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EXHIBIT 4.2
SHAREHOLDERS AGREEMENT
THIS SHAREHOLDERS AGREEMENT (the "Agreement"), is made and entered into
as of the ___day of November, 1999, by and among WT Technologies, Inc., a
Georgia corporation (the "Corporation"), BCD Technology, S.A., a company
organized under the laws of the country of Luxembourg ("BCD"), and the following
parties, each of which shall be a "Shareholder," and collectively, the
"Shareholders": (i) The Alexander Family, L.P., a Georgia limited partnership
("Alexander"); (ii) Xxxxx X. Xxxx, an individual resident of Georgia ("Hood");
(iii) Xxxxx Xxxxxxx, an individual resident of Virginia ("Xxxxxxx"); (iv) Xxxxx
Xxxxxxxx, an individual resident of Texas ("Xxxxxxxx"); and (v) Xxxxx Xxxxxxx,
an individual resident of Georgia ("Xxxxxxx").
R E C I T A L S
WHEREAS, Alexander, Hood, Manaker, Xxxxxxxx and Xxxxxxx are acquiring
shares of the Corporation's common stock pursuant to the terms of that certain
Contribution Agreement dated as of the date hereof between the Corporation and
those Shareholders, pursuant to which such Shareholders are contributing all of
their membership interests in WorldTravel Technologies, L.L.C. ("WTT"), to the
Corporation.
WHEREAS, the Corporation and the Shareholders desire to place certain
restrictions on the transferability of the Shares (as defined below) now or
hereafter owned by them, and address certain other matters with respect to the
Shares and the Corporation, all as set forth herein.
NOW, THEREFORE, in consideration of the mutual promises of the parties
made in this Agreement, and for other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties, intending to be legally
bound, agree as follows:
A G R E E M E N T
1. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
(a) "Affiliate" means a Person or Persons (each as
defined below) who: (i) directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with the
Person(s) in question, or (ii) is an officer, director, or shareholder of the
Person(s) in question. The term "control," as used in the immediately preceding
sentence, means, with respect to a Person that is a corporation, the right to
the exercise, directly or indirectly, of more than 50% of the voting rights
attributable to the shares of such controlled corporation and, with respect to a
Person that is not a corporation, the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of such
controlled Person.
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(b) "Person" means an individual, partnership, limited
liability company, joint venture, association, corporation, trust or any other
legal entity.
(c) "Share" or "Shares" shall mean and include shares of
the Corporation's common stock, par value $.01 per share, and all other
securities of the Corporation which may be issued in exchange for or in respect
of such shares (whether by way of stock split, stock dividend, combination,
reclassification or any other means);
(d) "Transfer" shall mean to transfer, sell, assign,
pledge, hypothecate, give, create a security interest in or lien on, place in
trust (voting or otherwise), assign or in any way encumber or dispose of
directly or indirectly and whether or not by operation of law or for value.
2. Transfers by Shareholders.
(a) Transfers Generally. Except as provided in this
Section 2, no Shareholder shall have the right to Transfer all or any portion of
his or her Shares other than to an existing shareholder of the Corporation
without the prior written consent of the Board of Directors of the Corporation.
(b) Redemption.
(1) (i) Upon the death or permanent physical or
mental disability of Alexander's managing general partner, Xxxx X.
Xxxxxxxxx ("JCA"), Hood, Manaker, Reynolds, or Xxxxxxx (each a
"Redeemable Shareholder"), or (ii) in the event that a Redeemable
Shareholder (or, in the case of Alexander, JCA) shall no longer be
employed by the Corporation, WTT, WorldTravel or WTPG (or any successor
or Affiliate entities thereof) for any reason (which, for the purpose
of this Section 2(b), shall be interpreted to include a party invoking
any notice of termination provision in an employment agreement,
regardless of the fact that actual employment with the Corporation,
WTT, WorldTravel or WTPG (or any successor or Affiliate entities
thereof) has not yet ceased), the Corporation shall have the right to
redeem, or shall have the right to cause a third party to purchase, and
(if the Corporation exercises such right) the Redeemable Shareholder
shall sell, all of the Shares of such Redeemable Shareholder. Each of
the events described in subsections (i) and (ii) above shall, for the
purposes of this Agreement, be deemed a "Separation Event." For the
purpose of clause (ii) above, performing consulting services as an
independent contractor and/or serving on the Board of Directors of the
Corporation, WTT, WTPG or WorldTravel (or any successor or Affiliate
entities thereof) shall not, singly or together, constitute employment.
