EXHIBIT 4.3
EXECUTION VERSION
SECOND AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT OF
VDK FOODS LLC
This Second Amended and Restated Limited Liability Company
Agreement of VDK Foods LLC (the "Company") is amended and restated as of
April 8, 1998, among the Persons whose names are set forth as Members on
Schedule A hereto.
WHEREAS, Dartford Partnership L.L.C. and ▇▇▇ ▇▇▇▇▇ have
heretofore formed a limited liability company pursuant to the Delaware
Limited Liability Company Act, 6 Del. C. Sections 18-101, et seq., as amended
from time to time (the "Delaware Act"), by filing a Certificate of Formation
of the Company with the office of the Secretary of State of the State of
Delaware on August 16, 1995, and entering into a Limited Liability Company
Agreement of the Company, dated as of August 15, 1995, which was amended and
restated as of September 19, 1995 and further amended and restated as of May
22, 1997 (the "Original Limited Liability Company Agreement").
NOW THEREFORE, in consideration of the agreements and
obligations set forth herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Members,
intending to be legally bound hereby, amend and restate the Original Limited
Liability Company Agreement in its entirety and agree as follows:
ARTICLE I
DEFINED TERMS
Section 1.1 Definitions. Unless the context otherwise
requires the terms defined in this Article I shall, for the purposes of this
Agreement, have the meanings herein specified.
"Additional Members" has the meaning set forth in Section
12.1 hereof.
"Additional Units" has the meaning set forth in Section
12.1 hereof.
"Admission Event" means any of the following actions:
(a) execution of this Agreement or any other writing
evidencing intent to become a Member; or
(b) the making of a Capital Contribution.
"Affiliate" means with respect to a specified Person, any
Person that directly or indirectly controls, is controlled by, or is under
common control with the specified Person. As used in this definition, the
term "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through ownership of voting securities, by contract or otherwise.
"Agreement" means this Second Amended and Restated Limited
Liability Company Agreement, as amended, modified, supplemented or restated
from time to time.
"Assignee" means any Person who is an assignee of a
Member's interest in the Company, or part thereof, and who does not become a
Member pursuant to Section 13.6 hereof.
"Aurora Foods" means Aurora Foods Inc., a Delaware
corporation, and any successor thereto.
"Aurora Holdings" means Aurora Foods Holdings Inc., a
Delaware corporation, and any successor thereto.
"Authorized Number of Class E Units" is 720.
"Available Cash" means all cash (including the net proceeds
from capital transactions and sale of assets not in the ordinary course of
business) held and owned by the Company less any reserve for the working
capital and other foreseeable future needs of the Company, as determined by
the Board in its sole discretion.
"Board" means the Board of Member Managers of the Company,
with such powers and duties as described in Article VI.
"Capital Account" means, for each Member, the sum of
Capital Contributions made by such Member pursuant to Section 4.1 hereof and
such adjustments made pursuant to Section 4.3 hereof.
"Capital Contribution" means, with respect to any Member,
the aggregate amount of money and the value of any property (other than
money) contributed to the Company pursuant to Section 4.1 hereof with respect
to the Units held by such Member. In the case of a Member who acquires an
interest in the Company by virtue of an assignment in accordance with the
terms of this Agreement, "Capital Contribution" has the meaning set forth in
Section 4.3(b) hereof.
"Cause" means (i) the failure or inability to cure or
remedy, within 20 days after written notice from the Board, any willful
misconduct in the course of rendering services for or
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on behalf of the Company; (ii) the commission of any fraudulent act in the
course of rendering services for or on behalf of the Company; or (iii) the
conviction of a felony by any court having competent jurisdiction.
"Certificate" means the Certificate of Formation and any
and all amendments thereto and restatements thereof filed on behalf of the
Company with the office of the Secretary of State of the State of Delaware
pursuant to the Delaware Act.
"Class A Holder" means any Person listed on Schedule A
hereto as a holder of Class A Units.
"Class A Units" means the outstanding Class A Units, each
of which shall have the rights, powers and preferences set forth in Section
4.6 hereof.
"Class B Holder" means any Person listed on Schedule A
hereto as a holder of Class B Units.
"Class B Units" means the outstanding Class B Units, each
of which shall have the rights, powers and preferences set forth in Section
4.6 hereof.
"Class C Holder" means any Person listed on Schedule A
hereto as a holder of Class C Units.
"Class C Units" means the outstanding Class C Units, each
of which shall have the rights, powers and preferences set forth in Section
4.6 hereof.
"Class D Holder" means any Person listed on Schedule A
hereto as a holder of Class D Units.
"Class D Units" means the outstanding Class D Units, each
of which shall have the rights, powers and preferences set forth in Section
4.6 hereof.
"Class E Catch-Up Percentage" means (x) the number of
Vested Class E Units then outstanding divided by (y) the Authorized Number of
Class E Units, then multiplying that quotient by .0399996. For example, if
the number of Vested Class E Units then outstanding is 648 and the Authorized
Number of Class E Units is 720, the Class E Catch-Up Percentage is 648 / 720
= .9, multiplied by .0399996 = .0359996 or 3.59996%.
"Class E Holder" means any Person listed on the books and
records of the Company as a holder of Class E Units.
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"Class E Units" means the outstanding Class E Units issued
by the Company, each of which shall have the rights, powers and preferences
set forth in Section 4.6 hereof and which, after the issuance thereof, shall
be subject to vesting in accordance with Schedule B hereto.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any corresponding federal tax statute enacted after the
date of this Agreement. A reference to a specific section (Sections) of the
Code refers not only to such specific section but also to any corresponding
provision of any federal tax statute enacted after the date of this
Agreement, as such specific section or corresponding provision is in effect
on the date of application of the provisions of this Agreement containing
such reference.
"Company" means VDK Foods LLC, the limited liability
company heretofore formed and continued under and pursuant to the Delaware
Act and this Agreement.
"Contribution" means the contribution to New LLC as of the
date of this Agreement (i) by the Company of all of the outstanding shares of
capital stock of VDK Holdings, and (ii) by MBW Investors LLC of all of the
outstanding shares of capital stock of Aurora Holdings, in each case pursuant
to the Contribution Documents.
"Contribution Documents" means the Contribution Agreement,
dated as of April 8, 1998, between the Company and MBW Investors LLC, and any
and all documents, agreements, certificates or other instruments required to
be executed and delivered by or on behalf of the Company in connection with
the Contribution.
"Covered Person" means a Member, a Member Manager, an
Officer, any Affiliate of a Member, Member Manager or Officer, any officers,
directors, shareholders, members, partners, employees, representatives or
agents of a Member, a Member Manager, an Officer or their respective
Affiliates, or any employee or agent of the Company or its Affiliates.
"Dartford" means Dartford Partnership L.L.C., a Delaware
limited liability company.
"Delaware Act" means the Delaware Limited Liability Company
Act, 6 Del.C. Sections 18-101, et seq., as amended from time to time.
"Depreciation" means, for each Tax Year or other period, an
amount equal to the depreciation, amortization or other cost recovery
deduction allowable with respect to an asset for such Tax Year or other
period; provided, however, that if the Gross Asset Value of an asset differs
from its adjusted basis for federal income tax purposes at the beginning of
such Tax Year or other period, Depreciation shall be an amount that bears the
same ratio to such beginning
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Gross Asset Value as the federal income tax depreciation, amortization or
other cost recovery deduction with respect to such asset for such Tax Year or
other period bears to such beginning adjusted tax basis; and provided
further, that if the federal income tax depreciation, amortization or other
cost recovery deduction for such Tax Year or other period is zero,
Depreciation shall be determined with reference to such beginning Gross Asset
Value using any reasonable method selected by the Member Manager.
"Exceptional Performance Units" has the meaning set forth
in Schedule D hereto.
"Fair Asset Value" means the amount for which any asset
could be sold in an arm's length transaction by one who desires to sell, but
is not under any urgent requirement to sell, to a buyer who desires to buy,
but is under no urgent necessity to buy, when both have a reasonable
knowledge of the facts, all as determined by the Board. In determining such
Fair Asset Value, furniture, fixtures and equipment shall be valued at cost
less depreciation and the reasonably foreseeable prospects (including all tax
liabilities and, in particular, tax liabilities upon the sale or other
disposition of Company assets) of the business of the Company shall be taken
into account. Securities which are traded on a national securities exchange
or quotation system shall be valued at the average closing sales price for
the actual number of Trading Days during the 60-day period immediately
preceding the date of such valuation, as such prices are reported in The Wall
Street Journal.
"Fenway" means Fenway Partners Capital Fund, L.P., a
Delaware limited partnership.
"Final Date" has the meaning set forth in Schedule D hereto.
"Fiscal Year" means (i) the calendar year, or (ii) any
portion of the period described in clause (i) of this sentence for which the
Company is required to allocate Profits, Losses and other items of Company
income, gain, loss or deduction pursuant to Article VIII hereof.
"Gloriande" means Gloriande (Luxembourg) SarL, an Affiliate
of Tiger Oats Limited.
"Gross Asset Value" means, with respect to any asset, such
asset's adjusted basis for federal income tax purposes, except as follows:
(a) the initial Gross Asset Value of any asset contributed
by a Member to the Company shall be the gross fair market value of such
asset, as agreed to by the contributing Member and the Board;
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(b) the Gross Asset Value of all Company assets shall be
adjusted to equal their respective Fair Asset Values, as of the following
times: (i) the acquisition of an additional interest in the Company by any
new or existing Member in exchange for more than a de minimis Capital
Contribution; (ii) the distribution by the Company to a Member of more than a
de minimis amount of Company assets as consideration for an interest in the
Company; and (iii) the liquidation of the Company within the meaning of
Treasury Regulation Sections 1.704-1(b)(2)(ii)(g); provided, however, that
adjustments pursuant to Clause (i) and Clause (ii) of this sentence shall be
made only if the Board reasonably determines that such adjustments are
necessary or appropriate to reflect the relative economic interests of the
Members in the Company; and
(c) the Gross Asset Value of any Company asset distributed
to any Member shall be the Fair Asset Value of such asset on the date of
distribution, as determined by the distributee Member and the Board.
If the Gross Asset Value of an asset has been determined or
adjusted pursuant to Paragraph (a) or Paragraph (b) above, such Gross Asset
Value shall thereafter be adjusted by the Depreciation taken into account
with respect to such asset for purposes of computing Profits and Losses.
"Incentive Plan" means the VDK Incentive Compensation Plan
in the form of Schedule D hereto.
"Liquidating Trustee" has the meaning set forth in Section
15.3 hereof.
"Majority Vote" means the written approval of, or the
affirmative vote by, Members holding a majority of the Voting Units held by
Members.
"Management Services Agreement" means the Amended and
Restated Management Services Agreement, dated as of July 9, 1996, as amended
from time to time, between Dartford and Van ▇▇ ▇▇▇▇'▇.
"MBW Investors LLC" means MBW Investors LLC, a Delaware
limited liability company and any successor thereto.
"Member" means any Person named as a member of the Company
on Schedule A hereto (or, in the case of Class E Units, identified as a
member on the books and records of the Company) and includes any Person
admitted as an Additional Member or a Substitute Member pursuant to the
provisions of this Agreement, and "Members" means two or more of such Persons
when acting in their capacities as members of the Company. Except as
otherwise provided herein, the Members shall constitute one class or group of
members.
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"Member Managers" means the Members designated in Section
6.1 hereof as the member managers of the Company and shall include successors
appointed pursuant to the provisions of this Agreement. A Member Manager
shall not be deemed to be a "manager" within the meaning of the Delaware Act.
"New LLC" means Aurora/VDK LLC, a Delaware limited
liability company into which the Company has agreed to contribute pursuant to
the Contribution Documents all of the outstanding capital stock of VDK
Holdings in exchange for certain interests in Aurora/VDK LLC, and any
surviving entity of a reorganization (including an incorporation of
Aurora/VDK LLC), merger or consolidation of Aurora/VDK LLC or any successor
thereto.
"New LLC Entities" means, collectively, New LLC and any
direct or indirect Subsidiary of New LLC and any successor thereto. As of the
effective date of the Contribution, the New LLC Entities will be New LLC, VDK
Holdings, Van ▇▇ ▇▇▇▇'▇, ▇▇▇▇▇▇ Holdings, and Aurora Foods.
