EXHIBIT 10(a)
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:
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WHEREAS, concurrently herewith, Parent, STEALTH ACQUISITION
II CORP., a Delaware corporation and a direct wholly-owned subsidiary
of Parent ("Merger Sub"), and DAVIDSON & ASSOCIATES, INC., a
California 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 Beneficially Owns (as
defined herein) 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
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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
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, transfer or disposition of any assets outside the
ordinary course of business or any assets which in the aggregate are
material to the Company and its subsidiaries taken as a whole, 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
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Shareholder hereby represents and warrants to Parent as follows:
(a) Ownership of Shares. Such Shareholder is the record
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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 (i) 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 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 and denoted by footnote 1, with no limitations,
qualifications or restrictions on such rights (ii) shared voting power
and shared power to issue instructions with respect to the matters set
forth in Section 1 hereof, shared power of disposition, shared power
of conversion, shared power to demand appraisal rights and shared
power to agree to all of the matters set forth in this Agreement, in
each case shared with another Shareholder party to this Agreement and
in each case with respect to all of the Shares set forth opposite such
Shareholder's name on Schedule 1 hereto and denoted by footnote 2.
(b) Power; Binding Agreement. Such Shareholder has the
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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 who is not a party to this Agreement
and 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,
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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
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advisory and investment banking arrangements and agreements between
the Company and Smith Barney Inc. and between the Company and Kerlin
Capital Group, 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 the knowledge of such Shareholder, the Company or
any of its affiliates.
(e) Other Potential Acquirors. Such Shareholder (i) shall
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immediately cease any existing discussions or negotiations, if any,
with any parties conducted heretofore with respect to any acquisition
of all or any material portion of the assets of, or any equity
interest in, the Company or its subsidiaries or any business
combination with the Company or its subsidiaries, in his, her or its
capacity as such, and (ii) from and after the date hereof until
termination of the Merger Agreement, unless and until the Company is
permitted to take such actions under Section 4.4 of the Merger
Agreement, shall not, in such capacity, directly or indirectly,
initiate, solicit or knowingly encourage (including by way of
furnishing non-public information or assistance), or take any other
action to facilitate knowingly, any inquiries or the making of any
proposal that constitutes, or may reasonably be expected to lead to,
any such transaction or acquisition, or agree to or endorse any such
transaction or acquisition, or authorize or permit any of such
Shareholder's agents to do so, and such Shareholder shall promptly
notify Parent or Merger Sub of any proposal and shall provide a copy
of any such written proposal and a summary of any oral proposal to
Parent or Merger Sub immediately after receipt thereof (and shall
specify the material terms and conditions of such proposal and
identify the person making such proposal) and thereafter keep Parent
or Merger Sub promptly advised of any development with respect
thereto.
(f) Restriction on Transfer, Proxies and Non-Interference.
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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.
(g) Reliance by Parent. Such Shareholder understands and
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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. Further Assurances. From time to time, at the other
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party's request and without further consideration, each party hereto
shall execute and deliver such additional documents and take all such
further lawful action as may be necessary or desirable to consummate
and make effective, in the most expeditious manner practicable, the
transactions contemplated by this Agreement.
4. Stop Transfer; Restrictive Legend. (a) Each
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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) Upon the written request of Parent, all
certificates representing any of such Shareholder's Shares shall
contain the following legend:
"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."
5. Termination. Except as otherwise provided herein, the
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covenants and agreements contained herein with respect to the Shares
shall terminate upon the earliest of (a) termination of the Merger
Agreement in accordance with its terms, (b) the Effective Time or (c)
at the election of the Shareholders, if the Company's Board of
Directors would have the right to terminate the Merger Agreement under
Section 6.1(c)(iv) thereof.
6. Shareholder Capacity. No person executing this
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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/or beneficial owner of such
Shareholder's Shares.
7. Miscellaneous.
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(a) Entire Agreement. This Agreement and the Merger
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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.
