1
Exhibit 10.6
AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT
THIS AMENDED AND RESTATED STOCKHOLDERS AGREEMENT (this
"AGREEMENT") dated as of March 5, 1997, by and among the VOTING TRUST (the
"VOTING TRUST) created under the Second Amended WABCO Voting Trust/Disposition
Agreement, dated as of December 13, 1995 (the "VOTING TRUST AGREEMENT"), VESTAR
EQUITY PARTNERS, L.P., a Delaware limited partnership ("VESTAR"), HARVARD
PRIVATE CAPITAL HOLDINGS, INC., a Massachusetts corporation ("HARVARD"),
AMERICAN INDUSTRIAL PARTNERS CAPITAL FUND II, L.P., a Delaware limited
partnership ("AIP"), and WESTINGHOUSE AIR BRAKE COMPANY, a Delaware corporation
("WABCO"). The Voting Trust, Vestar, Harvard, AIP and WABCO are sometimes
individually referred to as a "PARTY" and collectively the "PARTIES".
WHEREAS, this Agreement amends and restates the Stockholders
Agreement dated as of January 31, 1995 (the "Existing Stockholder Agreement") by
and among the Voting Trust, Scandinavian Incentive Holdings B.V. ("SIH") and
WABCO, and to which Vestar/WABCO Investors, L.P., Vestar Capital Partners, Inc.,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, and Incentive AB executed limited
joinders;
WHEREAS, concurrently with this Agreement becoming effective
Vestar, Harvard, AIP and members of WABCO's management are purchasing 6 million
of the shares of Common Stock owned by SIH and WABCO is repurchasing 4 million
of the shares of Common Stock owned by SIH (the purchase of such 10 million SIH
Shares, the "SIH Repurchase"); and
WHEREAS, the Parties desire to set forth certain agreements
with respect to the ownership of Common Stock by the Parties other than WABCO
and certain other matters relating to WABCO.
NOW, THEREFORE, in consideration of the promises and mutual
covenants hereinafter set forth, the Parties hereby agree as follows:
1. DEFINITIONS
1.1 In addition to the terms defined elsewhere herein, the following
terms shall have the following meanings:
1.1.1 "ACT" shall mean the Securities Act of 1933, as amended.
1.1.2 "AFFILIATE" shall mean any entity which is now, or
hereinafter becomes controlled by, or in control of, or in
common control with, another entity. "CONTROL" shall mean more
than fifty percent (50%) of the ownership interest or voting
rights of any entity, directly or indirectly.
2
1.1.3 "AIP Shares" shall mean the shares of Common Stock owned
by AIP.
1.1.4 "ASSOCIATE" shall mean any natural person who is a
partner, officer, director or employee of (i) another person,
(ii) a corporate general partner of a limited partnership or
(iii) a company or partnership that controls, is controlled
by, or is under common control with, such person. "PERSON"
shall mean an individual, corporation, partnership,
association, joint-stock company, trust and unincorporated
association.
1.1.5 "COMMON STOCK" shall mean shares of common stock, par
value $.01 per share, of WABCO.
1.1.6 "ESOP" shall mean, collectively, the WABCO Employee
Stock Ownership Plan effective January 1, 1995 and the WABCO
Employee Stock Ownership Trust established effective January
1, 1995 pursuant to the WABCO Employee Stock Ownership Trust
Agreement between WABCO and the U.S. Trust Company of
California, N.A., as such plan and trust may be amended,
modified or supplemented from time to time.
1.1.7 "HARVARD SHARES" shall mean the shares of Common Stock
owned by Harvard.
1.1.8 "PULSE SHARES" shall mean the shares of Common Stock
delivered by WABCO pursuant to that certain Asset Purchase
Agreement dated as of January 23, 1995, by and among WABCO,
Pulse Acquisition Corporation, Pulse Electronics, Incorporated
and Pulse Embedded Computer Systems, Inc.
1.1.9 "QUALIFYING PUBLIC OFFERING" shall mean a sale of shares
of Common Stock in a bona fide underwritten public offering
that is registered under the Act and conducted in the United
States in a manner reasonably designed to effect a broad
distribution of such shares.
1.1.10 "SEC" shall mean the United States Securities and
Exchange Commission.
1.1.11 "SIH SHARES" shall mean the 10,000,000 shares of Common
Stock owned by SIH.
1.1.12 "TRUSTHOLDERS" shall mean the holders of Trust
Certificates issued by the Voting Trust in exchange for shares
of Common Stock.
1.1.13 "VESTAR SHARES" shall mean the shares of Common Stock
owned by Vestar or Vestar Capital Partners, Inc.
1.1.14 "VOTING TRUST SHARES" shall mean the shares of Common
Stock owned by the Voting Trust.
2
3
2. NOTICE OF CERTAIN ACTIVITIES
2.1 Harvard hereby agrees that, so long as a Harvard representative is
on the Board of Directors of the Company, Harvard shall provide prompt
written notice to the Company if at any time Harvard competes with
WABCO in the railway products or rail passenger transit business,
PROVIDED, HOWEVER, that this covenant shall only apply with respect to
investments by Harvard in excess of $10,000,000.
