EXHIBIT 4.2
STOCK TRANSFER RESTRICTION AGREEMENT
This Stock Transfer Restriction Agreement (this "Agreement") is made this
____ day of _________________, 1997, between Group Maintenance America Corp., a
Texas corporation ("Parent") and the former holders of common stock of
_______________________, a __________ corporation ("Company") listed on the
signature pages hereto under the caption "Stockholders" ("Stockholders"), the
spouses of the Stockholders, if applicable, and any other persons or entities
who become parties to this Agreement as "Stockholders" pursuant to the terms of
this Agreement.
WHEREAS, Parent, _____________ Acquisition Corp., the Company and the
holders of common stock of the Company have entered into that certain Agreement
and Plan of Merger dated _____________________, 1997 ("Merger Agreement"); and
WHEREAS, as required by the Merger Agreement, certain restrictions are to
be placed on the disposition of shares of Common Stock, $.001 par value per
share, of Parent ("Parent Common Stock") to be issued to the Stockholders
pursuant to the Merger Agreement.
NOW, THEREFORE, in consideration of the premises and the agreements herein
contained, and intending to be legally bound hereby, the parties agree as
follows:
1. Definitions. For purposes hereof, the term "Stock" shall mean any
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capital stock of Parent now or at any time hereafter held of record or
beneficially by any Stockholder, including, without limitation, the Parent
Common Stock to be issued to the Stockholders pursuant to the Merger Agreement,
and the term "Disposition" shall mean any direct or indirect transfer,
assignment, gift, pledge, hypothecation, encumbrance or other disposition;
provided, however, that (i) a transfer of any Stock of a Stockholder upon such
Stockholder's death to his or her estate, heirs or devisees by will or the laws
of descent and distribution shall not be deemed a "Disposition" if each such
transferee agrees in writing to be bound by all of the provisions of this
Agreement to the same extent as if such transferee were a Stockholder by
execution of an Adoption Agreement in the form attached hereto as Exhibit A and
(ii) any gift of Stock by a Stockholder to such Stockholder's sibling(s) or
direct lineal ascendent(s) or descendent(s) (including any adopted children) (or
to a trust for the benefit of such Stockholder's sibling(s) or direct lineal
ascendent(s) or descendent(s) (including any adopted children)) may, at the
Company's discretion, not be deemed a "Disposition" if each such recipient of
such gift agrees in writing to be bound by all of the provisions of this
Agreement to the same extent as if such recipient were a Stockholder by
execution of an Adoption Agreement in the
form attached hereto as Exhibit A (the transfers in clause (i) above and the
transfers in clause (ii) above, if permitted by the Company, shall be referred
to herein as "Permitted Dispositions").
2. Standstill Agreement; Securities Matters.
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(a) Standstill. If Parent is engaged in an underwritten public
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offering of its securities, no Stockholder shall make any Disposition of any
Stock on a securities exchange or in the over-the-counter or any other public
trading market for whatever period of time Parent (upon the recommendation of
its underwriters) requests by written notice given to each Stockholder;
provided, however, that (i) such request shall not be for a period extending
longer than that applicable to management shareholders of Parent; (ii) this
Section 2(a) shall not limit any Stockholder's right to sell Stock pursuant to
any piggyback registration right that such Stockholder may have pursuant to any
registration rights or similar agreement binding upon Parent; and (iii) any
restrictions recommended by the underwriters are no more restrictive than those
imposed on the management shareholders of Parent.
(b) Securities Laws. No Stockholder shall make any Disposition of any
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time if such action would constitute (i) a violation of the registration
requirements of any federal or state securities or blue sky laws, (ii) a breach
of any condition to any exemption from registration of the Parent Common Stock
under any such laws, or (iii) a breach of any undertaking or agreement of such
Stockholder entered into pursuant to such laws or in connection with obtaining
an exemption thereunder. Each Stockholder shall comply with the requirements of
Rule 144 of the Securities Act of 1933. Prior to any proposed Disposition of any
Stock by a Stockholder, such Stockholder shall provide to Parent an unqualified
written opinion of legal counsel, which counsel and opinion (in form and
substance) shall be reasonably satisfactory to Parent, to the effect that the
proposed Disposition is in compliance with this Section 2(b) and that the
proposed Disposition is permitted by this Agreement and any shareholder buy-
sell, stock transfer restriction or other agreement to which such Stockholder is
a party restricting the transferability of such Stock. Any certificate
representing shares of Stock shall bear appropriate legends restricting the sale
or other transfer of such Stock in accordance with applicable federal or state
securities or blue sky laws and in accordance with the provisions of this
Agreement.
(c) Limitations on Dispositions; Notices.
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(i) Notwithstanding anything to the contrary contained herein, no
Stockholder shall make any Disposition of any Stock during the period beginning
on the date of this agreement and for 365 days thereafter (the "One Year Holding
Period") (otherwise than pursuant to an effective registration statement). In
addition to the foregoing restrictions, during the period beginning upon the
expiration of the One Year Holding Period and expiring 365 days thereafter (the
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"Second Holding Period"), no Stockholder may make a Disposition or Dispositions
in any calendar month of a number of shares of Parent Common Stock (otherwise
than pursuant to an effective registration statement) in an amount greater than
3% of the number of shares of Parent Common Stock issued to such Stockholder
pursuant to the Merger Agreement or transferred to such Stockholder pursuant to
a Permitted Disposition, increasing cumulatively for months in which less than
3% was sold.
