EXHIBIT 10.5
SHAREHOLDERS AGREEMENT
THIS SHAREHOLDERS AGREEMENT, dated as of NOVEMBER 30, 1996, by and
among Mastech Systems Corporation, a Pennsylvania corporation with its principal
place of business at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ (hereinafter,
"MSC"), Mastech Corporation, a Pennsylvania corporation also with its principal
place of business located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
(hereinafter "Mastech"), ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, an individual currently residing in
Allegheny County, Pennsylvania ("▇▇▇▇▇▇▇▇") and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, an individual
currently residing in Allegheny County, Pennsylvania ("Trivedi") (hereinafter,
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ are referred to collectively as the "Shareholders" or
individually as a "Shareholder"):
WHEREAS, the parties desire to enter into this Agreement to, among
other things, set forth the relative rights of the parties with respect to the
transfer of certain of the shares of Mastech common stock, $.01 Par Value
("Mastech Common Stock") and MSC common stock, $.01 Par Value ("MSC Common
Stock") held by the Shareholders, which shares are more fully described on
Exhibit I attached hereto; and
WHEREAS, Mastech is contemplating an initial public offering of shares
of Mastech Common Stock (the "IPO"); and
WHEREAS, in connection with the IPO, MSC will be reorganized into an
indirect wholly-owned subsidiary of Mastech; and
WHEREAS, in connection with the reorganization of MSC, the
Shareholders and their Permitted Transferees (as such term is defined below)
will contribute all their MSC
Common Stock to mastech, which contribution shall be considered an additional
capital contribution to Mastech by the Shareholders.
NOW, THEREFORE, in consideration of the mutual agreements and
covenants contained herein, and for other valuable consideration received, and
intending to be legally bound hereby, the parties hereto agree as follows:
1. Stock Transfer Restrictions.
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Each Shareholder hereby agrees that, except as provided in paragraph 2
below, such Shareholder may not sell, transfer or assign, voluntarily or
involuntarily, or by any other means cause the beneficial or record ownership of
MSC Common Stock or Mastech Common Stock to be transferred for a period of 24
months commencing on the date first written above (the "Restricted Period").
2. Permitted Transfers.
--------------------
Notwithstanding the restrictions imposed under paragraph 1 above, the
Shareholders or their Permitted Transferees may (i) in connection with the
reorganization of MSC, transfer their shares of MSC Common Stock to Mastech
prior to the closing of the IPO; (ii) transfer MSC Common Stock and Mastech
Common Stock to a buyer or its designee in connection with the sale of the
business of Mastech or MSC to an independent third party buyer ("Buyer") during
the Restricted Period (whether such sale is effected by a sale of all or
substantially all of the assets of MSC or Mastech, or by the merger of MSC or
Mastech with or into a third party, or by the sale of shares of MSC or Mastech);
or (iii) transfer any or all of their shares of MSC Common Stock or Mastech
Common Stock to, or in trust for the benefit of, the
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Shareholder, his spouse, siblings, children or grandchildren, and any
shareholder which is a trust may make distributions of such shares of stock to
its settlor or beneficiaries (such a transferee being referred to herein as a
"Permitted Transferee"); provided however that any transferee of any of the
shares of MSC Common Stock or Mastech Common Stock shall, prior to becoming a
holder thereof, join in this Agreement.
3. Payment of Expenses.
--------------------
Mastech shall pay all costs and expenses in connection with this
Agreement and the performance thereof.
4. Assignment.
-----------
This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective heirs, personal representatives, successors
and assigns; provided, however, that this Agreement may not be assigned by any
of the parties hereto without the prior written consent of the other parties
hereto.
5. Joinder by Subsequent Holders.
------------------------------
No shares of Mastech Common Stock or MSC Common Stock shall be issued
or transferred to any person except as permitted by this Agreement and until the
prospective holders of those certain shares join in this Agreement and consent
to be bound as a shareholder by the terms hereof.
6. Governing Law.
--------------
The provisions of this Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
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7. Termination.
------------
This Agreement shall terminate, and the shares of Mastech Common Stock
and MSC Common Stock subject to this Agreement shall be released from the terms
hereof:
(a) Upon the sale of the business of Mastech or MSC to a Buyer
during the Restricted Period (whether such sale is effected by a
sale of all or substantially all of the assets of MSC or Mastech,
or by the merger of MSC or Mastech with or into a third party, or
by the sale of shares of MSC or Mastech).
(b) Upon the bankruptcy, receivership or dissolution of MSC or
Mastech; or
(c) Upon the expiration of the Restricted Period.
8. Headings.
---------
The section headings in this Agreement are inserted solely as a matter
of convenience and for reference and are not a part of this Agreement.
9. Complete Agreement and Amendment.
---------------------------------
This Agreement constitutes the entire agreement between the parties
hereto, and supersedes any prior agreements concerning the subject matter hereof
whether written or oral. This Agreement may not be amended or modified except
by a written instrument executed by all parties hereto.
10. Execution Copies.
-----------------
The parties hereto may execute this Agreement in any number of
counterparts, each of which, when executed and delivered, shall be original; but
all such counterparts shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement
effective this 30th day of November, 1996.
ATTEST: MASTECH SYSTEMS CORPORATION
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------- ----------------------------------
Name:
Title:
ATTEST: MASTECH CORPORATION
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------- ----------------------------------
Name:
Title:
WITNESS:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------- ----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ - Shareholder
WITNESS:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------- ----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ - Shareholder
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EXHIBIT I
Name Number of Shares
---- ----------------
MSC Common Stock Mastech Common Stock
---------------- --------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Annuity Trust No. 1 9,160 9,160
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Annuity Trust No. 2 9,160 9,160
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Annuity Trust No. 1 9,160 9,160
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Annuity Trust No. 2 9,160 9,160
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JOINDER
This Joinder is executed this 30th day of November, 1996 by ▇▇▇▇▇
▇▇▇▇▇▇▇▇ in his capacity as Trustee to the ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Annuity Trust No. 1
and the ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Annuity Trust No. 2, and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ in his capacity
as Trustee to the ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Annuity Trust No. 1 and the ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Annuity Trust No. 2 (hereinafter collectively referred to in their capacities as
Trustees as the "GRAT Shareholders").
WITNESSETH:
WHEREAS, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, currently the beneficial
owners of all of the issued and outstanding shares of common stock of Mastech
Corporation ("Mastech") and Mastech Systems Corporation ("MSC"), desire to
transfer and assign to the GRAT Shareholders certain of those shares of Mastech
common stock and MSC common stock standing in their respective names on the
books of Mastech and MSC; and
WHEREAS, it is a condition to such transfer and assignment that the
GRAT Shareholders join in and agree to be bound by the terms of that certain
Shareholders' Agreement dated November 30, 1996 by and among Mastech, MSC and
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ as the individual shareholders of Mastech
and MSC (the "Shareholders Agreement").
NOW, THEREFORE, for good and valuable consideration and intending to
be legally bound hereby, the GRAT Shareholders join in and agree to be bound by
the terms of the Shareholders Agreement with the same effect as if they were
each an original signatory thereto.
IN WITNESS WHEREOF, the undersigned has caused this Joinder to be
executed by its duly authorized officer.
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WITNESS: GRAT SHAREHOLDERS:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Annuity Trust No. 1
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------- --------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ - Trustee
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Annuity Trust No. 2
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------- --------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ - Trustee
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Annuity Trust No. 1
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------- --------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ - Trustee
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Annuity Trust No. 2
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------- --------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ - Trustee
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