Exhibit 4.1
2000
STOCK PURCHASE AGREEMENT
IN CONSIDERATION of the premises, and of the mutual promises and covenants
herein contained, BDM, INC., a corporation organized and existing under the laws
of the State of Delaware, U.S.A. (hereinafter called the "Company"), and
(hereinafter called "Stockholder"), hereby agree effective as of the
day of January, 2000, as follows:
Section 1. Acquisition; Acknowledgments. Pursuant and subject to the terms
and provisions set forth in this Stock Purchase Agreement (this "Agreement"),
the Company agrees to issue to Stockholder, and Stockholder agrees to acquire
from the Company, shares of the Common Stock of the Company (as defined in
Section 3.7). In connection with such purchase, Stockholder hereby acknowledges
certain matters.
The Company has made available to Stockholder a Joint Proxy Statement/Private
Placement Memorandum (the "Statement") and has given Stockholder the
opportunity to review and study such material and ask any questions concerning
such material and the terms and conditions of the offering of the Shares (as
defined in Section 3.6) to Stockholder as Stockholder desired. Stockholder has
read the Statement. The Company has also given Stockholder the opportunity to
obtain additional information necessary to verify the accuracy of the
information Stockholder received.
Stockholder understands that the Shares are not being registered under the
U.S. Securities Act of 1933 on the ground that the issuance and sale thereof do
not involve any public offering. It is understood by Stockholder that, in
reaching this conclusion and in consummating the issuance and sale of the Shares
to Stockholder, the Company has relied and will rely upon the statements and
agreements made by Stockholder in this Section 1.
Stockholder acknowledges that the Shares can only be sold to the Company,
except pursuant to Section 4.1 of this Agreement and then only if an exemption
under federal and state law is available, or the Company registers the Shares.
This Agreement contains no promise on the part of the Company to register the
Shares.
With respect to exemptions from registration, sales of the Shares may not be
made by Stockholder in reliance upon the present rules providing exemptions from
registration.
In view of the foregoing and with knowledge of the matters outlined above,
Stockholder hereby states and agrees that:
(a) In connection with the offer and sale of the Shares, the Company
has not delivered to Stockholder any form of general solicitation or
general advertising, and to the best of Stockholder's knowledge no such
solicitation or advertising was delivered to any other person in connection
with an offer or sale of Shares pursuant to a similar agreement.
(b) Stockholder is acquiring the Shares for Stockholder's account for
investment and not with a view to any sale or distribution of all or any
part thereof.
(c) Stockholder will hold the Shares subject to all applicable
provisions of federal and state securities laws and the rules and
regulations promulgated thereunder, and will not at any time make any sale,
transfer, pledge or other disposition of the Shares in contravention
thereof.
(d) Stockholder will make no sale, transfer, pledge or other
disposition of the Shares other than as permitted by this Agreement, and
unless and until (i) Stockholder has given the Company notice in writing of
the proposed disposition and the circumstances surrounding the same and
(ii) except for a Permitted Transfer described in Section 4.1(a) or (b),
either (A) the Shares to be so disposed of shall have been registered under
federal and state securities law or (B) counsel acceptable to the Company
shall have rendered a written opinion satisfactory to the Company to the
effect that such registration is not required.
(e) Stockholder has no questions concerning the Company, this
Agreement or the Shares which have not been answered to Stockholder's
satisfaction, and Stockholder has obtained all the information concerning
these matters which Stockholder desired.
(f) Stockholder's prior business experience in the advertising agency
business has been sufficient so that Stockholder has the knowledge and
experience necessary to evaluate the merits and risks of the acquisition of
the Shares; and the Company has made reasonable inquiry of Stockholder in
order to determine whether Stockholder has such knowledge and experience.
(g) Stockholder is able to bear the economic risk of the investment in
the Shares and can hold the Shares for an indefinite period of time.
(h) A stop transfer order with respect to the Shares shall be placed
by the Company on its books and records.
(i) Stockholder is a bona fide resident of the state or country set
forth on the signature page hereto.
Section 2. Policy of the Company. It is the general policy of the Company to
sell its Common Stock to persons who are full time employees of the Company or
its subsidiaries or affiliates (collectively the "Companies") and to strategic
partners.
Section 3. Use of Terms. In this Agreement, the following terms shall have
the meanings given to each of them below:
Section 3.1 "Agreed Separation" means Stockholder's ceasing to be an
employee of the Companies on terms which the Company, in its sole
discretion, acknowledges in writing constitute an "Agreed Separation" for
purposes of this Agreement.
Section 3.2 "Cause" means (i) the commission of a felony or a crime
involving moral turpitude or the commission of any other act or omission
involving dishonesty, disloyalty or fraud with respect to any of the
Companies or any of their clients, (ii) conduct tending to bring any of the
Companies or any of their clients into substantial public disgrace or
disrepute, (iii) substantial and repeated failure to perform duties as
reasonably directed by the Board or Stockholder's supervisor, (iv) gross
negligence or willful misconduct with respect to any of the Companies or
any of their clients or (v) any material breach of this Agreement or any
written employment agreement between the Stockholder and any of the
Companies which, if capable of being cured, is not cured within 15 days
after written notice thereof to Stockholder.