For the purposes of this Agreement, a permanent physical or mental
disability of a Redeemable Shareholder shall be deemed to have occurred
at the end of a period of one hundred and eighty (180) consecutive days
during which the Redeemable Shareholder (or, in the case of Alexander,
JCA) has been unable to perform the customary and usual duties for
which he or she was employed. Any such redemption or purchase shall be
consummated
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(x) within sixty (60) days after the date of the Separation Event or
(y) if the redemption price is tied to "fair market value," within
thirty (30) days of a final determination of "fair market value;"
provided, however, in the event of a purchase or redemption occasioned
by a party invoking any notice of termination provision in an
employment agreement, the date specified in (x) above shall be sixty
(60) days after the date through which the employee is contractually
bound to be employed by the Corporation.
(2) The redemption price (the "Redemption
Price") for the Shares of a Redeemable Shareholder redeemed or
purchased pursuant to this Section 2(b) shall be equal to the amount
which would be distributed to such Redeemable Shareholder or its
representative upon the dissolution of the Corporation if the entire
business of the Corporation was sold to a third party for cash at its
"fair market value," as defined and determined below:
(A) For purposes of this Section 2(b),
"fair market value" shall mean the price which a sophisticated
purchaser, knowledgeable in the business of the Corporation,
would pay for such business as a going concern, taking into
account goodwill and any other intangible assets of the
Corporation's business, all as determined in accordance with
this Section 2(b). The "fair market value" measure to be used
in connection with a purchase or redemption occasioned by a
Separation Event which occurs during a given year shall be the
fair market value of the Corporation as of December 31st of
the year immediately preceding the year in which the
Separation Event occurs. If the Separation Event at issue is
the invocation of a "notice of termination" provision in an
employment agreement, then the "fair market value" for such
purchase or redemption shall be the fair market value
applicable for the year in which the notice of termination is
given and not the fair market value of the actual date of the
person's termination of employment, if different. Each year,
the Board of Directors shall propose in good faith a fair
market value for the Corporation and provide each shareholder
of the Corporation with written notice thereof within one
hundred and twenty (120) days of the end of the preceding
year. The fair market value proposed by the Board of Directors
shall be adopted on behalf of the Corporation and all
Shareholders by operation of this Agreement unless one or more
shareholders of the Corporation (the "Objecting
Shareholders"), by a majority of the votes entitled to be cast
in accordance with this Section 2(b)(2)(A), has objected to
the proposed fair market value through written notice to the
Corporation no later than fifteen (15) days after the date of
the Board of Directors' written proposal. For this purpose,
each shareholder of the Corporation shall be entitled to vote
that number of votes equal to the percentage derived by
dividing the number of Shares owned by such shareholder by the
sum of the Shares owned by all other shareholders of the
Corporation. In the event the Objecting Shareholders timely
and properly object to the fair market value figure proposed
by the Board of Directors, the Board of Directors will
continue to work with the
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Objecting Shareholders to attempt to reach agreement on fair
market value until (x) one or more shareholders of the
Corporation, by a majority of the votes entitled to be cast in
accordance with this Section 2(b)(2)(A), agree with the Board
of Directors in writing to a fair market value, or (y) such
time as either the Board of Directors or one or more
shareholders of the Corporation, by a majority of the votes
entitled to be cast in accordance with this Section
2(b)(2)(A), makes written demand on the other for an appraisal
(an "Appraisal Demand"). In the event of an Appraisal Demand,
fair market value shall be determined as set forth in Section
2(a)(1)(B)-(E).
