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Exhibit 99.2
SHAREHOLDERS AGREEMENT
AGREEMENT, dated February 19, 1996 (this "Agreement"), by and among CUC
INTERNATIONAL INC., a Delaware corporation ("Parent"), and each of the other
parties signatory hereto (each, a "Shareholder" and, collectively, the
"Shareholders").
W I T N E S S E T H:
WHEREAS, concurrently herewith, Parent, XXXXX ACQUISITION CORP., a
Delaware corporation and a direct wholly-owned subsidiary of Parent ("Merger
Sub"), and SIERRA ON-LINE, INC., a Delaware corporation (the "Company"), are
entering into an Agreement and Plan of Merger (as such agreement may hereafter
be amended from time to time, the "Merger Agreement;" capitalized terms used and
not defined herein have the respective meanings ascribed to them in the Merger
Agreement) pursuant to which Merger Sub will be merged with and into the Company
(the "Merger");
WHEREAS, each of the Shareholders owns the number of shares, par value
$.01 per share, of common stock of the Company (the "Shares" or "Company Common
Stock") set forth opposite such Shareholder's name on Schedule I hereto;
WHEREAS, as an inducement and a condition to entering into the Merger
Agreement, Parent has required that the Shareholders agree, and the Shareholders
have agreed, to enter into this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual
premises, representations, warranties, covenants and agreements contained
herein, the parties hereto hereby agree as follows:
1. PROVISIONS CONCERNING COMPANY COMMON STOCK
Each Shareholder hereby agrees that during the period commencing on the
date hereof and continuing until the first to occur of the Effective Time and
termination of the Merger Agreement in accordance with its terms, at any meeting
of the holders of Company Common Stock, however called, or in connection with
any written consent of the holders of Company Common Stock, such Shareholder
shall vote (or cause to be voted) the Shares held of record or Beneficially
Owned (as defined below) by such Shareholder, whether heretofore owned or
hereafter acquired, (i) in favor of approval of the Merger Agreement and any
actions required in furtherance thereof and hereof; (ii) against any action or
agreement that would result in a breach in any respect of any
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covenant, representation or warranty or any other obligation or agreement of the
Company under the Merger Agreement (after giving effect to any materiality or
similar qualifications contained therein); and (iii) except as otherwise agreed
to in writing in advance by Parent, against the following actions (other than
the Merger and the transactions contemplated by the Merger Agreement): (A) any
extraordinary corporate transaction, such as a merger, consolidation or other
business combination involving the Company; (B) a sale, lease or transfer of a
material amount of assets of the Company, or a reorganization, recapitalization,
dissolution or liquidation of the Company; (C) (1) any change in a majority of
the persons who constitute the board of directors of the Company; (2) any change
in the present capitalization of the Company or any amendment of the Company's
Certificate of Incorporation or By-Laws; (3) any other material change in the
Company's corporate structure or business; or (4) any other action which, in the
case of each of the matters referred to in clauses C (1), (2), (3) or (4), is
intended, or could reasonably be expected, to impede, interfere with, delay,
postpone, or materially adversely affect the Merger and the transactions
contemplated by this Agreement and the Merger Agreement. Such Shareholder shall
not enter into any agreement or understanding with any Person (as defined below)
the effect of which would be inconsistent or violative of the provisions and
agreements contained in Section 1 or 2 hereof. For purposes of this Agreement,
"Beneficially Own" or "Beneficial Ownership" with respect to any securities
shall mean having "beneficial ownership" of such securities (as determined
pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")), including pursuant to any agreement, arrangement or
understanding, whether or not in writing. Without duplicative counting of the
same securities by the same holder, securities Beneficially Owned by a Person
shall include securities Beneficially Owned by all other Persons with whom such
Person would constitute a "group" as within the meanings of Section 13(d)(3) of
the Exchange Act. For purposes of this Agreement, "Person" shall mean an
individual, corporation, partnership, joint venture, association, trust,
unincorporated organization or other entity.