Section 3.3 A person is "Insolvent" when any of the following
circumstances shall have occurred with respect to such person:
(a) he/she is adjudicated a bankrupt;
(b) he/she has a receiver in equity appointed for his/her property
and the appointment of such receiver is not set aside within 90 days,
or he/she requests or consents to the appointment of a receiver;
(c) he/she has a trustee in reorganization appointed for his/her
property and the appointment of such trustee is not set aside within
90 days;
(d) he/she files a voluntary petition for bankruptcy,
reorganization or arrangement;
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(e) he/she files an answer admitting bankruptcy or insolvency, or
agrees to a reorganization or arrangement;
(f) he/she makes a general assignment for the benefit of his/her
creditors;
(g) he/she permits his/her Shares to be attached by legal process
and such attachment is not set aside within 30 days; or
(h) he/she permits or consents to the sale of his/her Shares
pursuant to legal process or execution.
Section 3.4 "Per Share Book Value" has the meaning given such term by
Section 8 of this Agreement.
Section 3.5 "Permanent Disability" or "Permanently Disability" shall
mean the failure or inability of an individual to substantially perform his
or her duties to the Company as a result of his or her mental or physical
incapacity or disability for a period of at least 120 days, whether or not
consecutive, within any 360 day period, as reasonably determined by the
Company.
Section 3.6 The "Shares" include the shares of Common Stock of the
Company, if any, acquired by Stockholder (and certain trusts, where
applicable) concurrently with the execution of this Agreement, and the
shares of Common Stock of the Company hereinafter acquired by Stockholder
(or such trusts), whenever and however acquired (including shares acquired
upon termination of any voting trust), and any of the foregoing shares
which Stockholder has transferred, or may hereafter transfer, to any person
whether or not such transfer is a Permitted Transfer or a Prohibited
Transfer (as defined in Section 4.2 of this Agreement), except any shares
transferred by Stockholder, or any Transferee of Stockholder, to the
Company.
Section 3.7 The "shares of Common Stock of the Company" are the shares
of the Common Stock of the Company, par value $0.01 per share; the term
"shares of Common Stock of the Company" also includes divisible beneficial
interests in any voting trust heretofore or hereafter established with
respect to Common Stock of the Company, and references herein to shares of
Common Stock of the Company shall be deemed to include a reference to
beneficial interests in any such voting trust. The term "shares of Common
Stock of the Company" also includes:
(a) shares of the stock of any successor corporation to the Company
or of any corporation into which the Company is merged or consolidated
without regard to which corporation is the survivor and to shares of
stock which the Company may receive and distribute if it sells all or
substantially all of its assets for stock;
(b) shares of any class of stock issued by the Company as a stock
dividend on, or stock split of, or in exchange for shares subject to
the terms and conditions of this Agreement, whether by way of
reorganization, reclassification or other means.
Section 3.8 "Stockholder" also includes the estate (and its executors
or administrators) and the heirs and legatees of Stockholder wherever under
this Agreement the death of Stockholder creates an obligation on the part
of Stockholder.
Section 3.9 A "Transferee" is any person other than the Company who
acquires any Shares from Stockholder, whether the transfer to such person
was a Permitted Transfer or a Prohibited Transfer, and any person who
acquires any Shares from such Transferee, or a successor in title to such
Transferee, including the trustee(s) of a trust to which is made a
Permitted Transfer as defined in Section 4.1(a) of this Agreement and the
person, or persons, to whom any Shares are transferred upon termination of
any such trust. The term "Transferee" shall also include the estate (and
its executors or administrators) and the heirs and legatees of a
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Transferee wherever under this Agreement the death of a Transferee gives
rise to an obligation on the part of a Transferee.
Section 4. Permitted Transfers and Prohibited Transfers. Neither Stockholder
nor any Transferee shall make, or cause or allow to be made, any Prohibited
Transfer of any Shares. Stockholder, and any Transferee to whom any Shares were
transferred pursuant to a Permitted Transfer, may make Permitted Transfers.
Section 4.1 Permitted Transfers. For purposes of this Agreement, a
Permitted Transfer is any transfer upon the prior written express consent
of the Company, which consent shall normally be granted for a transfer:
(a) by Stockholder by way of gift to the spouse, children,
grandchildren or parents of Stockholder ("Family Members") or to a
partnership or a trustee of a trust (whether or not created by
Stockholder) for the benefit of Family Members, or all or any one or
more of the foregoing; provided the Family Members, general partner(s)
of such partnership or trustee(s) of such trust, as the case may be,
are obligated by the terms of the transfer instrument to comply with
the terms and conditions of this Agreement, as amended from time to
time by the Company and Stockholder, or the partnership agreement or
trust instrument allows the general partner(s) or trustee(s) to accept
gifts subject to such terms and conditions as are contained in this
Agreement, as amended from time to time by the Company and
Stockholder, and the gift is expressly made and accepted on those
terms; and
(b) to heirs and legatees upon the death of Stockholder; provided
that the person or entity to whom the Shares are transferred agrees to
be bound by the conditions and limitations of this Agreement;
provided, further, that the failure of such person or entity to
contract in writing to be bound by such conditions and limitations
shall not be deemed to be a waiver of any of such conditions or
limitations as to such person or entity or as to any of the Shares and
such person or entity shall be bound by such conditions and
limitations.