(B) In the event of an Appraisal
Demand, the Board of Directors and the Objecting Shareholders,
by a majority of the votes entitled to be cast in accordance
with Section 2(b)(2)(A), shall each appoint an appraiser to
determine the fair market value of the business of the
Corporation. Such appointments shall be made within sixty (60)
days from the date of the Appraisal Demand, and shall be
accomplished by each of the Board of Directors and the
Objecting Shareholders by providing written notice to the
other. In the event that either the Board of Directors or the
Objecting Shareholders do not appoint an appraiser within such
time, then such appraiser shall be appointed by the appraiser
who has been appointed by either the Board of Directors or the
Objecting Shareholders. Each appraiser selected hereunder
shall be qualified and experienced in valuing businesses which
are in the same or similar business of the Corporation and
shall be neutral and impartial. Each appraiser shall disclose
to all parties any circumstances likely to affect his
impartiality, including any bias, any financial or personal
interest in the outcome of the appraisal, and any past or
present relationship with any of the parties or their counsel.
The Board of Directors, on the one hand, and the Objecting
Shareholders, on the other hand, shall each be responsible for
paying the fees of their respective appointed appraiser.
(C) Within seventy (70) days of
appointment, each appraiser shall determine the fair market
value of the business of the Corporation as of December 31st
of the preceding year. Each appraiser shall deliver written
notice of such fair market value to the Board of Directors and
the Objecting Shareholders within such time period.
(D) In the event that the difference
between the appraised values determined by each of the
appraisers is ten percent (10%) or less, the fair market value
of the business of the Corporation shall be determined by
averaging the appraised value of each of the appraisers. In
the event that only one appraiser has timely delivered notice
of his/her appraised value, then such appraisal shall
determine the fair market value of the business of the
Corporation.
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(E) In the event that the difference
between the appraised values determined by each of the
appraisers is greater than ten percent (10%), then a third
appraiser shall be appointed by the original two appraisers
within ten (10) days and the fair market value shall be
determined by the majority vote of the three appraisers within
ten (10) days of the most recent appraisal issued under
subsection (iii) above; provided, however, that such appraised
value shall be within the range of appraised values originally
determined by the two appraisers under subsection (iii) above.
(3) At the closing of a redemption or purchase
of a Redeemable Shareholder's Shares pursuant to this Section 2(b), the
Corporation or its assignee shall pay to the Redeemable Shareholder the
Redemption Price in the following manner: twenty-five percent (25%) by
cashier's check at the closing and seventy-five percent (75%) pursuant
to a promissory note (the "Redemption Note"). The Redemption Note shall
be for a term of no longer than one (1) year and shall bear simple
interest at an annualized interest rate equal to the yield of U.S.
Treasury Notes (3 year) as published in the Wall Street Journal on the
date of issuance of the Redemption Note. Any Redemption Note of the
Corporation or its assignee shall be adequately secured.
(c) BCD Sale; Obtaining Offer. If BCD proposes to sell
all or substantially all of its Shares in any single transaction or related
series of transactions and other than to an Affiliate, then BCD shall cause the
proposed purchaser to deliver to the Shareholders an offer to purchase all of
their Shares on the same relative terms and conditions as offered to BCD for its
Shares. The Shareholders may accept such additional offer by delivering their
written acceptances to the proposed purchaser within thirty (30) days from the
receipt of such offer from the proposed purchaser. The closing of any sale
pursuant to this Section 2(c) shall occur simultaneously with the sale of BCD's
Shares to said purchaser.
(d) Mandatory Sale. If shareholders of the Corporation
holding an aggregate of sixty percent (60%) or more of the Shares (the "Selling
Shareholders") agree to sell their interests in the Corporation in any single
transaction or related series of transactions other than to an Affiliate, and
the proposed purchaser desires to acquire all the Shares in the Corporation,
then all of the Shareholders shall sell their Shares to said proposed purchaser
on the same relative terms and conditions contained in the offer delivered to
the Selling Shareholders.
(e) Permitted Transfers by Alexander. Notwithstanding the
foregoing provisions of this Section 2, Alexander may transfer all of its Shares
to an Affiliate without complying with the foregoing provisions of Section 2.
(f) Permitted Transfers by Hood. Notwithstanding the
foregoing provisions of this Section 2, Hood may transfer all of his Shares to
an Affiliate without complying with the foregoing provisions of Section 2.
