EXHIBIT 10.2 AMENDED AND RESTATED STOCKHOLDERS? AGREEMENT

Exhibit 10.2

 

EXECUTION VERSION

 

 

AMENDED AND RESTATED

 

STOCKHOLDERS’ AGREEMENT,

 

 

dated as of September 1, 2005,

 

 

by and among

 

 

PROGRESS RAIL SERVICES PARENT CORP.

 

 

and

 

THE STOCKHOLDERS NAMED HEREIN

 

 

 

 

TABLE OF CONTENTS

 

		Page
ARTICLE 1	CERTAIN DEFINITIONS	1
1.1	Defined Terms	1
ARTICLE 2	TRANSFERS OF SHARES	6
2.1	Restrictions Generally; Securities Act	6
2.2	Legend	6
2.3	Transfers by Stockholders	7
2.4	Drag-Along Rights	8
2.5	Rights of Inclusion	9
2.6	Rights of Offer	10
ARTICLE 3	ELECTION OF DIRECTORS	10
3.1	Board of Directors of Holdings	10
3.2	Removal	11
3.3	Vacancies	11
3.4	Voting Agreement	11
ARTICLE 4	CERTAIN COVENANTS OF THE PARTIES	11
4.1	Management Stockholders; Additional Stockholders	11
4.2	Purchaser Representative	12
4.3	Holdback Obligations	12
4.4	Non-Compete	12
ARTICLE 5	MISCELLANEOUS	13
5.1	Governing Law	13
5.2	Entire Agreement; Amendments	13
5.3	Term	13
5.4	Certain Actions	14
5.5	Inspection	14
5.6	Recapitalization, Exchanges, Etc., Affecting Shares	14
5.7	Waiver	15
5.8	Successors and Assigns	15

 

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		Page
5.9	Remedies	15
5.10	Invalid Provisions	15
5.11	Headings	15
5.12	Further Assurances	15
5.13	Gender	16
5.14	Counterparts	16
5.15	Notices	16
5.16	Consent to Jurisdiction and Service of Process	17

 

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AMENDED AND RESTATED STOCKHOLDERS’ AGREEMENT, dated as of September 1, 2005 (the “ Effective Date ”), by and among Progress Rail Services Parent Corp., a Delaware corporation (the “ Company ”), One Equity Partners LLC, a Delaware limited liability company (“ OEP ”), Gary Wilson (“ GW ”), Al Boyer (“ AB ”), Robert Day (“ RD ”) and each of the individuals and entities whose names appear under the heading “Management Group” on the signature pages hereto (individually, a “ Management Group Member ” and, collectively, the “ Management Group ”). Capitalized terms used and not otherwise defined herein have the respective meanings ascribed thereto in Article I.

 

RECITALS

 

WHEREAS , on March 24, 2005 (the “ Acquisition Closing Date ”), pursuant to the terms and conditions of that certain Agreement and Plan of Merger, dated as of February 17, 2005, as amended, modified and restated from time to time, by and among Progress Rail Services Holdings Corp., a Delaware corporation and wholly owned direct subsidiary of the Company (“ Holdings ”), PRSC Acquisition Corp., an Alabama corporation and indirect wholly owned subsidiary of the Company (“ Progress Rail Merger Sub ”), PMRC Acquisition Co., a Kentucky corporation and indirect wholly owned subsidiary of the Company (“ Progress Metal Merger Sub ”), Progress Rail Services Corporation (“ Progress Rail ”), Progress Metal Reclamation Company (“ Progress Metal ”), Progress Fuels Corporation and Progress Energy, Inc., (i) Progress Rail Merger Sub merged with and into Progress Rail, with Progress Rail as the surviving corporation, and (ii) Progress Metal Merger Sub merged with and into Progress Metal, with Progress Metal as the surviving corporation (such mergers, collectively, the “ Acquisition ”); and

 

WHEREAS , in connection with the Acquisition, OEP entered into a Stockholders’ Agreement, dated as of the Acquisition Closing Date, which is hereby being amended and restated;

 

WHEREAS , on the Effective Date the parties hereto will hold securities of the Company as set forth on Annex I; and

 

WHEREAS , the parties desire to enter into this Agreement to regulate certain aspects of their relationship and to provide for, among other things, restrictions on the transfer or other disposition of securities of the Company and matters relating to the corporate governance of the Company.

