Exhibit 10.2
SHAREHOLDERS
AGREEMENT
This SHAREHOLDERS AGREEMENT (this
“ Agreement ”), is made and entered into as of
October 5, 2005 among The Prudential Insurance Company of America,
a New Jersey corporation, PIC Realty Corporation, a Delaware
corporation, Strategic Value Investors, LLC, a Delaware limited
liability company, Prudential Assets, LLC, a Delaware limited
liability company, Prudential Investment Management, Inc., a
Delaware corporation, SHC/Olayan Redemption Vehicle, LLC, a
Delaware limited liability company, and SVI (SHC/Houston)
Redemption Vehicle, LLC, a Delaware limited liability company
(individually a “ Shareholder ” and collectively
the “ Shareholders ”) and Strategic Hotel
Capital, Inc., a Maryland corporation (the “ Company
”).
W I T N E S S E T
H
WHEREAS, the Shareholders and the
Company wish to record their understanding regarding certain
matters relating to the management of the Company and certain other
matters.
NOW, THEREFORE, in consideration of
the foregoing and of the mutual covenants and agreements contained
in this Agreement and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section
1.1
Definitions . In addition to the terms defined in the
preamble to this Agreement and elsewhere herein, the following
terms shall have the meanings set forth herein for the purposes of
this Agreement:
“ Affiliate ”
shall mean, with respect to a Person (as hereinafter defined), any
other Person that, directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common
control with such Person.
“ Board of Directors
” shall mean the Board of Directors of the Company in office
at the applicable time as elected in accordance with the provisions
of the Maryland General Corporation Law, the Charter and the
Bylaws.
“ Bylaws ” shall
mean the bylaws of the Company, as amended from time to
time.
“ Charter ” shall
mean the charter of the Company, as amended from time to
time.
“ Common Stock ”
shall mean the shares of common stock, par value $0.01 per share,
of the Company.
“ Common Stock Deemed
Outstanding ” shall mean, as of any date, the total
number of shares of Common Stock outstanding as of such date plus
the total number of shares of Common Stock which may be acquired
upon exercise or conversion of all options, warrants or other
securities or rights convertible into or exercisable for shares of
Common Stock which were
outstanding as of such date, whether
or not convertible or exercisable within 60 days of such
date.
“ Deemed Beneficial
Ownership ” shall mean, with respect to the Shareholders
as of any date, the percentage obtained by dividing (a) the total
number of shares of Common Stock owned of record or beneficially by
the Shareholders as of such date plus the total number of shares of
Common Stock which may be acquired by the Shareholders upon
exercise or conversion of all options, warrants or other securities
or rights convertible into or exercisable for shares of Common
Stock which were held by the Shareholders as of such date, whether
or not convertible or exercisable within 60 days of such date, by
(b) the Common Stock Deemed Outstanding as of such date.
“ Person ” shall
mean an individual, corporation, partnership, trust, joint venture,
limited liability company, unincorporated organization or other
legal entity, or a government or any agency or political
subdivision thereof.
ARTICLE II
BOARD REPRESENTATION
Section
2.1 Right to
Nominee . The Shareholders shall collectively have the right to
nominate one person (such person, the “ Shareholder
Nominee ”), as a director (such person, the “
Shareholder Director ”) to the Board of Directors so
long as the Deemed Beneficial Ownership of the Shareholders is not
less than 10% in the aggregate. The Shareholders shall not name any
person as the Shareholder Nominee if: (a) such person is not
reasonably experienced in business, financial and lodging industry
matters; (b) such person has been convicted of, or has pled nolo
contendere to, a felony; (c) the election of such person would
violate any law; or (d) any event required to be disclosed pursuant
to Item 401(f) of Regulation S-K of the Exchange Act has occurred
with respect to such person.
Section
2.2 Election of
Directors . The Company hereby covenants and agrees that,
during such time as the Shareholders have the right to nominate the
Shareholder Nominee pursuant to Section 2.1, the Company shall use
its best efforts to cause the election of the Shareholder
Nominee.
Section
2.3
Shareholders’ Meeting . Following execution of this
Agreement by all parties hereto, the Shareholders may by written
notice to the Corporate Governance and Nominating Committee of the
Board of Directors of the Company, not less than 120 days prior to
the anniversary of the mailing of the proxy statement of the
Company for the prior year’s annual meeting of shareholders,
identify the Shareholder Nominee who will be nominated by the Board
of Directors for election at the next annual meeting of
shareholders to elect directors of the Company in accordance with
Sections 2.1 and 2.2 hereof. The Shareholder Director will not be
entitled to receive compensation as a director of the Company;
provided the Shareholder Director will be reimbursed for
reaso