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3. Conditions of Transfer. No Transfer of Shares will be
effectuated by the Corporation until the following conditions have been
satisfied:
(a) the written consent of the Board of Directors must
have been obtained;
(b) the transferee must have executed a written
agreement, in form and substance satisfactory to the Board of Directors, to
assume all of the duties and obligations of the transferor Shareholder under
this Agreement and to be bound by and subject to all of the terms and conditions
of this Agreement;
(c) the transferee or transferor must have paid the
expenses incurred by the Corporation in connection with the Transfer;
(d) upon request of the Corporation, the transferor must
have delivered to the Corporation a written opinion of counsel reasonably
satisfactory to the Board of Directors (which opinion shall be obtained at the
expense of the transferor) that such Transfer will not result in a violation of
applicable law including the Securities Act of 1933, as amended (the "Securities
Act"), or any applicable state securities laws, or of this Agreement;
(e) the transferor must have executed a written
instrument of transfer of Shares in form and substance satisfactory to the Board
of Directors; and
(f) the transferor and the transferee must have executed
a written agreement, in form and substance satisfactory to the Board of
Directors, to indemnify and hold the Corporation and all shareholders of the
Corporation harmless from and against any loss or liability arising out of the
Transfer.
4. Term. This Agreement shall terminate immediately upon the
occurrence of any of the following events:
(a) The bankruptcy, receivership, insolvency or
dissolution of the Corporation;
(b) The unanimous written agreement of the Shareholders
and consent of the Corporation;
(c) The cessation of the Corporation's business; or
(d) The consummation of the initial public offering of
the Corporation's securities;
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5. Specific Enforcement. Each Shareholder expressly agrees that
the Shares of the Corporation cannot be purchased or sold in the public market
and that for these reasons, among others, the Corporation and the other
shareholders of the Corporation would 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 any Shareholder, the
Corporation and each other shareholder of the Corporation shall, in addition to
all other remedies, each be entitled to a temporary or permanent injunction,
and/or a decree for specific performance, in accordance with the provisions
hereof, without the necessity of proof of actual damages or the posting of a
bond or other security.
6. Legend.
(a) During the term of this Agreement, each certificate
evidencing any of the Shares now owned or hereafter acquired by the Shareholders
shall bear a legend substantially as follows:
"Any sale, assignment, transfer or other disposition of the shares
represented by this certificate is restricted by, and subject to, the
terms and provisions of a certain Shareholders Agreement dated as of
November __, 1999. A copy of said Agreement is on file with the
Secretary of the Corporation."
(b) The undersigned understands and acknowledges that the
Shares have not been registered for sale under the Securities Act or any
applicable state securities laws and that the Shares will be issued and sold by
the Corporation in reliance upon exemptions from the registration requirements
of such acts. Accordingly, the undersigned understands and agrees that for a
period of at least one year from the date of issuance of the Shares, (i)
stop-transfer instructions will be noted on the appropriate records of the
Corporation and (ii) there will be maintained on the certificate(s) evidencing
the Shares, or any substitutions therefor, a legend reading as follows:
THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED FOR
SALE UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY OTHER STATE SECURITIES LAWS (COLLECTIVELY, THE "STATE
SECURITIES ACTS"), AND HAVE BEEN ISSUED AND SOLD IN RELIANCE UPON
EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SUCH ACTS, INCLUDING,
BUT NOT NECESSARILY LIMITED TO, THE EXEMPTIONS CONTAINED IN SECTION
4(2) OF THE SECURITIES ACT. THESE SECURITIES MAY NOT BE SOLD OR
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR
IN A TRANSACTION WHICH IS EXEMPT FROM REGISTRATION UNDER THE SECURITIES
ACT, AND ALL APPLICABLE STATE SECURITIES ACTS.
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Any assignment or endorsement of the certificate(s) representing the
Shares which is in violation of the restrictions on transfer provided above will
not be recognized by the Corporation nor will any assignee or endorsee of such
shares be recognized as the owner thereof by the Corporation.
