Exhibit 10.37
ADVANCE HOLDING CORPORATION
RESTRICTED STOCK AGREEMENT
THIS RESTRICTED STOCK AGREEMENT (this "Agreement") is made and entered into
as of February 1, 2000, by and between Advance Holding Corporation, a Virginia
corporation (the "Company"), and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ("Executive").
R E C I T A L S:
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A. The Company and Executive have entered into an Employment and
Noncompetition Agreement of even date herewith, ("Employment Agreement")
pursuant to which the Company has agreed to sell to Executive 110,000 shares of
the Company's Class A Common Stock, $0.01 par value per share (the "Common
Stock").
B. The Company now desires to sell the Common Stock to Executive, and
Executive desires to purchase the Common Stock, subject to the terms and
conditions set forth in this Agreement, and Executive agrees to hold such shares
subject to the restrictions and interests created by this Agreement.
A G R E E M E N T:
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NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
covenants and conditions contained herein, the parties agree as follows:
1. Purchase of Shares. The Company hereby agrees to sell to Executive,
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subject to the conditions and restrictions contained in this Agreement, and
Executive hereby agrees to purchase from the Company, One Hundred Ten Thousand
(110,000) shares of Common Stock (individually, a "Share," and collectively, the
"Shares") of the Company, at a price of $16.82 per share, for an aggregate
payment of $1,850,200 in cash. In connection with the sale of Shares hereunder,
Executive acknowledges that he has reviewed the memorandum regarding Section
83(b) of the Internal Revenue Code of 1986, as amended, attached hereto as
Exhibit A.
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2. Restriction on Transfer of the Shares. Except as otherwise provided
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herein, Executive may not sell, transfer, assign, pledge, hypothecate or
otherwise dispose of (collectively, "Transfer") any of the Shares, or any right,
title or interest therein prior to the later of the second anniversary of the
date hereof, or the date that is 180 days after the Company's Initial Public
Offering (defined below) (the "Permitted Sale Date") and, thereafter, any
Transfer must be in compliance with Section 4 and Section 8 hereof. Any
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purported Transfer or Transfers (including involuntary Transfers initiated by
operation of legal process) of any of the Shares or
any right, title or interest therein, except in strict compliance with the terms
and conditions of this Agreement, shall be null and void.
3. Rights of the Company Upon Termination.
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(a) In the event that Purchaser's employment with the Company and all
of its directly or indirectly majority or wholly owned entities (individually, a
"Subsidiary," and collectively, the "Subsidiaries") terminates for any reason
(including, without limitation, by reason of Purchaser's death, disability,
retirement, voluntary resignation or dismissal by the Company and/or any of its
Subsidiaries, with or without cause), the Company shall have the option (the
"Repurchase Option") to purchase from Purchaser all or any portion of the Shares
for a period of six (6) months after the effective date of such termination (the
effective date of termination is hereinafter referred to as the "Termination
Date"). The purchase price (the "Repurchase Price") for each Share to be
purchased pursuant to the Repurchase Option shall equal (i) $0.02 per Share, if
Executive's employment is terminated for "Cause," as defined in the Employment
Agreement, (ii) $0.02 per Share, if Executive terminates or resigns from his
employment other than for Good Reason on or prior to the first anniversary of
his employment start date, (iii) for 50% of the Shares, Fair Market Value, and
for 50% of the Shares, $0.02 per Share, if Executive terminates or resigns from
his employment other than for Good Reason after the first anniversary of his
employment start date but on or prior to the second anniversary of his
employment start date, and (iv) the Fair Market Value per share, in any other
circumstance other than as set forth in clauses (i)-(iii).
(b) The "Fair Market Value" per Share shall be determined as of the
Termination Date and shall be the value determined by the Board of Directors of
the Company acting in good faith and based upon the best available evidence,
which determination shall be final and binding.
(c) The Repurchase Price for any Shares to be purchased pursuant to
the Repurchase Option shall be increased or decreased appropriately to reflect
any distribution of stock or other securities of the Company or any successor or
assign of the Company which is made in respect of, in exchange for or in
substitution of the Shares by reason of any split, reverse split, combination,
recapitalization, reclassification, merger, consolidation or otherwise.
(d) The Repurchase Option shall be exercised by the Company by
delivery to Executive, within the six-month period specified above, of a written
notice specifying (a) the number of Shares to be purchased and (b) a day, which
shall not be more than 30 days after the date such notice is delivered, on or
before which Executive shall surrender the certificate or certificates
representing the Shares to be purchased pursuant to the Repurchase Option (duly
endorsed in blank for Transfer) at the principal office of the Company in
exchange for a check, payable to Executive in the amount equal to the Repurchase
Price, calculated as provided in this Section 3, multiplied by the number of the
Shares to be purchased. If Executive fails to so surrender such certificate or
certificates on or before such date, from and after such date the
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Shares which the Company elected to repurchase shall be deemed to be no longer
outstanding, and Executive shall cease to be a stockholder with respect to such
Shares and shall have no rights with respect thereto except only the right to
receive payment of the Repurchase Price, without interest, upon surrender of the
certificate or certificates therefor (duly endorsed in blank for Transfer). The
Company may assign its Repurchase Option to any shareholder holding 3% or more
of the Common Stock.
