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EXHIBIT 10.5
EXECUTION COPY
STOCKHOLDERS AGREEMENT
OF
SUNSHINE ACQUISITION CORPORATION
This Stockholders Agreement ("Agreement") is entered into as of
this
23rd day of November, 2005, by and among Sunshine Acquisition
Corporation, a
Delaware corporation (the "Company"), Carlyle Partners IV, L.P., a
Delaware
limited partnership ("CP IV"), CP IV Coinvestment, L.P., a Delaware
limited
partnership ("Coinvestment", and, together with CP IV, the "Initial
Carlyle
Stockholders"), William C. Stone, an individual ("Executive"), and
the other
executive employees that hold shares of Common Stock (as defined
herein) or
Vested Options (as defined below) that become a party hereto from
time to time
by executing a supplemental signature page hereto in the form
attached as
Exhibit A hereto (each such holder individually, an "Other
Executive
Stockholder," and collectively, the "Other Executive
Stockholders"). Certain
capitalized terms used herein without definition have the meanings
ascribed to
them in Section 10 hereof.
RECITALS:
Reference is made to that certain Contribution and Subscription
Agreement, dated as of July 28, 2005, by and between the Company
and Executive
(the "Contribution Agreement");
WHEREAS, as a condition to consummating the transactions
contemplated
by the Contribution Agreement, the Company, the Initial Carlyle
Stockholders and
Executive are executing this Agreement;
WHEREAS, (i) certain Executive Stockholders (a) hold shares of
common
stock, par value $0.01 per share, of the Company ("Common Stock")
and/or (b)
have been or may hereafter be issued shares of Common Stock
pursuant to the
exercise by such Executive Stockholders of vested options to
purchase Common
Stock ("Vested Options"), which such options (i) were issued in
exchange for
options to purchase common stock of SS&C Technologies, Inc., a
Delaware
corporation ("SS&C"), pursuant to the Agreement and Plan of
Merger, dated as of
July 28, 2005, as amended August 25, 2005, by and among the
Company, Sunshine
Merger Corporation, a Delaware corporation and a wholly owned
subsidiary of the
Company, and SS&C (the "Assumed Options") or (ii) may hereafter
be issued
pursuant to any stock option plans or other employee benefit plans,
in either
case, now in effect or hereafter adopted by the board of directors
of the
Company (the "Board", and each director, a "Director") or pursuant
to other
arrangements approved by the Board; and (ii) the Initial Carlyle
Stockholders
hold shares of Common Stock (the shares of Common Stock issued or
that are
hereafter issued to the Stockholders being collectively referred to
as the
"Shares" and, together with the Vested Options, and any other
vested rights
issued by the Company to the Stockholders to acquire Common Stock,
the "Equity
Securities"); and
Stockholder Agreement- 7
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WHEREAS, the Parties hereto desire to promote the interests of
the
Company and the mutual interests of the Stockholders by
establishing herein
certain terms and conditions upon which the Equity Securities will
be held,
including provisions restricting the transfer of such, and
providing for other
matters.
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing and the
mutual
agreements set forth herein, and other good and valuable
consideration, the
receipt and adequacy of which is hereby acknowledged, the Parties
hereto,
intending to be legally bound, hereby agree as follows:
Section 1. Restrictions on Transfer.
Except for (i) Transfers effected by Transferring Stockholders
exercising Bring-Along Rights pursuant to Section 2 or any Transfer
effected in
connection with a Company Sale pursuant to Section 2; (ii)
Transfers effected by
Selling Stockholders pursuant to the exercise of Bring-Along Rights
pursuant to
Section 2 by another Stockholder; (iii) Transfers effected by
Stockholders
pursuant to the exercise of Tag-Along Rights pursuant to Section 3;
(iv)
Transfers effected pursuant to the Registration Rights Agreement,
dated as of
the date hereof, by and among the Initial Carlyle Stockholders,
Executive and
the Other Executive Stockholders; and (v) any Permitted Transfer,
no Stockholder
shall Transfer any Equity Securities without the prior written
approval of a
majority of the members of the Board, which such majority shall
include an
Executive Designee. Each Stockholder further agrees that, in
connection with any
Permitted Transfer or any Transfer approved by the Board, such
Stockholder
shall, if requested by the Company, deliver to the Company an
opinion of
counsel, in form and substance reasonably satisfactory to the
Company and
counsel for the Company, to the effect that such Transfer is not in
violation of
this Agreement, the Securities Act of 1933, as amended, and the
rules and
regulations promulgated thereunder (the "Securities Act"), or the
securities
laws of any state. Any purported Transfer in violation of the
provisions of this
Section 1 shall be null and void and shall have no force or effect.