(ii) Until the later to expire of (a) 365 days following the
expiration of the Second Holding Period, (b) the date on which a Stockholder
ceases to be an officer or director of the Company or any of its subsidiaries,
if applicable, or (c) the date on which such Stockholder ceases to hold the
greater of (1) 50,000 shares of Parent Common Stock or (2) 20% of the number of
shares of Parent Common Stock issued to such Stockholder pursuant to the Merger
Agreement or transferred to such Stockholder pursuant to a Permitted
Disposition, as adjusted for stock splits, stock dividends and the like, each
Stockholder shall provide five business days' written notice to the Company,
pursuant to Section 12, of any proposed Disposition or plan of Disposition.
3. Legend; Stop Transfer Instructions. Parent shall place a legend on
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the reverse side of all certificates representing shares of Stock now owned or
hereafter acquired by each Stockholder, or any permitted transferee to provide
notice of the existence of this Agreement and its applicability to any
Disposition of Stock. The legend shall be in substantially the following form:
BY THE TERMS OF A STOCK TRANSFER RESTRICTION AGREEMENT, CERTAIN
RESTRICTIONS HAVE BEEN PLACED UPON THE TRANSFERABILITY OF THE SHARES
REPRESENTED BY THIS CERTIFICATE. THE COMPANY WILL FURNISH COPIES OF SUCH
AGREEMENTS TO THE RECORD HOLDER OF THIS CERTIFICATE WITHOUT CHARGE UPON
WRITTEN REQUEST TO THE COMPANY AT ITS PRINCIPAL PLACE OF BUSINESS OR
REGISTERED OFFICE.
Parent also shall place stop transfer instructions with respect to such shares
of Stock in its stock transfer records for such purpose.
4. Breach. Any Disposition or attempted Disposition in breach of this
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Agreement shall be void and of no effect. In connection with any such voided
Disposition, Parent may hold and refuse to transfer any Stock or certificate
therefor tendered for transfer, in addition and without prejudice to any and all
other rights and remedies which may be available to Parent.
5. Termination. This Agreement shall terminate on the earlier to occur
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of (i) 5 years from the date of this Agreement or (ii) as to any Stockholder,
the date on which such Stockholder
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owns less than 10% of the shares of Parent Common Stock issued to such
Stockholder pursuant to the Merger Agreement or transferred to such Stockholder
pursuant to a Permitted Disposition.
6. Specific Enforcement. Each Stockholder expressly agrees that Parent
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will be irreparably damaged if this Agreement is not specifically enforced.
Upon a breach or threatened breach of the terms, covenants and/or conditions of
this Agreement by a Stockholder, Parent shall, in addition to all other
remedies, be entitled to a temporary or permanent injunction, without showing
any actual damage, and/or a decree for specific performance, in accordance with
the provisions hereof, against such Stockholder.
7. Governing Law; Successors and Assigns. This Agreement shall be
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governed by the laws of the State of Texas without regard to the choice of law
principles thereof and shall be binding upon the heirs, personal
representatives, executors, administrators, and permitted successors and assigns
of the parties.
8. Waivers. No waiver of any breach or default hereunder shall be
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considered valid unless in writing, and no such waiver shall be deemed a waiver
of any subsequent breach or default of the same or similar nature.
9. Severability. If any provision of this Agreement shall be held to be
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illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in any manner
affect or render illegal, invalid or unenforceable any other provision of this
Agreement, and this Agreement shall be carried out as if any such illegal,
invalid or unenforceable provision were not contained herein.
10. Captions. Captions are for convenience only and are not deemed to be
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part of this Agreement.
11. Counterparts. This Agreement may be executed in two or more
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counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
12. Notices. Any notice, reply or other communication required or
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permitted to be given under this Agreement must be given in writing and may be
served by depositing the same in the United States mail, certified, postage
prepaid, and addressed to the party or parties to be notified, or by delivering
such notice in person to such party or parties. Such notice shall be effective
upon receipt by the party to whom the notice is to be given. For the purposes
of this Section 13, the address of Parent shall be:
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Group Maintenance America Corp.
0000 Xxxx Xxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: President
The address of each Stockholder shall be such Stockholder's address as shown on
the signature pages hereto or, in the case of a Stockholder who receives Stock
in a Permitted Disposition, as shown on the Adoption Agreement executed and
delivered by such Stockholder, Parent and each Stockholder shall have the right
to change its, his or her address by giving at least fifteen (15) days prior
written notice of the new address to the other parties to this Agreement.
This Agreement is executed by the parties hereto and shall be
effective as of the date first above written.
PARENT:
GROUP MAINTENANCE AMERICA CORP.
By:_________________________________
Name:_______________________________
Title:______________________________
STOCKHOLDERS:
____________________________________
______________________
Address:____________________________
____________________________
____________________________
____________________________________
Spouse
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