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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): November 3, 1999
INTERNATIONAL TOTAL SERVICES, INC.
(Exact Name of Registrant as Specified in Charter)
<TABLE>
<S> <C> <C>
OHIO 0-23073 34-1264201
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(State or Other Jurisdiction of (Commission File Number) (IRS Employer Identification No.)
Incorporation)
CROWN CENTRE, 5005 ROCKSIDE ROAD, INDEPENDENCE, OHIO 44131
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(Address of Principal Executive Offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code: (216) 642-4522.
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
On October 19, 1999, Robert A. Weitzel ("Weitzel") resigned as the
chairman, chief executive officer and director of International Total Services,
Inc. ("ITS") and agreed to enter into certain additional documents. On November
3, 1999, Weitzel entered into a retirement and consulting agreement with ITS,
which agreement provided for certain payment from ITS to Weitzel and also
provided that Weitzel enter into the voting trust agreement (the "Voting Trust
Agreement") among ITS, Weitzel, and H. Jeffrey Schwartz, J. Jeffrey Eakin and
John P. O'Brien, as voting trustees (the "Trustees"), and a stock restriction
agreement between Weitzel and ITS (the "Stock Restriction Agreement"). Pursuant
to the Voting Trust Agreement, Weitzel transferred record ownership, and thereby
voting control, of 3,324,979 shares of ITS common stock, representing
approximately 49.9% of the issued and outstanding shares of ITS Common Stock,
held by Weitzel individually and by The Weitzel Family Limited Partnership to
the voting trust (the "Voting Trust") created by the Voting Trust Agreement.
Pursuant to the Voting Trust Agreement, a voting trust certificate was issued
and delivered to Weitzel. The Voting Trust Agreement provides that all shares of
the ITS Common Stock beneficially owned by Weitzel are placed in trust until the
earlier of September 30, 2001 or a payment default by ITS under certain
provisions of the consulting agreement. Pursuant to the Voting Trust Agreement,
the Trustees exercise voting power with respect to the shares of the ITS Common
Stock held in the Voting Trust, by the action of a majority of the Voting
Trustees. In addition, any transfer of the voting trust certificate is only
permitted in accordance with the Stock Restriction Agreement. Pursuant to the
Stock Restriction Agreement, other than transfers to his spouse, children, or
grandchildren, or entities of which those people are the beneficiaries or hold
controlling interests, Weitzel is not permitted to transfer shares of the ITS
Common Stock, or voting trust certificates, without first offering those shares
on identical terms to ITS, and ITS has a specified period of time during which
it may exercise its option to purchase those shares.
ITEM 7(C). EXHIBITS
10.1 Voting Trust Agreement dated as of November 1, 1999 among
International Total Services, Inc., Robert A. Weitzel, and H.
Jeffrey Schwartz, J. Jeffrey Eakin and John P. O'Brien as
Trustees.
10.2 Stock Restriction Agreement dated as of November 1, 1999
between Robert A. Weitzel and International Total Services,
Inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
INTERNATIONAL TOTAL SERVICES, INC.
Date: November 17, 1999 By: /s/ Mark D. Thompson
-----------------------
Mark D. Thompson
President
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EXHIBIT 10.1
VOTING TRUST AGREEMENT
----------------------
This Voting Trust Agreement (the "Voting Trust") is made and entered
into as of the 1st day of November, 1999, by and among International Total
Services, Inc., an Ohio corporation (the "Company"), Robert A Weitzel
("Weitzel"), H. Jeffrey Schwartz ("Schwartz"), J. Jeffrey Eakin ("Eakin") and
John P. O'Brien ("O'Brien"). Weitzel, and his permitted nominees, assignees and
transferees are sometimes referred to herein collectively as the "Shareholder".
Each of Schwartz, Eakin and O'Brien, and each of their respective successors as
selected and appointed in accordance with this Voting Trust, is sometimes
referred to herein as the "Trustee" and collectively as the "Trustees".
PRELIMINARY STATEMENT
---------------------
The Shareholder beneficially owns 3,324,979 shares (the "Shares") of
the common stock, without par value (the "Common Stock"), of the Company, which
represents approximately forty-nine and 91/100 percent (49.91%) of the
outstanding shares of the Common Stock.
The Shareholder and the Company desire to promote their mutual
interests by making provision to avoid future differences and to assure
continuity and harmony in the management of the Company.
NOW, THEREFORE, in consideration of the mutual promises contained
herein and in consideration of the payment by the Company to each other party
hereto of Ten Dollars ($10.00), the receipt and sufficiency of which
consideration is hereby acknowledged, and intending to be legally bound, the
parties hereto agree as follows:
1. ESTABLISHMENT OF VOTING TRUST. The parties hereto hereby establish
and constitute a trust for the purpose of placing all shares of the Common Stock
held by the Shareholder in trust and for that purpose to place all of the Common
Stock owned by them in trust under and pursuant to the provisions of this Voting
Trust.
2. DEPOSIT AND TRANSFER OF COMMON STOCK. The Shareholder hereby
deposits and transfers in trust to the Trustees under this Voting Trust, and in
accordance with the terms and provisions hereof, the Shares. The Shareholder
agrees that the transfer provided for hereunder includes all right, title and
interest of such Shareholder in and to shares of Common Stock pursuant to any
subscription agreement or otherwise. The Shareholder represents and warrants, to
and for the benefit of the Company and the Trustees, that the number of shares
of Common Stock deposited with or transferred to the Trustees hereunder
represents all of the Common Stock owned, beneficially or of record, by such
Shareholder. Subject to the other provisions hereof, the Shareholder agrees to
transfer to the Trustees all certificates evidencing the Common Stock owned by
him, together with duly executed assignments separate from certificates or other
instruments of transfer and other documents as shall be necessary to transfer
such Common Stock into the name of the Trustees and agrees to deposit and
transfer in trust to the Trustees all shares of Common Stock such Shareholder
acquires from and after the date hereof and to transfer to the Trustees all
certificates evidencing such shares with such assignments and instruments as
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necessary to transfer such Common Stock into the name of the Trustees. On
receipt by the Trustees of the certificates for any shares of Common Stock and
the assignment and instruments necessary for the transfer of the Common Stock
into the name of the Trustees, the Trustees shall hold the Common Stock pursuant
to the terms of this Voting Trust, and shall thereupon issue and deliver to the
Shareholder, a voting trust certificate for the Common Stock deposited by the
Shareholder.