2.2 Vestar hereby agrees that, so long as a Vestar representative is on
the Board of Directors of the Company, Vestar shall provide prompt
written notice to the Company if at any time Vestar or a wholly-owned
subsidiary of Vestar competes with WABCO in the railway products or
rail passenger transit business; PROVIDED, HOWEVER, that this covenant
shall only apply with respect to investments by Vestar or any of its
wholly-owned subsidiaries in excess of $10,000,000.
3. CERTAIN PURCHASES AND CORPORATE MATTERS
3.1 REPURCHASES. On or about the date hereof, (i) WABCO is acquiring
from SIH 4,000,000 of the SIH Shares (the "SIH REPURCHASE"), and (ii)
Vestar, Harvard, AIP and certain members of WABCO's management are
collectively purchasing 6,000,000 of the SIH Shares.
3.2 BY-LAWS. On or before the effective date hereof, the By-Laws of
WABCO (the "BY-LAWS") shall be amended to read as set forth in EXHIBIT
3.2 to this Agreement.
4. MANAGEMENT OF WABCO
4.1 BOARD OF DIRECTORS.
4.1.1 COMPOSITION.
(a) Subject to paragraphs (b) through (h) hereof, the Board of
Directors of WABCO (the "BOARD") shall consist of such number
of persons as is determined from time to time by the
affirmative vote of a majority of the Directors then in
office.
(b) The Board shall maintain a Nominating Committee, which
Nominating Committee shall nominate persons to be elected to
the Board as set forth in this Agreement. The Chairman of the
Board shall have exclusive authority to select the members of
the Board who will serve on the Nominating Committee, subject
in any event to the provision in Section 4.1.1(h). At any time
that a new Director is elected pursuant to the terms of this
Agreement, the remaining Directors then in office shall have
an obligation to ratify and approve such elections.
(c) The Nominating Committee shall nominate persons for
election to the Board so that the Board shall be comprised of
the following: (i) the Chief Executive of WABCO; (ii) another
executive officer of WABCO; (iii) at least three individuals
who are not employees of WABCO or any of its subsidiaries;
(iv) one individual designated by Vestar (the "Vestar
Director") (so long as Vestar and its partners, and Vestar
Capital and its stockholders and officers, and their
respective Affiliates collectively and beneficially own at
least 50% of the shares of Common Stock beneficially owned by
Vestar and Vestar Capital immediately after the closing of the
SIH Repurchase); (v) one individual designated by ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ (so long as ▇▇. ▇▇▇▇▇▇▇▇
3
4
and members of his immediate family and their Affiliates
collectively and beneficially own at least 50% of the shares
of Common Stock beneficially owned by ▇▇. ▇▇▇▇▇▇▇▇ immediately
after the closing of the SIH Repurchase); (vi) one individual
designated by Harvard (the "Harvard Director") (so long as
Harvard and its stockholders and officers and their respective
Affiliates collectively and beneficially own at least 50% of
the shares of Common Stock beneficially owned by Harvard
immediately after the closing of the SIH Repurchase); and
(vii) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ (so long as (x) ▇▇. ▇▇▇▇▇▇▇▇▇ is
able and willing to serve and (y) ▇▇. ▇▇▇▇▇▇▇▇▇ and his
immediate family and their Affiliates (the "▇▇▇▇▇▇▇▇▇ GROUP")
collectively and beneficially own at least 50% of the Pulse
Shares. So long as ▇▇. ▇▇▇▇▇▇▇▇▇ meets the qualifications set
forth in the foregoing clause (vii), the Chairman of the Board
shall direct the Nominating Committee to nominate ▇▇.
▇▇▇▇▇▇▇▇▇ as a member of the Board of Directors.
(d) If requested by WABCO in order to comply with paragraph
(c) above, Vestar, ▇▇. ▇▇▇▇▇▇▇▇ and/or Harvard shall cause its
designee for Director to resign effective at such time as
Vestar, ▇▇. ▇▇▇▇▇▇▇▇ or Harvard, as the case may be, no longer
has the ability to designate a Director pursuant to paragraph
(c) above, and ▇▇. ▇▇▇▇▇▇▇▇▇ shall resign effective at such
time as the ▇▇▇▇▇▇▇▇▇ Group no longer beneficially owns at
least 50% of the Pulse Shares.
(e) Vestar, Harvard and ▇▇. ▇▇▇▇▇▇▇▇ may, at any time during
which their respective right to designate Directors is
applicable, cause the removal of any Director designated by it
or him and designate a new individual or individuals to serve
as Director or Directors by prior written notice to the
Nominating Committee, which shall promptly nominate such
individual(s) for election to the Board. Except with respect
to ▇▇. ▇▇▇▇▇▇▇▇▇, in the event of a vacancy on the Board of
Directors caused by the death, resignation or removal of a
Director prior to the fulfillment of his term, the Party or
other person or entity originally designating such Director
shall, so long as its right to designate such Director is
applicable, designate an individual to serve as a successor
Director and shall promptly notify the Nominating Committee of
such action in writing, and the Nominating Committee shall
promptly nominate such individual for election to the Board.