Section 4.2 Prohibited Transfers. Any transfer by or from Stockholder,
or by or from any Transferee (whether or not such Transferee acquired the
Shares in connection with a Permitted Transfer as defined in Section 4.1 of
this Agreement), other than a Permitted Transfer, is a "Prohibited
Transfer", and without limiting the generality of the foregoing, Prohibited
Transfers include any transfer of any Shares, or of any interest in any
Shares, whether voluntarily or involuntarily made,
(a) by way of sale, gift or other disposition;
(b) by way of pledge or hypothecation or the creation of a security
interest (except as consented to in writing by the Company);
(c) by way of attachment, levy or lien;
(d) in connection with insolvency;
(e) in connection with a divorce, decree of separate maintenance or
any other arrangement for the adjustment of marital rights;
(f) into, or out of, joint tenancy, tenancy in common, or tenancy
by virtue of community property or similar rights;
(g) to any trustee, receiver, administrator, executor, custodian,
or guardian of an estate or property; or
(h) into any trust, or in any form the effect of which, expressly
or constructively, would create a trust or a separation of the
ownership of the Shares into legal interests and beneficial interests.
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Section 4.3 Notice of Transfer. Stockholder (or any Transferee) shall
give the Company at least 30 days advance written notice of any proposed
transfer of Shares by such Stockholder (or such Transferee).
Section 4.4 Refusal to Register. If Stockholder or any Transferee
requests the registration of transfer of any of the Shares, and the Company
is not able to determine to its satisfaction that such transfer is a
Permitted Transfer, the Company may refuse to register such transfer until
the Company has received such assurances as it may require that such
transfer is a Permitted Transfer. If no such assurances are forthcoming
within a reasonable time, the terms of Section 5.3 of this Agreement shall
be applicable. Stockholder (and each of his/her Transferees) hereby agrees
to indemnify and save harmless the Company and its directors, officers,
employees or agents from any claims or demands against the Company or its
directors, officers, employees or agents arising out of, or in connection
with, the refusal of the Company to register a transfer of the Shares.
Stockholder (and each of his/her Transferees) further agrees that the
Company shall not be responsible to any heirs, legatees, beneficiaries,
partners, representatives or assigns for any loss, damage or expense
suffered as the result of any action taken by the Company pursuant to the
provisions of this Agreement.
Section 5. Events Triggering an Option or a Sale. Upon the occurrence of any
of the events specified in Section 5.1, 5.3 or 5.4 below, the Company shall have
the option to buy the Shares from the owner, or owners, of the Shares, as the
case may be. At the times specified in Section 5.2 or 5.5 below, the owner, or
owners, of the Shares shall be deemed to have sold the Shares and the Company
shall be deemed to have purchased the Shares from the owner, or owners, of the
Shares. The date on which the Company exercises, or is deemed to exercise, its
option under Section 5.1, 5.3 or 5.4 below, or the date on which a sale and
purchase occurs under Section 5.2 or 5.5 below, is referred to as the
"Applicable Event."
Section 5.1 Insolvency of Stockholder or Owner of Shares. Upon the
owner of any of the Shares becoming Insolvent, the Company shall have a
continuing option to purchase the Shares owned by such person. Upon the
owner of the Shares becoming Insolvent, such person shall notify the
Company of the fact of such Insolvency. The time within which the Company
may exercise its option pursuant to this Section shall begin to run upon
receipt of such written notice or, if no such notice is received, when the
Company has actual knowledge of the Insolvency. The terms and conditions of
the sale shall be the terms and conditions provided in Sections 6 and 7 of
this Agreement. The Closing of the sale shall be made pursuant to Section 9
of this Agreement. The date of the Applicable Event shall be the date on
which the Company sends written notice to the owner of the Shares that the
Company has exercised its option.
Section 5.2 Stockholder Termination. Upon Stockholder's ceasing to be
an employee of the Companies for any reason, the Shares held by Stockholder
(and any Transferee) shall be subject to automatic repurchase by the
Company on the terms provided in Sections 6 and 7 of this Agreement. The
effective date of the repurchase shall be the date on which Stockholder's
employment ceases; provided that if Stockholder's employment ceases by
reason of (1) death or Permanent Disability, (2) termination by the
Companies without Cause or (3) an Agreed Separation, then the effective
date of the repurchase shall be the tenth anniversary of the date on which
Stockholder's employment ceases. A Stockholder who is entitled to retain
his/her Shares under the proviso in the preceding sentence is referred to
as a "Continuing Holder" and the period from cessation of a Continuing
Holder's employment to the tenth anniversary thereof is referred to as the
"Ten Year Period."
Section 5.3 Prohibited Transfer. Upon the occurrence of a Prohibited
Transfer, and at all times thereafter, the Company shall have a continuing
option to purchase the Shares transferred, or attempted to be transferred,
in the Prohibited Transfer. The Company shall have exercised its option to
purchase the Shares if the Company shall have sent written notice (the date
of which notice shall be the date of the Applicable Event) to Stockholder,
specifying a date for the Closing of the purchase, which shall be not later
than 60 days after the date of the written notice sent by the Company. The
terms and conditions of the sale shall be those provided in Sections 6 and
7 of this Agreement and the Closing shall be made pursuant to Section 9 of
this Agreement.