 

NOW, THEREFORE , for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:

 

ARTICLE 1

 

CERTAIN DEFINITIONS

 

1.1            Defined Terms .

 

(a)            The following capitalized terms, when used in this Agreement, have the respective meanings set forth below:

 

“ AB Stockholders ” means AB and each Permitted Transferee thereof (and each Transferee thereof that executes and delivers a Joinder Agreement, if so provided in such Joinder Agreement) to whom such AB Stockholder Transfers Shares and only with respect to such Transferred Shares, so long as any such Person shall hold such Shares.

 

 

“ Additional Stockholder ” means any Person to whom the Company issues Shares after the date hereof other than any OEP Stockholder, GW Stockholder, AB Stockholder, RD Stockholder or Management Stockholder.

 

“ Affiliate ” means, with respect to any Person, any other Person that controls, is controlled by or is under common control with such Person. For the purposes of this definition, “control” (including, with its correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of securities, by contract or otherwise.

 

“ Agreement ” means this Amended and Restated Stockholders’ Agreement and the exhibits and annexes hereto, as the same may be amended, modified, supplemented or restated from time to time in accordance with the terms hereof.

 

“ Associate ” means, with respect to any Person, (i) any corporation or organization of which such Person is an officer or partner or is, directly or indirectly, the beneficial owner of five (5%) percent or more of any class of equity securities, (ii) any trust or other estate in which such Person has a substantial beneficial interest or as to which such Person serves as trustee or in a similar fiduciary capacity and (iii) any relative or spouse of such Person, or any relative of such spouse, who has the same home as such Person or who is a director or officer of such Person or any of its parents or subsidiaries.

 

“ Board ” means the Board of Directors of the Company.

 

“ Commission ” means the Securities and Exchange Commission.

 

“ Common Stock ” means the Common Stock, par value $.01 per share, of the Company, any securities into which such Common Stock shall have been changed or any securities resulting from any reclassification or recapitalization of such Common Stock.

 

“ Competitor ” means any company in the business of, directly or indirectly, providing rail, railcar or transit systems parts or repair or maintenance services, including, without limitation, railcar and locomotive repair, trackwork, rail parts reconditioning and sales, scrap metal recycling, railcar leasing and other rail-related products or services.

 

“ Diluted Basis ” means, (i) with respect to the calculation of the number of shares of Common Stock, (A) with respect to all outstanding shares of Common Stock, all shares of Common Stock outstanding at the time of determination and all shares of Common Stock issuable upon the exercise, conversion or exchange, as applicable, of all outstanding securities exercisable, convertible or exchangeable for or into shares of Common Stock at the time of determination and (B) with respect to shares of Common Stock owned by one or more Stockholders, all shares of Common Stock owned by such Stockholder or Stockholders and all shares of Common Stock issuable upon the exercise, conversion or exchange, as applicable, of all securities owned by such Stockholder or Stockholders exercisable, convertible or exchangeable into shares of Common Stock and (ii) with respect to the calculation of the number of shares of Preferred Stock, (A) with respect to all outstanding shares of Preferred Stock, all shares of Preferred Stock outstanding at the time of determination and (B) with respect to shares of Preferred Stock owned by one or more Stockholders, all shares of Preferred Stock owned by such Stockholder or Stockholders.

 

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“ GW Stockholders ” means GW and each Permitted Transferee thereof (and each Transferee thereof that executes and delivers a Joinder Agreement, if so provided in such Joinder Agreement) to whom such GW Stockholder Transfers Shares and only with respect to such Transferred Shares, so long as any such Person shall hold such Shares.

 

“ Investor Stockholders ” means the OEP Stockholders, the GW Stockholders, the AB Stockholders and the RD Stockholders.

 

“ Joinder Agreement ” means a Joinder Agreement substantially in the form attached hereto as Exhibit A .