(e) This Repurchase Option shall terminate upon the last to occur of
(i) the second anniversary of Executive's Employment or (ii) an underwritten
public offering of the Common Stock by the Company registered under the Act (as
defined below) (other than an offering registered on Form S-4 or Form S-8 or any
substitute for such forms) resulting in gross proceeds to the Company in excess
of $25 million (an "Initial Public Offering").
4. Right of First Refusal.
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(a) Sales; Notice. At any time on or after the Permitted Sale Date,
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Executive may Transfer for cash (and only for such form of consideration) any or
all of the Shares to any third party subject to the provisions of Section 4,
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Section 6(c), Section 8 and Section 9(a) hereof. Prior to any such intended
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Transfer, Executive shall first give at least thirty (30) days' advance written
notice (the "Notice") to the Company specifying (i) Executive's bona fide
intention to sell such Shares; (ii) the name(s) and address(es) of the proposed
transferee(s); (iii) the number of Shares Executive proposes to Transfer
(individually, an "Offered Share," and collectively, the "Offered Shares"); (iv)
the price for which Executive proposes to Transfer each Offered Share (the
"Proposed Purchase Price"); (v) such evidence as the Company may reasonably
request to demonstrate the ability of the proposed transferee(s) to pay the
Proposed Purchase Price; and (vi) all other material terms and conditions of the
proposed transfer.
(b) Election by the Company. Within twenty (20) days after receipt
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of the Notice, the Company may elect to purchase any or all of the Offered
Shares at the price and on the terms and conditions set forth in the Notice by
delivery of written notice of such election to Executive, specifying a day,
which shall not be more than twenty (20) days after such notice is delivered, on
or before which Executive shall surrender (if Executive has not already done so)
the certificate or certificates representing the Offered Shares (duly endorsed
in blank for transfer) at the administrative office of the Company. Within
twenty (20) days after delivery of such notice to Executive, the Company shall
deliver to Executive a check, payable to Executive or to such person as
Executive shall request, in the amount equal to the product of the Proposed
Purchase Price multiplied by the number of Offered Shares (the "First Refusal
Price") in exchange for the Offered Shares. If Executive fails to so surrender
such certificate or certificates on or before such date, from and after such
date the Offered Shares shall be deemed to be no longer outstanding, and
Executive shall cease to be a Shareholder with respect to such Shares and shall
have no rights with respect thereto except only the right to receive payment of
the First Refusal Price, without interest, upon surrender of the certificate or
certificates therefor (duly endorsed in blank for Transfer). The Company may
assign its right to purchase the Offered
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Shares to any shareholder holding 3% or more of the Common Stock. This right of
first refusal terminates upon an Initial Public Offering.
5. Permitted Transfers. Executive may, at any time or times, transfer
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any or all of the Shares: (a) inter vivos to Executive's spouse or issue, a
trust for their benefit, or pursuant to any will or testamentary trust; or (b)
upon Executive's death, to any person in accordance with the laws of descent
and/or testamentary distribution (such persons described in clauses (a) and (b)
hereof are collectively referred to herein as "Permitted Transferees").
Notwithstanding the foregoing in this Section 5, Shares shall not be Transferred
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pursuant to this Section 5 until the Permitted Transferee executes a valid
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undertaking, in form and substance reasonably satisfactory to the Company, to
the effect that the Permitted Transferee and the Shares so Transferred shall
thereafter remain subject to all of the provisions of this Agreement (including
the Repurchase Option), as though the Permitted Transferee were a party to this
Agreement, bound in every respect in the same way as Executive. Transfers of
Shares made in accordance with this Section 5 shall not be subject to the
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provisions of Section 4 of this Agreement.
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6. Investment Representations. Executive represents and warrants to the
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Company as follows:
(a) Executive's Own Account. Executive is acquiring the Shares for
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Executive's own account and not with a view to or for sale in connection with
any distribution of the Shares.
(b) Access to Information. Executive (i) is familiar with the
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business of the Company and its Subsidiaries; (ii) has had an opportunity to
discuss with representatives of the Company and its Subsidiaries the condition
of and prospects for the continued operation and financing of the Company and
its Subsidiaries and such other matters as Executive has deemed appropriate in
considering whether to invest in the Shares; and (iii) has been provided access
to all available information about the Company and its Subsidiaries reasonably
requested by Executive.
