EXHIBIT 9.1
-----------
EXECUTION COPY
STOCKHOLDER AND BOARD COMPOSITION AGREEMENT
BY AND AMONG
MERISTAR HOTELS & RESORTS, INC.,
AND THE STOCKHOLDERS LISTED HEREIN
DATED AS OF JULY 31, 2002
STOCKHOLDER AND BOARD COMPOSITION AGREEMENT
STOCKHOLDER AND BOARD COMPOSITION AGREEMENT (this "AGREEMENT"), dated
as of July 31, 2002, by and among MERISTAR HOTELS & RESORTS, INC., a Delaware
corporation ( "MERISTAR") and each of the persons set forth on Schedule A hereto
(each, a "STOCKHOLDER" and, collectively, the "STOCKHOLDERS").
RECITALS
A. The Agreement and Plan of Merger dated as of May 1, 2002 and
as amended on June 3, 2002, by and between Interstate Hotels Corporation, a
Maryland corporation ("INTERSTATE"), and MeriStar (as amended, the "MERGER
AGREEMENT"), provides for, among other things, the merger (the "Merger") of
Interstate with and into MeriStar on the terms and subject to the conditions set
forth in the Merger Agreement, with MeriStar as the surviving corporation (the
"COMBINED COMPANY"). Capitalized terms used but not otherwise defined herein
shall have the meanings ascribed to them in the Merger Agreement.
B. It is a condition precedent to the obligation of each of
MeriStar and Interstate to consummate the Merger under the Merger Agreement,
that the parties hereto enter into this Agreement.
C. At the time the Merger is completed, each Stockholder will
beneficially own and be entitled to dispose of (or to direct the disposition of)
and to vote (or to direct the voting of) the number of shares of the Combined
Company's common stock, par value $0.01 per share (the "COMBINED COMPANY COMMON
STOCK"), set forth opposite such Stockholder's name on Schedule A hereto (such
shares, together with any other shares of Combined Company Common Stock, the
beneficial ownership of which is acquired by such Stockholder during the period
from and including the date hereof through and including the date on which this
Agreement is terminated, excluding those that are beneficially owned (a) in the
form of MeriStar Stock Options and (b) by such Stockholder solely because such
Combined Company Common Stock is held by an affiliate of such Stockholder, are
collectively referred to herein as such Stockholder's "SUBJECT SHARES").
D. The Stockholders wish to provide for, among other things,
procedures for the replacement of certain directors of the Combined Company who
resign, retire or are no longer able to serve as directors of the Combined
Company.
NOW, THEREFORE, in consideration of the mutual representations,
warranties and agreements contained herein, and for other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged, the
parties to this Agreement, intending to be legally bound by this Agreement,
agree as follows:
ARTICLE I BOARD COMPOSITION
Section 1.1 BOARD COMPOSITION. During the 18 months after the Effective
Time of the Merger:
(a) if any of Ms. Leslie R. Doggett or Messrs. Steven D.
Jorns, James B. McCurry, John Emery or J. Taylor Crandall or any replacement as
director of the Combined Company for any of them resigns, retires or is no
longer able to serve as a director of the Combined Company by reason of death,
disqualification, removal from office or any other cause, then Mr. Paul W.