"Non-Public Shareholders" of the Public Company means the
stockholders of the Public Company other than any stockholders who acquired
their equity securities of the Public Company pursuant to a registration
statement filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, and the rules and regulations thereunder.
"Officers" means officers of the Company appointed by the
Board pursuant to Article VI hereof.
"Other Subsidiary" means any Subsidiary of the Company,
other than any New LLC Entity that would qualify as a Subsidiary of the
Company.
"Performance Units" has the meaning set forth in Schedule D
hereto.
"Permitted Transferees" means the Persons to whom Transfers
are permitted to be made under Section 13.5.
"Person" includes any individual, corporation, association,
partnership (general or limited), joint venture, trust, estate, limited
liability company, or other legal entity or organization.
"Plan Catch-Up Percentage" means (x) the number of Vested
Performance Units plus the number of Vested Exceptional Performance Units
divided by (y) 4,000, then multiplying that quotient by .1111. For example,
if the number of Vested Performance Units is 1,334 and
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the number of Vested Exceptional Performance Units is 1,200, the Plan
Catch-Up Percentage is 2,534 / 4,000 = .6335, multiplied by .1111 = .070382
or 7.0382%.
"Preferred Capital Contribution" means, with respect to any
Member, the aggregate amount of money and the value of any property (other
than money) contributed to the Company pursuant to Section 4.1 hereof with
respect to the Class A Units held by such Member.
"Profits" and "Losses" means, for each Tax Year, an amount
equal to the Company's taxable income or loss for such Tax Year, determined
in accordance with Sections 703(a) of the Code (but including in taxable
income or loss, for this purpose, all items of income, gain, loss or
deduction required to be stated separately pursuant to Sections 703(a)(1) of
the Code), with the following adjustments:
(a) any income of the Company exempt from federal income
tax and not otherwise taken into account in computing Profits or Losses
pursuant to this definition shall be added to such taxable income or loss;
(b) any expenditures of the Company described in Sections
705(a)(2)(B) of the Code (or treated as expenditures described in Sections
705(a)(2)(B) of the Code pursuant to Treasury Regulation Sections
1.704-1(b)(2)(iv)(i)) and not otherwise taken into account in computing
Profits or Losses pursuant to this definition shall be subtracted from such
taxable income or loss;
(c) in the event the Gross Asset Value of any Company asset
is adjusted in accordance with Paragraph (b) or Paragraph (c) of the
definition of "Gross Asset Value" above, the amount of such adjustment shall
be taken into account as gain or loss from the disposition of such asset for
purposes of computing Profits or Losses;
(d) gain or loss resulting from any disposition of any
asset of the Company with respect to which gain or loss is recognized for
federal income tax purposes shall be computed by reference to the Gross Asset
Value of the asset disposed of, notwithstanding that the adjusted tax basis
of such asset differs from its Gross Asset Value; and
(e) in lieu of the depreciation, amortization and other
cost recovery deductions taken into account in computing such taxable income
or loss, there shall be taken into account Depreciation for such Tax Year or
other period, computed in accordance with the definition of "Depreciation"
above.
"Proportionate Percentage" means, (i) with respect to each
Member that elects to exercise its rights under Section 12.2, 13.1(b) or
Section 13.2(b) hereof, a percentage (expressed as a decimal fraction rounded
to the nearest one-hundredth) obtained by dividing
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(x) the number of all Voting Units owned by such electing Member by (y) the
aggregate number of Voting Units owned by all Members electing to exercise
their rights under such provision and (ii) with respect to the Selling Member
and each Member that elects to exercise its rights under Section 14.1 hereof,
a percentage expressed as a decimal fraction rounded to the nearest
one-hundredth) obtained by dividing (x) the number of all Class B Units owned
by such Selling Member or electing Member by (y) the aggregate number of
Class B Units owned by the Selling Member and all Members electing to
exercise their rights under such provision.
"Public Company" means the Company, any New LLC Entity, or
any Other Subsidiary, or any successor thereto, in each case which intends to
effect a Public Offering.
"Public Offering" means (i) the sale to the public by the
Public Company for its own account of equity securities issued by such Public
Company, and/or (ii) the sale to the public by the Non-Public Shareholders
pursuant to a Secondary Sale of equity securities issued by the Public
Company and held by the Non-Public Shareholders, in either case pursuant to a
registration statement filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
"Redemption Price" shall mean the amount required to be
paid on account of the redemption of any Class A Unit as provided by the
first sentence of Section 4.6(c).
"Sale Notice" means a written notice, delivered by a
Selling Member pursuant to Section 13.2 hereof, stating the number of each
class of Units that are proposed to be Transferred and describing the terms
and conditions of the intended Transfer, including the name of the proposed
transferee and the Transfer price therefor.
"Secondary Sale" means any sale by one or more Non-Public
Shareholders of equity securities issued by the Public Company and held by
such Non-Public Shareholders (but not originally issued by the Public Company
pursuant to a Public Offering), whether such sale is pursuant to a registered
public offering under the Securities Act of 1933, as amended, an exemption
from the registration requirements thereof, or otherwise.
"Securityholders Agreement" means the Securityholders
Agreement dated as of the date hereof by and among New LLC, the Company,
certain Members of the Company, MBW Investors LLC, and certain members of MBW
Investors LLC.
"Selling Member" means any Member that intends to Transfer
any Units owned by it when such proposed Transfer would be subject to the
provisions of Section 13.2 or Section 14.1 hereof.
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"Subsidiary" with respect to any company means any
corporation more than 50% of whose stock or other equity securities (measured
by virtue of voting rights) in the aggregate is owned by such company, by one
or more Subsidiaries of such company, or by such company and one or more
Subsidiaries of such company.
"Substitute Member" means a Person who is admitted to the
Company as a Member pursuant to Section 13.5 hereof, and who is named as a
Member on Schedule A to this Agreement.
"Super-Majority Vote" means the written approval of, or the
affirmative vote by, Members holding at least the following percentage of the
Voting Units held by all Members: (i) for purposes of Sections 16.1(a)(i),
(ii), (iii), (iv), (vii) and (xii): 70%; and (ii) for all other purposes: 75%.
"Tax Liability Distributions" shall have the meaning given
such term in Section 8.2 hereof.
"Tax Matters Member" has the meaning set forth in Section
10.1 hereof.
"Tax Year" means the 12 month period ending on the last
Saturday in December.
"Total Performance Unit Value" and "Total Exceptional
Performance Unit Value" shall have the meanings given such terms in Schedule
D hereto.
"Transfer" means (i) as a noun, any transaction (or the
consummation of a transaction) which has resulted in a change in the
ownership of any Unit, including without limitation, any voluntary or
involuntary sale, assignment, transfer, pledge, hypothecation, encumbrance,
disposal, loan, gift, attachment or levy of, by or with respect to the Member
which owns such Unit which has resulted in a transfer of the voting rights or
the rights to distribution with respect to such Unit, and (ii) as a verb, to
make any transaction described in (i).
"Treasury Regulations" means the income tax regulations,
including temporary regulations, promulgated under the Code, as such
regulations may be amended from time to time (including corresponding
provisions of succeeding regulations).
"UBS Capital" means UBS Capital LLC, a New York limited
liability company.
"UBS Permitted Transferee" means (A) any Affiliate of UBS
Capital, including co-investment entities established and controlled by UBS
Capital (collectively, "UBS Affiliates") (B) any managing director, director,
officer or employee of UBS Capital or any UBS Affiliate
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or the heirs, executors, administrators, testamentary trustee, descendants of
any of the foregoing persons referred to in this clause (B) (collectively,
"UBS Associates"); and (C) a trust, the beneficiaries of which, or a
corporation, limited liability company or partnership, the stockholders,
members or general or limited partners of which, include only UBS Capital,
UBS Affiliates or UBS Associates.
"Unit" means any one of the Class A Units, Class B Units,
Class C Units, Class D Units or Class E Units. Each Unit represents a limited
liability company interest in the Company, with the respective rights, powers
and preferences as provided in this Agreement. All issued Units are held by
the Members as set forth on the Schedule A hereto. If Additional Units are
issued as provided in Article XII, the total number of Units outstanding
shall be automatically increased by the number of Additional Units issued.
Upon their issuance, all Units shall be owned by the Members holding such
Units; provided, that Class E Units that have been issued but have not become
Vested Class E Units shall have no rights or powers under this Agreement
except as expressly provided on Schedule B hereto and in Section 7.1(iv)
hereof.
"Unrecouped Capital Contribution" means as to any Member or
Assignee the amount of such Member's or Assignee's Capital Contribution with
respect to Class B Units held by such Member or Assignee minus the aggregate
of all distributions previously made to such Member or Assignee pursuant to
Section 8.3(iii) hereof.
"Unrecouped Preferred Capital Contribution" means as to any
Member or Assignee the amount of such Member's or Assignee's Preferred
Capital Contribution, if any, minus the aggregate of all distributions
previously made to such Member or Assignee pursuant to Section 8.3(i) hereof.
"Van ▇▇ ▇▇▇▇'▇" means Van ▇▇ ▇▇▇▇'▇, Inc., a Delaware
corporation, and any successor thereto.
"VDK Holdings" means VDK Holdings, Inc., a Delaware
corporation, and any successor thereto.
"Vested Class E Percentage" means a percentage obtained by
dividing (x) the number of Vested Class E Units then outstanding by (y) the
Authorized Number of Class E Units, then multiplying that quotient by 0.36.
For example, if the number of Vested Class E Units then outstanding is 648
and the Authorized Number of Class E Units is 720, the Vested Class E
Percentage is 648 / 720 = .9, multiplied by .036 = .0324, or 3.24%.
"Vested Class E Units" means those Class E Units that have
vested in accordance with Schedule B hereto.
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"Vested Plan Percentage" means a percentage obtained by
dividing (x) the number of Vested Plan Units then outstanding by (y) 4,000,
then multiplying that quotient by .1. For example, if the number of Vested
Plan Units is 2,534, the Vested Plan Percentage is 2,534 / 4,000 = .6335,
multiplied by .1 = .06335, or 6.335%.
"Vested Plan Units" means the sum of those Performance
Units and those Exceptional Performance Units that have vested in accordance
with Schedule D hereto.
"Voting Units" means, collectively, the Class B Units and
the Class C Units which shall vote together as a single class.
Section 1.2 Headings. The headings and subheadings in this
Agreement are included for convenience and identification only and are in no
way intended to describe, interpret, define or limit the scope, extent or
intent of this Agreement or any provision hereof.
ARTICLE II
CONTINUATION AND TERM
Section 2.1 Continuation.
(a) The Members hereby agree to continue the Company as a
limited liability company under and pursuant to the provisions of the
Delaware Act and agree that the rights, duties and liabilities of the Members
and the Member Managers shall be as provided in the Delaware Act, except as
otherwise provided herein.
(b) Any Person listed on Schedule A hereto that performs an
Admission Event, or any Person listed on Schedule A hereto whose authorized
representative performs an Admission Event, shall be deemed to have evidenced
its intent to become a Member, to have complied with the conditions for
becoming a Member as set forth in this Agreement, and to have requested that
the records of the Company reflect such admission as a Member, and when the
records of the Company are amended to reflect the admission of such Person as
a Member, such Person shall be admitted to the Company as a Member.
(c) The name and mailing address of each Member shall be
listed on the Schedules hereto. The Member Managers shall update any Schedule
from time to time as necessary to accurately reflect the information therein.
Any amendment or revision to a Schedule made in accordance with this
Agreement shall not be deemed an amendment to this Agreement. Any reference
in this Agreement to a Schedule shall be deemed to be a reference to such
Schedule as amended and in effect from time to time.
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Section 2.2 Name. The name of the Company heretofore formed
and continued hereby is VDK Foods LLC. The business of the Company may also
be conducted under any other name or names designated by the Board from time
to time.
Section 2.3 Term. The term of the Company commenced on the
date the Certificate was filed in the office of the Secretary of State of the
State of Delaware and shall continue until December 31, 2020, unless
dissolved before such date in accordance with the provisions of this
Agreement. The existence of the Company as a separate legal entity shall
continue until the cancellation of the Certificate.
