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EXHIBIT 10.31
STOCKHOLDERS' AGREEMENT
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STOCKHOLDERS' AGREEMENT, dated as of December 31, 1992, among
Xxxxx Associates, Inc., a Delaware corporation ("Xxxxx Associates"), Kroll
Associates U.K. Limited, a corporation organized under the laws of England,
Xxxxxxxx/Kroll Environmental Services, Inc., a Louisiana corporation, Public
Advisory Services, Inc., a Delaware corporation and Xxxxxxx Partners, Inc., a
Delaware corporation (each of the above corporate parties hereto is referred to
herein severally as a "Company" and jointly as the "Companies"), Xxxxx X. Xxxxx,
an individual stockholder (the "Individual Stockholder"), and the management
stockholders listed on the signature pages hereof (the "Management
Stockholders", collectively with the Individual Stockholder, the
"Stockholders"):
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, the parties hereto want to set forth certain matters
regarding the stock granted by the Companies to the Management Stockholders on
the date hereof;
WHEREAS, the Stockholders and the Companies believe that the~
can best ensure the continued success of the Companies by entering into this
Agreement with respect to the shares of common stock (the "Common Stock") of the
Companies;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties hereto agree as follows:
1. DEFINITIONS. As used in this Agreement, the following
capitalized terms shall have the following meanings:
AFFILIATE: with respect to any Person, a spouse of such
Person, any relative (by blood, adoption or marriage) of such Person, any
director, officer or employee of such Person, any trust formed by such Person,
any other Person of which such Person is a director, officer or employee, and
any other Person directly or indirectly controlling or controlled by or under
direct or indirect common control with such Person.
APPRAISER: FIRST, Price Waterhouse & Company ("PW") so long as
PW is not disqualified ("Disqualified") because it (X) is not available or (Y)
has at that time a significant business relationship with any of the parties to
this Agreement, SECOND, if PW is Disqualified, Deloitte & Touche ("DT") so long
as DT is not Disqualified, THIRD, if DT is Disqualified, Coopers & Xxxxxxx
("CL") so long as CL is not Disqualified, and FOURTH, if CL is
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Disqualified another "Big 6" or comparable accounting firm mutually agreed upon
by the parties hereto.
CAUSE: (A) the commission in the course of his employment of
any dishonest or fraudulent act, (B) the commission of a felony, (C) willful
refusal to carry out reasonable instructions of the Chairman which has a
material adverse affect upon any of the Companies, and (D) the willful
disclosure of any trade secrets or confidential information of any of the
Companies to persons not authorized to know same.
CHAIRMAN: Xxxxx X. Xxxxx or a successor chairman of Xxxxx
Associates.
COMMISSION: the U.S. Securities and Exchange Commission.
COMMON STOCK: as defined in the second recital hereof.
COMPANY OR COMPANIES: as defined in the introductory
paragraph hereof.
COMPANY NOTICE: as defined in section 9.
DISABILITY: as defined in Kroll Associates' long-term
disability plan.
FAIR VALUE: as defined in section 8.
INDIVIDUAL STOCKHOLDER: as defined in the introductory
paragraph hereof.
KROLL ASSOCIATES: as defined in the introductory paragraph
hereof.
MANAGEMENT STOCKHOLDERS: as defined in the introductory
paragraph hereof.
PERMITTED TRANSFEREE: if any Stockholder Transfers shares of
Common Stock and such Transfer is in accordance with the terms of this
Agreement, PROVIDED that the Transferee becomes a party to this Agreement as
provided in section 2, PROVIDED FURTHER that any such Transfer by Management
Stockholders shall not adversely affect the Company's election as a Subchapter S
Corporation under the Internal Revenue Code, as amended, so long as Xxxxx
Associates shall make such election, and PROVIDED FURTHER that any Transfer
shall be subject to the terms of that certain Note Purchase Agreement, dated as
of December 15, 1989, among the Company and certain of its Affiliates and
Teachers Insurance and Annuity Association of America, as amended.
PERMITTED DISPOSITION: as defined in section 3.
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PERSON: an individual, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization or a government or any
department or agency thereof.
PUBLIC OFFERING: an offer for sale of shares of Common Stock
pursuant to an effective registration statement filed by the Company which
issued such shares on Form S-1 or a successor form thereto pursuant to the
Securities Act.
PUT DATE: as defined in section 8.
PUT NOTICE: as defined in section 8.
SECURITIES ACT: the Securities Act of 1933, as amended.
SELLING STOCKHOLDER: as defined in section 9.
STOCKHOLDER: as defined in the introductory paragraph hereof.
STOCKHOLDER NOTICE: as defined in section 9.
TRANSFER: any transfer, sale, assignment, gift, testamentary
transfer, pledge, hypothecation or other disposition of any interest.
"TRANSFEREE" and "TRANSFEROR" shall have correlative meanings.
TRUSTEE: in the case of Xxxxxx X. XxXxxxx, Xxxxxxx XxXxxxx,
Xxxx XxXxxxx or Xxxxx X. XxXxxxx; in the case of Xxxxxx X. Xxxxxxx, Xxxxxxx 0.
