EXHIBIT 10.8
EXECUTION COPY
================================================================================
SHAREHOLDERS AGREEMENT
among
US UNWIRED INC.,
THE 1818 FUND III, L.P.
and
THE SHAREHOLDERS NAMED HEREIN
_______________________________________
Dated as of: October 29, 1999
_______________________________________
================================================================================
TABLE OF CONTENTS
-----------------
Page
----
1. Definitions.......................................................... 1
2. Tag Along Rights..................................................... 3
2.1 Sales or Transfers by Principal Shareholders.................... 3
2.2 Offering Notice................................................. 3
2.3 Tag Along Rights; Exercise...................................... 4
2.4 Transfers to Family Members..................................... 4
3. Corporate Governance of the Company.................................. 5
3.1 Election of Directors; Number and Composition................... 5
3.2 Removal of Purchaser Company Directors.......................... 5
3.3 Replacement of Directors........................................ 5
3.4 Company Action.................................................. 6
4. Miscellaneous........................................................ 6
4.1 Notices......................................................... 6
4.2 FCC Requirements................................................ 7
4.3 Amendment and Waiver............................................ 8
4.4 Successors and Assigns.......................................... 8
4.5 Counterparts.................................................... 8
4.6 Specific Performance............................................ 8
4.7 Headings........................................................ 9
4.8 Governing Law................................................... 9
4.9 Jurisdiction.................................................... 9
4.10 Severability.................................................... 9
4.11 Rules of Construction........................................... 9
4.12 Entire Agreement................................................ 10
4.13 Further Assurances.............................................. 10
i
SHAREHOLDERS AGREEMENT
SHAREHOLDERS AGREEMENT, dated as of October 29, 1999 (this
"Agreement"), by and among US Unwired Inc., a Louisiana corporation (the
---------
"Company"), The 1818 Fund III, L.P., a Delaware limited partnership (the
- --------
"Purchaser"), and the shareholders of the Company listed on the signature pages
- ----------
hereto.
WHEREAS, pursuant to a Securities Purchase Agreement, dated as of
October __, 1999 (the "Securities Purchase Agreement"), by and among the Company
-----------------------------
and the Purchaser, the Company has agreed to issue and sell to the Purchaser
500,000 shares of the Company's Senior Redeemable Convertible Preferred Stock,
Series A, no par value (the "Preferred Stock"); and
---------------
WHEREAS, the parties hereto wish to provide for, among other things,
tag along rights, corporate governance rights and certain other rights and
obligations with respect to the Company and the other parties hereto.
NOW, THEREFORE, in consideration of the mutual promises and agreements
set forth herein, the adequacy of which are hereby acknowledged, the parties
hereto agree as follows:
1. Definitions. As used in this Agreement, the following terms
-----------
shall have the meanings set forth below:
"Affiliate" shall have the meaning ascribed to such term in Rule 12b-2
---------
of the General Rules and Regulations under the Exchange Act.
"Board" has the meaning set forth in Section 3.1.
-----
"Business Day" means any day other than a Saturday, Sunday or other
------------
legal holiday on which commercial banks in the City of New York, New York are
authorized or required by law or executive order to close.
"Class A Common Stock" means the Class A common stock, par value $.01
--------------------
per share, of the Company.
"Class B Common Stock" means the Class B common stock, par value $.01
--------------------
per share, of the Company.
"Company" has the meaning set forth in the recitals to this Agreement.
-------
2
"Common Stock" means the Class A Common Stock, the Class B Common
------------
Stock or any other capital stock of the Company into which such stock is
reclassified or reconstituted and any other common stock of the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
------------
and the rules and regulations promulgated thereunder.
"Family Members" has the meaning set forth in Section 2.4.
--------------
"FCC" means the Federal Communications Commission.
---
"Offered Securities" has the meaning set forth in Section 2.2.
------------------
"Offering Notice" has the meaning set forth in Section 2.2.
---------------
"Person" means any individual, corporation, partnership, limited
------
liability company, firm, joint venture, association, joint stock company, trust,
unincorporated organization, governmental authority or other entity.
"Preferred Stock" has the meaning set forth in the recitals to this
---------------
Agreement.
"Principal Shareholders" means any one or more of William L. Henning
----------------------
Sr., William L. Henning Jr., John A. Henning and Thomas G. Henning and their
respective heirs and any trust, corporation, partnership or limited liability
company, all of the beneficial ownership interests in which shall be held by any
of the foregoing.