(c) Shares Not Registered. Executive understands that the Shares
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have not been registered under the Act or registered or qualified under the
securities laws of any state and that Executive may not Transfer the Shares
unless they are subsequently registered under the Act and registered or
qualified under applicable state securities laws, or unless an exemption is
available which permits Transfers without such registration and qualification.
7. Partial Termination. This Agreement shall terminate with respect to
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those Shares which are (a) acquired by the Company pursuant to Section 3(b)
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hereof upon such acquisition; or (b) acquired by the Company pursuant to Section
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4 hereof, upon such acquisition.
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8. Obligation to Sell Securities.
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(a) If FS Equity Partners IV, L.P., a Delaware limited partnership,
("FSEP IV") finds a third-party buyer for all shares of common stock of the
Company held by it (whether such sale is by way of purchase, exchange, merger or
other form of transaction), upon the request of FSEP IV, Executive shall sell
all of Executive's Shares for the same per share consideration (which may be
less than $16.82 per share), and otherwise pursuant to the terms and conditions
applicable to the FSEP IV for the sale of its shares of its common stock of the
Company.
(b) Executive hereby consents to any sale, transfer, reorganization,
exchange, merger, combination or other form of transaction described in Section
9(a) and agrees to execute such agreements, powers of attorney, voting proxies
or other documents and instruments as may be necessary or desirable to
consummate such sale, transfer, reorganization, exchange, merger, combination or
other form of transaction. Executive further agrees to timely take such other
actions as FSEP IV may reasonably request in connection with the approval of the
consummation of such sale, transfer, reorganization, exchange, merger,
combination or other form of transaction, including voting as a stockholder to
approve any such sale, transfer, reorganization, exchange, merger, combination
or other form of transaction and waiving any appraisal rights that Executive may
have in connection therewith.
(c) The obligations of Executive pursuant to this Section 8 shall be
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binding on any transferee (other than a transferee in a Public Market Sale, as
defined below) of any of the Shares and Executive and any of his transferees
shall obtain and deliver to FSEP IV a written commitment to be bound by such
provisions from a subsequent transferee prior to any Transfer (other than
Transfers constituting a Public Market Sale). Executive's obligations pursuant
to this Section 8, and the obligations of any such transferee, shall survive the
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partial termination of this Agreement pursuant to Section 7 hereof. Any
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transfer effected in violation of this provision shall be void. The term
"Public Market Sale" means any sale of Common Stock after the Initial Public
Offering which is made pursuant to Rule 144 promulgated under the Securities Act
or which is made pursuant to a registration statement filed with the declared
effective by the Securities and Exchange Commission.
9. Tag Along Rights. If FSEP IV finds a third-party buyer (other than a
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buyer that is an investment fund or partnership affiliated with FSEP IV, a
general or limited partner of FSEP IV, or, for the period ending one year from
the date hereof, an unaffiliated institutional investor or merchant banking firm
(each, a "FS Permitted Transferee") or is a transferee in a Public Market Sale),
for all or part of the shares of Common Stock held by FSEP IV (whether such sale
is by way of purchase, exchange, merger or other form of transaction), Executive
shall have the right to sell, on the terms set forth in a written notice (the
"Offering Notice") delivered by FSEP IV to Executive describing the terms of the
proposed sale (including the minimum sale price for the shares of Common stock
that FSEP IV plans to sell), that amount of the Shares he then owns which
constitute the same percentage of his Shares as the percentage of Common Stock
sold by FSEP IV. Each such right shall be exercisable by delivering written
notice to FSEP IV within 15
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days after receipt of the Offering Notice. Failure to exercise such right within
such 15-day period shall be regarded as a waiver of such rights. The obligations
of FSEP IV under this Section 9 shall terminate upon an Initial Public Offering.
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10. Miscellaneous.
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(a) Legends on Certificates. Any and all certificates now or
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hereafter issued evidencing the Shares shall have endorsed upon them a legend
substantially as follows:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS
UPON TRANSFER AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF, EXCEPT IN ACCORDANCE WITH THE TERMS
AND CONDITIONS OF THAT CERTAIN RESTRICTED STOCK AGREEMENT DATED AS OF
FEBRUARY 1, 2000, BY AND BETWEEN ADVANCE HOLDING CORPORATION, A VIRGINIA
CORPORATION, AND THE ORIGINAL HOLDER HEREOF, A COPY OF WHICH AGREEMENT IS
ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF ADVANCE HOLDING CORPORATION."
Such certificates shall also bear such legends and shall be subject to such
restrictions on transfer as may be necessary to comply with all applicable
federal and state securities laws and regulations.