Whetsell or his replacement as director of the Combined Company, if any, shall
have the right to designate a person for nomination to be a successor to the
director of the Combined Company no longer serving; if Mr. Whetsell or any
replacement for him as director of the Combined Company resigns, retires or is
no longer able to serve as a director of the Combined Company by reason of
death, disqualification, removal from office or any other cause, then Mr. Emery
or his replacement as director of the Combined Company, if any, shall have the
right to designate a person for nomination to be a successor to Mr. Whetsell or
his replacement;
(b) if any of Messrs. Joseph J. Flannery, Mahmood J. Khimji,
Raymond C. Mikulich, Karim J. Alibhai or Sherwood M. Weiser or any replacement
as director of the Combined Company for any of them resigns, retires or is no
longer able to serve as a director of the Combined Company by reason of death,
disqualification, removal from office or any other cause, then the majority of
that group of individuals, including any of their replacements, if any, shall
have the right to designate a person for nomination to be a successor to the
director of the Combined Company no longer serving;
(c) if all of Messrs. Flannery, Khimji, Mikulich, Alibhai and
Weiser and any replacement as director of the Combined Company for any of them
resigns, retires or is no longer able to serve as a director of the Combined
Company by reason of death, disqualification, removal from office or any other
cause, then Mr. Thomas F. Hewitt or his replacement as director of the Combined
Company, if any, shall have the right to designate a person for nomination to be
a successor to the director of the Combined Company no longer serving;
(d) if John J. Russell, Jr. or any replacement as director of
the Combined Company for him resigns, retires or is no longer able to serve as a
director of the Combined Company by reason of death, disqualification, removal
from office or any other cause, then Mr. Hewitt or his replacement as director
of the Combined Company, if any, shall have the right to designate a person for
nomination to be a successor to Mr. Russell or his replacement; if Mr. Hewitt or
any replacement for him as director of the Combined Company resigns, retires or
is no longer able to serve as a director of the Combined Company by reason of
death, disqualification, removal from office or any other cause, then Mr.
Russell or his replacement as director of the Combined Company, if any, shall
have the right to designate a person for nomination to be a successor to Mr.
Hewitt or his replacement;
(e) the Combined Company shall use its best efforts, subject
to the fiduciary duties of its board of directors under applicable law, to have
any such successor that is designated for nomination under this Agreement to be
nominated and elected; and
(f) each Stockholder shall, if the matter is put to a vote of
stockholders, vote all of their Subject Shares that are still beneficially owned
by such Stockholder on the record date for vote or execute and deliver a written
consent (if permitted) in a manner to cause the election of any such successor
that is nominated under this Agreement.
Section 1.2 FURTHER ASSURANCES. Each of the parties hereto agrees to
execute and deliver such other documents and instruments and take such further
actions as may be necessary or appropriate in order to effectuate the intent of
this Agreement.
ARTICLE II MISCELLANEOUS
Section 2.1 COUNTERPARTS. This Agreement and any amendments hereto may
be executed in any number of counterparts, each such counterpart being deemed to
be an original instrument, and all such counterparts shall together constitute
the same agreement.
Section 2.2 GOVERNING LAW; WAIVER OF JURY TRIAL.
(a) THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN AND IN ALL
RESPECTS SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH
THE LAW OF THE STATE OF DELAWARE WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES
THEREUNDER THAT WOULD INDICATE THE APPLICABILITY OF THE LAWS OF ANY OTHER
JURISDICTION.
(b) Each party acknowledges and agrees that any controversy
which may arise under this Agreement is likely to involve complicated and
difficult issues, and therefore each such party hereby irrevocably and
unconditionally waives any right such party may have to a trial by jury in
respect of any litigation directly or indirectly arising out of or relating to
this Agreement, or the transactions contemplated by this Agreement. Each party
certifies and acknowledges that (i) no representative, agent or attorney of any
other party has represented, expressly or otherwise, that such other party would
not, in the event of litigation, seek to enforce the foregoing waiver, (ii) each
such party understands and has considered the implications of this waiver, (iii)
each such party makes this waiver voluntarily, and (iv) each such party has been
induced to enter into this Agreement by, among other things, the mutual waivers
and certifications in this Section 2.2(b).
Section 2.3 NOTICES. Any notice, request, instruction or other document
to be given hereunder by any party to the others shall be in writing and
delivered personally or sent by registered or certified mail, postage prepaid,
or by facsimile:
If to the Combined Company, Messrs. Whetsell, Emery, Jorns or Kilkeary:
Interstate Hotels & Resorts, Inc.
1010 Wisconsin Avenue
Suite 500
Washington, D.C. 20007
Attention: Christopher L. Bennett, Esq.