2. OTHER COVENANTS, REPRESENTATIONS AND WARRANTIES
Each Shareholder hereby represents and warrants to Parent as follows:
(a) Ownership of Shares. Such Shareholder is the record and
Beneficial Owner of the number of Shares set forth opposite such Shareholder's
name on Schedule I hereto. On the date hereof, the Shares set forth opposite
such Shareholder's name on Schedule I hereto constitute all of the Shares owned
of record or Beneficially Owned by such Shareholder. Such Shareholder has sole
voting power and sole power to issue instructions with respect to the matters
set forth in Section 1 hereof, sole power of disposition, sole power of
conversion, sole power to demand
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appraisal rights and sole power to agree to all of the matters set forth in this
Agreement, in each case with respect to all of the Shares set forth opposite
such Shareholder's name on Schedule I hereto, with no limitations,
qualifications or restrictions on such rights.
(b) Power; Binding Agreement. Such Shareholder has the legal
capacity, power and authority to enter into and perform all of such
Shareholder's obligations under this Agreement. The execution, delivery and
performance of this Agreement by such Shareholder will not violate any other
agreement to which such Shareholder is a party including, without limitation,
any voting agreement, shareholder agreement or voting trust. This Agreement has
been duly and validly executed and delivered by such Shareholder and constitutes
a valid and binding agreement of such Shareholder, enforceable against such
Shareholder in accordance with its terms. There is no beneficiary or holder of a
voting trust certificate or other interest of any trust of which such
Shareholder is Trustee whose consent is required for the execution and delivery
of this Agreement or the consummation by such Shareholder of the transactions
contemplated hereby. If such Shareholder is married and such Shareholder's
Shares constitute community property, this Agreement has been duly authorized,
executed and delivered by, and constitutes a valid and binding agreement of,
such Shareholder's spouse, enforceable against such person in accordance with
its terms.
(c) No Conflicts. (A) No filing with, and no permit, authorization,
consent or approval of, any state or federal public body or authority is
necessary for the execution of this Agreement by such Shareholder and the
consummation by such Shareholder of the transactions contemplated hereby and (B)
none of the execution and delivery of this Agreement by such Shareholder, the
consummation by such Shareholder of the transactions contemplated hereby or
compliance by such Shareholder with any of the provisions hereof shall (1)
result in a violation or breach of, or constitute (with or without notice or
lapse of time or both) a default (or give rise to any third party right of
termination, cancellation, material modification or acceleration) under any of
the terms, conditions or provisions of any note, bond, mortgage, indenture,
license, contract, commitment, arrangement, understanding, agreement or other
instrument or obligation of any kind to which such Shareholder is a party or by
which such Shareholder or any of such Shareholder's properties or assets may be
bound, or (2) violate any order, writ, injunction, decree, judgment, order,
statute, rule or regulation applicable to such Shareholder or any of such
Shareholder's properties or assets.
(d) No Finder's Fees. Other than existing financial advisory and
investment banking arrangements and agreements between the Company and
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Xxxxxxxxx, Xxxxxxxx & Company LLC, no broker, investment banker, financial
adviser or other person is entitled to any broker's, finder's, financial
adviser's or other similar fee or commission in connection with the transactions
contemplated by the Merger Agreement based upon arrangements made by or on
behalf of such Shareholder or any of its affiliates or, to such shareholder's
knowledge, the Company or any of its affiliates.
(e) Restriction on Transfer, Proxies and Non-Interference. Such
Shareholder shall not, directly or indirectly: (i) except as contemplated by the
Merger Agreement, offer for sale, sell, transfer, tender, pledge, encumber,
assign or otherwise dispose of, or enter into any contract, option or other
arrangement or understanding with respect to or consent to the offer for sale,
sale, transfer, tender, pledge, encumbrance, assignment or other disposition of,
any or all of such Shareholder's Shares or any interest therein; (ii) grant any
proxies or powers of attorney, deposit any Shares into a voting trust or enter
into a voting agreement with respect to any Shares; or (iii) take any action
that would make any representation or warranty of such Shareholder contained
herein untrue or incorrect or have the effect of preventing or disabling such
Shareholder from performing such Shareholder's obligations under this Agreement.