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Section 5.4 Breach of Certain Covenants. If a Continuing Holder
breaches his or her covenants under either Section 11 or Section 12 of this
Agreement, then the Company shall have a continuing option to purchase the
Shares owned by the Stockholder (and any Transferee). The Company shall
exercise its option to purchase the Shares by sending written notice to
such effect (the date of which notice shall be the date of the Applicable
Event) to Stockholder, specifying a date for the Closing of the purchase,
which shall be not later than 60 days after the date of the written notice
sent by the Company. The terms and conditions of the sale shall be those
provided in Section 6 and 7 of this Agreement and the Closing shall be made
pursuant to Section 9 of this Agreement.
Section 5.5 Put Right. At any time during the Ten Year Period, a
Continuing Holder (or, following the death of a Continuing Holder, his/her
Transferees, estate, heirs or legatees) may elect to cause the Company to
repurchase all Shares held by them. The Continuing Holder (or his/her
Transferees, estate, heirs, or legatees) shall exercise the option by
delivering written notice to such effect to the Company. The date of
repurchase (and the Applicable Event) shall be the last day of the fiscal
year in which such written notice is received by the Company or such
earlier date as the Company may select. The terms and conditions of the
sale shall be the terms and conditions provided in Sections 6 and 7 of this
Agreement. The Closing of the sale shall be made pursuant to Section 9 of
this Agreement.
Section 6. Terms and Conditions of Payments for Shares. The terms and
conditions of payment for Shares upon the occurrence of Applicable Events
described in Section 5 of this Agreement shall be as set forth in this Section 6
and Section 7. If an owner's legal interest in Shares is held by a voting trust,
then the Company, as soon as practicable after the date of an Applicable Event,
shall in writing notify the trustees of such voting trust that as of the date of
the Applicable Event (assuming, in the case of Sections 5.1, 5.3, and 5.4, the
exercise of an option) the Company is the beneficial owner of such Shares.
Section 6.1 Sale Price. The sale price shall be equal to the number
of Shares to be sold multiplied by the Per Share Book Value of the Shares
as of the date of the Applicable Event. The Per Share Book Value of the
Shares shall be determined pursuant to Section 8 of this Agreement. Subject
to the limitations and conditions of Sections 6.2 through 6.5 below, the
payment of the sale price shall be made in the following manner:
(a) A payment at the date of the Closing, by the Company to the
owner, or owners, of the Shares of an amount equal to the product of
the number of Shares sold or to be sold which are owned by the person
to whom the payment shall be made times the Per Share Book Value of
the Shares as of the last day of the fiscal year next preceding the
fiscal year in which occurs the date of the Applicable Event, plus
interest on such payment at a rate per annum equal to an amount set by
the Company (the "Adjustable Rate"), expressed in percentage terms and
adjusted quarterly at the option of the Company (provided that the
Adjustable Rate shall in no event be less than the Applicable Federal
Rate for short term instruments (rounded upwards to the nearest one-
hundredth) set forth in the Internal Revenue Code of 1986, or its
successor), payable from the date of the Applicable Event to the date
of payment;
(b) If an amount equal to the product of the number of Shares to be
sold times the Per Share Book Value of the Shares as of the date of
the Applicable Event as determined under Section 8 of this Agreement
exceeds the amount of the payment to be made in Subsection (a) above,
a payment by the Company, within 60 days after the date that a final
determination of the Per Share Book Value of the Shares is made
pursuant to Section 8 of this Agreement, equal to the amount of such
excess, plus interest thereon at a rate per annum equal to the
Adjustable Rate (provided that the Adjustable Rate shall in no event
be less than the Applicable Federal Rate for short term instruments
(rounded upwards to the nearest one-hundredth) set forth in the
Internal Revenue Code of 1986, or its successor), payable from the
date of the Applicable Event to the date of payment;
(c) If the amount of the payment made in Subsection (a) above
exceeds an amount equal to the product of the number of Shares sold
times the Per Share Book Value of the Shares as of the date of the
Applicable
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Event as determined under Section 8 of this Agreement, a payment shall
be made by the owner, or owners, of the Shares to the Company within
60 days after the date that a final determination of the Per Share
Book Value of the Shares is made pursuant to Section 8 of this
Agreement in the amount of such excess, plus interest thereon at a
rate per annum equal to the Adjustable Rate (provided that the
Adjustable Rate shall in no event be less than the Applicable Federal
Rate for short term instruments (rounded upwards to the nearest one-
hundredth) set forth in the Internal Revenue Code of 1986, or its
successor), payable from the date of the Applicable Event to the date
of payment.
(d) The Company may elect to make payments of the sale price in
four equal installments, subject to the terms of Section 9 below. If
the Company elects to make payment in installments, the first
installment shall become due at the Closing and the remaining
installments shall be due at equal intervals thereafter. Subject to
the conditions of this Agreement, the final installment shall become
due no later than three years after the date of Closing.
In any case where the final determination of the Per Share Book Value shall
have been made and the computation of the sale price requires the payment of an
additional amount by the Company, the payment of such additional amount shall be
made ratably with respect to each remaining installment payment, if any,
becoming due after such determination is made.
In any case where the final determination of the Per Share Book Value shall
have been made and the computation of the sale price requires that payments be
made by the owner, or owners, of the Shares to the Company, the Company may
ratably reduce the remaining installment payments, if any, becoming due after
the date such determination is made by the amount of payments due to the
Company.