Bittman; in the case of Xxxxxx Xxxx, Xxxxx Xxxx; and in each such case, such
other trustees consented to by the Individual Stockholder, such consent not to
be unreasonably withheld.
VESTING DATE: as defined in section 7.
VESTED SHARES: as defined in section 8.
2. LIMITATIONS ON TRANSFER. No Stockholder shall Transfer any
shares of Common Stock except as provided in this Agreement. It shall be a
condition precedent to any Transfer of shares of Common Stock (but excluding
Transfers referred to in section 6 (public offerings) hereof) that the
Transferee (if not already a party to this Agreement), shall agree prior to the
Transfer in writing with the Companies and the other parties hereto to be bound
by the terms of this Agreement as if it had been an original signatory hereto.
3. PERMITTED DISPOSITION. Each Management Stockholder shall be
entitled to Transfer shares of Common Stock, at any time and from time to time,
(A) if such Transfer is a testamentary transfer effected by operation of law or
by will, (B) to a trust
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for the benefit of such Management Stockholder or such Management Stockholder's
spouse, issue or siblings, (C) with the consent in writing of all of the
Stockholders, (D) pursuant to and in accordance with sections 6 (public
offering), 8 (puts), 9 (right of first refusal), 10 (tag-alongs) and 11 (drag
alongs). The Individual Stockholder shall be entitled to Transfer shares of
Common Stock at any time and from time to time (I) if such Transfer is a
testamentary transfer effected by operation of law or by will, (II) to an
affiliate of the Individual Stockholder, (III) in a public offering pursuant to
section 6, (IV) to a trust for the benefit of the Individual Stockholder or a
member of his family and (V) subject to the provisions of section 10 (tag
alongs), to any Person.
4. EFFECT OF VOID TRANSFERS. In the event of any purported
Transfer of any shares of Common Stock in violation of the provisions of this
Agreement, such purported Transfer shall, to the extent permitted by
xxxxxxxxxx.xxx, be void and of no effect, and, until such time as a Transfer in
compliance with this Agreement shall have occurred, (I) no dividend of any kind
whatsoever nor any distribution pursuant to liquidation or otherwise shall be
paid to the purported Transferee in respect of such shares, (II) the voting
rights of such shares, if any, on any matter whatsoever shall remain vested in
the Transferor, (III) the Transferor shall continue to be bound with respect to
its obligations hereunder as the holder of such shares and (IV) no such
purported Transfer in violation of this Agreement shall be registered by the
Company which issued such shares on its books of registry.
5. SECURITIES ACT: LEGENDS ON STOCK. (A) Each stock
certificate representing shares of Common Stock (prior to a public offering
pursuant to section 6) shall bear a legend in substantially the following form:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or under any
state securities or blue sky laws and may not be transferred in the
absence of such registration or any exception therefrom under such Act
or under such state securities or blue sky laws.
The shares represented by this certificate may not be sold,
assigned, transferred, exchanged, mortgaged, pledged or otherwise
disposed of or encumbered except in compliance with the provisions of
that certain Stockholders' Agreement, dated as of December 31, 1992, as
it may be amended, among Xxxxx Associates, Inc., Xxxxx Associates U.K.
Limited, Xxxxxxxx/Kroll Environmental Services, Inc., Xxxxx, Inc.,
Xxxxx X. Xxxxx, and the other stockholders listed on the signature
pages thereof. A copy of such Stockholders' Agreement, and any
amendments thereto, is on file and
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available for inspection at the principal offices of Kroll Associates,
Inc."
(B) Prior to any Transfer of shares of Common Stock, the
holder thereof will give written notice to the Company which issued such shares
of such holder's intention to effect such Transfer. The following provisions
shall then apply:
(X) If in the opinion of such Company's counsel the proposed
Transfer may be effected without registration of such shares under the
Securities Act, such Company shall, as promptly as practicable, so
notify the holder of such shares and such holder shall thereupon be
entitled, subject to the other provisions of this Agreement, to
Transfer such shares in accordance with the terms of the notice
delivered by such holder to such Company.
(Y) If such counsel is unable to conclude that the proposed
Transfer may be effected without registration of such shares under the
Securities Act, such Company will, as promptly as practicable, so
notify the holder thereof and thereafter such holder shall not be
entitled to Transfer such shares until either such shares have been
effectively registered under the Securities Act or the provisions of
this subdivision (B) of this section 5 have otherwise been complied
with.
6. PUBLIC OFFERINGS, ETC. Each Stockholder shall be entitled,
without the consent of any other Stockholder, to Transfer any or all of the
shares of Common Stock owned by it, at any time and from time to time, in a
Public Offering. None of the Companies has made any commitment to effect a
Public Offering of their respective shares or otherwise register such shares for
resale.
7. VESTING AND FORFEITURE. Upon the third anniversary of the
date hereof (the "Vesting Date"), the shares of Common Stock received by each
Management Stockholder on the date hereof will vest if such Management
Stockholder shall have continued to be employed by one or more of the Companies
through such date or if his employment ceases prior to such date due to his (1)
death, (2) Disability or (3) termination by the Companies other than for Cause.