Section 2.4 Registered Agent and Office. The Company's
registered agent and office in the State of Delaware shall be The Corporation
Trust Company, Corporation Trust Center, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. At any time, the Board may designate another
registered agent and/or registered office.
Section 2.5 Principal Place of Business. The principal
place of business of the Company shall be at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. Upon 10 days' notice to the Members,
the Board may change the location of the Company's principal place of
business.
ARTICLE III
PURPOSE AND POWERS OF THE COMPANY
Section 3.1 Purpose. The purpose of the Company is to
acquire, hold for investment, sell and dispose of the stock and other
securities, directly or indirectly, of any Subsidiary, and to engage in all
activities necessary, advisable or incidental thereto, including without
limitation engaging in (or causing or permitting any of its Subsidiaries to
engage in) any of the transactions identified in Section 16.1 hereof.
Section 3.2 Powers of the Company.
(a) Subject to the provisions of Section 3.3, the Company
shall have the power and authority to take any and all actions necessary,
appropriate, proper, advisable, incidental or convenient to or for the
furtherance of the purpose set forth in Section 3.1, including, but not
limited to, the power:
(i) to conduct its business, carry on its
operations and have and exercise the powers granted to a
limited liability company by the Delaware Act in any state,
territory, district or possession of the United States, or in
any
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foreign country that may be necessary, convenient or
incidental to the accomplishment of the purpose of the
Company;
(ii) to acquire by purchase, lease, contribution of
property or otherwise, own, hold, operate, maintain, finance,
improve, lease, sell, convey, mortgage, transfer or dispose of
any real or personal property that may be necessary,
convenient or incidental to the accomplishment of the purpose
of the Company;
(iii) to enter into, perform and carry out contracts
of any kind convenient to or incidental to the accomplishment
of the purpose of the Company;
(iv) to lend money for its proper purpose, to invest
and reinvest its funds, to take and hold real and personal
property for the payment of funds so loaned or invested;
(v) to appoint employees and agents of the Company,
and define their duties and fix their compensation;
(vi) to indemnify any Person in accordance with the
Delaware Act;
(vii) to cease its activities and cancel its
Certificate;
(viii) to negotiate, enter into, renegotiate, extend,
renew, terminate, modify, amend, waive, execute, acknowledge
or take any other action with respect to any lease, contract
or security agreement in respect of any assets of the Company;
(ix) to borrow money and issue evidences of
indebtedness; and
(x) to guaranty the obligations of any Person and
to secure any of the same by a mortgage, pledge or other lien
on the assets of the Company.
(b) The Member Managers and Officers, or any of them, are
hereby expressly authorized to enter into and perform on behalf of the
Company the Contribution Documents and the Securityholders Agreement, but
such authorization shall not be deemed a restriction on the power of the
Member Managers to authorize the Officers to enter into other documents not
inconsistent with such Contribution Documents or Securityholders Agreement on
behalf of the Company to the extent permitted by this Agreement. The Company,
Member Managers and the Officers on behalf of the Company, are expressly
authorized to enter into and perform the Contribution Documents and
Securityholders Agreement and are authorized and directed to take
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any and all actions contemplated thereby, and to the extent the Company,
Member Managers and the Officers have previously entered into and performed
such agreements not inconsistent with such Contribution Documents or
Securityholders Agreement, such actions are ratified, without any further
act, vote or approval of any Member notwithstanding any other provision of
this Agreement, the Delaware Act or other applicable law.
Section 3.3. Limitations on Actions. Anything in this
Agreement to the contrary notwithstanding, the Company shall not hold any
investment, incur any indebtedness or otherwise take any action that would
cause any Member of the Company to realize "unrelated business taxable
income" as such term is defined in Section 512 of the Code.
ARTICLE IV
CAPITAL CONTRIBUTIONS, UNITS,
CAPITAL ACCOUNTS AND ADVANCES
Section 4.1 Capital Contributions.
(a) Each Member has contributed to the capital of the
Company the amount of cash set forth opposite the Member's name on Schedule A
hereto, and the Company has issued to each Member the number of Units set
forth opposite the Member's name on Schedule A hereto; provided, that the
number of Class E Units issued to the Class E Holders and the respective
capital contributions relating thereto shall be maintained on the books and
records of the Company and not set forth on Schedule A hereto.
(b) No Member shall be required to make any additional
capital contribution to the Company.
Section 4.2 Status of Capital Contributions.
(a) Except as otherwise provided in this Agreement, the
amount of a Member's Capital Contributions may be returned to it, in whole or
in part, at any time, but only with the consent of all Members.
(b) No Member shall receive any interest, salary or drawing
with respect to its Capital Contributions or its Capital Account or for
services rendered on behalf of the Company or otherwise in its capacity as a
Member, except as otherwise specifically provided in this Agreement.
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(c) Except as otherwise provided herein and by applicable
state law, the Members shall be liable only to make their Capital
Contributions pursuant to Section 4.1 hereof, and no Member or Assignee shall
be required to lend any funds to the Company or, after a Member's Capital
Contributions has been fully paid pursuant to Section 4.1 hereof, to make any
additional capital contributions to the Company. No Member shall have any
personal liability for the repayment of any Capital Contribution of any other
Member or Assignee.
Section 4.3 Capital Accounts.
(a) An individual Capital Account shall be established and
maintained for each Member. The Capital Account of each Member shall be
maintained in accordance with the rules of Section 704(b) of the Code and the
Treasury Regulations (including Section 1.704-1(b)(2)(iv) thereof)
thereunder. Adjustments shall be made to the Capital Accounts for all
distributions and allocations as required by the rules of Section 704(b) of
the Code and the Treasury Regulations thereunder. In general, a Member's
Capital Account shall be increased by (i) the amount of money and the Gross
Asset Value of property (net of liabilities secured by such contributed
property that the Company is considered to assume to take subject to under
Section 752 of the Code) contributed to the Company by the Member and (ii)
allocations to the Member of Profits and decreased by (i) the amount of money
distributed to the Member by the Company, (ii) the Gross Asset Value of
property distributed to the Member by the Company (net of liabilities secured
by such distributed property that such Member is considered to assume or take
subject to under Section 752 of the Code), and (iii) allocations to the
Member of Losses. In the event the Gross Asset Value of Company assets is
adjusted under Article I of this Agreement, the Capital Accounts of the
Members shall be adjusted to reflect the aggregate net adjustment as if the
Company recognized Profits or Losses equal to the amount of such aggregate
net adjustment and such Profits or Losses were allocated to the Members
pursuant to Sections 8.7 and 8.8 of this Agreement. The foregoing provisions
relating to the maintenance of Capital Accounts are intended to comply with
Regulations Sections 1.704-1(b) and 1.704-2 and shall be applied in a manner
consistent with such Regulations.
(b) The original Capital Account established for any Member
or Assignee who acquires an interest in the Company by virtue of a Transfer
or an assignment that does not cause a termination of the Company within the
meaning of Code Section 708(b)(1)(B) and that is in accordance with the terms
of this Agreement shall be in the same amount as, and shall replace, the
Capital Account of the transferor or assignor of such interest, and, for
purposes of this Agreement, such Member or Assignee shall be deemed to have
made the Capital Contributions made by the transferor or assignor of such
interest (or made by such transferor's or assignor's predecessor in interest)
and have received the distributions and been allocated the allocations
receive by or allocated to the transferor or assignor of such interest (or
received by or allocated to such transferor's or assignor's predecessor in
interest). If the Company has a Code Section 754 election in effect, the
Capital Account will not be adjusted to reflect any adjustment
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under Code Section 743. To the extent such Member or Assignee acquires less
than the entire interest in the Company of the transferor or assignor of the
interest so acquired by such Member or Assignee, the original Capital Account
of such Member or Assignee and its Capital Contributions shall be in
proportion to the interest it acquires, and the Capital Account of the
transferor or assignor who retains a partial interest in the Company, and the
amount of its Capital Contributions, shall be reduced in proportion to the
interest it retains. If a Transfer or assignment of an interest in the
Company causes a termination of the Company within the meaning of Code
Section 708(b)(1)(B), the income tax consequences shall be governed by the
relevant provisions of Subchapter K of Chapter 1 of the Code and the
Regulations promulgated thereunder, and the initial Capital Accounts of the
Members and the Assignee in the new limited liability company shall be
determined in accordance with the rules of Treasury Regulations Section
1.704-1(b)(2)(iv)(d), (e), (f), (g) and (h) under Code Section 704 and
thereafter in accordance with this Section 4.3.
Section 4.4. Negative Capital Accounts. At no time during
the term of the Company or upon dissolution and liquidation thereof shall a
Member with a negative balance in his Capital Account have any obligation to
the Company or the other Members to restore such negative balance.
Section 4.5 Advances. If any Member shall advance any funds
to the Company in excess of its Capital Contributions, the amount of such
advance shall neither increase its Capital Account nor entitle it to any
increase in its share of the distributions of the Company. The amount of any
such advance shall be a debt obligation of the Company to such Member and
shall be repaid to it by the Company with interest at a rate equal to the
lesser of (i) such rate as the Board agrees and (ii) the maximum rate
permitted by applicable law, and upon such other terms and conditions as
shall be mutually determined by such Member and the Board. Any such advance
shall be payable and collectible only out of Company assets, and the other
Members shall not be personally obligated to repay any part thereof. No
Person who makes any nonrecourse loan to the Company shall have or acquire,
as a result of making such loan, any direct or indirect interest in the
profits, capital or property of the Company, other than as a creditor.
Section 4.6 Units.
(a) Distributions. Distributions on Units shall be made in
accordance with Article VIII hereof.
(b) Voting. Except as otherwise provided in this Agreement,
(i) the Members shall not be entitled to vote their Class A Units on any
matter brought before the Members for a vote; (ii) the Members who are Class
B Holders shall be entitled to vote on each matter on which the Members shall
be entitled to vote at the rate of one vote for each Class B Unit held
17
by such Member; (iii) the Members who are Class C Holders shall be entitled
to vote on each matter on which the Members shall be entitled to vote at the
rate of one vote for each Class C Unit held by such Member; (iv) the Members
shall not be entitled to vote their Class D Units on any matter brought
before the Members for a vote; and (v) the Members shall not be entitled to
vote their Class E Units on any matter brought before the Members for a vote.
(c) Redemption of Class A Units. The Company may at its
option by the approval of the Board, at any time and from time to time, upon
notice in writing to the Class A Holders not less than 10 days prior to the
date fixed for redemption, redeem the Class A Units, in whole or in part, on
a pro rata basis among the Class A Units outstanding on the date fixed for
redemption, at a redemption price per Class A Unit, payable in cash, equal to
$42,400,000 (if such redemption is prior to January 1, 1999), or equal to the
aggregate amount then distributable under Section 8.3(i), (ii) and/or (v)
hereof with respect to the Class A Units to be redeemed (if such redemption
is on or after January 1, 1999).
(d) Class E Units. The Class E Units shall vest in
accordance with the provisions set forth on Schedule B hereto.
ARTICLE V
MEMBERS
Section 5.1 Powers of Members. The Members shall have the
power to exercise any and all rights or powers granted to the Members
pursuant to the express terms of this Agreement but subject to the terms and
provisions of the Securityholders Agreement. The Members shall agree to take
all actions required by, or approved in accordance with, the Securityholders
Agreement. Except as expressly provided in this Agreement, Members who are
not Member Managers shall have no power as Members to bind the Company.
Members who are Member Managers shall have the power to bind the Company as
provided in Article VI.
Section 5.2 Reimbursements. The Company shall reimburse the
Members for all ordinary and necessary out-of-pocket expenses incurred by the
Members on behalf of the Company. The Board's sole determination of which
expenses may be reimbursed to a Member and the amount of such expenses shall
be conclusive. Such reimbursement shall be treated as an expense of the
Company that shall be deducted in computing the Profits and shall not be
deemed to constitute a distributive share of Profits or a distribution or
return of capital to any Member.
Section 5.3 Partition. Each Member waives any and all
rights that it may have to maintain an action for partition of the Company's
property.
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Section 5.4 Resignations. Other than any resignation by a
Member approved by a Super-Majority Vote of the Members and any resignation
described in Section 13.5, a Member may not resign from the Company.