Section 6.2 Net Income Limitation on Payments by Company. In any
fiscal year when one or more persons shall be entitled to be paid by the
Company for the purchase of Shares of the Company under an agreement or
agreements similar in nature to or identical to this Agreement, if the
total of the payments due all persons who have sold or are selling shares
to the Company when added together exceed 50% of the consolidated net
income of the Company during the previous fiscal year, then the following
shall be the maximum amount required to be paid by the Company in such year
on account of the purchase of the Shares by the Company from Stockholders
or any Transferees.
That proportion of 50% of the consolidated net income of the
Company for the previous fiscal year which represents the ratio
between the amount of the payment which would otherwise be due to the
person selling the Shares under this Agreement during the year to the
total amount of all payments which would otherwise be due from the
Company to all persons from whom Shares are then being or theretofore
have been purchased, without application of such 50% consolidated net
income formula. The obligation of the Company to pay interest on the
unpaid balance shall not be subject to the foregoing formula based on
percentage of consolidated net income of the Company.
Example: Assume in a given year on a 25% annual payment basis,
Stockholder A is entitled to $2,000.00, Stockholder B is entitled to
$3,000.00 and Stockholder C is entitled to $5,000.00. Assume 50% of
the consolidated net income for the previous calendar year was only
$5,000.00. In such event, the parties sharing pro rata would receive
instead of their 25% payments:
Stockholder A . $1,000.00
Stockholder B . $1,500.00
Stockholder C . $2,500.00
The deferred balance of any payment resulting from the use of the 50% of
consolidated net income formula shall be due in the next fiscal year, subject to
subsequent deferral under this Section 6.2 and subject to the limitation stated
in Section 6.5(b) hereof). Consolidated net income shall include the
proportionate shares of net income of all
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subsidiaries and affiliates of the Company including those of which the Company
owns less than 51%, even if such proportionate amount would not normally be
included in consolidated net income under the application of generally accepted
accounting principles.
Section 6.3 Prepayments. The Company may prepay any payment or any
part of any payment due to any person and the interest, if any, payable by
the Company shall be reduced accordingly.
Section 6.4 Withholding by Company of Part of Payments. The Company
may withhold from payment 10% of the amount of any initial or partial
payment until 60 days after the date on which the determination of the Per
Share Book Value is made for the fiscal year in which the Applicable Event
occurs.
Section 6.5 Additional Terms on Installment Payments. Whenever under
this Agreement the Company buys Shares from Stockholder on the installment
basis referred to in Section 6.1(d) of this Agreement, the following
further conditions and terms shall be applicable:
(a) If part of the sale price remains unpaid after the date of the
Applicable Event, the unpaid balance from time to time shall bear
interest from the date of the Applicable Event at a rate per annum
equal to the Adjustable Rate (provided that the Adjustable Rate shall
in no event be less than the Applicable Federal Rate for short term
instruments (rounded upwards to the nearest one-hundredth) set forth
in the Internal Revenue Code of 1986, or its successor), payable at
the time the next installment payment is due.
(b) If the Company shall be in default in the making of any payment
or performance of any obligation under this Agreement and such default
shall continue for a period of 90 days following written notice of
such default to the Company, Stockholder or his/her estate may enforce
payment of the entire sale price, and shall have the right to declare
the entire sale price of such Shares immediately due and payable, and
to ▇▇▇ therefor.
Section 6.6 Merger or Consolidation. In the event of a merger or
consolidation of the Company, whether or not the Company is the surviving
entity thereof, the owner, or owners, of the Shares agree that receipt, or
the right to receive, the sale price (computed in accordance with Section
6.1 hereof) for the Shares owned by such owner, or owners, shall be deemed
the fair value of the Shares held by such owner, or owners, for purposes of
appraisal rights, if any, under Section 262 of the Delaware General
Corporation Law (or any successor statute) to which the owner or owners are
entitled, whether such sale price is paid or payable in cash, securities on
any other property, or any combination of the foregoing, as the Company's
board of directors, in its absolute discretion, may determine. For purposes
of this Section 6.6, in the event of a merger or consolidation of the
Company, the effective date of such merger or consolidation shall be deemed
the date of the Applicable Event.
Section 7. Additional Conditions to Payments for Shares. The payment by the
Company of the sale price of Shares purchased by the Company from Stockholder or
any Transferee shall be subject to the additional terms and conditions stated in
Sections 7.1 and 7.2.
Section 7.1 Payments Contrary to Laws. The failure of the Company to
make any payment when due, or at any time thereafter, if at such time or
times the making of the payment by the Company would be contrary to any
laws, rules, regulations, or executive orders shall not constitute a
default by the Company under this Agreement, and the due date of any such
payment shall be postponed until such time as such payment can lawfully be
made by the Company.
Section 7.2 Subordination to Creditors. It is expressly agreed that
any obligation of the Company to purchase or pay for any Shares shall at
all times be and remain subject to the terms of credit agreements or debt
instruments to which the Company is party and subordinate to the rights of
trade creditors, bank lenders, and other creditors of the Company.
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Section 8. Per Share Book Value.
Section 8.1 Determination. Per Share Book Value as of any date shall
be determined by the Company. The determination by the Company of the Per
Share Book Value shall be conclusive and final for purposes of this
Agreement. In determining the Per Share Book Value, the Company shall
employ audited financial statements in determining the Company's net income
(subject to adjustments to net income made by the Company under Section
8.2).