A Management Stockholder shall forfeit the shares of Common Stock received on
the date hereof and all rights with respect thereto, as of the last date of his
employment, if he ceases to be employed by the Companies prior to the Vesting
Date other than a cessation of employment due to his (1) death, (2) Disability
or (3) termination by the Companies other than for Cause.
8. MANAGEMENT STOCKHOLDERS' RIGHT TO PUT SHARES TO THE
COMDANY. 8.1 Following the Vesting Date, a Management Stockholder and all of his
Permitted Transferees collectively shall have the right on three different dates
(each a "Put Date") to sell shares
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of Common Stock which have vested ("Vested Shares") pursuant to section 7 to the
Companies which issued such shares on the date hereof, and such Companies shall
have the obligation to purchase from such holder(s) of Vested Shares, the number
of Vested Shares specified in accordance with section 8.3 by such holder(s).
8.2 PUT NOTICE. The right of each Management Stockholder and
all of his Permitted Transferees collectively to sell Vested Shares to the
Companies shall be exercised on three dates only by the delivery of written
notices (each a "Put Notice") to the Company, specifying the Put Date, which
date shall be not less than 60 and no more than 90 days after the date of such
notice, on which the Companies shall be required to close for cash, payable by
wire transfer or other immediately available funds, the purchase of such Vested
Shares, and specifying the number of Vested Shares the Companies shall be
required to purchase pursuant to section 8.3. Each Put Notice must include an
equal proportion of all the Vested Shares of all the Companies held by each
Management Stockholder and all of his Permitted Transferees. A Management
Stockholder and all of his Permitted Transferees collectively may only deliver
one Put Notice within any 12-month period.
8.3 NUMBER AND PRICE OF SHARES. Each Company shall be
obligated to purchase no more than one-third of the total number of Vested
Shares held by each such Management Stockholder and all of his Permitted
Transferees collectively pursuant to each Put Notice delivered by such
holder(s). The price payable to such holder(s) for such shares put to the
Company shall be the Fair Value ("Fair Value") of such shares on the Put Date.
The Fair Value of such shares shall be determined by the Appraiser. Such
appraisal shall be paid for by the Companies. The Appraiser shall determine the
Fair Value of such shares as the product obtained by multiplying the fair value
of the Companies (collectively determined in accordance with the considerations
listed below) times the percentage obtained by dividing the number of shares of
Common Stock specified in the Put Notice divided by the total number of shares
of Common Stock issued and outstanding at the time. The fair value of the
Companies shall be the price at which the Companies collectively would change
hands between a willing buyer and a willing seller when the former is not under
any compulsion to buy and the latter is not under any compulsion to sell, both
parties having reasonable knowledge of relevant facts. In determining the fair
value of the Companies collectively, the Appraiser will consider the financial
condition and operating results and prospects of the Companies, including:
balance sheets, historical and at the valuation date, assets, liabilities, and
book value, historical operating results, particularly profits generated and
factors affecting profits, dividends paid historically and dividend-paying
capacity, budgets, plans, and projections of future performance, and prospects
at the valuation date.
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9. MANAGEMENT STOCKHOLDER RIGHT TO TRANSFER AND COMPANIES'
RIGHT OF FIRST REFUSAL. Following the fifth anniversary of the date hereof, a
Management Stockholder and all of his Permitted Transferees collectively shall
have the right (subject to the other terms of this Agreement) to Transfer Vested
Shares in accordance with the terms of this section 9; any such Transfer must
include an equal proportion of all the Vested Shares of all the Companies held
by each such holder. In the event that such holder(s) obtains from an
independent purchaser a good xxxxx XXXX FIDE offer to purchase Vested Shares, he
shall promptly notify the Companies in writing of the name and address of such
independent purchaser and inform the Companies of the status of such
negotiations. When and if such holder, a ("Selling Stockholder"), decides to
Transfer any Vested Shares, such Selling Stockholder shall promptly deliver to
the Companies a copy of such good xxxxx XXXX FIDE offer and a written notice
that, unless the Companies exercise their rights granted in this section 9, such
Selling Stockholder will Transfer his Vested Shares in accordance therewith (the
"Stockholder Notice"). At any time during the ten business days following
receipt of the Stockholder Notice, the Companies may give such Selling
Stockholder notice of exercise of its right to purchase all, but not less than
all, of the shares of Common Stock which the Selling Stockholder has given
notice of his intention to Transfer, on the same terms and conditions specified
in the Stockholder Notice (the "Company Notice"). Upon receipt of the Company
Notice, the Selling Stockholder shall sell the shares described in the
Stockholder Notice to the Companies at a price equal to the Fair Value of.such
shares. If the Selling Stockholder shall not receive the Company Notice as
provided in the foregoing sentence, he shall have the right to Transfer all, but
not less than all, of the shares offered for Transfer in the Stockholder Notice
to the independent purchaser specified in the Stockholder Notice, for the
consideration and in accordance with the terms and conditions set out in such
Stockholder Notice and in compliance with the terms of this Agreement, PROVIDED
that such Selling Stockholder shall not Transfer any such shares to (I) any
Person, or Affiliate of such Person, which competes, or is expected to compete,
with the Companies or any of their Affiliates, (II) any Person, or Affiliate of
such Pers9n, who the Companies determine (in their sole discretion) might cause
harm to the Companies by virtue of becoming a stockholder of the Companies,
(III) any bank or other financial institution for the purpose of pledging or
granting a security interest in such shares in order to secure indebtedness of
such Selling Stockholder, (IV) any other stockholder of the Companies without
the written consent of the Individual Stockholder, or (V) any Person, or
Affiliate of such Person, which has a material adverse interest to, or is
involved in a pending or threatened litigation or legal proceeding with, the
Companies, the Individual Stockholder or any of their Affiliates.