ARTICLE VI
BOARD OF MEMBER MANAGERS AND OFFICERS OF THE COMPANY
Section 6.1 Designation of Board of Member Managers. The
management of the Company's business shall be vested, to the extent provided
in this Article VI, in a Board of Member Managers of the Company (the
"Board"), consisting of four Member Managers who in the aggregate hold at
least 20% of the total interests in the Company. Each Member Manager must be
a Member. The Members hereby designate Fenway, Gloriande, Dartford and UBS
Capital to serve as the initial Member Managers on the Board, and such Member
Managers hereby accept and agree to be bound by the terms and conditions of
this Agreement. A Member Manager that is not an individual shall act through
one or more authorized representatives. Such Member Manager may designate any
number of authorized representatives to act on behalf of such Member Manager,
by written notice to the Company and all other Member Managers. Each Member
Manager and its designees agrees to act in accordance with the
Securityholders Agreement.
Section 6.2 Election; Resignation; Removal.
(a) Each Member Manager shall serve from the effective date
of its designation until the effective date of its resignation or removal. In
the event any Member Manager ceases to be a Member Manager of the Company
whether by resignation or removal as provided in this Agreement or otherwise,
a successor Member Manager shall be elected by a Super-Majority Vote. Such
successor Member Manager shall execute an instrument reasonably satisfactory
to the Members accepting and agreeing to the terms and conditions of this
Agreement. Notwithstanding anything in this Section 6.2 to the contrary:
(i) in the event that Fenway sells more than 50% of
the then outstanding Voting Units to a single purchaser that
Fenway designates as a Substitute Member in accordance with
Section 13.5 hereof (the "Fenway Transferee"), then, upon its
substitution as a Member in accordance with Section 13.5
hereof, the Fenway Transferee shall be the successor Member
Manager to Fenway without any further action by the Members or
the Board, and Fenway shall no longer be a Member Manager;
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(ii) in the event that Gloriande sells 80% or more of
the Class A Units and Class B Units held by it on the date of
this Agreement to a single purchaser that Gloriande designates
as a Substitute Member in accordance with Section 13.5 hereof
(the "Tiger Transferee"), then, upon its substitution as a
Member in accordance with Section 13.5 hereof, the Tiger
Transferee shall be the successor Member Manager to Gloriande
without any further action by the Members or the Board, and
Gloriande shall no longer be a Member Manager; and
(iii) in the event that Dartford sells 80% or more of
the Class C Units held by it on the date of this Agreement to
a single purchaser that Dartford designates as a Substitute
Member in accordance with Section 13.5 hereof (the "Dartford
Transferee"), then, upon its substitution as a Member in
accordance with Section 13.5 hereof, the Dartford Transferee
shall be the successor Member Manager to Dartford without any
further action by the Members or the Board, and Dartford shall
no longer be a Member Manager; and
(iv) in the event that UBS Capital sells 80% or more
of the Class A Units and Class B Units held by it on the date
of this Agreement to a single purchaser that UBS Capital
designates as a Substitute Member in accordance with Section
13.5 hereof (the "UBS Transferee"), then, upon its
substitution as a Member in accordance with Section 13.5
hereof, the UBS Transferee shall be the successor Member
Manager to UBS Capital without any further action by the
Members or the Board, and UBS Capital shall no longer be a
Member Manager.
(b) A Member Manager may resign from its position as a
Member Manager at any time upon not less than 10 days' prior written notice
to all of the Members.
(c) No initial Member Manager specified in Section 6.1
hereof or any successor Member Manager pursuant to clauses (i)-(iv) of the
last sentence of Section 6.2(a) hereof shall be removed unless such initial
Member Manager or successor Member Manager consents to such removal. Any
other Member Manager may be removed for Cause by a SuperMajority Vote. Any
removal of a Member Manager shall become effective on such date as may be
specified by the Members voting in favor thereof. Should a Member Manager
that is removed continue to be a Member, such Member shall continue to
participate in the Company as a Member and shall share in the Profits, Losses
and Available Cash in the same ratios, as provided in Article VIII hereof.
Section 6.3 Officers. The Board may appoint agents and
employees of the Company who are designated as officers of the Company. The
officers of the Company shall include a Chairman, one or more Executive Vice
Presidents, a Secretary and such other officers with such titles as may be
approved by the Board. ▇▇▇ ▇. ▇▇▇▇▇▇ shall be Chairman until his
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resignation or removal. ▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ shall each be an Executive
Vice President until his resignation or removal. M. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall be a
Vice President and the Secretary until her resignation or removal. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ shall each be an Assistant Secretary until his
resignation or removal. Subject to Article XVI hereof, the Board may remove any
officer so appointed at any time, with or without Cause, in its absolute
discretion. The Chairman and other officers shall be agents of the Company,
authorized to execute and deliver documents and take other actions on behalf of
the Company, subject to the direction of the Board, and to have such other
duties as may be approved by the Board; provided, that the delegation of any
such power and authority to the Chairman and other officers shall not limit in
any respect the power and authority of the Member Managers to take such actions
(or any other action) on behalf of the Company as provided in this Agreement.
The Secretary shall record the actions of the Board, certify this Agreement and
any related document or instrument, certify resolutions of the Board, incumbency
and other matters of the Company, and have such other ministerial duties as may
be specified by the Board from time to time.
Section 6.4 Board Action. Unless otherwise specified in this
Agreement or the Securityholders Agreement, the Board shall act by majority vote
with each Member Manager on the Board having the following number of votes:
Fenway: two, Gloriande: two, Dartford: two, and UBS: one; provided, that (i) so
long as Fenway holds more than 50% of the then outstanding Voting Units, Fenway
shall have the right, by taking such action as would be required under the
Delaware General Corporation Law for a majority shareholder to act without a
meeting, to increase its number of votes to the number of votes that would
constitute a majority of the total votes on the Board, and (ii) upon written
notice to all Member Managers, UBS Capital shall have the right to increase its
number of votes from one to two. Any authorized representative of any Member
Manager on the Board shall be permitted to cast all of the votes of such Member
Manager. The Board shall act in accordance with the terms and provisions of the
Securityholders Agreement.
Section 6.5 Meetings. The Board may hold regular meetings
without call or notice at such places and at such times as the Board may from
time to time determine, provided reasonable notice of the first regular meeting
following any such determination is given to Member Managers absent at the
meeting fixing regular meetings. When called by the Chairman or by Member
Managers holding a majority of votes of the Board, the Board may hold special
meetings at such places and times as are designated in the call of the meeting,
upon at least seven days' notice given by the Secretary or an Assistant
Secretary, or by the officer or Member Manager calling the meeting.
Section 6.6 Quorum. At any meeting of the Board, the presence
of three Member Managers by at least one of their authorized representatives
shall constitute a quorum. Any meeting may be adjourned from time to time by a
majority of votes, whether or not a quorum is present, and the meeting may be
held as adjourned upon reasonable notice.
21
Section 6.7 Action By Consent. Any action of the Board may be
taken without a meeting if (i) the Member Managers holding not less than the
minimum number of votes that would be required to approve and adopt such action
at a meeting consent to the action in writing, signed by an authorized
representative of each such Member Manager, (ii) written notice (delivered in
person or by facsimile) of the actions to be approved by such Member Managers is
given to all Member Managers simultaneously, and (iii) the written consents are
filed with the records of the meetings of the Board. Such actions by consent
shall be treated for all purposes as actions taken at a meeting.
Section 6.8 Telephonic Meetings. Member Managers, through
their respective authorized representatives, may participate in a meeting of the
Board by means of a conference telephone or similar communications equipment
provided all Member Managers participating in the meeting can hear each other at
the same time, and participation by such means shall constitute presence in
person at a meeting.
Section 6.9 Member Managers as Agents. The Member Managers, to
the extent of the powers set forth herein, are agents of the Company for the
purpose of the Company's business, and the actions of the Member Managers taken
in accordance with such powers shall bind the Company.
Section 6.10 Powers of the Board; Powers of Officers.
(a) The Board's powers on behalf and in respect of the
Company, subject to the provisions of this Agreement requiring the approval of
the Members, shall be all powers and privileges permitted to be exercised by
members that manage the Company under the Delaware Act, including, without
limitation, Section 18-402 of the Delaware Act; provided, nothing herein shall
supersede, limit or otherwise invalidate any action, authorization or resolution
of the Members set forth in this Agreement including, but not limited to those
referred to in Section 3.2(b).
(b) The Board may delegate any of its powers to the Officers
of the Company, or any one of them, except to the extent that this Agreement
requires the Board to take an action by voting.
(c) The Board hereby delegates to the Officers of the Company
the respective powers delegated to officers of a corporation under the Delaware
General Corporation Law, subject to the powers of a board of directors of a
corporation under such Delaware law; provided, that the Board reserves the right
to rescind the delegation of any such powers at any time in the sole discretion
of the Board. Notwithstanding the foregoing, all decisions as to the hiring and
terminating the employment of and the compensation of any officer who reports
22
directly to the Chairman or Chief Executive Officer of the Company shall be
subject to the approval of the Board.
Section 6.11 Reimbursement. The Company shall reimburse each
Member Manager for expenses incurred by such Member Manager on behalf of the
Company according to such terms as shall be approved by the Board. Such
reimbursement shall be treated as an expense of the Company that shall be
deducted in computing Profits and shall not be deemed to constitute a
distributive share of Profits or a distribution or return of capital to the
Member Manager.
Section 6.12 Required Approvals by the Board. Any action or
transaction by any of the New LLC Entities that requires a consent or approval
pursuant to the Securityholders Agreement shall be deemed to have been approved
by the Board if the required approval or consent pursuant to the Securityholders
Agreement has been obtained and shall not require any further approval by the
Board. The Board shall cause any vote, approval or consent by the Company
required by the Securityholders Agreement to be effected. The Board shall not
take any action or enter into any transaction inconsistent with the
Securityholders Agreement. The following actions shall not be taken by the
Company without the approval of the Board:
(i) the incurrence of indebtedness for borrowed
money;
(ii) capital expenditures in excess of $150,000 for
any Fiscal Year;
(iii) distributions of Available Cash and Tax
Liability Distributions (other than any amount distributable pursuant to the
last paragraph of Section 8.3 hereof which distribution is hereby approved);
(iv) the approval of the annual budget for the
Company; and
(v) the selection of the firm of independent public
accountants that will audit the financial statements of the Company and its
Other Subsidiaries.
Section 6.13 Board of Directors of Subsidiaries of the
Company.
(a) As of the date of this Agreement, the New LLC Entities do
not qualify as Subsidiaries of the Company. In the event that any New LLC Entity
hereafter qualifies as a Subsidiary of the Corporation, the Board of Directors
of such New LLC Entity shall be determined in accordance with the terms and
conditions of the Securityholders Agreement, and the Board will take such
actions as are necessary to cause the election of such Board of Directors in
accordance with the Securityholders Agreement.
23
(b) Each Member Manager agrees to take such action as a Member
Manager as may be necessary to cause any stockholder of any Other Subsidiary to
elect the following persons as members of the Board of Directors of the Other
Subsidiary: (A) two persons designated by Fenway, (B) two persons designated by
Dartford, (C) two persons designated by Gloriande, (D) one person designated by
UBS Capital, and (E) two persons designated by the Board of the Company;
provided, that
(i) so long as Fenway holds more than 50% of the then
outstanding Voting Units, Fenway shall have the right, by
taking such action as would be required under the Delaware
General Corporation Law (including without limitation Section
228 of the Delaware General Corporation Law) for a majority
shareholder to act without a meeting, to designate a number of
additional persons for election as members of the Board of
Directors of the Other Subsidiary which, when added to the two
persons previously designated by Fenway, would constitute a
majority of members of the Board of Directors of the Other
Subsidiary,
(ii) UBS Capital shall have the right, by written
notice to all Member Managers and all members of the Board of
Directors of the Other Subsidiary, to increase the number of
persons it may designate for election to such Board of
Directors from one to two, and
(iii) unless otherwise directed by a Super-Majority
Vote of Members, the number of directors on the Board of
Directors of any Other Subsidiary shall not be less than nine.