"Purchaser" has the meaning set forth in the recitals to this
---------
Agreement.
"Purchasing Company Director(s)" has the meaning set forth in Section
------------------------------
3.1.
"Restricted Period" has the meaning set forth in Section 4.2(b).
-----------------
"Securities Act" means the Securities Act of 1933, as amended, and the
--------------
rules and regulations promulgated thereunder.
"Securities Purchase Agreement" has the meaning set forth in the
-----------------------------
recitals to this Agreement.
"Selling Stockholder" has the meaning set forth in Section 2.1.
-------------------
3
"Shareholders" means the Principal Shareholders and the Purchaser and
------------
any transferee thereof who has agreed to be bound by the terms and conditions of
this Agreement.
"Shareholders Meeting" has the meaning set forth in Section 3.1.
--------------------
"Tag-Along Rightholder" means the Purchaser.
---------------------
"Third Party Purchaser" has the meaning set forth in Section 2.1.
---------------------
"Written Consent" has the meaning set forth in Section 3.1.
---------------
2. Tag Along Rights.
----------------
2.1 Sales or Transfers by Principal Shareholders. If any of the
--------------------------------------------
Principal Shareholders (a "Selling Shareholder"), at any time or from time to
-------------------
time, proposes or agrees to sell or transfer all or any portion of its or his
shares of Common Stock to any Person (a "Third Party Purchaser"), the Tag-Along
---------------------
Rightholder shall have the right to sell to such Third Party Purchaser, upon the
terms set forth in the Offering Notice, that number of shares of Common Stock
held by, or issuable upon conversion of shares of Preferred Stock to, the Tag-
Along Rightholder equal to that percentage of the Offered Securities determined
by dividing (i) the total number of shares of Common Stock held by, or issuable
upon conversion of shares of Preferred Stock to, the Tag-Along Rightholder by
(ii) the total number of shares of Common Stock held by such Selling Shareholder
plus the total number of shares of Common Stock held by, or issuable upon
conversion of shares of Preferred Stock to, the Tag-Along Rightholder; provided,
--------
however, that the provisions of this Section 2.1 shall not apply to a proposed
- -------
sale or transfer of any shares of Common Stock by a Selling Shareholder unless
(x) the sum of such shares plus all other shares of Common Stock sold or
transferred by any of the Principal Shareholders during the period from the date
hereof to the date of such proposed sale or transfer is equal to or greater than
twenty percent (20%) of the total number of shares of Common Stock held by the
Principal Shareholders (as a group) on the date hereof, and (y) the Purchaser
and its Affiliates, in the aggregate, hold at least five percent (5%) of the
shares of Common Stock issued or issuable upon conversion of the Preferred Stock
(whether or not the shares of Preferred Stock have been converted) as of the
date of such proposed sale or transfer. The Selling Shareholder and the Tag-
Along Rightholder shall effect the sale of the Offered Securities and the Tag-
Along Rightholder shall have the right to include in the Offered Securities that
number of shares of Common Stock determined in accordance with the previous
sentence with respect to the Tag-Along Rightholder, and the number of Offered
Securities to be sold to the Third Party Purchaser by the Selling Shareholder
shall be reduced accordingly. This Article shall not apply to sales of Common
Stock made (i) pursuant to Rule 144
4
promulgated under the Securities Act, or (ii) pursuant to an effective
registration statement under the Securities Act.
2.2 Offering Notice. At least twenty (20) days prior to the
---------------
consummation of a proposed sale or transfer by a Selling Shareholder which gives
rise to the rights of the Tag-Along Rightholder as set forth in Section 2.1,
each Selling Shareholder shall give notice (an "Offering Notice") to the Tag-
---------------
Along Rightholder of each such proposed sale. The Offering Notice shall state
(a) the name of such Selling Shareholder, (b) the number of shares of Common
Stock proposed to be sold or transferred (the "Offered Securities"), (c) the
------------------
name and address of the proposed Third Party Purchaser, (d) the proposed amount
and form of consideration and terms and conditions of payment offered by the
Third Party Purchaser, (e) the percent of shares of Common Stock that the Tag-
Along Rightholder may sell to such Third Party Purchaser (determined in
accordance with Section 2.1), and (f) a representation that the Third Party
Purchaser has been informed of the "tag-along" rights provided for in this
Article 2 and has agreed to purchase the shares of Common Stock in accordance
with the terms hereof. If requested by the Tag-Along Rightholder, such Selling
Shareholder shall, promptly upon receipt of such request, provide to the Tag-
Along Rightholder copies of the agreements or documents pursuant to which such
proposed sale is being effected.