10. MANAGEMENT STOCKHOLDERS' TAG-ALONG RIGHTS. In the event
that the Individual Stockholder or any of his Permitted
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Transferees agrees to sell, other than a Permitted Disposition pursuant to
section 3 (i), (ii), (iii) or (iv), any or all of the shares of Common Stock
owned by such holder, he shall promptly so notify the Management Stockholders
and shall provide in such notice the terms and conditions of the proposed sale.
Each Management Stockholder and all of his Permitted Transferees collectively
shall have the right, but not the obligation, to sell to the proposed purchaser,
and the Individual Stockholder and any such Permitted Transferees shall cause
the proposed purchaser to purchase, under the same terms and conditions that are
applicable to the sale by the Individual Stockholder and all of his Permitted
Transferees, and at the same time as such sale, up to that number of shares of
Common Stock (of the Company which issued such shares) owned by each such
Management Stockholder and all of his Permitted Transferees obtained by
multiplying (A) the total number of shares of Common Stock of such Company that
are proposed to be sold (before giving effect to this provision) by the
Individual Stockholder and all of his Permitted Transferees to the proposed
purchaser by (B) a fraction, the numerator of which is the total number of
shares of Common Stock of such Company owned by such Management Stockholder
and all of his Permitted Transferees and the denominator of which is the total
number of shares of Common Stock of such Company owned by the Individual
Stockholder and all of his Permitted Transferees. Each Management
Stockholder shall give the Individual Stockholder and all of his Permitted
Transferees written notice of how many shares of such Common Stock he and all
of his Permitted Transferees desire to sell to the proposed purchaser within
ten (10) days of receiving notice of the proposed sale, such number of shares
shall be allocated among such Management Stockholder and all of his Permitted
Transferees on a pro rata basis. To the extent that any right granted to a
Management Stockholder hereunder is not exercised in full, the Management
Stockholders who exercised their rights hereunder may sell to the proposed
purchaser all or any part of that number of additional shares owned by them
equal to the number of shares as to which the right granted to such Management
Stockholder was not exercised; such number of shares shall be allocated among
such Management Stockholders and their Permitted Transferees on a pro rata
basis.
11. INDIVIDUAL STOCKHOLDER'S DRAG-ALONG RIGHT. In the event
that the Individual Stockholder or any of his Permitted Transferees agrees to
sell, other than a Permitted Disposition pursuant to section 3(i), (ii), (iii),
or (iv), any or all of the shares of Common Stock owned by such holder, such
holder shall have the right, but not the obligation, to require each Management
Stockholder and all of his Permitted Transferees, and such Management
Stockholder and all of his Permitted Transferees shall have the obligation to
sell, under the same terms and conditions that are applicable to the sale by the
Individual Stockholder or any of his Permitted Transferees, as the case may be,
and at the same time as such sale, up to that total number of shares of Common
Stock of such Company which issued such shares owned by each such
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Management Stockholder and any of his Permitted Transferees obtained by
multiplying (A) the total number of shares of Common Stock of such Company
that are proposed to be sold (before giving effect to this provision) by the
Individual Stockholder and any of his Permitted Transferees, to the proposed
purchaser by (B) a fraction, the numerator of which is the total number of
shares of Common Stock of such Company owned by such Management Stockholder and
any of his Permitted Transferees and the denominator of which is the total
number of shares of Common Stock of such Company owned by the Individual
Stockholder and any of his Permitted Transferees
12. CERTAIN VOTING AGREEMENTS. 12.1 OBLIGATION TO BE COUNTED
FOR A QUORUM. Each Management Stockholder agrees to be present in person or
represented by proxy at all meetings of the stockholders of each of the
Companies, so that all shares owned by such Management Stockholder or his
Permitted Transferees may be counted for the purposes of determining the
presence of a quorum at such meetings.
12.2 VOTING BY STOCKHOLDERS. (a) Each Management Stockholder
agrees to vote any shares of Common Stock owned by such Management Stockholder,
and to cause all of his Permitted Transferees to vote any shares of Common Stock
owned by such Permitted Transferees, whether by vote, ballot, proxy or written
consent, in any vote of the stockholders of each of the Companies in the same
manner as the Individual Stockholder, or upon the death of the Individual
Stockholder, in the same manner as the holders of a malority of the shares held
by the Permitted Transferees of the Individual Stockholder.