(c) In the event either Fenway or UBS exercises its rights
under this Section 6.13, the Member Managers agree to take such actions as may
be necessary to cause the election of the additional persons designated by
Fenway or UBS Capital as directors of such Other Subsidiary of the Company and
to amend the By-Laws of such entity in connection therewith.
ARTICLE VII
AMENDMENTS AND MEETINGS
Section 7.1 Amendments. Except as expressly provided in this
Agreement, any amendment to this Agreement (including the Schedules hereto,
unless otherwise the power to amend any such Schedule is provided for therein)
shall be adopted and be effective as an
24
amendment hereto if it is approved by the affirmative vote of Members holding
95% of the outstanding Voting Units. In addition to the foregoing requirement:
(i) no amendment of this Section 7.1 or of Article
VIII hereof shall be effective without the written approval of
Members holding a majority of any class of Units that would be
adversely affected by such proposed amendment;
(ii) no amendment of Section 4.6(c) hereof shall be
effective without the written approval of Class A Holders
holding a majority of the Class A Units;
(iii) no amendment of Section 4.6(b) hereof shall be
effective without the written approval of Members holding a
majority of the Class B Units and Class C Units, respectively;
(iv) no amendment of Section 4.6(d) hereof or
Schedule B hereto shall be effective without the written
approval of Members holding a majority of the Class E Units;
(v) no amendment of Section 6.1 or 6.2 regarding the
initial Member Managers (or any successor Member Manager
pursuant to Section 6.2(a)(i)-(iii) hereof) shall be made
without the unanimous written consent of such initial Member
Managers and successor Member Managers; and
(vi) no amendment of Schedule D hereto shall be
effective without the approvals required by Section 10 of
Schedule D.
Notwithstanding the foregoing, the officers of the Company may amend Schedule A
hereto to reflect new Members or Substitute Members duly admitted in accordance
with this Agreement, with such amendment to be effective upon the filing of such
amendment with the books and records of the Company.
Section 7.2 Meetings of the Members.
(a) Meetings of the Members may be called by the Board and
shall be called by the Board upon the written request of Members holding 10% of
the Voting Units. The call shall state the location of the meeting and the
nature of the business to be transacted. Notice of any such meeting shall be
given to all Members not less than 14 days nor more than 50 days prior to the
date of such meeting. Members may vote in person or by proxy at such meeting.
Whenever a vote, consent or approval of Members is permitted or required under
this Agreement, such vote, consent or approval may be given at a meeting of
Members or may be given in accordance with the procedure prescribed in Section
7.2(e) hereof. Except as otherwise
25
expressly provided in this Agreement, a vote by Members holding a majority of
the Voting Units shall be required to constitute the act of the Members.
(b) For the purpose of determining the Members entitled to
vote on, or to vote at, any meeting of the Members or any adjournment thereof,
the Board or the Members requesting such meeting may fix, in advance, a date as
the record date for any such determination. Such date shall be not more than 50
days nor less than 14 days before any such meeting.
(c) Each Member may authorize any Person to act for it by
proxy on all matters in which a Member is entitled to participate, including
waiving notice of any meeting, or voting or participating at a meeting. Every
proxy must be signed by the Member or its attorney-in-fact. No proxy shall be
valid after the expiration of 11 months from the date thereof unless otherwise
provided in the proxy. Every proxy shall be revocable at the pleasure of the
Member executing it.
(d) Each meeting of Members shall be conducted by the Board or
Members requesting such meeting or by such other Person that the Board or
Members requesting such meeting may designate.
(e) Except as otherwise provided in this Agreement, any action
of the Members may be taken without a meeting if
(i) the Members holding not less than the minimum
number of Voting Units that would be required to approve and
adopt such action at a meeting consent to the action in
writing,
(ii) written notice (delivered in person or by
facsimile) of the actions to be approved by such Members is
given to all Members simultaneously, and
(iii) the written consents are filed with the records
of the meeting of the Members. Such actions by consent shall
be treated for all purposes as actions taken at a meeting.
ARTICLE VIII
DISTRIBUTIONS AND ALLOCATIONS
Section 8.1 General Distribution Rules. Except as provided in
Section 8.2 hereof, the Company shall distribute Available Cash pursuant to the
terms hereunder to the
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Members at such times as shall be determined by the Board. For purposes of this
Article VIII, the term "Member" shall include an Assignee of a Member and their
successors and assigns.
Section 8.2 Tax Liability Distributions. The Board shall make
cash distributions on or prior to April 15th of each Year to the Members in
amounts intended to enable the Members (or any Person whose tax liability is
determined by reference to the income of a Member) to discharge their United
States federal, state and local income tax liabilities arising from the
allocations made pursuant to this Article VIII with respect to the Company's
operations in the preceding year (a "Tax Liability Distribution"). The amount of
any such Tax Liability Distribution shall be equal to 50% of the amount of
income and gain allocated to each Member pursuant to this Article VIII.
Section 8.3 Other Distributions. Subject to the remaining
paragraphs of this Section 8.3, distributions other than Tax Liability
Distributions, including without limitation distributions of Available Cash and
distributions upon liquidation pursuant to Section 8.4 hereof, shall be made to
the Members as follows:
(i) First, an amount up to the aggregate Unrecouped
Preferred Capital Contributions of all Class A Holders at the
time such distribution is made shall be distributed to the
Class A Holders. Such distribution shall be allocated among
the Class A Holders in proportion to their Unrecouped
Preferred Capital Contributions.
(ii) In the event a Public Offering has occurred,
next, an amount shall be distributed to each Class A Holder
which amount shall produce a compounded annual return of 16%
per annum on the Unrecouped Preferred Capital Contribution of
such Class A Holder as may have been outstanding from time to
time, taking into account the amount and timing of any prior
distributions with respect to Class A Units under Sections
8.2, 8.3(i) and this Section 8.3(ii). All amounts distributed
to Class A Holders pursuant to this Section 8.3(ii) shall be
allocated among such Class A Holders pro rata based on their
respective Class A Units. In the event a Public Offering has
not occurred, no distribution shall be made under this Section
8.3(ii) and the provisions of Section 8.3(v) shall apply, with
the distribution under Section 8.3(v) to be made after all
distributions under Section 8.3(iv).
(iii) Next, an amount up to the aggregate Unrecouped
Capital Contributions of all Class B Holders at the time such
distribution is made shall be distributed to the Class B
Holders. Such distribution shall be allocated among
27
the Class B Holders in proportion to their respective
Unrecouped Capital Contributions.
(iv) Next, an amount shall be distributed to each
Class C Holder, which amount, when added to all prior
distributions made to such Member with respect to the Class C
Units under Section 8.2 and this Section 8.3(iv) shall be
equal to $4,750,000. Such distribution shall be allocated
among the Class C Holders in accordance with their respective
Class C Units.
(v) In the event a Public Offering has not
occurred, next, the amount to be distributed to each Class A
Holder as described in Section 8.3(ii) above shall be made.
(vi) Next, an amount shall be distributed to each
Class B Holder and each Class C Holder, which amount, when
added to all prior distributions made to such Member under
Section 8.2 with respect to Class B Units or Class C Units
(only to the extent such amounts have not reduced the amounts
distributed pursuant to Section 8.3 (iii) or (iv),
respectively), respectively, and this Section 8.3(vi) shall
produce an annual return of 10% per annum on (i) in the case
of the Class B Holders, the amount of Unrecouped Capital
Contributions outstanding from time to time from September 19,
1995, and (ii) in the case of the Class C Holders, the portion
of the amount payable pursuant to Section 8.3(iv) which
remains undistributed from time to time with the amount
payable pursuant to Section 8.3(iv) being $3,000,000 for the
period from September 19, 1995 to May 6, 1996, $3,500,000 for
the period from May 6, 1996 to July 9, 1996 and $4,750,000
from and after July 9, 1996. Distributions to the Class B
Holders shall be allocated in proportion to their respective
Class B Units. Distributions to the Class C Holders shall be
allocated in accordance with their respective Class C Units.
To the extent the amount of any proposed distribution under
this Section 8.3(vi) is not sufficient to provide a full
distribution of the amount required to be distributed to each
Class B Holder and Class C Holder by this Section 8.3(vi), the
amount of such distribution shall be allocated between the
Class B Holders as a group and the Class C Holders as a group
based on the respective amounts which each group would have
received had the total distribution been made.
(vii) Next, an amount shall be distributed to the
Class D Holders and the Class E Holders that hold Vested Class
E Units as follows: (A) the Class D Holders shall receive an
amount, which amount, when added to all prior distributions
made to the Class D Holders with respect to Class D Units
under Section 8.2 and this Section 8.3(vii), shall be equal to
7.11104% of all prior
28
distributions made pursuant to Section 8.3(vi); and (B) the
Class E Holders that hold Vested Class E Units shall be
entitled to receive an amount, which amount, when added to all
prior distributions made to Class E Holders with respect to
Vested Class E Units under Section 8.2 and this Section
8.3(vii), shall be equal to the Class E Catch-Up Percentage of
all prior distributions made pursuant to Section 8.3(vi)
above. Distributions to Class D Holders shall be allocated
among the Class D Holders in accordance with their respective
Class D Units. Distributions to Class E Holders that hold
Vested Class E Units shall be allocated among such Class E
Holders in accordance with their respective Vested Class E
Units. To the extent the amount of any proposed distribution
under this Section 8.3(vii) is not sufficient to provide a
full distribution of the amount required to be distributed to
each Class D Holder and each Class E Holder that holds Vested
Class E Units by this Section 8.3(vii), the amount of such
distribution shall be allocated between the Class D Holders as
a group and the Class E Holders that hold Vested Class E Units
as a group based on the respective amounts which each group
would have received had the total distribution been made.
(viii) Next, an amount shall be distributed to the
Persons that hold Vested Plan Units as follows: the Persons
that hold Vested Plan Units shall be entitled to receive an
amount, when added to all prior distributions made with
respect to Vested Plan Units under Section 8.2 and this
Section 8.3(viii), shall be equal to the Plan Catch-Up
Percentage of all prior distributions made pursuant to
Sections 8.3(vi) and 8.3(vii) above. Distributions to Persons
that hold Vested Plan Units shall be allocated among such
Persons in accordance with their respective Vested Plan Units.
To the extent the amount of any proposed distribution under
this Section 8.3(viii) is not sufficient to provide a full
distribution of the amount required to be distributed to each
Person that holds Vested Plan Units by this Section 8.3(viii),
the amount of such distribution shall be allocated among such
Persons in accordance with their respective Vested Plan Units.
(ix) Next, any balance shall be distributed to the
Class B Holders, the Class C Holders, the Class D Holders, the
Class E Holders that hold Vested Class E Units and the Persons
that hold Vested Plan Units as follows: (A) the Persons that
hold Vested Plan Units shall receive the Vested Plan
Percentage of such balance; (B) the Class D Holders shall
receive 6.4% of such balance; (C) the Class E Holders that
hold Vested Class E Units shall receive the Vested Class E
Percentage of such balance; and (D) the Class B Holders and
the Class C Holders shall receive the remaining amount of such
balance to be distributed after accounting for any payments
under clauses (A), (B) and (C) of this Section 8.3(ix).
Distributions to the Class B Holders and Class C Holders shall
29
be allocated in accordance with their respective Class B Units
and Class C Units taken as a whole. Distributions to the Class
D Holders shall be allocated among the Class D Holders in
accordance with their respective Class D Units. Distributions
to the Class E Holders that hold Vested Class E Units shall be
allocated among such Class E Holders in accordance with their
respective Vested Class E Units. Distributions to the Persons
that hold Vested Plan Units shall be allocated among such
Persons in accordance with their respective Vested Plan Units.
Appropriate adjustments shall be made to the amounts distributed under clauses
(vii) and (ix) of this Section 8.3 with respect to Class E Units that become
Vested Class E Units after the time of any distribution under clause (vii) or
(ix) (such Class E Units are referred to herein as "Post-Distribution Vested
Class E Units"). Such adjustments shall result in each such Class E Holder
holding Post-Distribution Vested Class E Units being distributed an amount with
respect to such Post-Distribution Vested Class E Units before any further
distributions are made under subclause (B) of clause (vii) or under clauses
(viii) or (ix), with such amount to be equal to the amount such Class E Holder
would have received with respect to such Units if such Units had been Vested
Class E Units at the time of the prior distribution under clause (vii) or (ix).