All certificates for Common Stock transferred and delivered to the
Trustees pursuant to this Voting Trust shall be surrendered by the Trustees to
the Company and cancelled, and new certificates therefor shall be issued in the
name of the Trustees.
The voting trust certificates and the interests represented thereby,
issued to the Shareholder upon transfer of the shares with Common Stock, shall
be transferable in the same manner, to the same extent and upon the same terms
as the Common Stock.
3. VOTING TRUST AGREEMENT. Copies of this Voting Trust, and of every
agreement supplemental hereto or amendatory hereof, shall be filed in the
principal office of the Company, and shall be open to inspection during regular
business hours by the Shareholder, or any beneficiary of the trust created under
this Voting Trust. All voting trust certificates issued as herein provided shall
be issued, received, and held subject to all of the terms of this Voting Trust.
Every person, firm, or corporation entitled to receive voting trust certificates
representing shares of Common Stock and their respective transferees and
assigns, upon accepting the voting trust certificates issued hereunder, shall
become -parties to and be bound by the provisions of this Voting Trust with the
same effect as if they had executed this Voting Trust.
4. AMENDMENT OF VOTING TRUST AGREEMENT. The Voting Trust may be amended
with the written consent of the holders of at least sixty-six and two-thirds
percent (66-2/3%) of the interests represented by the voting trust certificates
and the consent of the Company.
5. VOTING TRUST CERTIFICATES. The voting trust certificates to be
issued and delivered by the Trustees in respect of the Common Stock as
hereinbefore provided shall be in substantially the form attached hereto as
Schedule "A" and expressly incorporated herein.
6. TRANSFER OF CERTIFICATES. The voting trust certificates shall be
transferable at the principal office of the Company, on the books of the
Trustees, by the registered owner thereof, either in person or by attorney
thereof duly authorized, upon surrender thereof, according to the rules
established for that purpose by the Trustees and the Trustees may treat the
registered holder as owner thereof for all purposes whatsoever, but the Trustees
shall not be required to deliver stock certificates hereunder with the surrender
of such voting trust certificates. Every transferee of a voting trust
certificate or stock certificates issued hereunder shall by the acceptance of
such voting trust certificate or stock certificates become a party hereto and be
fully bound by the terms of this Voting Trust with like effect as though an
original party hereto, and shall be embraced within the meaning of the term
"Shareholder" whenever used herein.
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Notwithstanding anything to the contrary contained herein, a transfer
of a voting trust certificate issued hereunder shall be deemed to be a transfer
of the shares of the Common Stock represented thereby for the purposes of that
certain stock restriction agreement, of even date herewith, between the Company
and Weitzel (the "Stock Restriction Agreement"), the terms of which are hereby
expressly incorporated herein and made a part hereof, and no transfer of a
voting trust certificate shall be effective unless it is in compliance with and
does not violate the terms and conditions of the Stock Restriction Agreement.
The Trustees may refuse to effect a transfer of a voting trust certificate
issued hereunder on the books of the Trustees in the absence of a certification
and indemnification from the transferor and transferee thereof certifying that
such transfer is in compliance with the terms and conditions of the Stock
Restriction Agreement and indemnifying the Trustees from any and all claims and
expenses of any kind, nature or type whatsoever arising out of such transfer.
Further, transfers permitted under the Stock Restriction Agreement shall be
permitted hereunder, whether transfers of voting trust certificates or of shares
of the Common Stock. Transfers which pursuant to the Stock Restriction Agreement
results in the shares of the Common Stock so transferred being free from the
restrictions of the Stock Restriction Agreement also results in those shares
being free from this Voting Trust Agreement. Notwithstanding anything to the
contrary herein, shares of Common Stock owned beneficially by the Shareholder
shall be held subject to the terms and restrictions of this Voting Trust
Agreement.
If a voting trust certificate is lost, stolen, mutilated, or destroyed,
the Trustees, in their discretion, may issue a duplicate of such certificate
upon receipt of: (a) evidence of such fact satisfactory to them; (b) indemnity
satisfactory to them; (c) the existing certificate, if mutilated, and (d)
reasonable fees and expenses incurred in connection with the issuance of a new
voting trust certificate. The Trustees shall not be required to recognize any
transfer of a voting trust certificate not made in accordance with the
provisions hereof, unless the person claiming such ownership shall have produced
indicia of title satisfactory to the Trustees, and shall in addition deposit
with the Trustees indemnity satisfactory to them.
7. DIVIDENDS. Prior to the termination of this Voting Trust, the holder
of each voting trust certificate shall be entitled to receive payment equal to
the cash dividends, if any, received by the Trustees upon a like number and
class of shares of Common Stock as is called for by each such voting trust
certificate. If any dividend in respect of the stock deposited with the Trustees
is paid, in whole or in part, in stock of the Company having general voting
powers, the Trustees shall likewise retain for safekeeping, subject to the terms
of this Voting Trust, the certificates for stock which are received by him on
account of such dividend, and the holder of each voting trust certificate
representing stock on which such stock dividend has been paid shall be entitled
to have issued in his name a voting trust certificate issued under this Voting
Trust for the number of shares and class of stock received as such dividend with
respect to the shares represented by such voting trust certificate, which
certificate shall be delivered to such Shareholder. A Shareholder entitled to
receive the dividends discussed above shall be one registered as such on the
transfer books of the Trustees at the close of business on the day fixed by the
Company for the taking of a record to determine those holders of its stock
entitled to receive such dividends, or if the Trustees has fixed a date, as
hereinafter in this paragraph provided, for the purpose of determining the
holders of voting trust certificates entitled to receive such payment or
distribution, then registered as such at the close of business on the date so
fixed by the Trustees.