The death, resignation or removal of ▇▇. ▇▇▇▇▇▇▇▇▇ as a
director shall terminate his right to serve on the Board of
Directors, and the ▇▇▇▇▇▇▇▇▇ Group shall have no right to
designate a successor to fill any vacancy caused by such
death, resignation or removal.
(f) Any person designated by Vestar, Harvard, ▇▇. ▇▇▇▇▇▇▇▇ or,
in the case of ▇▇. ▇▇▇▇▇▇▇▇▇, the Chairman of the Board, as
provided for herein shall be nominated by the Nominating
Committee to be elected to the Board at the stockholders'
meeting, or by the Directors already elected to the Board, as
the case may be, voting in conformity with such nomination. In
furtherance thereof, each of the Voting Trust, Vestar,
Harvard, Vestar Capital, AIP, ▇▇. ▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
agrees to vote all of the shares of Common Stock and any other
voting securities of WABCO from time to time held by it or him
in favor of, and each of the Voting Trust, Harvard, Vestar
Capital, AIP, ▇▇. ▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇▇ agrees to cause any shares of Common
Stock or other WABCO voting securities as to which it or he
from time to time has the right to direct the vote to be voted
in favor of, and to take any other appropriate steps to cause,
the election to the Board of individuals designated by Vestar,
Harvard and/or ▇▇. ▇▇▇▇▇▇▇▇ and, in the case of ▇▇. ▇▇▇▇▇▇▇▇▇,
the Chairman of the Board, and nominated by the Nominating
Committee in accordance with this Section 4.1.1; PROVIDED,
that ▇▇. ▇▇▇▇▇▇▇▇ shall not be deemed to control any shares of
Common Stock held by the ESOP for purposes of this Section 4.1
(g) Each director elected in accordance with the foregoing
paragraphs (b) through (f) shall be elected to one of three
classes, as allocated by the Chairman of the Board in his sole
discretion.
4
5
Each director will be elected to hold office for a term
expiring at the third succeeding annual meeting. In all such
cases, a Director's term of office shall continue until his
successor is duly elected and qualified or until his earlier
resignation or removal. Until such time as Vestar designates a
new individual in accordance with this Section 4.1.1, ▇▇▇▇▇ ▇.
▇▇▇▇▇▇ shall be the Vestar Director and shall continue in his
current term as a Director. The Harvard Director shall fill
the vacancy to be created by ▇▇▇▇▇▇ ▇▇▇▇▇▇' resignation from
the Board and shall be nominated for a full term expiring in
2000. Each other Director currently serving as such (with the
exception of ▇▇. ▇▇▇▇▇▇) will continue his present term.
(h) Each committee of the Board shall include either the
Vestar Director or the Harvard Director (as determined by
Harvard and Vestar) as one of its members.
4.1.2 POWERS AND MANAGEMENT.
(a) The Board of Directors shall have full power to control,
manage and direct the business of WABCO and to take such
actions as may be necessary to further the purposes of WABCO.
(b) The management of the business of WABCO shall be the
responsibility of a Chief Executive Officer, to be appointed
by the Board of Directors. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ shall continue
to be the Chief Executive Officer of WABCO and he shall
continue to serve as Chief Executive Officer until replaced by
the Board of Directors in accordance with the provisions of
any employment agreement then in force between WABCO and ▇▇.
▇▇▇▇▇▇▇▇. The Chief Executive Officer of WABCO shall, subject
to subsection(a) above, be entitled to make all decisions
regarding the ordinary course of business operations of WABCO
according to good business practice.
(c) All of the Directors shall have one vote each. A quorum
shall be constituted by a majority of the Directors then in
office.
5. TRANSFER OF SECURITIES
5.1 NO TRANSFER.
5.1.1 Except as permitted by Section 5.2 hereof, until March
31, 2001, neither Vestar, Harvard, AIP nor the Voting Trust
shall sell, transfer, assign, mortgage, change, hypothecate,
give away or otherwise dispose of (collectively, "TRANSFER")
any Common Stock owned or held by it. Any transfer contrary to
the provisions of this Agreement shall be null and void. The
foregoing shall not restrict (i) the transferability of
interests in the Voting Trust so long as any such transfer
does not affect the underlying Common Stock and (ii) the
ability of Vestar Capital Partners, Inc. to pledge the 40,000
Vestar Shares currently held by Vestar Capital Partners, Inc.