Section 8.2 Per Share Book Value. The Per Share Book Value as of any
date shall equal the Starting Per Share Book Value plus or minus Per Share
Book Value Changes through such date. The "Starting Per Share Book Value"
shall equal (a) with respect to the Shares acquired by the Stockholder in
connection with the mergers (as described in the Statement), the amount
determined as of January 31, 2000 under and in accordance with the
agreements previously in place at The ▇▇▇ Group, Inc. or The MacManus
Group, Inc., as applicable and (b) with respect to any Shares acquired by
Stockholder after the date of this Agreement, the purchase price. "Per
Share Book Value Changes" shall be calculated based on the consolidated net
income (or loss) per Share of the Company from January 31, 2000 (or, in the
case of Shares acquired after the date of this Agreement, the date of such
acquisition) through the date of determination, but reduced by dividends
and adjusted to eliminate (1) non-recurring items (net of taxes), including
but not limited to gains or losses on sales of securities, real estate,
business units or other assets outside the ordinary course of business, (2)
any changes as a result of the application of purchase accounting to the
mergers of The ▇▇▇ Group, Inc. and The MacManus Group, Inc. into
subsidiaries of the Company and (3) any charges arising from issuances or
repurchases of equity at prices other than book value. Per Share Book Value
Changes during any period of less than a full year shall be determined by
pro ration (or another method selected by the Company).
Section 9. Closing. The Closing of any purchase of Shares by the Company
shall take place at the principal office of the Company within 60 days after the
date of an Applicable Event at which time the owner, or owners, of the Shares
(including the executor or administrator of the owner, if applicable) shall
deliver a properly endorsed instrument of transfer for the Shares (and, if
applicable, copies of letters testamentary showing the authority of the
administrator or executor), and tender or pay for all documentary stamps
required by the transfer.
At the Closing and thereafter, the Company shall not be obligated to make any
payment to any person if the Company shall not have received from such person an
instrument of transfer properly endorsed by the person as the owner of the
Shares or the representative of the owner of the Shares or the estate of the
owner of the Shares and, if applicable, copies of letters testamentary and
documentary stamps. If the conditions to the obligation of the Company to make
payments have been met, and the Company shall fail to make any payment when such
payment becomes due, the Company shall be obligated to pay interest at a rate
per annum equal to the Adjustable Rate (provided that the Adjustable Rate shall
in no event be less than the Applicable Federal Rate for short term instruments
(rounded upwards to the nearest one-hundredth) set forth in the Internal Revenue
Code of 1986, or its successor) upon the unpaid balance from time to time.
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Section 10. Registration of Certain Transfers.
Section 10.1 Prohibited Transfers. Neither the Company nor any person
acting from time to time as the agent for the transfer or registration of
the transfer of any Shares of the Company shall be required to record or
effectuate any transfer of the Shares of the Company, if such transfer
shall be a Prohibited Transfer or if such transfer is or would be a
Permitted Transfer but any term or condition of this Agreement with respect
to such transfer shall not have been fulfilled.
Section 10.2 Sales to Transferees. No transfer shall be effective
unless and until the Company shall have received from the transferor and
the transferee such assurances, including the execution, acknowledgment
under oath and delivery to the Company of any documents requested from such
transferor and transferee as the Company shall deem desirable or necessary
to verify the fact that the purchase price for the sale of the Shares shall
not be different from the aggregate Per Share Book Value of the Shares as
of the date of the transfer as determined in accordance with Section 8 of
this Agreement. The Company agrees to furnish the transferor and transferee
with statements of the Per Share Book Value of the Shares determined in the
manner and at the time after the end of the fiscal year of the Company as
contemplated for the determination of Per Share Book Value under Section 8
of this Agreement.
Section 10.3 Stop Transfer Order. The Company has placed the
following stop transfer order on the transfer register of the Company:
"THE RIGHTS OF THE HOLDERS OF THE COMMON STOCK OF THE COMPANY ARE
SUBJECT TO AND LIMITED BY THE TERMS AND CONDITIONS OF THE BDM, INC.
STOCK PURCHASE AGREEMENT ("STOCK PURCHASE AGREEMENT"), A COPY OF WHICH
IS ON FILE AT THE OFFICE OF THE COMPANY, TO THE TERMS AND CONDITIONS
OF WHICH THE HOLDERS OF SUCH COMMON STOCK HAVE ASSENTED. THE STOCK
PURCHASE AGREEMENT CONTAINS RESTRICTIONS ON TRANSFER OF THE COMMON
STOCK. IN ADDITION, UPON THE OCCURRENCE OF CERTAIN "APPLICABLE EVENTS"
AS DESCRIBED IN THE STOCK PURCHASE AGREEMENT, THE HOLDER'S OWNERSHIP
OF SHARES OF COMMON STOCK SHALL BECOME CANCELED UPON THE BOOKS OF THE
COMPANY, AND SUCH SHARES OF COMMON STOCK SHALL BE TRANSFERRED TO THE
COMPANY AND THE RIGHTS OF THE HOLDER OF SUCH SHARES OF COMMON STOCK
SHALL BE THOSE AS STATED IN THE STOCK PURCHASE AGREEMENT ENTERED INTO
BY THE HOLDER OF SUCH SHARES OF COMMON STOCK OR HIS/HER PREDECESSORS
IN TITLE."