13. MISCELLANEOUS. (A) OTHER STOCKHOLDERS AGREEMENTS. None of
the Stockholders or their respective Permitted Transferees shall enter into any
stockholder agreement or arrangement of any kind with any person with respect to
the shares of Common Stock received on the date hereof inconsistent with the
provisions of this Agreement (whether or not such agreement or arrangement is
with other stockholders that are not parties to this Agreement).
(B) AMENDMENTS. This Agreement may be amended only by a
written instrument signed by all of the parties hereto.
(C) SUCCESSORS, ASSIGNS AND TRANSFEREES. This Agreement shall
be binding upon and shall inure to the benefit of the parties hereto and each of
their respective successors, assigns and Transferees, PROVIDED that no
Stockholder may assign to any Person any of its rights hereunder other than in
connection with a Transfer to such Person of shares in accordance with the
provisions hereof.
(D) DELAYS OR OMISSIONS. No delay or omission to exercise any
right, power or remedy accruing to any party hereto
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upon any breach or default of any party under this Agreement, shall impair any
such right, power or remedy of such party nor shall it be construed to be a
waiver of any such breach or default, or an acquiescence therein, or of or in
any similar breach or default thereafter occurring; nor shall any waiver of any
single breach of default be deemed a waiver of any other breach or default
theretofore or thereafter occurring. Any waiver, permit, consent or approval of
any kind of character on the part of any party of any breach or default under
this Agreement, or any waiver on the part of any party of any provisions or
conditions of this Agreement, shall be in writing and shall be effective only to
the extent specifically set forth in such writing.
(E) INTEGRATION. This Agreement and the documents referred to
herein or delivered pursuant hereto which form a part hereof contain the entire
understanding of the parties with respect to its subject matter. There are no
restrictions, agreements, promises, representations, warranties, covenants or
undertakings with respect to the subject matter hereof other than those
expressly set forth herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to its subject matter.
(F) NOTICES. All notices and other communications provided for
hereunder shall be in writing and shall be sent by first-class mail, overnight
courier, telex, telecopier or hand delivery:
(I) if to one of the Companies, to:
Xxxxx Associates, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxx
Chairman
(II) if to the Individual Stockholder, to:
Xxxxx Associates, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxx
Chairman
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(III) if to any of the Management Stockholders, to:
Xxxxx Associates, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: the name of such Management
Stockholder
or, in each case, to such other address as shall have been furnished to each
other party hereto in accordance with the provisions of this section 12. All
such notices and communications shall be deemed to have been given or made (I)
when delivered, if by hand or by overnight courier on the first business day
thereafter if such date of delivery is not a business day, (II) on the fifth
business day after being deposited in the mail, postage prepaid, if sent by
mail, (III) if sent by telex, when telex answer back is received or (IV) if
telecopied, when telecopy receipt is acknowledged.
(G) DESCRIPTIVE HEADINGS. The headings in this Agreement are
for convenience of reference only and shall not limit or otherwise affect the
meaning of the terms contained herein.
(H) SEVERABILITY. In the event that any one or more of the
provisions, subdivisions, words, clauses, phrases or sentences contained herein,
or the application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision, subdivision, word, clause, phrase or
sentence in every other respect and of the remaining provisions, subdivisions,
words, clauses, phrases or sentences hereof shall not be in any way impaired, it
being intended that all rights, powers and privileges of the parties hereto
shall be enforceable to the fullest extent permitted by law.
(I) COUNTERPARTS This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
(J) GOVERNING LAW. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New York,
including the rules governing conflict of laws.
(K) INJUNCTIVE RELIEF. The Stockholders acknowledge and agree
that a violation of any of the terms of this Agreement will cause the
Stockholders irreparable injury for which adequate remedy at law is not
available. Therefore, the Stockholders agree that each Stockholder shall be
entitled to an injunction, restraining order or other equitable relief from any
court of competent jurisdiction, restraining any Stockholder from committing any
violations of the provisions of this Agreement.
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IN WITNESS WHEREOF, each of the undersigned has executed this
Agreement or caused this Agreement to be executed on its behalf as of the date
first written above.
XXXXX ASSOCIATES, INC.
By: /s/ Xxxxx Xxxxx
-------------------
Title:
XXXXX ASSOCIATES U.K. LIMITED:
By: /s/ Xxxxx Xxxxx
-------------------
Title:
XXXXXXXX/KROLL ENVIRONMENTAL
SERVICES INC.
By: /s/ Xxxxx Xxxxx
-------------------
Title:
PUBLIC ADVISORY SERVICES, INC.
By: /s/ Xxxxx Xxxxx
-------------------
Title:
XXXXXXX PARTNERS, INC.