5.1.2 No transfer of shares of Common Stock by Vestar,
Harvard, AIP or the Voting Trust shall be permitted pursuant
to Section 5.2 hereof except (i) pursuant to an effective
registration statement covering such shares under the Act and
any applicable state securities laws, (ii) in a transaction
permitted by Rule 144 promulgated under the Act and as to
which WABCO has received reasonably satisfactory evidence of
compliance with the provisions of Rule 144, (iii) to a person
whom the seller reasonably believes is a Qualified
Institutional Buyer within the meaning of Rule 144A
promulgated under the Act purchasing for its own account or
for the account of a Qualified Institutional Buyer that is
aware that the transfer is being made in reliance upon Rule
144A promulgated under the Act, or (iv) upon receipt of a
legal opinion in form and
5
6
substance reasonably acceptable to WABCO rendered by counsel
(who may be an employee of the party for whom or on whose
behalf the opinion is being rendered) reasonably satisfactory
to WABCO to the effect that the transaction does not require
registration under the Act and any applicable state securities
laws. This Section shall not apply to transfers by Vestar,
Harvard or AIP to their respective Affiliates as permitted by
Section 5.2.1.
5.1.3 At the request of WABCO, each share certificate for the
Common Stock held by Vestar, Harvard, AIP or the Voting Trust
shall be provided with the following legend:
"The shares of stock represented by this certificate
are subject to, and may be sold, transferred,
assigned, mortgaged, changed, hypothecated, given
away or otherwise disposed of (collectively,
"transferred") only in accordance with, the
provisions of the Amended and Restated Stockholders
Agreement dated as of March 5, 1997. The shares of
stock represented by this certificate have not been
registered under the Securities Act of 1933, as
amended (the "Act"), or any applicable state
securities laws, and may not be transferred , and
Westinghouse Air Brake Company (the "Company") is not
required to give effect to any attempted transfer,
except in accordance with the terms of said
Stockholders Agreement and (i) pursuant to an
effective registration statement covering such
security under the Act and any applicable state
securities laws, (ii) in a transaction permitted by
Rule 144 promulgated under the Act and as to which
the Company has received reasonably satisfactory
evidence of compliance with the provisions of Rule
144, (iii) to a person whom the seller reasonably
believes is a Qualified Institutional Buyer within
the meaning of Rule 144A promulgated under the Act
purchasing for its own account or for the account of
a Qualified Institutional Buyer that is aware that
the transfer is being made in reliance upon Rule 144A
promulgated under the Act, or (iv) upon receipt of a
legal opinion in form and substance reasonably
acceptable to the Company rendered by counsel (who
may be an employee of the party for whom or on whose
behalf the opinion is being rendered) reasonably
satisfactory to the Company to the effect that the
transaction does not require registration under the
Act and any applicable state securities laws."
5.2 TRANSFERS ALLOWED.
5.2.1 On or prior to March 31, 1998 the Harvard Shares, the
Vestar Shares and the AIP Shares may only be transferred (i)
to Affiliates or partners of such transferor who agree in a
writing, in form and substance reasonably satisfactory to
WABCO, to be bound by and subject to the provisions of this
Agreement , (ii) in connection with the exercise of
"piggyback" registration rights granted to such transferor by
WABCO, or (iii) in connection with any merger, consolidation,
reorganization, recapitalization or similar transaction or any
tender or exchange offer approved or recommended by WABCO's
Board of Directors. After March 31, 1998 the Harvard Shares,
the Vestar Shares and the AIP Shares may be transferred as
permitted under the foregoing clauses (i), (ii) and (iii) and
(w) in a Qualifying Public Offering, (x) in any disposition to
a person which, to the best knowledge of Harvard, Vestar or
AIP, as the case may be, after due inquiry (it being
understood that Harvard, Vestar and AIP may rely on
representations and warranties made by such person and such
person's Schedule 13D or Schedule 13G filings with the SEC
unless Harvard, Vestar or AIP has actual knowledge that such
Schedules are not accurate), will not beneficially own,
together with such person's Affiliates, a number of shares of
Common Stock then outstanding on a fully diluted basis which,
when combined with the number of Harvard Shares, Vestar Shares
or AIP Shares, as the case may be, being disposed of in such
disposition would constitute more than 6% of the shares of
Common Stock then outstanding on a
6
7
fully diluted basis, (y) to or through any broker,
underwriter, placement agent or other financial intermediary,
acting in such capacity, which undertakes in a writing
reasonably satisfactory to WABCO to effect any subsequent
transfer by it of such Harvard Shares, AIP Shares or Vestar
Shares, as the case may be, in a Qualifying Public Offering or
(z) to any person (other than any person which, to the best
knowledge of Harvard, Vestar or AIP, as the case may be, after
due inquiry, is a competitor or customer of WABCO or has,
prior to such sale, initiated or been an active participant
in, an unsolicited change of control transaction by tender
offer, proxy contest, consent solicitation or otherwise with
respect to WABCO), provided that WABCO shall have a right of
first offer with respect to any Harvard Shares, Vestar Shares
or AIP Shares, as the case may be, proposed to be sold in
accordance with this clause (z) pursuant to Section 5.2.2
hereof unless WABCO shall have approved of such transfer in
writing.