"THE COMMON STOCK OF THE COMPANY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") OR UNDER ANY STATE SECURITIES LAW
AND MAY NOT BE SOLD, TRANSFERRED OR DISPOSED OF EXCEPT IN COMPLIANCE
WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAW. THE COMPANY
RESERVES THE RIGHT TO REFUSE THE TRANSFER OF SHARES OF SUCH COMMON
STOCK UNLESS SUCH SHARES OF COMMON STOCK ARE REGISTERED UNDER THE ACT
AND UNDER ANY APPLICABLE STATE SECURITIES LAWS OR UNLESS THE COMPANY
HAS RECEIVED A SATISFACTORY LEGAL OPINION TO THE EFFECT THAT SUCH
REGISTRATION IS NOT REQUIRED."
Section 11. Restrictive Covenants.
Section 11.1 While employed by any of the Companies, and for a period
of one year after the termination of his or her employment with all of the
Companies, the Stockholder agrees that he or she will not, directly or
indirectly, own, operate, join, control, engage in or participate in the
ownership, management, operation or
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control of, or serve as a director or employee of, or consultant to, any
business, firm or corporation which is competitive with any business
conducted by any of the Applicable Companies (as defined below). The
foregoing shall not prohibit the Stockholder from owning 1% or less of the
outstanding shares of a publicly traded company.
The foregoing restriction shall not apply to any period after employment in
the event that the Stockholder's employment is terminated by the Companies
without Cause.
Section 11.2 The Stockholder further agrees that while he or she is
employed by any of the Companies and for a period of two years after the
termination of his or her employment for any reason, the Stockholder will
not, directly or indirectly:
(i) attempt in any manner to solicit from any client of the
Applicable Companies, except on behalf of the Companies, business of
the type performed by the Companies or to persuade any person, firm or
corporation which is a client of any of the Companies to cease to do
business or to reduce the amount of business which any such client has
customarily done or contemplates doing with the Companies, whether or
not the relationship between the Companies and such client was
originally established in whole or in part through the Stockholder's
efforts; or
(ii) render any services of the type rendered by the Applicable
Companies to or for any client of the Applicable Companies unless such
services are rendered as an employee or consultant of the Companies;
or
(iii) attempt to persuade or otherwise induce any employee of the
Companies to terminate his or her employment with the Companies, or
otherwise employ or attempt to employ or assist anyone else to employ
any person who is then in the employ of the Companies, or who was in
the employ of the Companies at any time during the then preceding one
year period.
Section 11.3 As used in Sections 11.1 and 11.2, the term "Applicable
Companies" shall mean, at the time the Stockholder is employed by the
Companies, each of the Companies then employing the Stockholder and/or for
whom the Stockholder had provided services within the then immediately
preceding one year period, and with respect to any period after the
Stockholder's employment shall have terminated, each of the Companies which
employed the Stockholder during the one year period immediately preceding
the date of termination of Stockholder's employment, including any
subsidiaries or divisions of such Companies; and the term "client" of an
Applicable Company shall mean (A) anyone who is a client of any of the
Applicable Companies at the date of termination of the Stockholder's
employment or, if the Stockholder's employment shall not have terminated,
at the time of the alleged prohibited conduct; (B) anyone who was a client
of any of the Applicable Companies at any time during the one year period
immediately preceding the date of termination of the Stockholder's
employment or, if the Stockholder's employment shall not have terminated,
during the one year period immediately preceding the alleged prohibited
conduct; and (C) any prospective clients to whom any of the Applicable
Companies had made a formal presentation (or similar offering of services)
within a period of one year immediately preceding the date of such
termination of employment or, if the Stockholder's employment shall not
have terminated, during the one year period immediately preceding the
alleged prohibited conduct.
Section 11.4 The Stockholder also agrees that he or she will not, at
any time (whether during the period of his or her employment with the
Companies or at any time thereafter), disclose to anyone any confidential
information of the Companies or any client of the Companies or utilize such
confidential information for his or her own benefit, or for the benefit of
third parties, and all memoranda, notes, records or other documents
compiled by him or her or made available to him or her during his or her
employment, if any, concerning the business of the Companies and/or their
clients shall be the property of the Company and shall be delivered to the
Company on the termination of the Stockholder's employment or at any other
time upon request.
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Section 11.5 If the Stockholder commits a breach or is about to
commit a breach of any of the foregoing provisions of this Section 11, the
Company shall have the right to have the provisions of this Agreement
specifically enforced by any court having equity jurisdiction without being
required to post bond or other security and without having to prove the
inadequacy of the available remedies at law, it being acknowledged and
agreed that any such breach or threatened breach will cause irreparable
injury to the Company and that money damages will not provide an adequate
remedy to the Company. In addition, the Company may take all such other
actions and remedies available to it under law or in equity and shall be
entitled to such damages as it can show it has sustained by reason of such
breach.