 

“ Lien ” means any lien, claim, restriction, security interest, preemptive right, covenant, easement, mortgage, encumbrance or other limitation.

 

“ Management Stockholders ” means the Management Group Members and each employee of the Company or any of its Subsidiaries who owns Shares and becomes a party hereto and each Permitted Transferee (and each Transferee thereof that executes and delivers a Joinder Agreement, if so provided in such Joinder Agreement) to whom such Management Stockholder Transfers Shares and only with respect to such Transferred Shares, so long as any such Person shall hold such Shares.

 

“ New Stock ” means any securities issued after the Effective Date, other than any securities issued or issuable (i) in connection with any stock split, stock dividend, reclassification, recapitalization, or similar event of any securities; (ii) in a public offering registered under the Securities Act; (iii) to officers, directors or employees of the Company or any direct or indirect Subsidiary thereof; (iv) upon exercise, conversion, exchange or redemption of any securities outstanding prior to the New Stock Offer; or (v) in connection with any acquisition of assets or of any business (whether by merger, stock acquisition, asset acquisition or otherwise).

 

“ OEP Stockholders ” means OEP and each Permitted Transferee (and each Transferee thereof that executes and delivers a Joinder Agreement, if so provided in such Joinder Agreement) to whom OEP or any OEP Stockholder Transfers any Shares and only with respect to such Transferred Shares, so long as any such Person shall hold such Shares.

 

“ Permitted Transferee ” means:

 

(i)             with respect to any Stockholder who is a natural person, (A) the spouse, any lineal ancestor or descendant (including by adoption and stepchildren) of such Stockholder or any of their Permitted Transferees or any trust of which such Stockholder or any Permitted Transferees of such Stockholder are the controlling trustees and which is established solely for the benefit of any of the foregoing individuals, (B) the estate of such Stockholder established by reason of any of the foregoing individual’s death or any beneficiaries of such estate, or (C) any corporation, limited liability company or partnership or any of their respective Permitted Transferees, all of the interests of which are (or is) owned by one or more of the Persons identified in this clause (i) or any of their respective Permitted Transferees; provided , however , that (1) with respect to RD, Oakmont Corporation, any of its directors or officers (other than any GW Stockholder or AB Stockholder) and any sibling of RD shall also be deemed Permitted Transferees of RD; (2) with respect to GW, any charitable organization under the sole control of GW or any of his Permitted Transferees shall also be deemed a Permitted Transferee of GW and (iii) with respect to AB, any charitable organization under the sole control of AB or any of his Permitted Transferees shall also be deemed a Permitted Transferee of AB;

 

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(ii)            with respect to any OEP Stockholder, (A) any other OEP Stockholder or any of their Permitted Transferees, (B) any Affiliate of any OEP Stockholder or any of their Permitted Transferees, or (C) in the case of OEP, any director, officer, employee, representative, general partner, limited partner or member of OEP or any of their Permitted Transferees; and

 

(iii)           with respect to any GW Stockholder, AB Stockholder, RD Stockholder or Additional Stockholder that is not a natural Person, any Affiliate of such Stockholder that is not also a Stockholder or an Affiliate of another Stockholder.

 

“ Person ” means an individual, partnership, corporation, limited liability company or partnership, trust, unincorporated organization, joint venture, government (or agency or political subdivision thereof) or any other entity of any kind.

 

“ Preferred Stock ” means the Series A Participating Preferred Stock, par value $0.01 per share, of the Company, and any securities into which such Preferred Stock shall have been changed or any securities resulting from any reclassification or recapitalization of such Preferred Stock.

 

“ Pro Rata ” means, with respect to one or more Stockholders, (i) with respect to the Common Stock, in proportion to the number of shares of Common Stock on a Diluted Basis owned by such Stockholder or Stockholders and (ii) with respect to the Preferred Stock, in proportion to the number of shares of Preferred Stock on a Diluted Basis owned by such Stockholder or Stockholders.

 

“ Qualifying Offering ” means the consummation of an underwritten public offering of Common Stock registered under the Securities Act that together with the consummation of any other prior underwritten public offerings of Common Stock registered under the Securities Act results in gross proceeds to the Company of at least $90 million in the aggregate.