(b) Further Assurances. Each party hereto agrees to perform any
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further acts and execute and deliver any documents which may be reasonably
necessary to carry out the intent of this Agreement.
(c) Notices. Except as otherwise provided herein, all notices,
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requests, demands and other communications under this Agreement shall be in
writing, and if by telegram or telecopy, shall be deemed to have been validly
served, given or delivered when sent, or if by personal delivery or messenger or
courier service, or by registered or certified mail, shall be deemed to have
been validly served, given or delivered upon actual delivery, at the following
addresses, telephone and facsimile numbers (or such other address(es), telephone
and facsimile numbers a party may designate for itself by like notice):
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If to the Company:
Advance Holding Corporation
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co. Incorporated
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Flippin ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Drawer 1200
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Executive:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Advance Auto Parts
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Goodyear, LLP
▇▇▇ ▇&▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone:_______________
Fax:_____________________
or such other address as the parties may provide in writing from time to time.
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(d) Amendments. This Agreement may be amended only by a written
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agreement executed by both of the parties hereto and by FSEP IV.
(e) Governing Law. This Agreement shall be governed by and construed
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in accordance with the laws of the Commonwealth of Virginia.
(f) Disputes. In the event of any dispute among the parties arising
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out of this Agreement, the prevailing party shall be entitled to recover from
the nonprevailing party the reasonable expenses of the prevailing party
including, without limitation, reasonable attorneys' fees.
(g) Entire Agreement. This Agreement constitutes the entire
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agreement and understanding among the parties pertaining to the subject matter
hereof and supersedes any and all prior agreements, whether written or oral,
relating hereto.
(h) Recapitalizations or Exchanges Affecting the Company's Capital.
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The provisions of this Agreement shall apply to any and all stock or other
securities of the Company or any successor or assign of the Company, which may
be issued in respect of, in exchange for or in substitution of, the Shares by
reason of any split, reverse split, recapitalization, reclassification,
combination, merger, consolidation or otherwise, and such Shares or other
securities shall be encompassed within the term "Shares" for purposes of this
Agreement.
(i) No Rights as an Employee. Nothing in this Agreement shall affect
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in any manner whatsoever the rights of the Company or any of its Subsidiaries to
terminate Executive's employment for any reason, with or without cause, subject
to the terms and conditions of any employment agreement to which Executive may
be a party.
(j) Disclosure. The Company shall have no duty or obligation to
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affirmatively disclose to Executive, and Executive shall have no right to be
advised of, any material information regarding the Company or any of its
Subsidiaries at any time prior to, upon or in connection with the Company's
repurchase of the Shares under this Agreement at the cessation or termination of
Executive's employment with the Company and/or any of its Subsidiaries.
(k) Successors and Assigns. The Company may assign with absolute
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discretion any or all of its rights and/or obligations and/or delegate any of
its duties under this Agreement to any of its affiliates, successors and/or
assigns and this Agreement shall inure to the benefit of, and be binding upon,
such respective affiliates, successors and/or assigns of the Company in the same
manner and to the same extent as if such affiliates, successors and/or assigns
were original parties hereto. Without limiting the foregoing, the Company may
assign the Repurchase Option and/or the right of first refusal provided for in
Section 3 and Section 4 of this Agreement, respectively, to any of its
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affiliates, successors and/or assigns. FSEP IV may assign its rights under
Section 8 to any FS Permitted Transferee or to a Executive of shares of
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Common Stock then owned by FSEP IV. For purposes of this Agreement, the term
"Shares" shall include shares of capital stock or other securities of the
Company or any successor or assign of the Company, which are issued in respect
of, in exchange for or in substitution of the Shares by reason of any split,
reverse split, recapitalization, reclassification, combination, merger, exchange
or consolidation. Unless specifically provided herein to the contrary, Executive
may not assign any or all of its rights and/or obligations and/or delegate any
or all its duties under this Agreement without the prior written consent of the
Company and FSEP IV. Upon an assignment of any or all of Executive's rights
and/or obligations and/or a delegation of any or all of its duties under this
Agreement in accordance with the terms of this Agreement, this Agreement shall
inure to the benefit of, and be binding upon, Executive's respective affiliates,
successors and/or assigns in the same manner and to the same extent as if such
affiliates, successors and/or assigns were original parties hereto.
(l) Headings. Introductory headings at the beginning of each section
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and subsection of this Agreement are solely for the convenience of the parties
and shall not be deemed to be a limitation upon or description of the contents
of any such section and subsection of this Agreement.
(m) Counterparts. This Agreement may be executed in two
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counterparts, each of which shall be deemed an original and both of which, when
taken together, shall constitute one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
THE COMPANY:
ADVANCE HOLDING CORPORATION,
a Virginia corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇
President & CAO
EXECUTIVE:
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
10