It shall be
a condition to any Permitted Transfer or any Transfer approved by
the Board
(other than any Transfer pursuant to Rule 144 promulgated under the
Securities
Act approved by the Board) that the transferee shall (i) agree to
become a party
to this Agreement as a Carlyle Stockholder (if such Transfer is
effected by a
Carlyle Stockholder) or as an Executive Stockholder (if such
transfer is
effected by an Executive Stockholder), as the case may be, and (ii)
execute a
signature page in the form attached as Exhibit A hereto
acknowledging that such
transferee agrees to be bound by the terms hereof.
Section 2. Bring-Along Rights.
(a) If, on or after the earlier of (i) the second anniversary of
the
date hereof and (ii) the date that Executive ceases to be Chief
Executive
Officer of the Company (the earlier of the date referred to in the
preceding
clauses (i) and (ii) being referred to as the "Bring-Along Date"),
one or more
Stockholders, in one transaction or a series of related
transactions, proposes
to Transfer fifty percent (50%) or more of the Shares then
collectively held by
all Stockholders
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to one or more Persons other than Permitted Transferees (each such
Person, a
"Third Party Purchaser"), then such Stockholder(s) (the
"Transferring
Stockholder(s)") shall have the right (a "Bring-Along Right"), but
not the
obligation (subject to Section 3 hereof), to require each other
Stockholder
(each, a "Selling Stockholder") to tender for purchase to the Third
Party
Purchaser(s), on the same terms and conditions as apply to the
Transferring
Stockholder(s) (provided, however, that (i) in the event that the
Transferring
Stockholder(s) are granted the right to appoint only one director
of any Person
in connection with such Transfer, the Transferring Stockholders
shall be
entitled to designate such member of the board of directors of such
Person and
(ii) in the event that any portion of the consideration payable in
connection
with such Transfer is in a form other than cash and Executive
refuses to accept
such non-cash consideration pursuant to Section 2(h), at the
election of the
Transferring Stockholders, the consideration payable to Executive
in connection
with such Transfer may consist solely of cash in an amount per
share equal to
the fair market value (determined based on the manner in which the
value of the
non-cash consideration was determined in connection with such
transaction) of
the per share consideration received by the Transferring
Stockholders), a number
of Equity Securities (including any options that vest as a result
of the
consummation of such Transfer to such Third Party Purchaser(s))
that, in the
aggregate, equal the number derived by multiplying (A) the total
number of
Equity Securities owned by such Selling Stockholder (including any
options that
vest as a result of the consummation of such Transfer to such Third
Party
Purchaser(s)); by (B) a fraction, the numerator of which is the
total number of
shares of Common Stock to be sold by such Transferring
Stockholder(s) in
connection with such transaction or series of related transactions,
and the
denominator of which is the total number of the then-outstanding
shares of
Common Stock collectively held by the Transferring Stockholder(s).
For purposes
of this Section 2 and Section 3 hereof, the phrase "number of
Equity Securities"
held by any Person or group of Persons shall mean the number of
Shares held by
such Person or group of Persons plus the number of shares of Common
Stock
issuable upon exercise of Vested Options held by such Person or
group of
Persons.