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If any dividend in respect of the stock deposited with the Trustees is
paid other than in cash or in capital stock having general voting powers, then
the Trustees shall distribute the same among the holders of voting trust
certificates registered as such at the close of business on the day fixed by the
Trustees for taking a record to determine the holders of voting trust
certificates entitled to receive such distribution. Such distribution shall be
made to such holders of voting trust certificates ratably, in accordance with
the number of shares represented by their respective voting trust certificates.
The transfer books of the Trustees may be closed temporarily by the
Trustees for a period not exceeding twenty (20) days preceding the date fixed by
the Company for the payment or distribution of dividends or the distribution of
assets or rights. In lieu of providing for the closing of the books against the
transfer of voting trust certificates, the Trustees may fix a date not exceeding
twenty (20) days preceding any date fixed by the Company for the payment or
distribution of dividends, or for the distribution of assets or rights, as a
record date for the determination of the holders of voting trust certificates
entitled to receive such payment or distribution, and the holders of voting
trust certificates of record at the close of business on such date shall
exclusively be entitled to participate in such payments or distribution.
In lieu of receiving cash dividends upon the Common Stock and paying
the same to the holders of voting trust certificates pursuant to the provisions
of this Voting Trust, the Trustees may instruct the Company in writing to pay
such dividends to the holders of the voting trust certificates. Upon receipt of
such written instructions, the Company shall pay such dividends directly to the
holders of the voting trust certificates. The Trustees may at any time revoke
such instructions and by written notice to the Company direct it to make
dividend payments to the Trustees. Upon such instructions being given by the
Trustees to the Company to pay such dividends directly to holders of voting
trust certificates, and until revoked by the Trustees, all liability of the
Trustees with respect to such dividends shall cease.
8. SUBSCRIPTION RIGHTS. In the event that any stock or other securities
of the Company are offered for subscription to the holders of Common Stock
deposited hereunder, the Trustees, promptly upon receipt of notice of such
offer, shall mail a copy thereof to each of the holders of the voting trust
certificates. Upon receipt by the Trustees at least five (5) days prior to the
last day fixed by the Company for subscription and payment, of a request from
any such registered holder of voting trust certificates to subscribe in his
behalf, accompanied with the sum of money required to pay for such stock or
securities (not in excess of the amount subject to subscription in respect of
the shares represented by the voting trust certificate held by such certificate
holder), the Trustees shall make such subscription and payment, and upon
receiving from the Company the certificates for share; or securities so
subscribed for, and shall retain such certificates for safekeeping and shall
issue and deliver to such holder a voting trust certificate in respect thereof
if the same be stock having general voting powers, but if the same be securities
other than stock having general voting powers, the Trustees shall mail or
deliver such securities to the certificate holder in whose behalf the
subscription was made, or may instruct the Company to make delivery directly to
the certificate holder entitled thereto.
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9. DISSOLUTION OF THE COMPANY. In the event of the dissolution or
total, or partial liquidation of the Company, whether voluntary or involuntary,
the Trustees shall receive the monies, securities, rights, or property to which
the holders of the Company Common Stock deposited hereunder are entitled, and
shall distribute the same among the registered holders of voting trust
certificates in proportion to their interests, and shall distribute the assets
other than liquid assets (i.e. cash, stock securities, or their equivalents)
among such registered holders as tenants in common in proportion to their
interests, as shown by the books of the Trustees. Notwithstanding the foregoing,
the Trustees may in their discretion deposit such monies, securities, rights, or
property with any bank or trust company doing business in the United States of
America and having assets of at least One Hundred Million Dollars
($100,000,000), with authority and instructions to distribute the same as above
provided, and upon such deposit all further obligations or liabilities of the
Trustees in respect to such monies, securities, rights, or property so deposited
shall cease.
10. REORGANIZATION OF THE COMPANY. In the event that the Company is
merged into or consolidated with another corporation, or all or substantially
all of the assets of the Company are transferred to another corporation, then in
connection with such transaction the term "the Company" for all purposes of this
Voting Trust shall be deemed to include such successor corporation, and the
Trustees shall receive for safekeeping under this Voting Trust any stock of such
successor corporation received on account of the ownership as Trustees
hereunder, of the Common Stock held hereunder prior to such merger,
consolidation, and transfer. Voting trust certificates issued and outstanding
under this Voting Trust at the time of such merger, consolidation, or transfer
may remain outstanding, or the Trustees, in their discretion, may substitute for
such voting trust certificates new voting trust certificates in appropriate
form, and the terms "stock" and "Common Stock" as used herein shall be deemed to
include any stock which may be received by the Trustees in lieu of all or any
part of the Common Stock.
11. SELECTION AND APPOINTMENT OF TRUSTEES. There shall be three (3)
Trustees serving under this Voting Trust. The Trustees hereunder on the date
hereof shall be H. Jeffrey Schwartz, J. Jeffrey Eakin and John P. O'Brien. The
Trustees shall each serve until his successor has been appointed in accordance
with the provisions of Section 12 of this Voting Trust or until this Voting
Trust is terminated pursuant to Section 15, below.