2.3 Tag Along Rights; Exercise. In order to exercise its right
--------------------------
to sell shares of Common Stock to a Third Party Purchaser pursuant to this
Article 2, the Tag-Along Rightholder must agree to make substantially the same
representations and warranties with respect to the ownership of the securities
to be sold by it as the Selling Shareholder agrees to make in connection with
the proposed sale by it of Offered Securities to a Third Party Purchaser. The
"tag-along" rights provided by this Article 2 must be exercised by the Tag-Along
Rightholder within ten (10) days following receipt of the Offering Notice, by
delivery of a written notice to such Selling Shareholder indicating the Tag-
Along Rightholder's wish to exercise its "tag-along" rights and specifying the
number of shares of Common Stock (up to the maximum number of shares of Common
Stock that the Tag-Along Rightholder has "tag-along" rights to sell to the Third
Party Purchaser pursuant to Section 2.1) it wishes to sell. The failure of the
Tag-Along Rightholder to respond within such 10-day period shall be deemed to be
a waiver of the Tag-Along Rightholder's rights under this Article 2 with respect
to such Offering Notice. If the Tag-Along Rightholder has properly exercised its
rights under this Article 2 and a Third Party Purchaser fails to purchase shares
of Common Stock from the Tag-Along Rightholder, then none of the Selling
Shareholders shall be permitted to consummate the proposed sale or transfer of
the Offered Securities, and any such attempted sale or transfer shall be null
and void and the Company shall not register any such sale or transfer.
5
2.4 Transfers to Family Members. Notwithstanding anything to
---------------------------
the contrary contained in this Agreement, at any time, each of the Principal
Shareholders may transfer all or a portion of its or his shares of Common Stock
to or among (i) the other Principal Shareholders; (ii) a member of the Principal
Shareholder's immediate family, which shall include his spouse, siblings,
children, grandchildren, nieces or nephews ("Family Members"); or (iii) a trust,
--------------
corporation, partnership or limited liability company, all of the beneficial
interests in which shall be held by the Principal Shareholder or one or more
Family Members of the Principal Shareholder or which would otherwise be an
Affiliate of the Principal Shareholder; provided, however, that during the
-------- -------
period that any trust, corporation, partnership or limited liability company
holds any right, title or interest in any shares of Common Stock, no Person
other than the Principal Shareholder or one or more Family Members of the
Principal Shareholder may be or become beneficiaries, Shareholders, limited or
general partners or members of such trust, corporation, partnership or limited
liability company.
3. Corporate Governance of the Company.
-----------------------------------
3.1 Election of Directors; Number and Composition. Each
---------------------------------------------
Shareholder shall vote its or his shares of Common Stock or Preferred Stock at
any regular or special meeting of the Company (a "Shareholders Meeting"), or in
--------------------
any written consent executed in lieu of such a meeting of shareholders of the
Company (a "Written Consent"), and shall take all other reasonable actions
---------------
necessary, to ensure that the number of directors constituting the entire Board
of Directors of the Company (the "Board") shall be not greater than 7. So long
-----
as the Purchaser and its Affiliates hold, in the aggregate, at least 50% of the
shares of Common Stock issued or issuable upon conversion of the Preferred Stock
(whether or not the shares of Preferred Stock have been converted), each
Shareholder shall vote its shares at any Shareholders Meeting called for the
purpose of filling positions on the Board or in any Written Consent executed for
such purpose, and with respect to such shares take all other reasonable actions
necessary, to ensure the election to the Board of two (2) individuals designated
by the Purchaser (each a "Purchaser Company Director" and together, the
--------------------------
"Purchaser Company Directors"). So long as the Purchaser and its Affiliates
- ----------------------------
hold, in the aggregate, at least 25% of the shares of Common Stock issued or
issuable upon conversion of the Preferred Stock (whether or not the shares of
Preferred Stock have been converted), each Shareholder shall vote its shares at
any Shareholders Meeting called for the purpose of filing positions on the Board
or in any Written Consent executed for such purpose, and shall take all other
action reasonably necessary, to ensure the election to the Board of one (1)
Purchaser Company Director. One Purchaser Company Director shall have the right
to serve in any committee formed by the Board.