Telecopy: (207) 295-1026
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Attention: Richard S. Borisoff, Esq.
Facsimile: (212) 757-3990
If to CGLH Partners I LP or CGLH Partners II LP:
Lehman Brothers Inc.
399 Park Avenue
8th Floor
New York, NY 10022
Attention: Joseph Flannery
Facsimile: (212) 526-7006
with a copy to:
Continental Gencom Holdings
c/o Mr. K. Alibhai and Mr. S. Weiser
3250 Mary Street
Suite 500
Miami, Florida 33133
Facsimile: (305) 445-4255
with a copy to:
Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A.
150 West Flagler Street
Suite 2200
Miami, Florida 33130
Attention: Richard E. Schatz, Esq.
Facsimile: (305) 789-3395
with a copy to:
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004
Attention: Jonathan Mechanic, Esq.
Facsimile: (212) 859-8582
If to Oak Hill Capital Partners, L.P., Oak Hill Capital Management
Partners, L.P., FW Hospitality, L.P., Arbor Reit, L.P. or MHX Investors, L.P.:
c/o Oak Hill Capital Management Partners, L.P.
201 Main Street, Suite 2600
Fort Worth, Texas 76102
Attention: Kevin G. Levy, Esq.
Facsimile: (817) 338-2067
If to Mr. Hewitt:
1055 St. Mellion Drive
Nevillewood, Pennsylvania 15142
Facsimile: (412) 276-6026
with a copy to:
Jones, Day, Reavis & Pogue
222 East 41st Street
New York, New York 10017
Attention: Jere R. Thomson, Esq.
Facsimile: (212) 755-7306
If to Mr. Richardson:
3323 Ponoka Road
Pittsburgh, Pennsylvania 15209
Facsimile: (412) 833-6005
with a copy to:
Jones, Day, Reavis & Pogue
222 East 41st Street
New York, New York 10017
Attention: Jere R. Thomson, Esq.
Facsimile: (212) 755-7306
or to such other persons or addresses as may be designated in writing by the
party to receive such notice as provided above.
Section 2.4 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement and supersedes all other prior agreements, understandings,
representations and warranties, both written and oral, among the parties to this
Agreement, with respect to the subject matter of this Agreement.
Section 2.5 BINDING EFFECT UPON SUCCESSORS AND ASSIGNS. This Agreement
shall be binding upon and inure to the benefit of the parties to this Agreement
and their respective successors and permitted assigns. This Agreement is not
intended to confer upon any person other than the parties to this Agreement or
their respective successors or permitted assigns any rights or remedies under
this Agreement.
Section 2.6 AMENDMENT AND WAIVER. This Agreement may be amended,
superseded, canceled, renewed or extended, and the terms hereof may be waived,
only by a written instrument signed by the parties or, in the case of a waiver,
by the party waiving compliance. No delay on the part of any party in exercising
any right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any waiver on the part of any party of any such right, power or privilege,
nor any single or partial exercise of any such right, power or privilege,
preclude any further exercise thereof or the exercise of any other such right,
power or privilege.
Section 2.7 SEVERABILITY. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability or the other provisions of this
Agreement. If any provision of this Agreement, or the application of that
provision to any person or any circumstance, is invalid or unenforceable, (a) a
suitable and equitable provision shall be substituted for that provision in
order to carry out, so far as may be valid and enforceable, the intent and
purpose of the invalid or unenforceable provision and (b) the remainder of this
Agreement and the application of the provision to other persons or circumstances
shall not be affected by such invalidity or unenforceability, nor shall such
invalidity or unenforceability affect the validity or enforceability of the
provision, or the application of that provision, in any other jurisdiction.
Section 2.8 INTERPRETATION. The headings in this Agreement are for
convenience of reference only, do not constitute part of this Agreement and
shall not be deemed to limit or otherwise affect any of the provisions of this
Agreement. All pronouns and any variations thereof refer to the masculine,
feminine or neuter, singular or plural, as the context may require.