5.2.2 If either Harvard, Vestar or AIP (the "SELLING PARTY")
proposes to sell any Harvard Shares, Vestar Shares or AIP
Shares, as the case may be pursuant to clause (z) of Section
5.2.1 hereof (a "THIRD PARTY SALE"), the Selling Party shall
not transfer such Shares (the "OFFERED SHARES") without first
offering the Offered Shares to WABCO in accordance with the
following procedures. The Selling Party shall provide to WABCO
written notice of its intention to sell (the "SALE NOTICE"),
which Sale Notice shall include a request for WABCO to make a
written offer (the "WABCO OFFER") to purchase for cash all of
the Offered Shares. WABCO shall have the right to make a WABCO
Offer for the Offered Shares by notifying the Selling Party
(such notice being referred to as an "ELECTION NOTICE") at any
time within 35 days of WABCO's receipt of the Sale Notice of
WABCO's intent to make such WABCO Offer; PROVIDED, that any
such Election Notice from WABCO shall be irrevocable, contain
all of the material terms and conditions of the sale and be
accompanied by a commitment letter from a bank or other
responsible source of financing for such purchase or a
certificate signed by the Chief Financial Officer of WABCO
certifying that WABCO has sufficient funds to purchase the
Offered Shares. If WABCO exercises its right to purchase the
Offered Shares pursuant to the foregoing sentence, the closing
of the purchase of the Offered Shares by WABCO shall take
place at the principal offices of WABCO on a date specified by
WABCO in the Election Notice, but in any event not later than
100 days after receipt by WABCO of the Sale Notice. On the
closing date for such purchase, the Selling Party shall
deliver the Offered Shares to WABCO free and clear of all
liens, encumbrances and security interests and, in connection
therewith, the Selling Party shall execute and deliver such
agreements, documents and instruments, including stock powers,
as WABCO shall reasonably require. If WABCO fails to deliver
an Election Notice within 35 days of receipt by WABCO of the
Selling Party Sale Notice or if WABCO otherwise advises the
Selling Party in writing that WABCO does not intend to
exercise its right to acquire the Offered Shares, the Selling
Party shall be entitled to sell the Offered Shares to any
other person without any requirements as to the terms and
conditions of such sale; PROVIDED, that if the Selling Party
does not sell the Offered Shares by the earlier to occur of
180 days from the expiration of WABCO's right to deliver an
Election Notice or 180 days from written notice from WABCO
that it does not intend to exercise its right to acquire the
Offered Shares, the provisions of this Section 5.2.2 shall
again apply to the Offered Shares.
If WABCO delivers its Election Notice for the Offered Shares
within 35 days of receipt by WABCO of the Selling Party Sale
Notice, the Selling Party shall be entitled to offer the
Offered Shares to any person pursuant to a Third Party Sale at
a price that is more favorable to the Selling Party than those
set forth in the Election Notice, provided that any such sale
must occur within 180 days of the date of delivery of the
Election Notice.
7
8
Notwithstanding the foregoing, if the Selling Party's Sale
Notice is in connection with any tender offer or exchange
offer for outstanding Common Stock, WABCO shall be required to
the extent WABCO desires to purchase the Offered Shares to
exercise its right to so purchase, and to close such purchase
of, the Offered Shares by the date which is the earlier of (i)
10 days following receipt of such Sale Notice and (ii) the
business day prior to the expiration of such tender or
exchange offer.
5.2.3 After March 31, 1998 Harvard, Vestar and AIP shall be
permitted to sell Shares pursuant to and subject to the
limitations set forth in Rule 144 of the SEC under the Act.
5.2.4 Notwithstanding any provision herein to the contrary,
Trustholders (other than ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, who shall be
subject to Section 5.2.5 below) shall, to the extent permitted
by the Voting Trust Agreement, be permitted to transfer Voting
Trust Shares, withdraw Voting Trust Shares from the Voting
Trust, and/or sell or otherwise dispose of Shares at any time.
Upon expiration of the Voting Trust, Voting Trust Shares may
be distributed in accordance with the terms thereof and such
Voting Trust Shares will no longer be subject to Section 5.1.
5.2.5 (a) Except as permitted by Section 5.2.5(b), 5.2.5(c)
and 5.2.5(d), until ▇▇▇▇▇ ▇▇, ▇▇▇▇, ▇▇▇▇ of Messrs. Kassling,
Fernandez, Brooks, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ (collectively, the
"Management Group") shall sell, transfer, assign, mortgage,
change, hypothecate, give away or otherwise dispose of
(collectively "transfer") any shares of Common Stock
beneficially owned by him or any of his interest in the Voting
Trust (treating any Common Stock held by the Voting Trust for
the account of any member of the Management Group as Common
Stock owned by such member).