 

“ RD Stockholders ” means RD and each Permitted Transferee thereof (and each Transferee thereof that executes and delivers a Joinder Agreement, if so provided in such Joinder Agreement) to whom such RD Stockholder Transfers Shares and only with respect to such Transferred Shares, so long as any such Person shall hold such Shares.

 

 “ Restricted Stock Purchase Agreements ” means the Restricted Stock Purchase Agreement entered into at any time or from time to time on or after the date hereof, by the Company and any director, officer, employee, consultant or agent of the Company or any of its Subsidiaries, as any such agreement may be amended, restated or modified from time to time, and any other agreement designated as such by the Board.

 

“ Sale of the Company ” means the sale of the Company (whether by merger, consolidation, recapitalization, reorganization, sale of securities, sale of assets or otherwise) in one transaction or series of related transactions to a Person or Persons that is not (i) One Equity Partners LLC or any Affiliate thereof or (ii) a Permitted Transferee of One Equity Partners LLC or any Affiliate thereof pursuant to which such Person or Persons (together with its Affiliates) acquires (a) securities representing at least a majority of the voting power of the Common Stock of the Company, assuming the conversion, exchange or exercise of all securities convertible, exchangeable or exercisable for or into Common Stock, or (b) all or substantially all of the Company’s assets on a consolidated basis.

 

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“ Sale of Preferred Stock ” means the Transfer of Shares (other than a Sale of the Company) to a Person or Persons that is not a Stockholder or a Permitted Transferee or Associate of any Stockholder or of any Permitted Transferee of any Stockholder in which only Preferred Stock is Transferred.

 

“ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder.

 

“ Series A Liquidation Preference ” shall have the meaning ascribed thereto in the Amended and Restated Certificate of Incorporation of the Company, as the same may be amended from time to time.

 

“ Shares ” means shares of Common Stock and shares of Preferred Stock and any other securities designated as such by the Board.

 

“ Stockholders ” means each of the OEP Stockholders, the GW Stockholders, the AB Stockholders, the RD Stockholders, the Management Stockholders and the Additional Stockholders.

 

“ Subscription Agreements ” means that certain Subscription Agreement, as of March 24, 2005, between the Company and OEP and any other agreement pursuant to which a Stockholder purchases Shares from the Company.

 

“ Subsidiary ” means, with respect to any Person, any corporation, partnership, limited liability company, association or other business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (ii) if a partnership, limited liability company, association or other business entity, a majority of the partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or Persons shall be deemed to have a majority ownership interest in a partnership, limited liability company, association or other business entity if such Person or Persons shall be allocated a majority of partnership, limited liability company, association or other business entity gains or losses or shall be or control the managing director or general partner of such partnership, limited liability company, association or other business entity.

 

“ Transfer ” means, directly or indirectly, any sale, transfer, assignment, hypothecation, pledge or other disposition of any Shares or any interests therein.

 

“ Transferee ” means any Person to whom a Transfer is made.

 

(b)            Unless otherwise provided herein, all accounting terms used in this Agreement shall be interpreted in accordance with generally accepted accounting principles as in effect from time to time, applied on a consistent basis.

 

(c)            The following terms, when used in this Agreement, shall have the meanings defined for such terms in the Section set forth below:

 

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ARTICLE 2
TRANSFERS OF SHARES

 

2.1            Restrictions Generally; Securities Act .

 

(a)            Each Stockholder agrees that it will not, directly or indirectly, Transfer any Shares in violation of this Agreement. Any attempt by any Stockholder to Transfer any Shares in violation of this Agreement shall be null and void and neither the issuer of such securities nor any transfer agent of such securities shall give any effect to such attempted Transfer in its stock records.

 

(b)            Each Stockholder agrees that, in addition to the other requirements relating to Transfer set forth in this Agreement and in each Stockholder’s respective Subscription Agreement or Restricted Stock Purchase Agreement, as applicable, it will not Transfer any Shares except pursuant to an effective registration statement under the Securities Act, or, unless waived by the Board, upon receipt by

 

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the Company of an opinion of counsel to the Stockholder reasonably satisfactory to the Company or a no-action letter from the Commission addressed to the Company, to the effect that no registration statement is required because of the availability of an exemption from registration under the Securities Act.