(b) If any Transferring Stockholder elects to exercise its
Bring-Along
Right under this Section 2 with respect to the Equity Securities
held by any
Selling Stockholder, then it shall so notify such Selling
Stockholder in writing
(a "Bring-Along Notice"). Each Bring-Along Notice shall set forth:
(i) the name
of the Third Party Purchaser(s) and the number of shares of Common
Stock
proposed to be sold by the Transferring Stockholder(s) to such
Third Party
Purchaser(s); (ii) the proposed amount and form of consideration
and material
terms and conditions of payment offered by the Third Party
Purchaser(s) and a
summary of any other material terms pertaining to the Transfer
("Third Party
Terms"); and (iii) the number of Equity Securities that such
Selling Stockholder
shall be required to sell in such Transfer (as determined in
accordance with
Section 2(a) above). The Bring-Along Notice shall be given at least
fifteen (15)
days before the closing of the proposed Transfer.
(c) Upon the giving of a Bring-Along Notice, such Selling
Stockholder
shall be obligated to sell such number of Equity Securities as is
set forth in
the Bring-Along Notice on the Third Party Terms.
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(d) At the closing of the Transfer to any Third Party
Purchaser(s)
pursuant to this Section 2, the Third Party Purchaser(s) shall
remit to such
Selling Stockholder (i) the consideration for the total sales price
of the
Equity Securities held by such Selling Stockholder sold pursuant
hereto, minus
(ii) such Selling Stockholder's pro rata portion of the
consideration to be
escrowed or otherwise held back, if any, in accordance with the
Third Party
Terms, minus (iii) the aggregate exercise price of any Vested
Options being
Transferred by such Selling Stockholder to such Third Party
Purchaser(s),
against delivery by such Selling Stockholder of (i) certificates
for such
Shares, duly endorsed for Transfer or with duly executed stock
powers reasonably
acceptable to the Company, and/or (ii) an instrument evidencing the
Transfer or
the cancellation of the Vested Options subject to the Bring-Along
Right
reasonably acceptable to the Company, and the compliance by such
Selling
Stockholder with any other conditions to closing generally
applicable to the
Transferring Stockholder(s) and all other holders of Common Stock
selling shares
in such transaction, and which transaction will not subject
Executive to any
liability other than (i) Executive's pro rata share of any
liability to which
the holders of Equity Securities are subject in connection with
such liability
and (ii) liabilities in respect of any representation, warranty or
indemnity
with respect to the title and ownership of the Equity Securities
being sold by
Executive. In the event that the proposed Transfer of the Common
Stock to such
Third Party Purchaser is not consummated, the Bring Along Right
shall continue
to be applicable to any proposed subsequent Transfer of the Common
Stock by any
Stockholder(s) pursuant to this Section 2.
(e) In the event that (i) any Transferring Stockholder exercises
its
rights pursuant to this Section 2, or (ii) subsequent to the
Bring-Along Date, a
Company Sale is approved by the Board and the holders of fifty
percent (50%) or
more of the then-outstanding Shares, each Stockholder shall consent
to and raise
no objections against such transaction, and if any such transaction
is
structured as a sale of stock, each Stockholder shall take all
actions that the
Board and/or the Transferring Stockholder(s) reasonably deem
necessary or
desirable in connection with the consummation of such transaction.
Without
limiting the generality of the foregoing, each Stockholder agrees
that it (i)
shall consent to and raise no objections against such transaction;
(ii) shall
execute any Common Stock purchase agreement, merger agreement or
other agreement
entered into with the purchaser with respect to such transaction
setting forth
the Third Party Terms and any ancillary agreement with respect
thereto; (iii)
shall vote the Common Stock held by such Stockholder in favor of
such
transaction (including executing a written consent of stockholders
approving
such transaction); and (iv) shall refrain from the exercise of
dissenters'
appraisal rights with respect to such transaction.
(f) If the Company or the holders of the Company's securities
enter
into any negotiation or transaction for which Rule 506 (or any
similar rule then
in effect) promulgated under the Securities Act, may be available
with respect
to such negotiation or transaction (including a merger,
consolidation, or other
reorganization), each Stockholder shall, if requested by the
Company, appoint a
purchaser representative (as such term is defined in Rule 501 of
the Securities
Act) reasonably acceptable to the Company. If such purchaser
representative was
designated by the Company, the Company shall pay the fees of such
purchaser
representative,
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but if any Stockholder appoints another purchaser representative,
such
Stockholder shall be responsible for the fees of the purchaser
representative so
appointed.