(b) Subject to Section 5.2.5(f) below, each member of the
Management Group shall be permitted to transfer shares of
Common Stock beneficially owned by him at any time in
accordance with the terms of Section 8 of the Voting Trust
Agreement, as in effect on the date hereof, regardless of
whether such person is a participant in the Voting Trust. Each
member of the Management Group who is also a participant in
the Voting Trust shall be permitted to withdraw shares of
Common Stock from the Voting Trust at any time in accordance
with the terms of the Voting Trust Agreement, as in effect on
the date hereof.
(c) So long as any member of the Management Group continues to
be an employee of WABCO or any of its subsidiaries, such
member, together with his transferees permitted under this
Section 5.2.5, may transfer during each 12-month period
following the effective date of this Agreement, in the
aggregate, 5% of the shares of Common Stock beneficially owned
by such member on the date of this Agreement.
(d) In the event that a member of the Management Group's
employment with WABCO and its subsidiaries is terminated for
any reason, such member, together with his transferees
permitted under this Section 5.2.5, may transfer during each
12-month period following the effective date of such
termination, in the aggregate, 20% of the shares of Common
Stock beneficially owned by such member on the effective date
of such termination. The restriction in this Section 5.2.5(d)
may be waived by the Chairman of the Board of WABCO as to any
member of the Management Group if such member delivers to the
Chairman a request for waiver indicating that such waiver is
required in order to alleviate personal hardship. The decision
as to whether and to what extent to grant a waiver shall be in
the sole discretion of the Chairman.
8
9
(e) Each member of the Management Group agrees not to effect
any public sale or distribution of shares of Common Stock
owned by him or any similar security of the Company, or any
securities convertible into or exchangeable or exercisable for
such securities, or any securities into which such securities
are convertible or for which such securities are exchangeable
or exercisable, during the 10 days prior to, and during the 90
day period beginning on, the effective date of any
registration statement in which "Holders" (as defined in that
certain Common Stock Registration Rights Agreement of even
date herewith among the Company, Vestar, Harvard, AIP, the
Voting Trust and certain other holders of shares of Common
Stock) are participating in connection with an underwritten
public offering of shares of Common Stock (except as part of
such registration), if and to the extent reasonably requested
in writing (with reasonable prior notice) by the lead managing
underwriter of the underwritten public offering.
(f) Each member of the Management Group agrees that no shares
of Common Stock (or any interests in the Voting Trust)
beneficially owned by him, his spouse or his minor children
will be transferred in a transfer permitted by this Section
5.2.5 (other than subsections (c) and (d) above) unless the
transferee agrees in a writing, in form and substance
reasonably satisfactory to WABCO, to be bound by and subject
to the provisions of this Section 5.2.5.
(g) Shares of Common Stock beneficially owned by the
Management Group are as follows:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 1,548,336 shares
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 643,444 shares
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 437,300 shares
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 640,200 shares
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 251,000 shares
It is agreed that the foregoing shares include all shares of
Common Stock controlled by the Management Group and their
respective spouses and minor children and that all of the
foregoing shares shall be subject to this Agreement.
(h) Shares of Common Stock held by the ESOP shall not be
deemed to be beneficially owned by any member of the
Management Group for purposes of this Agreement. Shares of
Common Stock held in the Voting Trust (other than shares
deposited by members of the Management Group in the Voting
Trust) also shall not be deemed to be beneficially owned by
any member of the Management Group for purposes of this
Agreement.
6. ASSIGNMENT
6.1 This Agreement and all of the provisions hereof shall be binding
upon and inure to the benefit of the Parties to this Agreement and
their respective successors and assigns.
6.2 Neither this Agreement nor any of the rights, interests and
obligations hereunder shall be assignable by any Party without the
prior written consent of the other Parties; provided, however, Vestar,
Harvard and AIP shall have the right to assign their rights, interests
and obligations hereunder to their respective Affiliates from time to
time so long as such Affiliates agree in a writing, in form and
substance reasonably satisfactory to WABCO, to be bound by and subject
to the provisions of this Agreement.
9
10
7. TERM
7.1 This Agreement shall continue in effect (unless terminated by a
mutual agreement of the Parties) until March 31, 2007.
8. CONCILIATION AND ARBITRATION
8.1 CONCILIATION. If any dispute, claim or difference arises out of or
relating to this Agreement, or as to the rights and liabilities of the
Parties hereunder or as to the breach or invalidity hereof, or in
connection with the construction of this Agreement (each such event
being hereinafter called a "DISPUTE"), the Parties shall use their best
efforts to resolve the Dispute and, if they so desire, consult outside
experts for assistance in arriving at such a resolution.