12. RESIGNATION AND SUCCESSOR TRUSTEES. Any Trustee may at any time
resign by mailing to the registered holders of voting trust certificates a
written resignation, to take effect ten (10) days thereafter or upon prior
acceptance thereof. In the event that a person designated Trustee hereunder
shall die, resign, or become unable to act, then such person (a "Terminated
Trustee") shall be replaced by vote of the remaining Trustees, with any deadlock
being decided by the Terminated Trustee.
The rights, powers, privileges and duties of a Trustee named hereunder
shall be possessed by a successor Trustee, with the same effect as though such
successor had originally been a party to this Voting Trust. The word "Trustees"
as used in this Voting Trust means the Trustees or any successor Trustees acting
hereunder.
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Notwithstanding any provision of this Voting Trust to the contrary, in
the event that a vote or action by holders of Common Stock is desired or
required at a time when there is no Trustee serving pursuant to this Voting
Trust, such vote or action shall be delayed, adjourned or otherwise deferred
until a successor Trustee has been selected pursuant hereto.
13. RIGHTS OF TRUSTEES. Until the actual delivery to the holders of
voting trust certificates issued hereunder of stock certificates in exchange
therefor, and until the surrender of the voting trust certificates for
cancellation, the Trustees shall have the right, subject to the provisions of
this section 13, to exercise, in person or by their nominee or proxy, all
Shareholder's rights and powers to vote or to act by consent in respect of all
Common Stock deposited hereunder, including the right to vote thereon and to
take part in or consent to any corporate or shareholders' action of any kind
whatsoever. The right to vote shall include the right to vote for the election
of directors, and in favor of or against any resolution or proposed action of
any character whatsoever, which may be presented at any meeting or which may
require the consent of the shareholders of the Company. Without limiting such
general right, it is understood that such action or proceeding may include, upon
terms satisfactory to the Trustees or to their nominee or proxy thereto
appointed by them, the voting in favor of or the consenting to the mortgaging,
creating a security interest in, and pledging of all or any part of the property
of the Company, the lease or sale of all or any part of the property of the
Company, for cash, securities, or other property, and the dissolution of the
Company, or the consolidation, merger, reorganization, or recapitalization of
the Company. The Trustees shall act by the concurrence of a majority of the
Trustees then serving and the action by a majority of the Trustees then serving
shall be deemed to be the action of and by all of the Trustees.
14. VOTING OF THE COMPANY COMMON STOCK BY TRUSTEES. The Trustees shall
exercise the voting power represented by the shares of Common Stock held
hereunder in the following manner:
(a) On all matters, the Trustees shall vote the Common Stock
subject to the Voting Trust in the manner determined by the Trustees in
their sole discretion.
(c) Each of the parties to this Voting Trust, in the capacity
of a shareholder, director, officer or otherwise in the Company agrees
to expend his best efforts to cause, by adoption, amendment, or
otherwise, the articles of incorporation, codes of regulations and
other constituent instruments of the Company to contain provisions
consistent with the provisions of this Voting Trust.
15. TERM. This Voting Trust shall continue in effect until the earlier
of (i) September 30, 2001 and (ii) a payment default by the Company under
Sections 1(b)or 3(a) of that certain Retirement and Consulting Agreement between
the Company and Weitzel, which payment default continues for more than five days
after the Company receives notice of such default from Weitzel (in accordance
with said Retirement and Consulting Agreement) unless the Company's failure to
make payment is as a result of a Breach, as defined in said Retirement and
Consulting Agreement.
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16. TERMINATION PROCEDURE. Upon the termination of this Voting Trust at
any time, as herein provided, the Trustees, at such time as they may choose
during the period commencing twenty (20) days before and ending twenty (20) days
after such termination, shall mail written notice of such termination to the
registered owners of the voting trust certificates, at the addresses appearing
on the transfer books of the Trustees. From the date specified in any such
notice, which date shall be fixed by the Trustees, the voting trust certificates
shall cease to have any effect, and the holders of such voting trust
certificates shall have no further rights under this Voting Trust other than to
receive certificates for shares of Common Stock or other property distributable
under the terms hereof and upon the surrender of such voting trust certificates.
Within thirty (30) days after the termination of this Voting Trust, the
Trustees shall deliver to the registered holders of all voting trust
certificates, after obtaining proper endorsements thereon, certificates for the
number of shares of the Common Stock represented thereby, such delivery to be
made in each case at the principal office of the Company.
At any time subsequent to thirty (30) days after the termination of
this Voting Trust, the Trustees may deposit with the Company, stock certificates
representing the number of shares of the Company Common Stock represented by the
voting trust certificates there. outstanding, with authority in writing to the
Company to deliver such stock certificates in exchange for voting trust
certificates representing a like number of shares of Common Stock and upon such
deposit all further liability of the Trustees for the delivery of such stock
certificate; and the delivery or payment of dividends upon surrender of the
voting trust certificates shall cease, and the Trustees shall not be required to
take any further action hereunder.
17. COMPENSATION AND REIMBURSEMENT OF TRUSTEES. The Trustees shall
serve without compensation. The Trustees shall have the right to incur and pay
such reasonable expenses and charges, to employ and pay such agents, attorneys,
and counsel as he may deem necessary and proper for carrying this Voting Trust
into effect and for discharge of the Trustees' rights and duties hereunder. Any
such expenses or charges incurred by and due to the Trustees shall promptly be
paid by the Company upon invoice therefor. Nothing herein contained shall
disqualify the Trustees or successor Trustees, or incapacitate the Trustees or
successor Trustees from serving the Company or any of its subsidiaries as
officer or director, or in any other capacity receiving compensation. The
Trustees shall be entitled to full indemnification from the Company against all
costs, losses, damages, charges, expenses and other liabilities (collectively,
"Liabilities") incurred by the Trustees in the exercise of any power conferred
on the Trustees by this Agreement, unless (i) it is determined in a final
nonappealable order of a court of competent jurisdiction that such Liabilities
were incurred solely as a result of the Trustees' gross negligence or willful
malfeasance or (ii) such Liabilities were incurred in connection with an action
or proceeding brought by or on behalf of the Shareholder or as a result of an
action or non-action by the Shareholder. In the event of (ii) above, the
Trustees shall be entitled to full indemnification from the Shareholder against
all Liabilities incurred by the Trustees in the exercise of any power conferred
on the Trustees by this Agreement, unless it is determined in a final
nonappealable order of a court of competent jurisdiction that such Liabilities
were incurred solely as a result of the Trustees' own negligence or willful
malfeasance. The Trustees shall not be required to give bond or security and
shall not be personally liable for any action or non-action in connection with
the
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Trustees' exercise of any power conferred on the Trustees by this Agreement,
unless it is determined in a final nonappealable order of a court of competent
jurisdiction to have resulted solely from their own gross negligence or willful
malfeasance, in which event the Trustees shall indemnify and save the
Shareholder harmless from any Liabilities resulting solely therefrom.