(b) Certain Events. Each Shareholder agrees that this
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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
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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
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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
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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
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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
with a copy to: Gibson, Dunn & Crutcher
333 South Grand Avenue
Los Angeles, California 90071-3197
Attention: Peter F. Ziegler, Esq.
Telephone: (213) 229-7000
Facsimile: (213) 229-7520
If to Parent
or Merger Sub: CUC International Inc.
707 Summer Street
Stamford, Connecticut 06901
Telephone: (203) 324-9261
Facsimile: (203) 977-8501
Attention: Amy N. Lipton, Esq.
with a copy to: Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Telephone: (212) 310-8000
Facsimile: (212) 310-8007
Attention: Howard Chatzinoff, 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
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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.
(g) Specific Performance. Each of the parties hereto
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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
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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
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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
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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
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construed in accordance with the laws of the State of California,
without giving effect to the principles of conflicts of law thereof.
(l) Descriptive Headings. The descriptive headings used
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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.
(m) Counterparts. This Agreement may be executed in
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counterparts, each of which shall be deemed to be an original, but all
of which, taken together, shall constitute one and the same Agreement.
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. Kirk Shelton
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Name: E. Kirk Shelton
Title: President
ROBERT M. DAVIDSON By: /s/ Robert M. Davidson
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CHARITABLE REMAINDER TRUST Robert M. Davidson
By: /s/ Robert M. Davidson By: /s/ Janice G. Davidson
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Robert M. Davidson, Trustee Janice G. Davidson
JANICE G. DAVIDSON ELIZABETH A. DAVIDSON TRUST
CHARITABLE REMAINDER TRUST
By: /s/ Robert M. Davidson
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By: /s/ Janice G. Davidson Robert M. Davidson, Co-Trustee
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Janice G. Davidson, Trustee
By: /s/ Janice G. Davidson
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JOHN R. DAVIDSON TRUST Janice G. Davidson, Co-Trustee
By: /s/ Robert M. Davidson EMILIE A. DAVIDSON TRUST
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Robert M. Davidson, Co-Trustee
By: /s/ Robert M. Davidson
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By: /s/ Janice G. Davidson Robert M. Davidson, Co-Trustee
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Janice G. Davidson, Co-Trustee
By: /s/ Janice G. Davidson
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Janice G. Davidson, Co-Trustee
AGREED TO AND ACKNOWLEDGED
(with respect to Section 4):
DAVIDSON & ASSOCIATES, INC.
BY: /s/ Robert M. Davidson
--------------------------------
Name: Robert M. Davidson
Title: Chairman and Chief
Executive Officer
NYFS01...:\01\39801\0023\1547\AGR0265N.25F
Schedule I to
Shareholders Agreement
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Name and Address* Number of Shares Owned
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Robert M. Davidson 494,075 (1)
Robert M. Davidson, as trustee of Robert M. 9,000,000 (1)
Davidson Charitable Remainder Unitrust
Robert M. Davidson, as co-trustee of 2,168,750 (2)
Elizabeth A. Davidson Trust
Robert M. Davidson, as co-trustee of 2,168,750 (2)
Emilie A. Davidson Trust2
Robert M. Davidson, as co-trustee of 2,168,750 (2)
John R. Davidson Trust
Janice G. Davidson 488,475 (1)
Janice G. Davidson, as trustee of Janice G. 9,000,000 (1)
Davidson Charitable Remainder Unitrust
Janice G. Davidson, as co-trustee of 2,168,750 (2)
Elizabeth A. Davidson Trust
Janice G. Davidson, as co-trustee of 2,168,750 (2)
Emilie A. Davidson Trust
Janice G. Davidson, as co-trustee of 2,168,750 (2)
John R. Davidson Trust
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(1) Shareholder has sole power with respect to such shares. See Section
2(a)(i) of this Agreement.
(2) Shareholder has shared power with respect to such shares. See
Section 2(a)(ii) of this Agreement.
*c/o Robert M. Davidson and Janice G. Davidson, 19840 Pioneer Avenue,
Torrance, CA 90503; Tel. (310) 793-0600; Fax (310) 793-0601.