(g) Each Stockholder shall bear its pro rata share of the costs of
any
Company Sale or other transaction (pursuant to this Agreement or
otherwise) in
which it sells Equity Securities to the extent such costs are
incurred for the
benefit of all holders of Equity Securities and are not otherwise
paid by the
Company or the acquiring party.
(h) Notwithstanding the foregoing, Executive shall not be required
to
Transfer Equity Securities pursuant to this Section 2 unless (i)
90% of the
consideration received or to be received by Executive in connection
with such
Transfer is in the form of cash (it being understood that cash
consideration, if
any, held back or held in escrow to secure payment of
indemnification or other
obligations shall not be considered non-cash consideration) or (ii)
100% of the
consideration received or to be received by Executive in connection
with such
Transfer is in the form of cash and/or Publicly Traded Stock (it
being
understood that cash consideration or Publicly Traded Stock, if
any, held back
or held in escrow to secure payment of indemnification or other
obligations
shall not be considered non-cash consideration or consideration
other than
Publicly Traded Stock, as applicable); provided that the shares of
Publicly
Traded Stock received by Executive in connection with such Transfer
(i) do not
represent more than 1% of the outstanding shares of capital stock
of the issuer
of such Publicly Traded Stock; (ii) are not subject to contractual
restrictions
on transfer; and (iii) have been registered under the Securities
Act or are
contractually required to be registered under the Securities Act
within ninety
(90) days of Executive's receipt thereof or are freely saleable to
the public
without registration under the Securities Act pursuant to Rule 144
or Rule 145
promulgated under the Securities Act or otherwise within 90 days of
receipt of
such shares by Executive.
Section 3.
Tag-Along Right.
(a) In the event that any Stockholder(s) ( "Initiating
Stockholder(s)") propose, in accordance with the terms of this
Agreement, to
Transfer capital stock of the company to a Third Party Purchaser,
then each
other Stockholder shall have the right (the "Tag-Along Right") to
request that
the proposed Third Party Purchaser purchase from such Stockholder
(each a
"Tagging Stockholder") up to the number of whole Equity Securities
equal to the
number derived by multiplying (x) the total number of shares of
Common Stock
that the proposed Third Party Purchaser has agreed or committed to
purchase plus
the total number of shares of Common Stock that are issuable upon
conversion,
exercise or exchange of Vested Options or Convertible Securities
that the
proposed Third Party Purchaser has agreed or committed to purchase,
by (y) a
fraction, the numerator of which is the total number of Equity
Securities
(including any options that vest as a result of the consummation of
such
Transfer to such Third Party Purchaser but excluding (i) shares
issuable upon
the exercise of unvested options and (ii) any Vested Options that
have an
exercise price per share of Common Stock greater than the price per
share of
Common Stock to be paid by the Third Party Purchaser) owned by such
Tagging
Stockholder, and the denominator of which is the aggregate number
of shares of
Common Stock collectively owned by the Initiating Stockholders and
their
Affiliates, the Tagging Stockholder and all other holders of Common
Stock plus
the aggregate number of shares of Common Stock issuable upon
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conversion, exercise or exchange of Vested Options and Convertible
Securities
(excluding (i) shares issuable upon the exercise of unvested
options and (ii)
any Vested Options or other Convertible Securities that have an
exercise or
conversion price per share of Common Stock greater than the price
per shares of
Common Stock to be paid by the Third Party Purchaser) owned by all
Initiating
Stockholder(s) and their Affiliates, the Tagging Stockholder and
all other
holders of Common Stock, Vested Options, or other Convertible
Securities. Any
Equity Securities purchased from the Tagging Stockholders pursuant
to this
Section 3(a) shall be purchased at the same price per share of
Common Stock
(less, in the case of a Vested Option, the exercise price thereof)
and upon the
same terms and conditions as such proposed Transfer by the
Initiating
Stockholder(s) (provided, however, that in the event that the
Initiating
Stockholder(s) are granted the right to appoint only one director
of any Person
in connection with such Transfer, the Initiating Stockholder(s)
shall be
entitled to designate such member of the board of directors of such
Person).