18. NOTICE. Unless otherwise specifically provided in this Voting
Trust, any notice to or communication with the holders of the voting trust
certificates hereunder shall be deemed to be sufficiently given or made if
mailed, postage prepaid, and addressed to such holders at their respective
addresses appearing on the transfer books of the Trustees, and deposited in any
post office or post office box. The addresses of the holders of voting trust
certificates, as shown on the transfer books of the Trustees shall in all cases
be deemed to be the addresses of voting trust certificate holders for all
purposes under this Voting Trust, without regard to what other or different
addresses the Trustees may have for any voting trust certificate holder on any
other books or records of the Trustees. Every notice so given shall be
effective, whether or not received, and such notice is deemed given for all
purposes hereunder on the date it is mailed.
Any notice to the Company hereunder shall be sufficient if mailed,
postage prepaid, by registered mail to the Company addressed to International
Total Services, Inc., Crown Centre, 5005 Rockside Road, Independence, OH 44131,
or to such other address as the Company may designate by notice in writing to
the Trustees.
Any notice to the Trustees hereunder shall be sufficient if mailed,
postage prepaid, by registered mail to the Trustees, addressed to them at such
addresses as may from time to time be furnished in writing to the Company by the
Trustees, and if no such address has been so furnished by the Trustees, then to
the Trustees in care of the Company.
All distributions of cash, securities, or other property hereunder by
the Trustees to the holders of voting trust certificates may be made, in the
discretion of the Trustees, by mail (regular or registered mail, as the Trustees
may deem advisable), in the same manner as hereinabove provided for the giving
of notices to the holders of voting trust certificates.
19. COUNTERPARTS. This Voting Trust may be executed in several
counterparts (including by facsimile transmission), each of which so executed
shall be deemed to be an original, but all such counterparts shall together
constitute one and the same instrument bearing a uniform date, namely, the date
first hereinabove set forth, and as if all had been executed together on such
date.
20. SEVERABILITY. The provisions of this Voting Trust are severable. If
any section, subsection, paragraph, sentence or provisions shall be invalid,
unenforceable, or inoperative, it shall not affect any of the remaining
provisions of this instrument, and all provisions shall be given full force and
effect separately from the invalid, unenforceable or inoperative section,
subsection, paragraph, sentence or provision of this Voting Trust, and if any
section, subsection, paragraph, sentence or provision would render this Voting
Trust void, invalid or unenforceable, then such section, subsection, paragraph,
sentence or provision shall be a nullity as if never incorporated herein.
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21. ENTIRE AGREEMENT. This Voting Trust constitutes the entire
agreement with respect to the subject matter hereof and supersedes all prior
written and oral agreements with respect thereto, and may be modified only by an
instrument in writing signed by each party hereto.
IN WITNESS WHEREOF, the Company, the Shareholder and the Trustees have
signed this Voting Trust to be effective on the date first above written.
<TABLE>
<CAPTION>
INTERNATIONAL TOTAL SERVICES, INC. TRUSTEES
- ---------------------------------- --------
<S> <C>
By: /s/ H. Jeffrey Schwartz /s/ H. Jeffrey Schwartz
- ----------------------------------------------- ----------------------------------------
Its: Co-Chairman H. Jeffrey Schwartz, Trustee
SHAREHOLDER /s/ J. Jeffrey Eakin
- ----------- ----------------------------------------
J. Jeffrey Eakin, Trustee
/s/ Robert A. Weitzel /s/ John P. O'brien
- ----------------------------------------------- ----------------------------------------
Robert A. Weitzel, individually and for John P. O'Brien, Trustee
Weitzel Family Limited Partnership, as
General Partner
</TABLE>
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SCHEDULE "A"
------------
No._______________________________ ________________________Shares
International Total Services, Inc.
an Ohio corporation
Voting Trust Certificate for Common Stock
-----------------------------------------
Without Par Value
This certificate is issued, received, and held under, and the rights of
the owner hereof are subject to, the terms of the Voting Trust Agreement dated
as of November __, 1999, (the "Voting Trust") between International Total
Services, Inc., an Ohio corporation (hereinafter called "the Company"), and H.
Jeffrey Schwartz, J. Jeffrey Eakin and John P. O'Brien (collectively, the
"Trustees"), and their successors in trust, and the holders of this and similar
certificates (copies of which Voting Trust, and of every agreement amending or
supplementing the same, are on file in the registered office of the Company in
Ohio and, if different, in the principal office of the Company, or any
beneficiary of the trust under such agreement, during regular business hours),
to all the provisions of which Voting Trust the holder of this certificate, by
acceptance hereof assents, and by which he is bound with like effect as if such
Voting Trust had been signed by him in person.
This certifies that ___________________________ or registered assigns
is entitled to all the benefits arising from the deposit with the Trustees under
the Voting Trust of certificates for _______________ shares of the Common Stock,
without par value (the "Common Stock"), of the Company, as provided in such the
Voting Trust and subject to the terms hereof.