8.2 ARBITRATION. (a) Any Dispute shall be finally settled by
arbitration in accordance with the Commercial Arbitration Rules of the
American Arbitration Association ("AAA") effective as of the
commencement of the arbitration(the "RULES"), except as such Rules may
be modified as provided in this Agreement. The arbitration shall be
held in New York, New York, unless the parties mutually agree to have
the arbitration held elsewhere, and judgment upon the award made
therein may be entered by any court having jurisdiction thereof;
PROVIDED, HOWEVER, that nothing contained in this paragraph shall be
construed to limit or preclude a party from bringing any action in any
court of competent jurisdiction for injunctive or other provisional
relief to compel another party to comply with its obligations under
this Agreement during the pendency of the arbitration proceedings. The
arbitral tribunal shall be composed of three(3) arbitrators, who shall
be experienced commercial litigators admitted to practice law in the
State of New York. If the Dispute is between two of the Parties, each
Party shall appoint one arbitrator. If the Dispute is among more than
two Parties hereto, the Parties shall mutually agree upon and appoint
two arbitrators. If such Parties fail to nominate an arbitrator (in the
case of a two-party Dispute) or if the Parties fail to agree upon two
arbitrators (in the case of a more than two Party Dispute) in
accordance with the two preceding sentences within thirty(30) days from
the date when the notice of intention to arbitrate referred to in Rule
6 of the Rules (the "COMMENCEMENT NOTICE") has been received by the
Respondent (as defined in the Rules) such appointment shall, upon
written request by either or any Party (as the case may be) to the AAA,
be made in accordance with Rule 14 of the Rules. The two arbitrators
thus appointed shall attempt to agree upon the third arbitrator to act
as chairperson of the arbitration tribunal. If said two (2) arbitrators
fail to appoint the chairperson within thirty (30) days from the date
of appointment of the second arbitrator, upon written request of either
party to the AAA, such appointment shall be made in accordance with
Rule 15 of the Rules. The arbitrators shall have no power to waive,
alter, amend, revoke, or suspend any of the provisions of this
Agreement, provided, however, that the arbitrators shall have the power
to decide all questions with respect to the interpretation and validity
of this Subsection 8.2. An arbitrator may not act as an advocate for
the party nominating him, and all three arbitrators shall be impartial
and unbiased. A majority vote by the three arbitrators shall be
required on any decision made by them; PROVIDED, HOWEVER, that lacking
such a majority in the case of questions of amounts of dollar or other
quantities, the vote for the greatest amount or quantity shall be
deemed to be a vote for the amount or quantity next in magnitude in
order to form a majority for such vote. The arbitrators shall permit
such discovery as they shall determine is appropriate in the
circumstances, taking into account the needs of the Parties and the
desirability of making discovery expeditious and cost-effective. Any
such discovery shall be limited to information directly relevant to the
controversy or claim in arbitration and shall be concluded within
thirty (30) days after the appointment of the arbitration panel. This
agreement to arbitrate shall be binding upon the heirs or successors
and the assigns and any
10
11
trustee, receiver or executor of each party hereto. Except to the
extent required by law or court or administrative order, no party,
arbitrator, representative, counsel or witness shall disclose or
confirm to any person not present at the arbitration hearings, any
information about the arbitration proceeding or hearings, including the
names of the parties and arbitrators, the nature and amount of the
claims, the financial condition of any party, the expected date of
hearing or the award made.
(b) Subject to and not in any way limiting subsection (a) hereof, each
of the parties hereto irrevocably consents to personal jurisdiction in
any action brought in connection with this Agreement in the United
Stated District Court for the Southern District of New York or any New
York court of competent jurisdiction, including, but not limited to,
any action to enforce an award rendered pursuant to subsection (a)
hereof, and the Voting Trust and WABCO each hereby appoints ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ & ▇▇▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq. as its agent for
service of process, Vestar hereby appoints Vestar Capital Partners,
Inc., Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ as its agent for service of process,
Harvard hereby appoints Ropes & ▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇ as its
agent for service of process and AIP hereby appoints American
Industrial Partners Corporation, Attention: ▇▇▇ ▇▇▇▇▇▇▇ as its agent
for service of process. The submission of the Parties to jurisdiction
as set forth in this subsection (b) does not constitute and shall not
be deemed a consent to jurisdiction for any purpose other than those
expressly set forth in this Agreement.
9. GENERAL PROVISIONS
9.1 NOTICES. Any notice, request, demand, waiver or other communication
required or permitted to be given hereunder shall be in writing and
shall be deemed to have been duly given (i) when delivered by hand,
(ii) five business days after it is mailed certified or registered
mail, return receipt requested with postage prepaid, (iii) when
answered back if sent by telecopy (with receipt confirmed) or (iv)
three business days after it is sent by express delivery service, as
follows:
IF TO VESTAR:
c/o Vestar Capital Partners, Inc.
Seventeenth Street Plaza
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Fax: ▇▇▇-▇▇▇-▇▇▇▇
11
12
IF TO THE VOTING TRUST:
c/o Westinghouse Air Brake Company
▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Fax: ▇▇▇-▇▇▇-▇▇▇▇
IF TO HARVARD:
c/o Harvard Private Capital Group, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
Ropes & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Fax: ▇▇▇-▇▇▇-▇▇▇▇
IF TO AIP:
American Industrial Partners
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
12
13
With a copy to:
American Industrial Partners
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
IF TO WABCO:
Westinghouse Air Brake Company
▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Any Party may change its address specified for notices here in by
designating a new address by notice in accordance with this Section.