3.2 Removal of Purchaser Company Directors. If, at any
--------------------------------------
time, the Purchaser notifies the other Shareholders of its wish to remove for
any reason
6
(or no reason) any Purchaser Company Director, then each Shareholder shall vote
all of its or his shares of Common Stock or Preferred Stock, and take all other
reasonable actions necessary, to ensure the removal of such Purchaser Company
Director.
3.3 Replacement of Directors. If, at any time, a vacancy is
------------------------
created on the Board by reason of the incapacity, death, removal or resignation
of any Purchaser Company Director, then the Purchaser shall designate an
individual who shall be elected to fill such vacancy until the next Shareholders
Meeting. Upon receipt of notice of the designation of a nominee, each
Shareholder shall, as soon as practicable after the date of such notice, take
action, including the voting of its or his shares of Common Stock or Preferred
Stock, to elect the director designated by the Purchaser to fill such vacancy.
3.4 Company Actions. The Company shall cause any Purchaser
---------------
Company Director to be included in the slate of nominees recommended by the
Board to the Company's shareholders for election as directors, and the Company
shall use its best efforts to cause the election of such nominee, including
voting all shares for which the Company holds proxies (unless otherwise directed
by the shareholder submitting such proxy) or is otherwise entitled to vote, in
favor of the election of such person. If, at any time, a vacancy is created on
the Board by reason of the incapacity, death, removal or resignation of any
Purchaser Company Director, the Company shall take all action necessary to cause
the election of the individual designated by the Purchaser to fill such vacancy.
4. Miscellaneous.
-------------
4.1 Notices. All notices, demands and other communications
-------
provided for or permitted hereunder shall be made in writing and shall be by
registered or certified first-class mail, return receipt requested, telecopier,
courier services or personal delivery to the following addresses, or to such
other addresses as shall be designated from time to time by a party in
accordance with this Section 4.1:
(a) if to the Purchaser:
The 1818 Fund III, L.P.
c/o Brown Brothers Harriman & Co.
59 Wall Street
New York, New York 10005
Attention: Lawrence C. Tucker
Telecopier No.: (212) 493-8429
7
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Attention: Marilyn Sobel, Esq.
Telecopier No.: (212) 757-3990
(b) if to the Company:
US Unwired Inc.
Hibernia Tower
One Lakeshore Drive
Suite 1900
Lake Chambers, LA 70629
Telecopier No.: (318) 497-3197
Attention: William Henning, Jr.
with a copy to:
Thomas G. Henning
Post Office Box 3709
Lake Charles, Louisiana 70602
Telecopier No.: (318) 497-3479
(c) If to the Shareholders, at the address of each such
Shareholder on the books and records of the Company.
All such notices and communications shall be deemed to have been duly
given: (i) when delivered by hand, if personally delivered; (ii) the next
Business Day, if delivered by commercial overnight courier service; (iii) five
Business Days after being deposited in the mail, postage prepaid, if mailed; and
(iv) when receipt is acknowledged (or if not a Business Day, then the next
Business Day), if telecopied.
4.2 FCC Requirements.
----------------
(a) The Company, through its subsidiaries, holds certain of
its FCC licenses pursuant to the FCC's rules, which provide certain benefits to
a licensee that qualifies as a "Designated Entity". In addition, the Company may
wish to bid in future FCC auctions for a spectrum made available to Designated
Entities or otherwise acquire licenses or rights to manage Designated Entity
licenses. In order to continue to qualify as a Designated Entity for licenses
currently held and to remain
8
eligible for preferences afforded Designated Entities in future actions, the FCC
requires that (i) the Principal Shareholders collectively own greater than 50%
of the equity of the Company, determined on a fully-diluted basis, and (ii) the
Principal Shareholders exercise de jure and de facto control of the Company.
(b) During the time that the FCC requires the Company to
maintain its eligibility to be a Designated Entity (the "Restricted Period"),
-----------------
the Company and the Shareholders shall take no action, nor permit any action to
be taken, including the sale or other encumbrance of capital stock, which would
cause the company to lose its eligibility to hold licenses as a Designated
Entity, unless such actions is approved by a two thirds vote of the
Shareholders. During the Restricted Period, the Principal Shareholders shall
retain de jure and de facto control of the Company.