The registered holder hereof, or assigns, is entitled to receive
payment equal to the amount of cash dividends, if any, received by the Trustees
upon the number of shares of Common Stock in respect of which this certificate
is issued. Dividends received by the Trustees in common or other stock of the
Company having general voting powers shall be payable in voting trust
certificates, in form similar hereto. Until the Trustees shall have delivered
the Common Stock held under the Voting Trust to the holders of the trust
certificates, or to the Company, as specified in the Voting Trust, the Trustees
shall possess and shall be entitled to exercise those rights and powers of an
absolute owner of such Common Stock as permitted in the Voting Trust, including
the right to vote thereon for every purpose, and to execute consents in respect
thereof for every purpose, it being expressly stipulated that no voting right
passes to the owner hereof, or his assigns, under this certificate or any
agreement, express or implied.
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In the event of the dissolution or total or partial liquidation of the
Company, the monies, securities, or property received by the Trustees in respect
of the stock deposited under the Voting Trust shall be distributed among the
registered holders of trust certificates in proportion to their interests as
shown on the books of the Trustees. In the event that any dividend or
distribution other than in cash or stock of the Company having general voting
powers is received by the Trustees, the Trustees shall distribute the same to
the registered holders of voting trust certificates, on the date of such
distribution, or to the registered certificate holders at the close of business
on the day fixed by the Trustees for taking a record to determine the
certificate holders entitled to such distribution, pursuant to the provisions of
section 6 of the Voting Trust. Such distribution shall be made to the
certificate holders ratably in accordance with the number of shares represented
by their respective voting trust certificates. Stock certificates for the number
of shares of Common Stock then represented by this certificate, or the net
proceeds in cash or property of such shares, shall be due and deliverable
hereunder upon the termination of the Voting Trust as provided therein.
Subject to the terms of the Voting Trust, this certificate is
transferable on the books of the Trustees at the principal office of the Company
by the holder hereof, either in person or by attorney duly authorized, in
accordance with the rules established for that purpose by the Trustees and on
surrender of this certificate properly endorsed. Title to this certificate when
duly endorsed shall, to the extent permitted by law, be transferable with the
same effect as in the case of a negotiable instrument. Each holder hereof agrees
that delivery of this certificate, duly endorsed by any holder hereof, shall
vest title hereto and all rights hereunder in the transferee; provided, however,
that the Trustees may treat the registered holder hereof, as the absolute owner
hereof, and of all rights and interests represented hereby, for all purposes
whatsoever, and the Trustees shall not be bound or affected by any notice to the
contrary, or by any notice of any trust, whether express or implied, or
constructive, or of any charge or equity respecting the title or ownership of
this certificate, or the share of stock represented hereby; provided, however,
that no delivery of stock certificates hereunder, or the proceeds thereof, shall
be made without surrender hereof properly endorsed.
Each holder hereof further agrees that the transfer of this certificate
is and shall be subject to the limitations and restrictions on transfer set
forth in the Voting Trust, that such holder shall not attempt to make nor make
any transfer of this certificate in violation of such limitations and
restrictions, and that the Trustees shall be free from any claim whatsoever for
their failure to effect any transfer of this certificate on the books of the
Trustees which the Trustees reasonably believe to be in violation of such
limitations and restrictions, and for their effecting any transfer which they
reasonably believe not to be in violation thereof.
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The foregoing is subject to the provisions of the Voting Trust, and to
the extent that there are any inconsistencies between the provisions of the
Voting Trust and this Voting Trust Certificate for Common Stock, the provisions
of the Voting Trust shall control.
This Voting Trust Certificate may be signed in multiple counterparts
(including by facsimile transmission), all of which taken together will
constitute an original certificate.
Neither this Voting Trust Certificate nor the shares represented by
this certificate may be transferred, sold, assigned, pledged, hypothecated or
otherwise disposed of unless such transfer, sale, assignment, pledge,
hypothecation or other disposition complies with the provisions of: (i) the
Stock Restriction Agreement dated as of November __, 1999, by and among the
Company and the Shareholder, and (ii) the Voting Trust (a copy of each of which
is on file with the Secretary of the Company). In addition, except as otherwise
provided in such Agreements, no transfer, sale, assignment, pledge,
hypothecation or other disposition of the shares represented by this certificate
may be made except (a) pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "Act"), or (b) if the Company has been
furnished with a satisfactory opinion of counsel for the holder that such
transfer, sale, assignment, pledge, hypothecation or other disposition is exempt
from the provisions of Section 5 of the Act and the rules and regulations in
effect thereunder.
This certificate shall not be valid for any purposes until duly signed
by the Trustees.
The word "Trustees" as used in this certificate means the Trustees or
the successor Trustees acting under the Voting Trust.
IN WITNESS WHEREOF, the Trustees have signed this certificate as of
____________, _____.
_________________________________
___________________, Trustee
_________________________________
___________________, Trustee
_________________________________
___________________, Trustee
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(Form of Assignment):
For value received _________________________ hereby assigns the within
certificate, and all rights and interests represented thereby, to _____________
_________________________ and appoints ________________________________ attorney
to transfer this certificate on the books of the Trustees mentioned therein,
with full power of substitution.
Dated:____________________________ ________________________________
In the presence of:
________________________________
________________________________
NOTE: The signature to this assignment must correspond with the name as
written upon the face of this certificate in every particular, without
alteration, enlargement, or any change whatsoever. All endorsements, in the
discretion of the Trustees, shall be guaranteed by a bank or trust company
satisfactory to the Trustees.
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EXHIBIT 10.2
STOCK RESTRICTION AGREEMENT
---------------------------
THIS AGREEMENT is made as of the 1st day of November, 1999, between the
Robert A. Weitzel (the "Shareholder") and International Total Services, Inc., an
Ohio corporation (the "Company").