Appropriate adjustments shall also be made to the amounts
distributed under clauses (viii) and (ix) of this Section 8.3 with respect to
Performance Units and Exceptional Performance Units that become Vested Plan
Units after the time of any distribution under clause (viii) or (ix) (such
Performance Units and Exceptional Performance Units are referred to herein as
"Post-Distribution Plan Units"). Such adjustments shall result in each such
Person holding Post-Distribution Vested Plan Units being distributed an amount
with respect to such Post-Distribution Vested Plan Units before any further
distributions are made under clause (viii) or under clause (ix), with such
amount to be equal to the amount such Person would have received with respect to
such Performance Units and Exceptional Performance Units if such Performance
Units and Exceptional Performance Units had been Vested Plan Units at the time
of the prior distribution under clauses (viii) or (ix).
Notwithstanding the foregoing, the amounts distributable under
clauses (iii) through (ix) of this Section 8.3 and the time and manner of such
distributions are subject to adjustment as set forth in Schedule B and Schedule
D hereto in certain events following a Public Offering.
Any amounts (including in the form of shares of the Public
Company) so distributed in accordance with such adjustments shall be treated as
distributions made under clauses (iii) through (ix) of this Section 8.3 so as to
reduce the obligation to make distributions under said clauses (iii) through
(ix) in the order in which said distribution obligations are set forth in said
clauses (iii) through (ix).
30
Holders of Performance Units and Exceptional Performance Units
under the Incentive Plan are not, by reason of the provisions of this Section
8.3 or any other provision of this Agreement, intended to be third party
beneficiaries of any provision of this Agreement and are not Members as a result
of any right to payment.
Notwithstanding any other provision of this Agreement to the
contrary (including without limitation Sections 8.3(i), (ii) and (v) hereof), in
the event that the Public Company consummates a Public Offering on or before
January 1, 1999, (i) the first amount distributable under Section 8.3 hereof
shall be the amount of $42,400,000 less all prior year distributions made
pursuant to Section 8.2 hereof relating to an allocation of income to the
holders of the Class A Units in respect of the $42,400,000 distribution, which
shall be distributed to the holders of Class A Units, with such distribution to
be allocated among the Class A Holders as set forth on Schedule A-1 hereto and
(ii) no amounts shall be distributable under Sections 8.3(i), (ii) and (v)
hereof, including in connection with any liquidation of the Company.
Section 8.4 Distribution of Proceeds Upon Liquidation. Subject
to the terms and conditions in Article XV hereof, upon liquidation of the
Company, any distributions shall be made in accordance with the principles and
rules of Section 8.3 hereof and shall be made by the end of the taxable year in
which the liquidation occurs, or, if later, within ninety (90) days after the
liquidation.
Section 8.5 Tax Withholding. All amounts withheld pursuant to
the Code or any provision of any state or local tax law with respect to any
payment, distribution or allocation to the Company or the Members shall be
treated as amounts distributed to the Members pursuant to this Article VIII for
all purposes of this Agreement. The Board is authorized to withhold from
distributions, or with respect to allocations, to the Members and to pay over to
any federal, state or local government any amounts required to be so withheld
pursuant to the Code or any provision of any other federal, state or local law
and shall allocate such amounts to those Members or with respect to which such
amounts were withheld.
Section 8.6 Limitations on Distribution. Notwithstanding any
provision to the contrary contained in this Agreement, the Company shall not
make a distribution to any Member on account of its interest in the Company if
such distribution would violate Section 18-607 of the Delaware Act or other
applicable law.
Section 8.7 Allocation of Profits. Profits of the Company for
any Tax Year shall be allocated in the following order and priority:
(i) First, among the Members in accordance with and
in an amount equal to the cumulative Losses allocated among
the Members pursuant to
31
Section 8.8(ii) hereof for all prior periods and not
previously taken into account under this clause.
(ii) Next, among the Members in accordance with and
in an amount equal to the cumulative Losses allocated among
the Members pursuant to Section 8.8(i) hereof for all prior
periods and not previously taken into account under this
clause.
(iii) Next, among the Class A Holders in proportion
to, and in an amount equal to the excess, if any, of (A) the
cumulative cash distributions pursuant to the last paragraph
of Section 8.3 or, if the Public Company does not consummate a
Public Offering on or before January 1, 1999, pursuant to
Sections 8.3(ii) or (v) and that have previously been made to
the Class A Holders and that each Member would have received
pursuant to such Section for the current Tax Year of the
Company had an amount of cash at least equal to such Profits
been available for distribution under such Section over (B)
the cumulative allocations previously made to the Class A
Holders pursuant to this Section 8.7(iii) plus for each Class
A Holder its Preferred Capital Contribution.
(iv) Next, among the Class C Holders in proportion
to, and in an amount equal to the excess, if any, of (A) the
cumulative cash distributions under Section 8.3(iv) that have
previously been made to the Class C Holders and that each
Class C Holder would have received under such Section for the
then current Tax Year of the Company had an amount of cash at
least equal to such Profits been available for such
distribution under such Section over (B) the cumulative
allocations previously made to the Class C Holders pursuant to
this Section 8.7(iv).
(v) Next, among the Class B Holders and the Class C
Holders in proportion to and in an amount equal to the excess,
if any, of (A) the cumulative cash distributions under Section
8.3(vi) hereof that have previously been made to the Class B
Holders and Class C Holders and that each Class B Holder and
Class C Holder would have received under Section 8.3(vi)
hereof for the then current Tax Year had an amount of cash at
least equal to such Profits been available for such
distribution under such Section over (B) the cumulative
allocations previously made to the Class B Holders and Class C
Holders pursuant to this Section 8.7(v).
(vi) Next, among the Class D Holders and the Class E
Holders holding Vested Class E Units in proportion to, and in
an amount equal to the excess, if any, of (A) the cumulative
cash distributions under Section 8.3(vii) that have
32
previously been made to the Class D Holders and such Class E
Holders and that each Class D Holder and each such Class E
Holder would have received under Section 8.3(vii) hereof for
the current Tax Year of the Company had an amount of cash at
least equal to such Profits been available for distribution
under such Section over (B) the cumulative allocations
previously made to the Class D Holders and such Class E
Holders pursuant to this Section 8.7(vi).
(vii) Next, among the Members in proportion to and in
an amount equal to the excess, if any, of (A) the cumulative
cash distributions under Section 8.3(ix) hereof that have
previously been made to such Members and that such Member
would have received under Section 8.3(ix) hereof for the then
current Tax Year had an amount of cash at least equal to such
Profits been available for such distribution under such
Section over (B) the cumulative allocations previously made to
the Members pursuant to this Section 8.7(vii).
For purposes of determining Profits allocations under this Section 8.7, amounts
actually distributed under the relevant paragraph of Section 8.3 shall be
increased by the amount of the reduction under such paragraph that was made to
reflect the Section 8.2 distribution referred to therein. Cash distributions to
Persons holding Vested Plan Units shall be treated as an expense of the Company.
Section 8.8 Allocation of Losses. Losses of the Company for
any Tax Year shall be allocated in the following order and priority:
(i) First, to offset any Profits previously
allocated under Section 8.7 in the inverse order and priority
in which such Profits were allocated; and
(ii) Next, in the following order (a) to the Class B
Holders to the extent of their Capital Contributions, (b) to
the Class A Holders to the extent of their Preferred Capital
Contributions, and (c) to the Class A Holders, the Class B
Holders and the Class C Holders in accordance with their
respective pro rata portion of Class A Units, Class B Units
and Class C Units taken together for this purpose as a single
class of Units.
Section 8.9. Special Allocations. The following special
allocations shall be made in the following order:
(i) Qualified Income Offset. Notwithstanding the
foregoing, in the event that any Member receives any
adjustments, allocations or distributions described in
Sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6) of the Treasury
Regulations, items of Company income and gain (including gross
income) shall
33
be specially allocated to each such Member in a manner and
amount sufficient to eliminate, to the extent required by such
Regulations, the negative balance in the Capital Account of
the Member described in Section 1.704-1(b)(2)(ii)(d)(3) of the
Treasury Regulations as quickly as possible.
(ii) Gross Income Allocation. In the event any Member
has a deficit Capital Account at the end of any Tax Year, each
such Member shall be specially allocated items of Company
income and gain in the amount of such deficit Capital Account
as quickly as possible, provided that an allocation pursuant
to this Section 8.9(ii) shall be made only if and to the
extent that such Member would have a deficit Capital Account
in excess of such sum after all other allocations provided for
in this Article VIII have been made as if Section 8.9(i) and
(ii) were not in this Agreement.
Section 8.10 Allocation Rules.
(a) In the event Members are admitted to the Company
pursuant to this Agreement on different dates, the Profits (or Losses)
allocated to the Members for each Tax Year during which Members are so
admitted shall be allocated among the Members in proportion to the respective
Units that each holds from time to time during such Tax Year in accordance
with Sections 706 of the Code, using any convention permitted by law and
selected by the Board.
(b) For purposes of determining the Profits, Losses or any
other items allocable to any period, Profits, Losses and any such other items
shall be determined on a daily, monthly or other basis, as determined by the
Board using any method that is permissible under Sections 706 of the Code and
the Treasury Regulations thereunder.
(c) Except as otherwise provided in this Agreement, all types
of Company income, gain, loss, deduction and any other allocations not otherwise
provided for shall be divided among the Members in the same proportions as they
share Profits and Losses for the Tax Year in question. Notwithstanding the
foregoing, items of income and gain that would be taxed to any Member at
ordinary income tax rates shall be allocated under Section 8.7 prior to items of
income and gain that would be taxed at capital gains rates.
Section 8.11 Tax Allocations of Section 704(c) of the Code.
(a) In accordance with Sections 704(c) of the Code and the
Treasury Regulations thereunder, income, gain, loss and deduction with
respect to any property contributed to the capital of the Company shall,
solely for income tax purposes, be allocated among the Members so as to take
account of any variation between the adjusted basis of such property to the
34
Company for federal income tax purposes and its initial Gross Asset Value
(computed in accordance with Section 1.1 hereof).
(b) In the event the Gross Asset Value of any Company asset
is adjusted pursuant to Paragraph (b) of the definition of "Gross Asset
Value" contained in Section 1.1 hereof, subsequent allocations of income,
gain, loss and deduction with respect to such asset shall take account of any
variation between the adjusted basis of such asset for federal income tax
purposes and its Gross Asset Value in the same manner as under Sections
704(c) of the Code and the Treasury Regulations thereunder.
(c) Any elections or other decisions relating to
allocations for tax purposes under this Article VIII, including the selection
of any allocation method permitted under proposed Treasury Regulation
Sections 1.704-1(c), shall be made by the Board in any manner that reasonably
reflects the purpose and intention of this Agreement. Allocations pursuant to
this Section 8.11 are solely for purposes of federal, state and local taxes
and shall not affect, or in any way be taken into account in computing, any
Member's Capital Account or share of Profits, Losses, other items or
distributions pursuant to any provision of this Agreement.
(d) The Members are aware of the income tax consequences of
the allocations made by this Article VIII and hereby agree to be bound by the
provisions of this Article VIII in reporting their shares of Company income and
loss for income tax purposes.
Notwithstanding any other provision of this Agreement, for
federal income tax purposes, taxable gain recognized by the Company on a sale of
stock described in clause (ii) of the final paragraph of Section 14.2 of the
Limited Liability Company Agreement of Aurora/VDK LLC shall be allocated to the
Members in proportion to the amounts set forth on Schedule A-1 hereto.
ARTICLE IX
BOOKS AND RECORDS
Section 9.1 Books, Records and Financial Statements.
(a) At all times during the continuance of the Company, the
Company shall maintain, at its principal place of business, separate books of
account for the Company that shall show a true and accurate record of all costs
and expenses incurred, all charges made, all credits made and received and all
income derived in connection with the operation of the Company business in
accordance with generally accepted accounting principles consistently applied,
and, to the extent inconsistent therewith, in accordance with this Agreement.