Section 2.9 ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assignable, in whole or
in part, by operation of Law or otherwise, by any of the parties hereto without
the prior written consent of the other parties; PROVIDED, HOWEVER, that no such
assignment will relieve the assigning party of its obligations hereunder.
Section 2.10 SPECIFIC PERFORMANCE. The parties to this Agreement agree
that irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions of this Agreement in any
court of the United States or any state having jurisdiction, this being in
addition to any other remedy to which they are entitled at Law or in equity.
Section 2.11 JURISDICTION; CONSENT TO SERVICE OF PROCESS. (a) Each
party hereto hereby irrevocably and unconditionally submits, for itself and its
property, to the exclusive jurisdiction of the Chancery or other courts of the
State of Delaware (a "DELAWARE COURT"), and any appellate court from any such
court, in any suit, action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment resulting from any
suit, action or proceeding, and each party hereby irrevocably and
unconditionally agrees that all
claims in respect of any such suit, action or proceeding may be heard and
determined in a Delaware Court.
(a) It will be a condition precedent to each party's right to
bring any such suit, action or proceeding that such suit, action or proceeding,
in the first instance, be brought in a Delaware Court (unless such suit, action
or proceeding is brought solely to obtain discovery or to enforce a judgment),
and if each such court refuses to accept jurisdiction with respect thereto, such
suit, action or proceeding may be brought in any other court with jurisdiction.
(b) No party may move to (i) transfer any such suit, action or
proceeding from a Delaware Court to another jurisdiction, (ii) consolidate any
such suit, action or proceeding brought in a Delaware Court with a suit, action
or proceeding in another jurisdiction, or (iii) dismiss any such suit, action or
proceeding brought in a Delaware Court for the purpose of bringing the same in
another jurisdiction.
(c) Each party hereby irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, (i) any objection
which it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in a Delaware Court,
(ii) the defense of an inconvenient forum to the maintenance of such suit,
action or proceeding in any such court, and (iii) the right to object, with
respect to such suit, action or proceeding, that such court does not have
jurisdiction over such party. Each party irrevocably consents to service of
process in any manner permitted by law.
Section 2.12 FIDUCIARY DUTIES. Each Stockholder is signing this
Agreement solely in such Stockholder's capacity as the beneficial owner of
Subject Shares and, notwithstanding anything herein to the contrary, nothing
contained herein shall limit or affect any actions taken by such Stockholder or
any designee of such Stockholder in his or her capacity, if any, as an officer
or director of the Combined Company or any of its subsidiaries and none of such
actions in any such capacity shall be deemed to constitute a breach of this
Agreement.
Section 2.13 BENEFICIAL OWNERSHIP. For purposes of this Agreement, the
term "BENEFICIAL OWNER" shall have the meaning ascribed to such term under Rule
13d-3 under the Securities Exchange Act of 1934, and the terms "BENEFICIALLY
OWN" and "BENEFICIAL OWNERSHIP" shall have correlative meanings therewith.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the parties to this Agreement as of the date first written above.
MERISTAR HOTELS & RESORTS, INC.
By: /s/ Christopher L. Bennett
-----------------------------------------
Name: Christopher L. Bennett
Title: Senior Vice President and General
Counsel
OAK HILL CAPITAL PARTNERS, L.P.
By: OHCP GenPar, L.P., its general partner
By: OHCP MGP, LLC, its general partner
By: /s/ Kevin G. Levy
----------------------------------
Name: Kevin G. Levy
Title: Vice President
OAK HILL CAPITAL MANAGEMENT PARTNERS, L.P.
By: OHCP GenPar, L.P., its general partner
By: OHCP MGP, LLC, its general partner
By: /s/ Kevin G. Levy
----------------------------------
Name: Kevin G. Levy
Title: Vice President
FW HOSPITALITY, L.P.