9.2 WAIVER. Any failure on the part of either Party hereto to comply
with any of its obligations, agreement or conditions hereunder may be
waived by the other Party. No waiver of any provision of this Agreement
shall be deemed, or shall constitute, a waiver of any other provision,
whether or not similar, nor shall any waiver constitute a continuing
wavier.
9.3 BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the Parties and their respective heirs, legal
representatives, executors, administrators, successors and assigns as
permitted by the terms of this Agreement.
9.4 SEVERABILITY. If any provision of this Agreement should be or
become fully or partly invalid or unenforceable for any reason
whatsoever or violate any applicable law, this Agreement is to be
considered divisible as to such provision and such provision is to be
deleted from this Agreement, and the remainder of this Agreement shall
be deemed valid and binding as if such provision were not included
herein. There shall be substituted for any such provision deemed to be
deleted a suitable provision which, as far as it is legally possible,
comes nearest to what the Parties desired or would have
13
14
desired according to the sense and purpose of this Agreement had this
been considered when concluding this Agreement.
9.5 HEADINGS. The section and other headings in this Agreement are
inserted solely as a matter of convenience and for reference only, and
do not constitute a part of this Agreement.
9.6 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
among the Parties as to the subject matter hereof and supersedes any
other agreements, representations, warranties, or communications,
whether oral or written, among the Parties (or their Affiliates)
relating to the subject matter hereof. Each of WABCO, the other parties
hereto and, by its execution and delivery of its termination letter,
SIH hereby acknowledges and agrees that the Existing Stockholders
Agreement is amended and restated in full by this Agreement and that
all obligations owed by SIH and its Affiliates to WABCO under the
Existing Stockholders Agreement (other than under Section 10 thereof)
are terminated effective upon the effectiveness of this Agreement.
9.7 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware and such laws shall
also govern in the settlement by arbitration or otherwise of any and
all disputes arising between the Parties as well as the validity of the
arbitration clause in Section 11 above.
9.8 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
9.9 EXHIBITS INCORPORATED. All Exhibits attached hereto are
incorporated herein by reference, and all blanks in such Exhibits, if
any, will be filled in as required in order to consummate the
transactions contemplated herein and in accordance with this Agreement.
9.10 MODIFICATIONS. No modification, alteration, addition, change or
amendment of the terms of this Agreement shall be binding on the
Parties unless reduced to writing and duly executed by each of the
Parties hereto in the same manner as the execution of this Agreement.
9.11 EFFECT OF STOCK SPLITS, STOCK DIVIDENDS, ETC. If the outstanding
shares of Common Stock shall be changed into or exchangeable for a
different number or kind of shares of stock or other securities of
WABCO or another corporation, or if the outstanding number of shares of
Common Stock is increased or decreased, in each case as a result of a
stock dividend, stock split-up, reverse stock split-up, reorganization,
reclassification, combination of shares, merger, consolidation or like
event (collectively, a "STOCK EVENT"), the provisions of this Agreement
shall apply to the shares or other securities acquired pursuant to such
Stock Event (the "ADDITIONAL SHARES") to the extent (but only to the
extent) that such provisions apply to the shares of Common Stock on
which or as a result of which the Additional Shares are issued or paid
to the holders thereof.
9.12. EFFECTIVENESS. This Agreement shall become effective upon the
consummation of the SIH Repurchase.
14
15
IN WITNESS WHEREOF, each party hereto has executed or caused
this Agreement to be executed on its behalf, all on the day and year first above
written.
VESTAR EQUITY PARTNERS, L.P.
By: VESTAR ASSOCIATES, L.P., its General Partner
By: VESTAR ASSOCIATES CORPORATION, its
General Partner
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
HARVARD PRIVATE CAPITAL HOLDINGS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
Its: AUTHORIZED SIGNATORY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------
Its: AUTHORIZED SIGNATORY
VOTING TRUST
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Its: TRUSTEE
WESTINGHOUSE AIR BRAKE COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Its: VICE PRESIDENT AND SECRETARY
15
16
AMERICAN INDUSTRIAL PARTNERS
CAPITAL FUND II, L.P.
By: American Industrial Partners II, L.P., its
General Partner
By: American Industrial Partners
Corporation, its General Partner
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
By: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman
16
17
JOINDER
Vestar Capital Partners, Inc. joins in this Amended and Restated
Stockholders Agreement for the limited purpose of agreeing to be bound by and to
be entitled to the benefits of Sections 2, 4 and 5 hereof.
VESTAR CAPITAL PARTNERS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
17
18
JOINDER
The undersigned join in this Amended and Restated Stockholders
Agreement for the limited purpose of agreeing to be bound by and to be entitled
to the benefits of Sections 4 through 9 hereof.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
DAVIDECO, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------
Its: DIRECTOR
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
SUEBRO, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------
Its: PRESIDENT
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
18