(f) Reliance by Parent. Such Shareholder understands and
acknowledges that Parent is entering into, and causing Merger Sub to enter into,
the Merger Agreement in reliance upon such Shareholder's execution and delivery
of this Agreement.
3. STOP TRANSFER; RESTRICTIVE LEGEND
(a) Each Shareholder agrees with, and covenants to, Parent that
such Shareholder shall not request that the Company register the transfer
(book-entry or otherwise) of any certificate or uncertificated interest
representing any of such Shareholder's Shares, unless such transfer is made in
compliance with this Agreement. In the event of a stock dividend or
distribution, or any change in the Company Common Stock by reason of any stock
dividend, split-up, recapitalization, combination, exchange of shares or the
like, the term "Shares" shall be deemed to refer to and include the Shares as
well as all such stock dividends and distributions and any shares into which or
for which any or all of the Shares may be changed or exchanged.
(b) All certificates representing any of such Shareholder's Shares
shall contain the following legend:
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"The securities represented by this certificate, including certain
voting and transfer rights with respect thereto, are subject to the
terms of a Shareholders Agreement, dated February 19, 1996, among
CUC International Inc., the Issuer and the parties listed on the
signature pages thereto, a copy of which is on file in the principal
office of the Issuer."
4. TERMINATION
Except as otherwise provided herein, this Agreement shall terminate
upon the earlier of (a) termination of the Merger Agreement in accordance with
its terms and (b) the Effective Time.
5. SHAREHOLDER CAPACITY
No person executing this Agreement who is or becomes during the term
hereof a director of the Company makes any agreement or understanding herein in
his or her capacity as such director. Each Shareholder signs solely in his or
her capacity as the record and beneficial owner of such Shareholder's Shares.
Notwithstanding any other provision of this Agreement, no Shareholder shall have
any obligation under this Agreement to act or refrain from acting in any manner
inconsistent with such Shareholder's fiduciary duties as a director of the
Company.
6. CONFIDENTIALITY
The Shareholders recognize that successful consummation of the
transactions contemplated by this Agreement may be dependent upon
confidentiality with respect to the matters referred to herein. In this
connection, pending public disclosure thereof, each Shareholder hereby agrees
not to disclose or discuss such matters with anyone not a party to this
Agreement (other than such Shareholder's counsel and advisors, if any) without
the prior written consent of Parent, except for disclosures such Shareholder's
counsel advises are necessary in order to fulfill such Shareholder's obligations
imposed by law, in which event such Shareholder shall give notice of such
disclosure to Parent as promptly as practicable so as to enable Parent to seek a
protective order from a court of competent jurisdiction with respect thereto.
7. MISCELLANEOUS
(a) Entire Agreement. This Agreement and the Merger Agreement
constitute the entire agreement between the parties with respect to the subject
matter hereof and supersede all other prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter hereof.
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(b) Certain Events. Each Shareholder agrees that this Agreement and
the obligations hereunder shall attach to such Shareholder's Shares and shall be
binding upon any person or entity to which legal or beneficial ownership of such
Shares shall pass, whether by operation of law or otherwise, including, without
limitation, such Shareholder's heirs, guardians, administrators or successors.
Notwithstanding any transfer of Shares, the transferor shall remain liable for
the performance of all obligations under this Agreement of the transferor.
(c) Assignment. This Agreement shall not be assigned by operation of
law or otherwise without the prior written consent of the other party, provided
that Parent may assign, in its sole discretion, its rights and obligations
hereunder to any direct or indirect wholly owned subsidiary of Parent, but no
such assignment shall relieve Parent of its obligations hereunder if such
assignee does not perform such obligations.