(c) The Principal Shareholders shall exercise unfettered
control over the day-to-day management of the Company's business. A
Shareholder's right to transfer any of its Shares may be subject to obtaining
prior FCC or other regulatory approval, and shall be void, ab initio, if such
transfer would violate the Communications Act of 1934, as amended by the
Telecommunications Act of 1996, as amended, or any applicable FCC regulations,
or cause the company to lose its eligibility to hold licenses as a Designated
Entity, and such violation or loss of eligibility cannot be cured. The
transferring Shareholder shall bear all expenses associated with obtaining any
necessary regulatory approvals and curing any violations.
4.3 Amendment and Waiver.
--------------------
(a) No failure or delay on the part of any party hereto, in
exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy.
(b) Any amendment, supplement or modification of or to any
provision of this Agreement, any waiver of any provision of this Agreement and
any consent to any departure by the Company or any Shareholder from the terms of
any provision of this Agreement, shall be effective (i) only if it is made or
given in writing and signed by the party requesting such amendment or waiver and
holders of at least a majority of the shares of Preferred Stock, and (ii) only
in the specific instance and for the specific purpose for which made or given.
4.4 Successors and Assigns. This Agreement can not be assigned
----------------------
but shall be binding upon and inure to the benefit of the parties and their
respective successors, heirs, legatees and legal representatives.
9
4.5 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original, and all of which taken
together shall constitute one and the same instrument.
4.6 Specific Performance. The parties hereto intend that each
--------------------
of the parties have the right to seek damages or specific performance in the
event that any other party hereto fails to perform such party's obligations
hereunder. Therefore, if any party shall institute any action or proceeding to
enforce the provisions hereof, any party against whom such action or proceeding
is brought hereby waives any claim or defense therein that the plaintiff party
has an adequate remedy at law.
4.7 Headings. The headings in this Agreement are for
--------
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
4.8 Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of Louisiana, without regard
to principles of conflicts of law.
4.9 Jurisdiction. Each party to this Agreement hereby
------------
irrevocably agrees that any legal action or proceeding arising out of or
relating to this Agreement or any agreements or transactions contemplated hereby
may be brought exclusively in the courts of the State of Delaware or of the
United States of America for the District of Delaware and hereby expressly
submits to the exclusive personal jurisdiction and venue of such courts for the
purposes thereof and expressly waives any claim of improper venue and any claim
that such courts are an inconvenient forum. Each party hereby irrevocably
consents to the service of process of any of the aforementioned courts pursuant
to a contractual provision in any such suit, action or proceeding by the mailing
of copies thereof by registered or certified mail, postage prepaid, to the
address set forth in Section 4.1, such service to become effective ten (10) days
after such mailing. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT
BE WAIVED, EACH PARTY HEREBY WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT
(WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN
ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION
ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT MATTER HEREOF OR ANY
FUNDAMENTAL DOCUMENT, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING OR
WHETHER IN CONTRACT OR TORT OR OTHERWISE.
4.10 Severability. In the event that any one or more of the
------------
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and
10
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired, unless the provisions held
invalid, illegal or unenforceable shall substantially impair the benefits of the
remaining provisions hereof.
4.11 Rules of Construction. Unless the context otherwise
---------------------
requires, "or" is not exclusive, and references to Articles, Sections or
Subsections refer to Articles, Sections or Subsections of this Agreement.
4.12 Entire Agreement. This Agreement, together with the
----------------
exhibits and schedules hereto, is intended by the parties as a final expression
of their agreement and intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein and therein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein or
therein. This Agreement, together with the exhibits hereto, supersede all prior
agreements and understandings between the parties with respect to such subject
matter.
4.13 Further Assurances. Each of the parties shall, and shall
------------------
cause their respective Affiliates to, execute such instruments and take such
action as may be reasonably required or desirable to carry out the provisions
hereof and the transactions contemplated hereby.
11
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their respective officers or partners hereunto duly
authorized as of the date first above written.
US UNWIRED INC.
By: /s/ Robert Piper
---------------------------------
Name: Robert Piper
Title: President
THE 1818 FUND III, L.P.
By: Brown Brothers Harriman & Co.,
its General Partner
By: /s/ Lawrence C. Tucker
----------------------------------
Name: Lawrence C. Tucker
Title: Partner Brown Brothers
Harriman & Co.
Name: /s/ William L. Henning Sr
------------------------------
William L. Henning. Sr.
Name: /s/ William L. Henning Jr.
------------------------------
William L. Henning Jr.
Name: /s/ John A. Henning
------------------------------
John A. Henning
Name: /s/ Thomas G. Henning
------------------------------
Thomas G. Henning