R E C I T A L S:
- - - - - - - -
A. The Shareholder and the Company desire to promote their mutual
interests by making provision to avoid future differences and to assure
continuity and harmony in the management of the Company.
B. The Shareholder recognizes that to accomplish that objective,
transferability of the shares of the Company's common stock owned by him should
be restricted and provision made for the purchase of such shares in the event
the Shareholder desires to sell or otherwise dispose of such shares.
C. The Shareholder beneficially owns, in the aggregate, 3,324,979
issued and outstanding shares (the "Shares") of the common stock, without par
value, of the Company.
NOW, THEREFORE, in consideration of the mutual promises of the parties
made in this Agreement, the parties, intending to be legally bound, agree as
follows:
1. DEFINITIONS.
(a) SHAREHOLDER. "Shareholder" means and includes the
Shareholder named above and any transferee who acquires any Shares from
the Shareholder or any such person or entity in accordance with the
provisions of this Agreement or otherwise, as well as the heirs,
estate, personal representatives, successors and assigns of the
Shareholder or any such person or entity.
(b) SHARES. "Shares" means and includes those now or
subsequently issued and outstanding.
(c) TRANSFER. "Transfer" or "transferred" means and includes
any encumbrance, alienation, hypothecation, conveyance, pledge, sale,
gift, assignment or other voluntary transfer, as well as any transfer
by operation of law, by levy or execution, or by judicial sale to or by
a receiver or trustee in bankruptcy or insolvency proceedings.
2. PERMITTED TRANSFERS. Any Shareholder may transfer for value or
otherwise (a "permitted transfer"), but not for a price in excess of the price
determined pursuant to Paragraph 4, all or any part of his Shares, without first
giving the notice provided in Paragraph 3, to any of (i) his spouse, children or
grandchildren, (ii) a partnership, all the partners of which are such person or
persons or the Shareholder, or the trustees of any trust made by the Shareholder
primarily for the benefit of any such person or persons, or for the benefit of
himself, (iii) a corporation in which the Shareholder has a controlling
interest, or (iv) to the trustees of that certain voting trust established
pursuant to that certain Voting Trust Agreement of even date
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herewith (the "Voting Trust") (collectively, the "permitted transferees"). The
permitted transferees will receive and hold such Shares subject to the terms of
this Agreement and to the obligations under this Agreement of the Shareholder
making the transfer. There may be no further transfer of Shares except in
accordance with the terms of this Agreement. A Shareholder who has made a
permitted transfer and his permitted transferees are collectively referred to as
a "Family Group."
3. RESTRICTIONS DURING LIFE. Except as provided in Paragraph 2, no
Shares may be transferred Shares except in accordance with the terms of this
Paragraph 3. The Shareholder (which, for purposes of this Paragraph 3 shall
include the Family Group) may sell not less than one hundred thousand (100,000)
of his Shares at any one time, may not undertake more than one sale of Shares
during any three consecutive month period, and may only undertake such sale in
accordance with the following provisions:
(a) OFFER BY TRANSFEROR. When the Shareholder proposes to sell
Shares to a prospective bona fide purchaser, the Shareholder must first
offer to the Company the Shares he proposes to sell. The offer is to be
in writing and must contain the name and address of the proposed bona
fide purchaser and the terms of the proposed transfer. In the event
that the Shareholder previously made a permitted transfer, the offer
must include an offer to sell all Shares owned by all members of the
Shareholder's Family Group if such proposed sale includes all Shares
then directly held by the Shareholder.
(b) ACCEPTANCE OF OFFER BY THE COMPANY. If the offer is
received by the Company on or before January 31, 2000 then within
ninety (90) days after receipt of the offer from the Shareholder, the
Company may, at its option, elect to purchase all of the offered
Shares. If the offer is received by the Company after January 31, 2000
then within sixty (60) days after receipt of the offer from the
Shareholder, the Company may, at its option, elect to purchase all of
the offered Shares. The Shareholder may not, nor may any member of his
Family Group, participate in any manner, including the voting of Shares
or voting as a Director, in making the decision of whether or not the
Company elects to purchase the offered Shares. Likewise, no Director
who has any interest in the proposed sale, either direct or indirect,
may participate in any manner in making the decision of whether or not
the Company elects to purchase the offered Shares. Such prohibition on
participation will not prevent the Shareholder or Director from being
counted for purposes of establishing a quorum of Shareholders or
Directors at a meeting duly called. The Company must exercise its
option to purchase by giving written notice to the Shareholder within
the ninety (90) day period or the sixty (60) day period, as the case
may be. The exercise notice must specify a date for the closing of the
purchase, not to be more than forty-five (45) days after the date of
the giving of the exercise notice. The purchase price for the Shares
and terms of payment are described in Paragraphs 4 and 5. It is
expressly acknowledged and agreed that the Company's first refusal
rights, and any and all related rights of the Company contained herein,
shall be assignable by the Company to any other person or entity in the
Company's sole discretion.
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(c) RELEASE FROM RESTRICTION. If the offer to sell is not
accepted and consummated by the Company in the manner provided above,
the Shareholder may sell all, but not less than all, of his Shares
(including the Shares of his Family Group) which were included in the
offer to the Company to the prospective bona fide purchaser named in
the Shareholder's offer to the Company, but only in strict accordance
with the terms stated in the offer. The bona fide purchaser will
acquire the Shares free from the restrictions of this Agreement. If the
Shareholder fails to conclude the sale within forty-five (45) days
following the expiration of the time provided for the exercise of the
option by the Company, the Shares will again become subject to all the
restrictions of this Agreement.
4. PURCHASE PRICE. The per share purchase price for the Shares
purchased by the Company pursuant hereto will be the amount contained in the
offer from the prospective bona fide purchaser.