(d) Amendments, Waivers, Etc. This Agreement may not be amended,
changed, supplemented, waived or otherwise modified or terminated, with respect
to any one or more Shareholders, except upon the execution and delivery of a
written agreement executed by the relevant parties hereto; provided that
Schedule I hereto may be supplemented by Parent by adding the name and other
relevant information concerning any Shareholder of the Company who agrees to be
bound by the terms of this Agreement without the agreement of any other party
hereto, and thereafter such added shareholder shall be treated as a
"Shareholder" for all purposes of this Agreement.
(e) Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, telegram, telex
or telecopy, or by mail (registered or certified mail, postage prepaid, return
receipt requested) or by any courier service, such as Federal Express, providing
proof of delivery. All communications hereunder shall be delivered to the
respective parties at the following addresses:
If to any Shareholder:
At the addresses set forth on Schedule I hereto
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with a copy to:
Xxxxxxx Coie
0000 Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. XxXxxx, Esq.
If to Parent
or Merger Sub:
CUC International Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxx X. Xxxxxx, Esq.
with a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxxxxxxx, Esq.
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
(f) Severability. Whenever possible, each provision or portion of
any provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of 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 will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
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(g) Specific Performance. Each of the parties hereto recognizes and
acknowledges that a breach by it of any covenants or agreements contained in
this Agreement will cause the other party to sustain damages for which it would
not have an adequate remedy at law for money damages, and therefore each of the
parties hereto agrees that in the event of any such breach the aggrieved party
shall be entitled to the remedy of specific performance of such covenants and
agreements and injunctive and other equitable relief in addition to any other
remedy to which it may be entitled, at law or in equity.
(h) Remedies Cumulative. All rights, powers and remedies provided
under this Agreement or otherwise available in respect hereof at law or in
equity shall be cumulative and not alternative, and the exercise of any thereof
by any party shall not preclude the simultaneous or later exercise of any other
such right, power or remedy by such party.
(i) No Waiver. The failure of any party hereto to exercise any
right, power or remedy provided under this Agreement or otherwise available in
respect hereof at law or in equity, or to insist upon compliance by any other
party hereto with its obligations hereunder, and any custom or practice of the
parties at variance with the terms hereof, shall not constitute a waiver by such
party of its right to exercise any such or other right, power or remedy or to
demand such compliance.
(j) No Third Party Beneficiaries. This Agreement is not intended to
be for the benefit of, and shall not be enforceable by, any person or entity who
or which is not a party hereto.
(k) Governing Law. This Agreement shall be governed and construed
in accordance with the laws of the State of Delaware, without giving effect to
the principles of conflicts of law thereof.
(l) WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES ANY RIGHT
TO A TRIAL BY JURY IN CONNECTION WITH ANY SUCH ACTION, SUIT OR PROCEEDING.
(m) Descriptive Headings. The descriptive headings used herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
(n) Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but all of which, taken
together, shall constitute one and the same Agreement.
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IN WITNESS WHEREOF, Parent and each Shareholder have caused this
Agreement to be duly executed as of the day and year first above written.
CUC INTERNATIONAL INC.
By: /s/ E. Xxxx Xxxxxxx
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Name: E. Xxxx Xxxxxxx
Title: President
/s/ Xxxxxxx X. Xxxxxxxx
--------------------------
Xxxxxxx X. Xxxxxxxx
/s/ Xxxxxxx X. Xxxxxxxx
--------------------------
Xxxxxxx X. Xxxxxxxx
AGREED TO AND ACKNOWLEDGED
(with respect to Section 4):
SIERRA ON-LINE, INC.
By:
--------------------------
Name:
Title:
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SCHEDULE I TO
SHAREHOLDERS AGREEMENT
NAME AND ADDRESS NUMBER OF SHARES OWNED
Xxxxxxx X. Xxxxxxxx and 1,676,698
Xxxxxxx X. Xxxxxxxx
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