Such books of account,
35
together with a copy of this Agreement and of the Certificate, shall at all
times be maintained at the principal place of business of the Company and shall
be open to inspection and examination at reasonable times by each Member and its
duly authorized representative for any purpose reasonably related to such
Member's interest in the Company. The books of account and the records of the
Company shall be examined by and reported upon as of the end of each Fiscal Year
by a firm of independent certified public accountants selected by the Board. Any
Member shall have the right to have a private audit of the Company books and
records conducted at reasonable times and after reasonable advance notice to the
Company for any purpose reasonably related to such Member's interest in the
Company, but any such private audit shall be at the expense of the Member
desiring it, and it shall not be paid for out of Company funds.
(b) The Board shall prepare and maintain, or cause to be
prepared and maintained, the books of account of the Company and the following
documents shall be transmitted by the Board to each Member holding 10% or more
of the outstanding Voting Units at the times hereinafter set forth:
(i) as soon as available and in any event within
120 days after the end of each Fiscal Year of the Company, a
balance sheet of the Company as of the end of such Fiscal Year
and the related statements of income and cash flows of the
Company for such Fiscal Year, all reported on by such
independent public accountants of nationally recognized
standing as the Board shall select;
(ii) as soon as available and in any event within 60
days after the end of each of the first three quarters of each
Fiscal Year of the Company, a balance sheet of the Company as
of the end of such quarter and the related statements of
income and cash flows of the Company for such quarter; and
(iii) such other financial reports of the Company or
any Subsidiary that the Company or any Subsidiary is required
to deliver to its senior lender, within 5 days after such
financial reports are required to be delivered to such senior
lender.
(c) All information contained in any statement or other
document distributed to any Member pursuant to Section 9.1(b) hereof shall be
deemed accurate, binding and conclusive with respect to such Member unless
written objection is made thereto by such Member to the Company within 20
business days after the receipt of such statement or other document by such
Member.
36
Section 9.2 Accounting Method. The books and records of the
Company shall be kept on the accrual method of accounting applied in a
consistent manner and shall reflect all Company transactions and be appropriate
and adequate for the Company's business.
Section 9.3 Annual Audit. As soon as practical after the end
of each Fiscal Year, but not later than 120 days after such end, the financial
statements of the Company shall be audited by the independent certified public
accountants referred to in Section 9.1(a) hereof, and such financial statements
shall be accompanied by a report of such accountants containing their opinion.
The cost of such audits will be an expense of the Company. A copy of the audited
financial statements and the accountants' report will be furnished to each
Member within 10 business days after their receipt by the Member Manager.
ARTICLE X
TAX
Section 10.1 Tax Matters Member.
(a) Dartford is hereby designated as the initial "Tax
Matters Member" of the Company and as the "Tax Matters Partner" for purposes
of Sections 6231(a)(7) of the Code and shall have the power to manage and
control, on behalf of the Company, any administrative proceeding at the
Company level with the Internal Revenue Service relating to the determination
of any item of Company income, gain, loss, deduction or credit for federal
income tax purposes.
(b) The Tax Matters Member shall, within 10 days of the
receipt of any notice from the Internal Revenue Service in any administrative
proceeding at the Company level relating to the determination of any Company
item of income, gain, loss, deduction or credit, mail a copy of such notice to
each Member.
(c) The Members may at any time hereafter designate a new Tax
Matters Member; provided, however, that only a Member may be designated as the
Tax Matters Member of the Company.
Section 10.2 Right to Make Section 754 Election. The Board
may, in its sole discretion, make or revoke, on behalf of the Company, an
election in accordance with Sections 754 of the Code, so as to adjust the tax
basis of Company property in the case of a distribution of property within
the meaning of Sections 734 of the Code, and in the case of a transfer of a
Company interest within the meaning of Sections 743 of the Code. Each of the
Members shall, upon request of the Board, supply the information necessary to
give effect to such an election.
37
ARTICLE XI
LIABILITY, EXCULPATION AND INDEMNIFICATION
Section 11.1 Liability. Except as otherwise provided by the
Delaware Act, the debts, obligations and liabilities of the Company, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the Company, and no Covered Person shall be obligated
personally for any such debt, obligation or liability of the Company solely by
reason of being a Covered Person.
Section 11.2 Exculpation.
(a) No Covered Person shall be liable to the Company or any
other Covered Person for any loss, damage or claim incurred by reason of any act
or omission performed or omitted by such Covered Person in good faith on behalf
of the Company and in a manner reasonably believed to be within the scope of
authority conferred on such Covered Person by this Agreement and the
Securityholders Agreement, except that a Covered Person shall be liable for any
such loss, damage or claim incurred by reason of such Covered Person's gross
negligence or willful misconduct.
(b) A Covered Person shall be fully protected in relying in
good faith upon the records of the Company and upon such information, opinions,
reports or statements presented to the Company by any Person as to matters the
Covered Person reasonably believes are within such other Person's professional
or expert competence and who has been selected with reasonable care by or on
behalf of the Company, including information, opinions, reports or statements as
to the value and amount of the assets, liabilities, Profits, Losses or any other
facts pertinent to the existence and amount of assets from which distributions
to Members might properly be paid.
Section 11.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, a Covered Person
has duties (including fiduciary duties) and liabilities relating thereto to the
Company or to any other Covered Person, a Covered Person acting under this
Agreement and the Securityholders Agreement shall not be liable to the Company
or to any other Covered Person for its good faith reliance on the provisions of
this Agreement and the Securityholders Agreement. The provisions of this
Agreement and the Securityholders Agreement, to the extent that they restrict
the duties and liabilities of a Covered Person otherwise existing at law or in
equity, are agreed by the parties hereto to replace such other duties and
liabilities of such Covered Person.
(b) Unless otherwise expressly provided herein,
38
(i) whenever a conflict of interest exists or arises
between Covered Persons, or
(ii) whenever this Agreement, the Securityholders
Agreement or any other agreement contemplated herein or
therein provides that a Covered Person shall act in a manner
that is, or provides terms that are, fair and reasonable to
the Company or any Member, the Covered Person shall resolve
such conflict of interest, taking such action or providing
such terms, considering in each case the relative interest of
each party (including its own interest) to such conflict,
agreement, transaction or situation and the benefits and
burdens relating to such interests, any customary or accepted
industry practices, and any applicable generally accepted
accounting practices or principles; provided that the Board
shall vote on the adequacy of any such resolution of conflict
of interest by the Covered Person, making such adjustments to
such resolution as the Board in its sole discretion sees fit;
and provided further that if such Covered Person is a Member
Manager, such Covered Person shall not vote with the Board on
the adequacy of such resolution. In the absence of bad faith
by the Covered Person, the resolution, action or term so made,
taken or provided by the Covered Person shall not constitute a
breach of this Agreement, the Securityholders Agreement or any
other agreement contemplated herein or of any duty or
obligation of the Covered Person at law or in equity or
otherwise.
(c) Whenever in this Agreement or in the Securityholders
Agreement a Covered Person is permitted or required to make a decision
(i) in its "discretion" or under a grant of similar
authority or latitude, the Covered Person shall be entitled to
consider such interests and factors as it desires, including
its own interests, and shall have no duty or obligation to
give any consideration to any interest of or factors affecting
the Company or any other Person, or
(ii) in its "good faith" or under another express
standard, the Covered Person shall act under such express
standard and shall not be subject to any other or different
standard imposed by this Agreement, the Securityholders
Agreement or other applicable law.
Section 11.4 Indemnification. To the fullest extent permitted
by applicable law, a Covered Person shall be entitled to indemnification from
the Company for any loss, damage or claim incurred by such Covered Person by
reason of any act or omission performed or omitted by such Covered Person in
good faith on behalf of the Company and in a manner reasonably believed to be
within the scope of authority conferred on such Covered Person by
39
this Agreement and the Securityholders Agreement, except that no Covered Person
shall be entitled to be indemnified in respect of any loss, damage or claim
incurred by such Covered Person by reason of gross negligence or willful
misconduct with respect to such acts or omissions; provided, however, that any
indemnity under this Section 11.4 shall be provided out of and to the extent of
Company assets only, and no Covered Person shall have any personal liability on
account thereof.
Section 11.5 Expenses. To the fullest extent permitted by
applicable law, expenses (including legal fees) incurred by a Covered Person in
defending any claim, demand, action, suit or proceeding shall, from time to
time, be advanced by the Company prior to the final disposition of such claim,
demand, action, suit or proceeding including any claim, demand, action, suit or
proceeding with respect to which such Covered Person is alleged to have not met
the applicable standard of conduct or is alleged to have committed conduct so
that, if true, such Covered Person would not be entitled to indemnification
under this Agreement or the Securityholders Agreement, upon receipt by the
Company of an undertaking by or on behalf of the Covered Person to repay such
amount if it shall be determined that the Covered Person is not entitled to be
indemnified as authorized in Section 11.4 hereof.
Section 11.6 Outside Businesses. Except as may be provided in
any other agreement entered into by such Person and the Company or its
Subsidiaries, any Member, Member Manager, Officer or Affiliate thereof may
engage in or possess an interest in other business ventures of any nature or
description, independently or with others, similar or dissimilar to the business
of the Company or any of its Subsidiaries, and the Company, the Members, the
Member Managers and the Officers shall have no rights by virtue of this
Agreement in and to such independent ventures or the income or Profits derived
therefrom, and the pursuit of any such venture, even if competitive with the
business of the Company, shall not be deemed wrongful or improper. Except as may
be provided in any other agreement entered into by such Person and the Company
or its Subsidiaries, no Member, Member Manager, Officer or Affiliate thereof
shall be obligated to present any particular investment opportunity to the
Company even if such opportunity is of a character that, if presented to the
Company, could be taken by the Company, and any Member, Member Manager, Officer
or Affiliate thereof shall have the right to take for its own account
(individually or as a partner or fiduciary) or to recommend to others any such
particular investment opportunity.
40
ARTICLE XII
ADDITIONAL MEMBERS AND UNITS
Section 12.1 Additional Units.
(a) If approved by a Super-Majority Vote, the Company is
authorized to raise additional capital by offering and selling, or causing to be
offered and sold, additional limited liability company interests in the Company
("Additional Units") to any Person in such amounts and on such terms as the
Board may determine; provided, that any issuance of Class E Units, or reissuance
of Class E Units that are forfeited in accordance with Schedule B hereto, shall
be to such Persons and in such amounts as the Chairman of the Company shall
recommend to the Board and the Board shall approve, and the approval of a
Super-Majority Vote of Members shall not be required with respect thereto; and
provided, further, that the Company is not authorized to issue any additional
Class D Units unless all of the Class D Holders consent to such issuance in
advance thereof. Each Person who subscribes for any of the Additional Units
shall be admitted as an additional member of the Company (each, an "Additional
Member" and collectively, the "Additional Members") at the time such Person (i)
executes this Agreement and the Securityholders Agreement or a counterpart of
this Agreement and the Securityholders Agreement and (ii) is named as a Member
on the Schedules hereto. The legal fees and expenses associated with such
admission shall be borne by the Company.
(b) If Additional Units are issued pursuant to this Article
XII such Additional Units will be treated for all purposes of this Agreement as
Units as of the date of issuance.
Section 12.2 Preemptive Rights. In the event that the Company
at any time shall propose to issue additional Class A Units, Class B Units or
Class C Units or units of any other class of limited liability company interests
(other than Class D Units or Class E Units), or any securities convertible into,
or exchangeable for, or any rights, warrants or options to purchase, any limited
liability company interests in the Company, each Class B Holder and Class C
Holder shall have the right to purchase up to such Holder's Proportionate
Percentage of such Additional Units or such securities being issued. Each such
Holder who elects to purchase a full Proportionate Percentage of such Additional
Units or securities shall also be entitled to elect to purchase additional
amounts of such Additional Units or securities up to the amount of such Holder's
recalculated Proportionate Percentage of the number of Additional Units which
the Holders purchasing less than their full Proportionate Percentages did not
purchase.
Section 12.3 Allocations. Additional Units shall not be
entitled to any retroactive allocation of the Company's income, gains,
losses, deductions, credits or other items; provided that, subject to the
restrictions of Sections 706(d) of the Code, Additional Units shall be
entitled to their respective share of the Company's income, gains, losses,
deductions, credits and other items
41
arising under contracts entered into before the effective date of the
issuance of any Additional Units to the extent that such income, gains,
losses, deductions, credits and other items arise after such effective date.