By: /s/ Xxxxx Xxxxx
-------------------
Title:
INDIVIDUAL STOCKHOLDER
By: /s/ Xxxxx X. Xxxxx
-------------------
Xxxxx X. Xxxxx
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MANAGEMENT STOCKHOLDERS:
By: /s/ Xxxxxx X. XxXxxxx
-------------------------
Xxxxxx X. XxXxxxx
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------
Xxxxxx X. Xxxxxxx
By: /s/ Xxxxxx Xxxx
-------------------------
Xxxxxx Xxxx
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CONSENT AND AMENDMENT NO. 1 TO DECEMBER STOCKHOLDERS' AGREEMENT
---------------------------------------------------------------
Consent and Amendment No. 1, dated as of June 15, 1993 (this
"Amendment"), to Stockholders' Agreement, dated as of December 31, 1992 (the
"December Stockholders' Agreement"), among Xxxxx Associates, Inc., a Delaware
corporation, Kroll Associates U.K. Limited, a corporation organized under the
laws of England, Xxxxxxxx/Kroll Environmental Services, Inc., a Louisiana
corporation and Xxxxxxx Partners, Inc., a Delaware corporation (each of the
above corporate parties is referred to herein jointly as the "Companies"),
Public Advisory Services, Inc., a Delaware corporation, Xxxxx X. Xxxxx, and the
management stockholders listed on the signature pages thereof (the "Management
Stockholders" and, together with Xx. Xxxxx, the "Stockholders").
WHEREAS, the parties hereto wish to take certain actions and make
certain amendments to the December Stockholders' Agreement in order to effect
the transactions contemplated hereby and by the Plan of Reorganization and
Stockholders' Agreement dated as of June 15, 1993 (the "Reorganization
Agreement") by and among American International Group, Inc. ("AIG"), Xxxxx X.
Xxxxx and Xxxxx Holdings, Inc. ("Holdings"); and
WHEREAS, pursuant to this Amendment and the Reorganization Agreement,
the Stockholders and AIG will effect a reorganization of the Companies in which,
among other things, the Stockholders
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will contribute to Holdings all of the capital stock of the Companies held by
them (the "Outstanding Stock") and will receive, in exchange therefor, shares
of Common Stock, par value $.01 per share ("Common Stock"), of Holdings, as a
result of which Holdings shall become a holding company of the Companies and
their subsidiaries;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto hereby agree as follows:
1. All capitalized terms shall have the respective meanings ascribed to
them in the December Stockholders' Agreement unless otherwise defined herein.
2. The amendments set forth in, and effected by, paragraphs 4 through
18 of this Amendment are conditioned upon the consummation of the transactions
contemplated by this Amendment and the Reorganization Agreement and shall become
effective only upon the consummation of such transactions.
3. Each Stockholder hereby agrees that, at the Closing (as defined in
the Reorganization Agreement), he shall contribute to Holdings all of the shares
of Outstanding Stock then held by him, free and clear of all Encumbrances (as
defined in the Reorganization Agreement), and together with all rights now and
hereafter attaching thereto, and in consideration therefor, Holding will issue
and deliver to each of the Stockholders the number of shares of Common Stock set
forth opposite his name on Schedule 1.2 to the Reorganization Agreement. To the
extent
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required by the December Stockholders' Agreement, each Stockholder consents to
the transfers contemplated by the preceding sentence in accordance with Section
3(c) of the December Stockholders' Agreement.
4. The first paragraph of the December Stockholders' Agreement is
hereby amended by deleting the words "Public Advisory Services, Inc., a Delaware
corporation" from the fifth and sixth lines thereof and by inserting the words
"Kroll Holdings, Inc., a Delaware corporation ("Holdings")," on the ninth line
thereof, before the words "Xxxxx X. Xxxxx".
5. The second recital of the December Stockholders' Agreement is hereby
amended by deleting the words "(the "Common Stock")" from the fourth line
thereof and the definition of "Common Stock" in Section 1 of the December
Stockholders' Agreement is hereby amended by deleting the words "as defined in
the second recital hereof" and by inserting in lieu thereof the words "the
Common Stock, par value $.01 per share, of Holdings."
6. Section 1 of the December Stockholders' Agreement is hereby further
amended in the following ways:
(i) by adding the following definition: "Holdings: as
defined in the introductory paragraph hereof.";
(ii) by deleting from the definition of "Permitted
Transferee" the second proviso thereof in its entirety; and
(iii) by deleting from the definition of "Public Offering" the
words "the Company which issued such shares" and inserting in lieu thereof the
word "Holdings".
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7. Section 4 of the December Stockholders' Agreement is hereby amended
by deleting the words "the Company which issued such shares" from the
penultimate line thereof and inserting in lieu thereof the word "Holdings".
8. Section 5 of the December Stockholders' Agreement is hereby amended
in the following ways:
(i) by deleting, in the second paragraph of the legend,
provided in subsection (a), at the end of the seventh line thereof, the words
"Xxxxx, Inc.," and inserting in lieu thereof the words "Xxxxxxx Partners, Inc.,
Xxxxx Holdings, Inc.,"; and
(ii) by deleting the words "the Company which issued such
shares" from the second and third lines of subsection (b), and the words "such
Company" from each of the first, third and last lines of subparagraph (x) and
the third line of paragraph (y), and, in each case, inserting in lieu thereof
the word "Holdings".
