
be entitled to enforce their rights under this Agreement specifically to
recover damages by reason of any breach of any provision of this Agreement
and to exercise all other rights existing in their favor. The parties hereto
agree and acknowledge that money damages may not be an adequate remedy for
any breach of the provisions of this Agreement and that any of the Company,
the Investor and the Executives may in its or their sole discretion apply to
any court of law or equity of competent jurisdiction for specific performance
and/or injunctive relief (without posting a bond or other security) in order
to enforce or prevent any violation of the provisions of this Agreement.
16. NOTICES. Any notice provided for in this Agreement shall be
in writing and shall be personally delivered, mailed first class mail
(postage prepaid) or sent by reputable overnight courier service (charges
prepaid) to the Company at the address set forth below and to any other
recipient at the address indicated on the schedules hereto and to any
subsequent holder of Stock subject to this Agreement at such address as
indicated by the Company's records, or at such address or to the attention of
such other person as the recipient party has specified by prior written
notice to the sending party. Notices will be deemed to have been given
hereunder when delivered personally, three days after deposit in the U.S.
mail and one day after deposit with a reputable overnight courier service.
Such notices, demands and other communications shall be sent to the
Stockholders and the Company at the addresses indicated below:
IF TO THE COMPANY:
USAI Acquisition Corp.
▇▇▇-▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Board of Directors
IF TO THE EXECUTIVES:
USAI Acquisition Corp.
▇▇▇-▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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IF TO THE INVESTOR:
Golder, Thoma, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ Fund IV
Limited Partnership
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
WITH A COPY TO:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
17. GOVERNING LAW. The corporate law of Delaware shall govern all
issues concerning the relative rights of the Company and its stockholders.
All other questions concerning the construction, validity and interpretation
of this Agreement shall be governed by and construed in accordance with the
internal laws of the State of Illinois, without giving effect to any choice
of law or other conflict of law provision or rule (whether of the State of
Illinois or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Illinois.
18. DESCRIPTIVE HEADINGS. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of
this Agreement.
* * * *
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the day and year first above written.
USAI ACQUISITION CORP.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Its
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GOLDER, THOMA, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
FUND IV LIMITED PARTNERSHIP
By: Golder, Thoma, ▇▇▇▇▇▇▇
▇▇▇▇▇▇, Inc.
Its: General Partner
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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Its
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/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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