 

2.2            Legend .

 

(a)            Each certificate representing Shares shall be endorsed with the following legends and such other legends as may be required by the Restricted Stock Purchase Agreements and applicable state securities laws:

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A STOCKHOLDERS’ AGREEMENT, DATED AS OF MARCH 24, 2005, AS SUCH AGREEMENT MAY BE AMENDED, RESTATED OR MODIFIED FROM TIME TO TIME, AND MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE WITH THE PROVISIONS THEREOF AND ANY TRANSFEREE OF THESE SECURITIES SHALL BE SUBJECT TO THE TERMS OF SUCH AGREEMENT. COPIES OF THE FOREGOING AGREEMENT ARE MAINTAINED WITH THE CORPORATE RECORDS OF THE ISSUER AND ARE AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICES OF THE ISSUER.”

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY BE OFFERED AND SOLD ONLY IF SO REGISTERED OR IF AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.”

 

(b)            Any certificate issued at any time in exchange or substitution for any certificate bearing such legends (except a new certificate issued upon the completion of a Transfer pursuant to a registered public offering under the Securities Act and made in accordance with the Securities Act) shall also bear such legends, unless in the opinion of counsel for the Company, the Shares represented thereby are no longer subject to the provisions of this Agreement or the restrictions imposed under the Securities Act or state securities laws, in which case the applicable legend (or legends) may be removed.

 

2.3            Transfers by Stockholders .

 

(a)            Each of the GW Stockholders, the AB Stockholders, the RD Stockholders, the Management Stockholders and the Additional Stockholders severally agrees not to Transfer any Shares, except (i) to any Permitted Transferee who shall have executed and delivered to the Company a Joinder Agreement and thereby becomes a party to this Agreement; (ii) on the terms, and subject to the conditions, set forth in Section 2.4 (Drag-Along Rights); (iii) on the terms, and subject to the conditions, set forth in Section 2.5 (Rights of Inclusion); and (iv) on the terms, and subject to the conditions, set forth in the Restricted Stock Purchase Agreements or Subscription Agreements, if applicable.

 

(b)            Notwithstanding anything herein to contrary, each of the GW Stockholders, the AB Stockholders, the RD Stockholders, Management Stockholders and Additional Stockholders severally agrees not to Transfer any Shares to a Competitor except pursuant to (i) a Sale of the Company, (ii) on the terms, and subject to the conditions, set forth in Section 2.4 (Drag-Along Rights); or (iii) on the terms, and subject to the conditions, set forth in Section 2.5 (Rights of Inclusion).

 

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2.4            Drag-Along Rights .

 

(a)            Sale of the Company .      If the OEP Stockholders notify (a “ Sale Notice ”) each other Stockholder in writing that the OEP Stockholders desire to effect a Sale of the Company and specify the terms and conditions of such proposed sale then, notwithstanding any other provision of this Agreement, each such other Stockholder shall take all necessary and desirable actions reasonably requested by such OEP Stockholders in connection with the consummation of such Sale of the Company, including, without limitation, if applicable, (i) within ten (10) business days of the receipt of such notice (or such longer period of time as such OEP Stockholders shall designate in such notice) such other Stockholders shall cause a Pro Rata number of their respective Shares (for the avoidance of doubt, based on the percentage of Shares, on a Diluted Basis, owned by the OEP Stockholders that is being sold) to be sold to the designated purchaser on the same terms and conditions and for the same per share consideration and at the same time as the Shares being sold by such OEP Stockholders or (ii) otherwise participating in such Sale of the Company on the same terms and conditions and for the same consideration and at the same time as such OEP Stockholders; provided , that, in the absence of fraud or willful misconduct, the indemnification obligations, if any, of each Stockholder provided to the designated purchaser shall not be greater than the gross proceeds received by each such Stockholder in connection with the Sale of the Company; provided further , that bef