9. Section 6 of the December Stockholders' Agreement is hereby amended
by deleting from the fourth and fifth lines thereof the words "None of the
Companies has" and inserting in lieu thereof the words "Holdings has not", and
by deleting from the fifth and sixth lines thereof the words "their respective"
and inserting in lieu thereof the word "its".
10. Section 7 of the December Stockholders' Agreement is hereby amended
by deleting from each of the third and ninth lines thereof the words "on the
date hereof".
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11. Section 8.1 of the December Stockholders' Agreement is hereby
amended by deleting the words "the Companies which issued such shares on the
date hereof" from the sixth and seventh lines thereof, and the words "such
Companies" from the tenth line thereof, and, in each case, inserting in lieu
thereof the word "Holdings".
12. Section 8.2 of the December Stockholders' Agreement is hereby
amended (i) by deleting the words "the Companies" from each of the third,
seventh and tenth lines thereof, and the words "the Company" from the fifth line
thereof, and, in each case, inserting in lieu thereof the word "Holdings" and
(ii) by deleting the second sentence thereof in its entirety.
13. Section 8.3 of the December Stockholders' Agreement is hereby
amended (i) by deleting the words "Each Company" from the first line thereof,
the words "the Company" from the sixth line thereof, and the words "the
Companies" from the ninth line thereof, and, in each case, inserting in lieu
thereof the word "Holdings", (ii) by inserting the words "Holdings and" before
the words "the Companies" in each of the eleventh, sixteenth, seventeenth,
twenty-first and twenty-third lines thereof and (iii) by deleting the words
"Common Stock" in the fifteenth line thereof and inserting in lieu thereof the
words "capital stock of Holdings".
14. Section 9 of the December Stockholders' Agreement is hereby amended
(i) by deleting the word "Companies" from the second line thereof, and the words
"the Companies" from each of
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the tenth/eleventh, twelfth, fifteenth, sixteenth, twentieth, twenty-seventh,
thirty-ninth, forty-first and forty-fifth lines thereof, and, in each case,
inserting in lieu thereof the word "Holdings", (ii) by deleting from the sixth
through eighth lines thereof the words "; any such Transfer must include an
equal proportion of all the Vested Shares of all the Companies held by each such
holder", (iii) by deleting the words "exercise their" from the seventeenth line
thereof and inserting in lieu thereof the words "exercises its", (iv) by
deleting the word "determine" from the thirty-ninth line thereof and inserting
in lieu thereof the word "determines" and (v) by deleting the word "their" from
the fortieth line thereof and inserting in lieu thereof the word "its".
15. Section 10 of the December Stockholders' Agreement is hereby
amended (i) by deleting the words "(of the Company which issued such shares)"
from the fifteenth line thereof and (ii) by deleting all the words following
"Common Stock" on the eighteenth line thereof through the period at the end of
such second sentence on the twenty-sixth line thereof and inserting in lieu
thereof the following:
"then owned by such Management Stockholder and all of his Permitted
Transferees by (b) a fraction, the numerator of which equals the number
of shares of Common Stock to be purchased from the Individual
Stockholder and all of his Permitted Transferees and the denominator of
which equals the sum of the total number of shares of Common Stock then
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owned by the Individual Stockholder and any of his Permitted
Transferees plus the number of shares of capital stock of Holdings then
owned by any other stockholder of Holdings entitled to participate in
such sale."
16. Section 11 of the December Stockholders' Agreement is hereby
amended (i) by deleting the words "of such Company which issued such shares"
from the thirteenth line thereof and (ii) by deleting all the words following
"Stock" on the sixteenth line thereof through the period at the end of such
Section 11 and inserting in lieu thereof the following:
"then owned by such Management Stockholder and all of his Permitted
Transferees by (b) a fraction, the numerator of which equals the number
of shares of Common Stock to be purchased from the Individual
Stockholder and all of his Permitted Transferees and the denominator of
which equals the total number of shares of Common Stock then owned by
the Individual Stockholder and any of his Permitted Transferees."
17. Section 12.1 of the December Stockholders' Agreement is hereby
amended by deleting the words "each of the Companies" from the fourth line
thereof, and Section 12.2 of the December Stockholders' Agreement is hereby
amended by deleting the words "each of the Companies" from the sixth line
thereof, and, in each case, inserting in lieu thereof the word "Holdings".
18. Section 13 of the December Stockholders' Agreement is hereby
amended in the following ways:
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(i) by deleting the words "received on the date hereof"
from the fifth line of subsection (a) thereof;
(ii) by adding the words "Holdings or" before the word
"one" in the first line of subsection (f) (i) thereof; and
(iii) by adding the words "Holdings and" after the word "that"
at the end of the fourth line of subsection (k) thereof.
19. This Amendment 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.
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IN WITNESS WHEREOF, this Amendment has been executed and
delivered as of the date first written above.
KROLL HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxx
----------------------
XXXXX ASSOCIATES, INC.