(b) The Initiating Stockholder(s) shall notify each other
Stockholder
in writing in the event such Initiating Stockholder(s) propose to
make a
Transfer or series of Transfers giving rise to the Tag-Along Right
at least
fifteen (15) business days prior to the date on which such
Initiating
Stockholder(s) expect to consummate such Transfer (the "Sale
Notice") which
notice shall specify the number of shares of Common Stock which the
Third Party
Purchaser intends to purchase in such Transfer. The Tag-Along Right
may be
exercised by any Stockholder by delivery of a written notice to the
Initiating
Stockholder(s) proposing to sell securities of the Company (the
"Tag-Along
Notice") within ten (10) business days following receipt of the
Sale Notice from
such Initiating Stockholder(s). The Tag-Along Notice shall state
the number of
Equity Securities that the Tagging Stockholder proposes to include
in such
Transfer to the proposed Third Party Purchaser (not to exceed the
number as
determined above). In the event that the proposed Third Party
Purchaser does not
purchase the specified number of Equity Securities from the Tagging
Stockholders
at the same price per share of Common Stock (less, in the case of a
Vested
Option, the exercise price thereof) and on the same terms and
conditions as such
proposed Transfer by the Initiating Stockholders (provided,
however, that in the
event that the Initiating Stockholder(s) are granted the right to
appoint only
one director of any Person in connection with such Transfer, the
Initiating
Stockholder(s) shall be entitled to designate such member of the
board of
directors of such Person), then the Initiating Stockholders shall
not be
permitted to sell any shares of Common Stock to the proposed Third
Party
Purchaser unless such Initiating Stockholder(s) purchase from the
Tagging
Stockholder such specified number of Equity Securities on the same
terms and
conditions as specified in such Sale Notice.
(c) At the closing of the Transfer to any Third Party Purchaser
pursuant to this Section 3, the Third Party Purchaser shall remit
to each
Tagging Stockholder exercising his rights under this Section 3 (x)
the
consideration for the total sales price of the Equity Securities
(calculated in
the manner set forth above) held by such Tagging Stockholder sold
pursuant
hereto, minus (y) the aggregate exercise price of any Vested
Options being
Transferred by such Tagging Stockholder to such Third Party
Purchaser(s), minus
(z) such Tagging Stockholder's pro rata portion of any such
consideration to be
escrowed or otherwise held back, if any, in accordance with the
Third Party
Terms, against delivery by such Tagging Stockholder of
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certificates for such Shares subject to the Tag Along Right, duly
endorsed for
Transfer or with duly executed stock powers reasonably acceptable
to the
Company, and/or an instrument evidencing the Transfer or the
cancellation of the
Vested Options being sold reasonably acceptable to the Company, and
the
compliance by such Tagging Stockholder with any other conditions to
closing
generally applicable to the Initiating Stockholder(s) and all other
holders of
Common Stock, Vested Options or Convertible Securities selling
securities in
such transaction.
Section 4. Preemptive Rights.
(a) The Company hereby grants to each Stockholder the right to
purchase, in accordance with the procedures set forth in this
Section 4, such
Stockholder's pro rata portion of any New Securities (as defined
below) which
the Company may propose to sell and issue. A Stockholder's pro rata
portion, for
purposes of this Section 4, is the ratio of (i) the number of
Shares (other than
shares issued or issuable upon the exercise of Vested Options or
Convertible
Securities) held by such Stockholder immediately prior to any
proposed issuance
and sale to (ii) the aggregate number of shares of Common Stock
issued and
outstanding immediately prior to such proposed issuance and sale
(other than
shares issued or issuable upon the exercise of Vested Options or
Convertible
Securities). As used herein, "New Securities" shall mean shares of
Common Stock
or other equity securities of the Company, whether now or
hereinafter
authorized, any rights, options or warrants to purchase shares of
Common Stock
and any securities of any kind whatsoever that are, or may become,
convertible
into or exchangeable for such shares of Common Stock or other
equity securities
of the Company; provided, however, that the preemptive righ