Section 11.6 The parties acknowledge that the type and periods of
restriction imposed in the provisions of this Section 11 are fair and
reasonable and are reasonably required for the protection of the Company
and the goodwill associated with the business of the Company. If any of the
covenants in this Section 11, or any part thereof, is hereafter construed
to be invalid or unenforceable, the same shall not affect the remainder of
the covenant or covenants, which shall be given full effect, without regard
to the invalid portions. The parties hereto intend to and hereby confer
jurisdiction to enforce the covenants contained herein upon the courts of
any state or other jurisdiction within the geographical scope of such
covenants. In the event that the courts of any one or more of such states
or jurisdictions shall hold such covenants wholly unenforceable by reason
of the breadth of such scope or otherwise, it is the intention of the
parties hereto that such determination not bar or in any way affect the
Company's right to the relief provided above in the courts of any other
states or jurisdictions within the geographical scope of such covenants as
to breaches of such covenants in such other respective states or
jurisdictions, the above covenants as they relate to each state or
jurisdiction being, for this purpose, severable into diverse and
independent covenants.
Section 12. Final Provisions.
Section 12.1 Indemnity for Employment Taxes. Stockholder hereby
agrees to indemnify and hold harmless the Company, The ▇▇▇ Group, Inc., the
MacManus Group, Inc., and all affiliates against the gross amount of any
federal, state or local withholding or employment taxes, interest and
additions to tax (excluding penalties) arising out of the treatment of the
Shares or any predecessor shares, by any applicable federal, state or local
tax authorities, as attributable to compensation to Stockholder taxable
upon the actual or deemed receipt of consideration for such Shares in
shares, cash or other property or the release of any restrictions on such
Shares or any predecessors, and to file amended federal and state or local
income tax returns in order to reflect such compensation income.
Section 12.2 Survival of Covenants. The covenants, undertakings and
indemnities herein shall survive the acquisition, transfer and repurchase
of Shares hereunder.
Section 12.3 Amendments. This Agreement may not be amended, modified,
or discharged in whole or in part orally. No written amendment to this
Agreement may be enforced against Stockholder, the Company, or any
Transferee unless such amendment shall have been signed by Stockholder and
by the Company or by the predecessor in interest of Stockholder or the
Company.
Section 12.4 Waivers. No party hereto shall be deemed to have waived
any right hereunder unless such waiver is in writing and signed by the
party claimed to have waived such right. No delay or omission in exercising
any right hereunder shall operate as a waiver of such right or any other
right. A waiver upon any one occasion shall not be considered as a waiver
of any right or remedy on any future occasion.
Section 12.5 Severability. In the event any one or more of the
provisions contained in this Agreement shall for any reason be held to be
invalid, illegal, or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement, but this Agreement shall be construed as if such invalid or
unenforceable provision had never been contained herein.
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Section 12.6 Headings. The section headings and subsection headings
used herein are used for convenience only, do not constitute a part of this
Agreement, and shall not be deemed to limit, characterize or interpret any
provisions of this Agreement.
Section 12.7 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, U.S.A.
Section 12.8 Benefit. This Agreement shall be binding upon and inure
to the benefit of and be enforceable by the respective successors and
assigns of the Company. The rights of Stockholder under this Agreement are
personal to Stockholder and, except as otherwise expressly provided herein,
Stockholder may not assign this Agreement, or sell, transfer, assign,
pledge, hypothecate or otherwise dispose of any rights of Stockholder under
this Agreement without the prior written and express consent of the Company
to such assignment or disposition. All obligations of this Agreement shall
be binding upon the heirs, representatives and estate of Stockholder and
upon any person to whom a purported assignment is made.
Section 12.9 Notice. Any notice, designation, consent, offer,
acceptance or any other communication provided for herein shall be given in
writing by registered mail with return receipt requested which mail shall
be addressed in the case of the Company to its President and its Secretary
at its principal office, and in the case of any Stockholder or Transferee,
to his/her address appearing on the books of the Company or his/her
residence or to such other address as may be designated by him/her.
Section 12.10 Counterparts. This Agreement may be executed in
counterparts, each of which so executed shall be deemed to be an original,
and such counterparts shall together constitute one and the same
instrument.
Section 12.11 Entire Agreement. This Agreement supercedes all
previous stock purchase agreements between The ▇▇▇ Group, Inc. (or its
predecessors), or The MacManus Group, Inc. (or its predecessors), on the
one hand, and Stockholder, on the other hand, and any and all such previous
agreements are hereby canceled and of no further force or effect.
Section 12.12 Remedies. Each of the parties to this Agreement shall
be entitled to enforce its rights under this Agreement specifically, to
recover damages and costs (including reasonable attorneys fees) caused by
any breach of any provision of this Agreement and to exercise all other
rights existing in its favor. The parties hereto agree and acknowledge that
Stockholder's breach of any term or provision of this Agreement shall
materially and irreparably harm the Company, that money damages shall
accordingly not be an adequate remedy for any breach of the provisions of
this Agreement by Stockholder and that the Company in its sole discretion
and in addition to any other remedies it may have at law or in equity may
apply to any court of law or equity of competent jurisdiction (without
posting any bond or deposit) for specific performance and/or other
injunctive relief in order to enforce or prevent any violations of the
provisions of this Agreement.
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IN WITNESS WHEREOF the parties hereto have executed the Agreement as of the
date first above written.
BDM, Inc.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------
Its: Chief Administrative OfficeR and Secretary
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_____________________________________________
Signature of Stockholder
Name
-----
Printed Name of Stockholder
Stockholder Address of Residence:
_____________________________________________
_____________________________________________
_____________________________________________
_____________________________________________
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