By: /s/ Xxxxx X. Xxxxx
----------------------
XXXXX ASSOCIATES U.K. LIMITED
By: /s/ Xxxxx X. Xxxxx
----------------------
XXXXXXXX/KROLL ENVIRONMENTAL
SERVICES, INC.
By: /s/ Xxxxx X. Xxxxx
----------------------
PUBLIC ADVISORY SERVICES, INC.
By: /s/ Xxxxx X. Xxxxx
----------------------
XXXXXXX PARTNERS, INC.
By: /s/ Xxxxx X. Xxxxx
----------------------
INDIVIDUAL STOCKHOLDER
By: /s/ Xxxxx X. Xxxxx
----------------------
Xxxxx X. Xxxxx
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MANAGEMENT STOCKHOLDERS
/s/ Xxxxxx X. XxXxxxx
---------------------------
Xxxxxx X. XxXxxxx
/s/ Xxxxxx X. Xxxxxxx
---------------------------
Xxxxxx X. Xxxxxxx
/s/ Xxxxxx Xxxx
---------------------------
Xxxxxx Xxxx
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MANAGEMENT STOCKHOLDER CONTRIBUTION
On and subject to the terms and conditions set forth in the Consent and
Amendment No. 1 to December Stockholders' Agreement, dated as of June 15, 1993,
to which the undersigned is a party (the "December Amendment") and the
Reorganization Agreement (as defined in the December Amendment), the undersigned
hereby assigns, transfers, conveys, contributes and delivers to Kroll Holdings,
Inc. ("Holdings") all right, title and interest of the undersigned in and to any
and all shares of capital stock of each of Xxxxx Associates, Inc., Kroll
Associates U.K. Limited, Xxxxxxxx/Kroll Environmental Services, Inc. and Xxxxxxx
Partners Inc. owned by the undersigned, or to which the undersigned is entitled.
There shall be no continuing liability on the part of any of such corporations
to the undersigned, and the undersigned hereby expressly releases each such
corporation from any claim or demand whatsoever, in each case, relating to a
direct equity ownership by the undersigned in any such corporation; provided
that the undersigned shall receive the equity interest in Holdings to which the
undersigned is entitled under the December Amendment and the Reorganization
Agreement.
IN WITNESS WHEREOF, I have executed this Management Stockholder
Contribution on this 15th day of June, 1993.
/s/ Xxxxxx X. XxXxxxx
-------------------------
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MANAGEMENT STOCKHOLDER CONTRIBUTION
On and subject to the terms and conditions set forth in the Consent and
Amendment No. 1 to December Stockholders' Agreement, dated as of June 15, 1993,
to which the undersigned is a party (the "December Amendment") and the
Reorganization Agreement (as defined in the December Amendment), the undersigned
hereby assigns, transfers, conveys, contributes and delivers to Kroll Holdings,
Inc. ("Holdings") all right, title and interest of the undersigned in and to any
and all shares of capital stock of each of Xxxxx Associates, Inc., Kroll
Associates U.K. Limited, Xxxxxxxx/Kroll Environmental Services, Inc. and Xxxxxxx
Partners Inc. owned by the undersigned, or to which the undersigned is entitled.
There shall be no continuing liability on the part of any of such corporations
to the undersigned, and the undersigned hereby expressly releases each such
corporation from any claim or demand whatsoever, in each case, relating to a
direct equity ownership by the undersigned in any such corporation; provided
that the undersigned shall receive the equity interest in Holdings to which the
undersigned is entitled under the December Amendment and the Reorganization
Agreement.
IN WITNESS WHEREOF, I have executed this Management Stockholder
Contribution on this 15th day of June, 1993.
/s/ Xxxxxx X. Xxxxxxx
-------------------------
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MANAGEMENT STOCKHOLDER CONTRIBUTION
On and subject to the terms and conditions set forth in the Consent and
Amendment No. 1 to December Stockholders' Agreement, dated as of June 14, 1993,
to which the undersigned is a party (the "December Amendment") and the
Reorganization Agreement (as defined in the December Amendment), the undersigned
hereby assigns, transfers, conveys, contributes and delivers to Kroll Holdings,
Inc. ("Holdings") all right, title and interest of the undersigned in and to any
and all shares of capital stock of each of Xxxxx Associates, Inc., Kroll
Associates U.K. Limited, Xxxxxxxx/Kroll Environmental Services, Inc. and Xxxxxxx
Partners Inc. owned by the undersigned, or to which the undersigned is entitled.
There shall be no continuing liability on the part of any of such corporations
to the undersigned, and the undersigned hereby expressly releases each such
corporation from any claim or demand whatsoever, in each case, relating to a
direct equity ownership by the undersigned in any such corporation; provided
that the undersigned shall receive the equity interest in Holdings to which the
undersigned is entitled under the December Amendment and the Reorganization
Agreement.
IN WITNESS WHEREOF, I have executed this Management Stockholder
Contribution on this 14th day of June, 1993.
/s/ Xxxxxx Xxxx
-------------------------