By: Group III 31, L.L.C., its general partner
By: /s/ Kevin G. Levy
--------------------------------------
Name: Kevin G. Levy
Title: Vice President
ARBOR REIT, L.P.
By: Group Investors, L.L.C., its general
partner
By: /s/ Kevin G. Levy
--------------------------------------
Name: Kevin G. Levy
Title: Vice President
MHX INVESTORS, L.P.
By: FW Group Genpar, Inc., its general partner
By: /s/ Kevin G. Levy
--------------------------------------
Name: Kevin G. Levy
Title: Vice President
CGLH PARTNERS I LP
By: MK/CG-GP LLC, its general partner
By: CG Interstate Associates, LLC, a
managing member
By: Continental Gencom Holdings, LLC,
its sole member
By: /s/ Karim Alibhai
---------------------------
Name: Karim Alibhai
Title: Member
By: /s/ Sherwood M. Weiser
---------------------------
Name: Sherwood M. Weiser
Title: Member
By: KFP Interstate Associates, LLC, its
general partner
By: KFP Interstate, LLC, a managing
member
By: KFP Holdings, Ltd., its sole
member
By: Grosvenor, L.C., its
general partner
By: /s/ Jaffer Khimji
-----------------------
Name: Jaffer Khimji
Title:Authorized Signatory
By: LB INTERSTATE GP LLC, its general partner
By: PAMI LLC, its sole member
By: /s/ Joseph J. Flannery
---------------------------------
Name: Joseph J. Flannery
Title: Authorized Signatory
CGLH PARTNERS II LP
By: MK/CG-GP LLC, its general partner
By: CG Interstate Associates, LLC, a
managing member
By: Continental Gencom Holdings, LLC,
its sole member
By: /s/ Karim Alibhai
---------------------------
Name: Karim Alibhai
Title: Member
By: /s/ Sherwood M. Weiser
---------------------------
Name: Sherwood M. Weiser
Title: Member
By: KFP Interstate Associates, LLC, its
general partner
By: KFP Interstate, LLC, a managing
member
By: KFP Holdings, Ltd., its sole
member
By: Grosvenor, L.C., its
general partner
By: /s/ Jaffer Khimji
------------------------
Name: Jaffer Khimji
Title: Authorized Signatory
By: LB INTERSTATE GP LLC, its general
partner
By: PAMI LLC, its sole member
By: /s/ Joseph J. Flannery
-----------------------------
Name: Joseph J. Flannery
Title: Authorized Signatory
/s/ Paul W. Whetsell
----------------------------------
PAUL W. WHETSELL
/s/ John Emery
----------------------------------
JOHN EMERY
/s/ Steven D. Jorns
----------------------------------
STEVEN D. JORNS
/s/ Thomas F. Hewitt
----------------------------------
THOMAS F. HEWITT
/s/ J. William Richardson
----------------------------------
J. WILLIAM RICHARDSON
/s/ Kevin P. Kilkeary
----------------------------------
KEVIN P. KILKEARY
SCHEDULE A
COMBINED COMPANY
STOCKHOLDER COMMON STOCK
----------- ------------
John Emery 281,667(1)
Thomas F. Hewitt 2,030,596
Steven D. Jorns 1,328,931(2)
Kevin P. Kilkeary 782,764
J. William Richardson 1,571,972
Paul W. Whetsell 866,652(3)
Arbor REIT, L.P 764,067
CGLH Partners I LP and CGLH Partners II LP 34,500,000
FW Hospitality, L.P. 764,067
MHX Investors, L.P. 764,066
Oak Hill Capital Partners, L.P. 3,545,455
Oak Hill Capital Management Partners, L.P. 90,909
(1) Of these shares of Combined Company Common Stock, 191,667 shares are
subject to MeriStar Stock
Options.
(2) Of these shares of Combined Company Common Stock, 255,001 shares are
subject to MeriStar Stock
Options.
(3) Of these shares of Combined Company Common Stock, 333,333 shares are
subject to MeriStar Stock
Options.