7. Notices. All notices, designations, consents, offers or any
other communications provided for in this Agreement must be given in writing,
personally delivered, by a recognized overnight mail and courier service or by
mail. If by mail, it must be mailed by registered or certified mail, postage
prepaid, return receipt requested, and it will be deemed to have been given on
the date which is three (3) days following the date it is posted. Notice to the
Corporation is to be addressed to its then principal office. Notices to the
Shareholders and BCD are to be addressed to their respective addresses as they
appear on the transfer books of the Corporation, or to such other address as may
be designated by a Shareholder or BCD in writing to the Secretary of the
Corporation.
8. Entire Agreement. This Agreement constitutes the entire
agreement among the Shareholders, BCD and the Corporation with respect to the
subject matter hereof and supersedes all prior agreements and understandings
between them or any of them with respect to such subject matter.
9. Governing Law; Successors and Assigns. This Agreement shall be
governed by, and construed and enforced in accordance with the laws of the State
of Georgia (without giving effect to the conflict of law principles thereof).
10. Exculpation; Rights of the Shareholders. Each Shareholder and
BCD shall have the absolute right to exercise or refrain from exercising any
rights that such Shareholder or BCD may have by reason of this Agreement or the
Corporation's corporate charter (including, without limitation, the right to
consent to the waiver of any obligation of the Corporation under this Agreement
or the Corporation's corporate charter and to enter into an agreement with the
Corporation for the purpose of amending or supplementing, in accordance with
their respective terms, this Agreement or the Corporation's corporate charter),
and neither any such holder nor any of its controlling persons, officers,
directors, partners, agents, or employees, as the case may be, shall incur any
liability to any other holder of Shares as a result of such holder's exercising
or refraining from exercising any such right.
11. Severability. If any provision of this Agreement shall be held
to be 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.
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12. Captions and Headings. Captions and Article and Section
headings are for convenience only and are not deemed to be part of this
Agreement, and in no way define, limit, extend or describe the scope of this
Agreement or the intent of any provision hereof.
13. Singular and Plural, Etc. Whenever the singular number is used
herein and where required by the context, the same shall include the plural, and
the neuter gender shall include the masculine and feminine genders.
14. Amendments and Waivers. Neither this Agreement nor any term
hereof may be changed, waived, discharged or terminated orally or in writing,
except that any term of this Agreement may be amended and the observance of any
such term may be waived (either generally or in a particular instance and either
retroactively or prospectively) only with the written consent of the Corporation
and the holders of at least 80% of the common stock of the Corporation then
issued and outstanding; provided, however, that no such waiver shall extend to
or affect any other obligation not expressly waived. No failure to exercise and
no delay in exercising, on the part of any party, any right, remedy, power or
privilege hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right remedy,
power or privilege. The rights, remedies, powers and privileges herein provided
are cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law. The failure of any party to insist upon a strict performance of
any of the terms or provisions of this Agreement, or to exercise any option,
right or remedy herein contained, shall not be construed as a waiver or as a
relinquishment for the future of such term, provision, option, right or remedy,
but the same shall continue and remain in full force and effect.
15. Successors and Assigns. All rights, covenants and agreements
of the parties contained in this Agreement shall, except as otherwise provided
herein, be binding upon and inure to the benefit of their respective successors
and assigns.
16. 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.
[Signatures on next page]
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IN WITNESS WHEREOF, this Agreement has been executed as of the day and
year first above written.
WT TECHNOLOGIES, INC.
By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
Its: Vice President
BCD TECHNOLOGY, S.A. THE ALEXANDER FAMILY, L.P.
By: /s/ Xxxxxx Xxxxxxx By: /s/ Xxxx X. Xxxxxxxxx
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Name: Xxxxxx Xxxxxxx Name: Xxxx X. Xxxxxxxxx,
Its: Director its managing general partner
By: /s/ Xxxxxx Xxxxx
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Name: Xxxxxx Xxxxx
Its: Director
XXXXX X. XXXX XXXXX XXXXXXX
/s/ Xxxxx Xxxx /s/ Xxxxx Xxxxxxx
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XXXXX XXXXXXXX XXXXX XXXXXXX
/s/ Xxxxx Xxxxxxxx /s/ Xxxxx Xxxxxxx
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