5. PAYMENT OF PURCHASE PRICE. Payment for all Shares purchased by the
Company under this Agreement will be made pursuant to the terms of the proposed
sale to the bona fide purchaser pursuant to Paragraph 3(a).
6. DEATH OF PERMITTED TRANSFEREE. On the death of any member of a
Family Group if the Shares owned by the member are bequeathed to, or for the
primary benefit of, or pass by descent to, the spouse, parent, child or children
of the deceased member, then the Shares will not be required to be sold, but
will remain subject to the other terms of this Agreement.
However, on the death of any member of a Family Group during the
lifetime of the Shareholder, if the Shares owned by the member are not
bequeathed to or for the primary benefit of, or will not pass by descent to, the
spouse, parent, child or children of such person, then the Shareholder will be
obligated to acquire, and the estate of the deceased member will be obligated to
sell, the Shares under the terms of Paragraphs 4 and 5.
7. SPECIFIC PERFORMANCE. The parties acknowledge that it is impossible
to measure, in money, the damages that will accrue to a party or to the personal
representative of a decedent from a failure of a party to perform any of
obligations under this Agreement. Therefore, if any party or the personal
representative of a decedent institutes any action or proceeding to enforce the
provisions of this Agreement, any person (including the Company) against whom
the action or proceeding is brought waives the claim or defense that the moving
party or representative has or will have an adequate remedy at law, and the
person will not urge in the action or proceeding the claim or defense that an
adequate remedy at law exists.
8. TERMINATION. This Agreement will terminate upon the occurrence of
any of the following events:
(a) The bankruptcy, receivership, insolvency or
dissolution of the Company, or
(b) The mutual written agreement of the parties, or
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(c) The cessation of the Company's business, or
(d) September 30, 2001, or
(e) A payment default by the Company under Sections 1(b)
or 3(a) of that certain Retirement and Consulting
Agreement between the Company and the Shareholder,
which payment default continues for more than five
days after the Company receives notice of such
default from the Shareholder (in accordance with said
Retirement and Consulting Agreement) unless the
Company's failure to make payment is as a result of a
Breach, as defined in said Retirement and Consulting
Agreement.
9. REFERENCE ON CERTIFICATES. Each certificate representing Shares now
or subsequently held by the Shareholder will be stamped with a legend in
substantially the following form:
The transfer of the shares represented by this certificate are
restricted under the terms of a Stock Restriction Agreement
dated _________________, 1999, among the Company and the
Shareholder, a copy of which Agreement will be mailed to the
holder without charge within five (5) days after receipt by
the Company of written request.
10. EXECUTION OF DOCUMENTS. If, under the terms of this Agreement, the
Shares of the Shareholder, or of any transferee who has received Shares in
accordance with the provisions of this Agreement or otherwise, are purchased,
the Shareholder or transferee, or the personal representative of the Shareholder
or transferee, will execute and deliver all necessary documents that may be
reasonably required for accomplishing the complete transfer of the Shares for
the purpose of the purchase or transaction.
11. NOTICE. All notices, designations, consents, offers or any other
communications provided for in this Agreement must be given in writing,
personally delivered, or by facsimile transmission with an appropriate answer
back received, or by mail. If by mail, it must be mailed by registered or
certified mail, postage prepaid, return receipt requested, and it will be deemed
to have been given on the date following the date it is posted. Notice to the
Company is to be addressed to its then principal office. Notice to the
Shareholder is to be addressed to his address as appear on the transfer books of
the Company, or to such other address as may be designated by the Shareholder in
writing to the Secretary of the Company.
12. MODIFICATION. No change, termination, waiver or modification of
this Agreement will be valid unless in writing and signed by the parties to this
Agreement.
13. PARTIES TO AGREEMENT. This Agreement will be binding on and will
operate for the benefit of the Company, its successors and assigns, and the
Shareholder and his respective heirs, estates, personal representatives,
successors and assigns, will be binding on any transferee who
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has received any stock in accordance with the provisions of this Agreement and
the heirs, estate, personal representatives, successors and assigns of the
transferee, and will be binding on any persons or entity to whom any of the
Shares are transferred in violation of the provisions of this Agreement and the
heirs, estate, personal representatives, successors and assigns of the person or
entity.
14. MULTIPLE COUNTERPARTS. This Agreement may be signed in multiple
counterparts (including by facsimile transmission), all of which taken together
will constitute an original agreement. The execution by one party of any
counterpart will be sufficient execution by that party, whether or not the same
counterpart has been executed by any other party.
15. GOVERNING LAW. This Agreement is to be governed by the laws of the
State of Ohio.
16. GENDER. Where necessary or appropriate to the meaning of this
Agreement, the singular, plural, masculine, feminine and neuter are deemed to
include each other.
17. SEVERABILITY. If any paragraph, subparagraph or provision of this
Agreement is found for any reason whatsoever to be invalid or inoperative, that
paragraph, subparagraph or provision shall be deemed severable and shall not
affect the force and validity of any other provision of this Agreement. If any
paragraph, subparagraph or provision of this Agreement is determined by a court
or arbitrator to be invalid or inoperative, the parties agree and it is their
desire that such court shall substitute a reasonable judicially enforceable
provision in place of the invalid or inoperative provision and that as so
modified the provision shall be as fully enforceable as if set forth herein by
the parties themselves in the modified form.
IN WITNESS WHEREOF, the Shareholder has set his hand and the Company
has caused this Agreement to be signed by its duly authorized officers the day
and year first above written.
INTERNATIONAL TOTAL SERVICES, INC.
By: /s/ H. Jeffrey Schwartz /s/ Robert A. Weitzel
------------------------------- ---------------------------------------
Robert A. Weitzel, individually and for
Its Co-Chairman Weitzel Family Limited Partnership, as
General Partner
5