To the extent consistent with Sections 706(d) of the Code and Treasury
Regulations promulgated thereunder, the Company's books may be closed at the
time Additional Units are issued (as though the Company's Tax Year had ended)
or the Company may credit to the Additional Units pro rata allocations of the
Company' income, gains, losses, deductions, credits and items for that
portion of the Company's Tax Year after the effective date of the issuance of
the Additional Units.
ARTICLE XIII
ASSIGNABILITY AND SUBSTITUTE MEMBERS
Section 13.1 Restrictions on Transfer.
(a) No Member shall sell or otherwise Transfer any of its
Units (whether now held or hereafter acquired), except in accordance with the
terms of this Agreement and the Securityholders Agreement. Any attempted
Transfer of any of a Member's Units in violation of the terms of this Agreement
will be null, void and of no effect and the proposed transferee shall not be
recognized by the Company as the owner or holder of the Units attempted to be
Transferred or any rights pertaining thereto (including, without limitation,
voting rights and rights to allocations and distributions).
(b) Except as otherwise provided in this Agreement, no
Transfer of (i) a Class C Unit by a Class C Holder, (ii) a Class D Unit by a
Class D Holder, or (iii) a Class E Unit by a Class E Holder may be made without
the consent of the Board, which may be withheld in its sole discretion, and in
no event shall a Class C Holder be permitted to Transfer any Class C Units
unless it is part of a transaction in which outstanding Class A Units and Class
B Units of all Class A Holders and Class B Holders are entitled to be
Transferred on a pro rata basis and the Class C Holders Transfer not more than
their Proportionate Percentage of Units.
(c) As a condition precedent to the effectiveness of any
Transfer of Units to any Person (other than the Company or a Person that is
already a Member and has executed this Agreement), the transferee shall execute
a counterpart of this Agreement and deliver it to the Company. As a condition
precedent to the effectiveness of any Transfer of Units by a Member or Person
who is a signatory to the Securityholders Agreement (other than to the Company
or a Person who is already a signatory to the Securityholders Agreement), the
transferee shall execute a counterpart of the Securityholders Agreement and
deliver it to the Company and New LLC.
42
Section 13.2 Rights of First Refusal.
(a) Except as provided in Section 13.4 hereof and subject to
Section 13.1(b) and (c) hereof, whenever a Selling Member intends to voluntarily
Transfer any Units at any time owned by it, other than pursuant to a public
offering, such Selling Member shall deliver to the Company and the Members
holding Class B Units or Class C Units a Sale Notice. The Company shall have the
exclusive right and option during the 30 day period from and after the Company's
receipt of the Sale Notice (the "Option Period") to elect to purchase all (but
not less than all) of the Units described in the Sale Notice that are proposed
to be Transferred (the "Offered Units") for the Transfer price and upon such
other terms and conditions as stated in the Sale Notice. In the event the
Company elects to exercise its option under this Section 13.2(a), it shall
consummate the purchase and pay the Transfer price for such Offered Units on or
before the 90th day after the Company's receipt of the Sale Notice.
(b) In the event the Company does not elect to repurchase the
Offered Units pursuant to Section 13.2(a) hereof within the Option Period, the
Company shall furnish written notice thereof to all Members at the end of the
Option Period. The Members shall have the exclusive right and option during the
45-day period from and after the expiration of the Option Period (the "Member
Option Period") to elect to purchase up to such Member's Proportionate
Percentage of the Offered Units. Each Member that elects to purchase its full
Proportionate Percentage of such Offered Units shall also be entitled to elect
to purchase additional amounts of such Offered Units up to the amount of such
Member's recalculated Proportionate Percentage of the number of Offered Units
which the electing Members purchasing less than their full Proportionate
Percentages did not purchase. Each Member that elects to purchase Offered Units
under this Section 13.2(b) shall consummate the purchase and pay the Transfer
price therefor on or before the 15th day following the expiration of the Member
Option Period.
(c) If (i) upon the expiration of a Member Option Period
arising under Section 13.2(b) hereof neither the Company nor the Members shall
have exercised their options to elect to purchase Offered Units pursuant to this
Section 13.2, (ii) the Members exercising their right to elect to purchase
Offered Units do not elect to purchase in the aggregate all of the Offered
Units, or (iii) the Company or the Members fail to consummate a purchase within
the requisite time period, then, subject to Section 14.1 hereof, the Selling
Member shall have the right to Transfer such Offered Units during the 120-day
period from and after the expiration of the Member Option Period (the "Free
Transfer Period") on terms and conditions no more favorable to a purchaser of
such Offered Units than those set forth in the Sale Notice; provided, that the
Selling Member shall have the right to Transfer such Offered Units for a
Transfer price equal to or greater than 97.5% of the Transfer price set forth in
the Sale Notice. Any Offered Units not so Transferred before the expiration of
the Free Transfer Period shall again become subject to the restrictions set
forth in this Agreement.
43
Section 13.3 Closing of Purchase by the Company. Upon the
determination of the purchase price of and the identification of the parties to
any Transfer of Units by any Member to the Company upon exercise of any rights
pursuant to Section 13.2(a) hereof, at the closing of such purchase (i) any
Member selling its Units shall deliver to the Company any documentation
necessary to transfer such Member's Units and (ii) the Company shall deliver in
immediately available funds to the Member selling its Units the purchase price
for the Units being purchased by the Company.
Section 13.4. Permitted Transfers. The rights and obligations
under Section 13.2 of this Agreement will not apply to a Transfer:
(a) to a Member's ancestors or descendants or spouse or to a
trust, partnership, custodianship or other fiduciary account for his or for
their benefit;
(b) if the Member is a partnership or limited liability
company, to the respective partners in such partnership or Affiliates of such
partners or members of such limited liability company;
(c) to an Affiliate of the Member, provided, that such
Affiliate is not being used as a device to avoid the restrictions on Transfer
provided in this Agreement;
(d) by UBS Capital to a UBS Permitted Transferee or by a UBS
Permitted Transferee to another UBS Permitted Transferee, provided that such UBS
Permitted Transferee is not being used as a device to avoid the restrictions on
Transfer provided in this Agreement;
(e) by Dartford of any of its Class A Units and Class B Units
to any officer, director or employee of the Company or any Subsidiary of the
Company; or
(f) by any Class A Holder of any of its Class A Units.
Section 13.5 Substitute Members. Except for a Transfer by UBS
Capital or a UBS Permitted Transferee pursuant to Section 13.4(d) hereof, any
Transfer of Units pursuant to this Article XIII or XIV including, but not
limited to a Transfer permitted by Section 13.2 hereof or a Transfer made
pursuant to Section 14.1 hereof, shall, nevertheless, not entitle the transferee
to become a Substitute Member or to be entitled to exercise or receive any of
the rights, powers or benefits of a Member other than the right to share in such
profits and losses, to receive distribution or distributions and to receive such
allocation of income, gain, loss, deduction or credit or similar item to which
the transferor Member would otherwise be entitled, to the extent assigned,
unless the transferor Member designates, in a written instrument delivered to
the other Members, its transferee to become a Substitute Member and the
non-transferring Members holding a majority of the capital and Profits interests
of the Company in their sole and
44
absolute discretion, consent to the admission of such transferee as a Member;
and provided further, that such transferee shall not become a Substitute Member
without having first executed an instrument reasonably satisfactory to the other
Members accepting and agreeing to the terms and conditions of this Agreement and
the Securityholders Agreement, including a counterpart signature page to this
Agreement and the Securityholders Agreement, and without having paid to the
Company a fee sufficient to cover all reasonable expenses of the Company in
connection with such transferee's admission as a Substitute Member. A UBS
Permitted Transferee of Units from UBS Capital or a UBS Permitted Transferee
pursuant to Section 13.4(d) hereof shall become a Substitute Member upon
designation by UBS Capital or such UBS Permitted Transferee and upon execution
by such Transferee of the instrument referred to in the last proviso of the
preceding sentence. If a Member Transfers all of its interest in the Company and
the transferee of such interest is entitled to become a Substitute Member
pursuant to this Section 13.5, such transferee shall be admitted to the Company
effective immediately prior to the effective date of the Transfer, and,
immediately following such admission, the transferor Member shall automatically
resign as a Member of the Company. In such event, the Company shall not dissolve
if the business of the Company is continued without dissolution in accordance
with Section 15.2(d) hereof.
Section 13.6 Recognition of Assignment by Company. No Transfer
or assignment, or any part thereof, that is in violation of this Article XIII
shall be valid or effective, and neither the Company nor the Members shall
recognize the same for the purpose of making distributions pursuant to Article
VIII hereof with respect to such assigned interest or part thereof. Neither the
Company nor the nonassigning Members shall incur any liability as a result of
refusing to make any such distributions to the assignee of any such invalid
assignment.
Section 13.7 Effective Date of Transfer. Any valid Transfer
of a Member's interest in the Company, or part thereof, pursuant to the
provisions of this Article XIII shall be effective as of the close of
business on the last day of the calendar month in which such Transfer occurs.
The Company shall, from the effective date of such assignment, thereafter pay
all further distributions on account of the Company interest (or part
thereof) so assigned, to the transferee of such interest, or part thereof. As
between any Member and its transferee, Profits and Losses for the Fiscal Year
of the Company in which such Transfer occurs shall be apportioned for federal
income tax purposes in accordance with any convention permitted under
Sections 706(d) of the Code and selected by the Member Manager.
Section 13.8 Indemnification. In the case of Transfer or
assignment or attempted Transfer or assignment of an interest in the Company
that has not received the consents required by this Article XIII, the parties
engaging or attempting to engage in such Transfer or assignment shall be liable
to indemnify and hold harmless the Company and the other Members from all costs,
liabilities and damages that any of such indemnified Persons may incur
(including, without
45
limitation, incremental tax liability and lawyers' fees and expenses) as a
result of such Transfer or assignment or attempted Transfer or assignment and
efforts to enforce the indemnity granted hereby.
ARTICLE XIV
TAG-ALONG OPTION AND COME-ALONG OBLIGATION
Section 14.1. Tag-Along Option. To the extent certain
Transfers of Units are subject to the tag-along provisions in the
Securityholders Agreement, this Section 14.1 shall have no force and effect. To
the extent certain Transfers of Units are not subject to the tag-along
provisions in the Securityholders Agreement, and subject to Section 13.1(c)
hereof, in the event that any Selling Member intends to voluntarily Transfer to
another Person (other than to a Permitted Transferee or pursuant to a Public
Offering) (such Person being the "Purchaser") a number of Class B Units which,
together with all other Transfers made by such Selling Member to any other
person (other than a Permitted Transferee) in the immediately preceding 12
months, represents 10% or more of the outstanding Class B Units held by such
Member on the date of this Agreement, the Selling Member shall deliver to the
Company and each other Member a written notice (a "Compliance Notice") stating
that it has complied with the provisions of Section 13.2 hereof and that such
Units are no longer subject to such Section 13.2. During the 30-day period (the
"Tag-Along Period") from and after the delivery of such Compliance Notice to the
Company and such other Members, each Member shall have the right to elect to
sell to the Purchaser, and the Purchaser shall have the obligation to purchase
from such Member, such Member's Proportionate Percentage of the Class B Units
being proposed to be sold pursuant to the Compliance Notice. Each Member that
elects to sell its full Proportionate Percentage of such Class B Units shall
also be entitled to elect to sell additional amounts of such Member's Class B
Units up to the amount of such Member's recalculated Proportionate Percentage of
the number of Class B Units which the electing Members selling less than their
full Proportionate Percentages did not sell. Each Member that elects to sell
Class B Units under this Section 14.1 shall consummate the sale pursuant to the
Sale Notice delivered under Section 13.2(a) hereof. The Selling Member may not
consummate such a transaction unless the Purchaser complies with this Section
14.1.
Section 14.2. Come-Along Obligation. So long as the
Securityholders Agreement is in effect, certain Transfers of Units shall be
subject to the drag-along provisions thereof and this Section 14.2 shall have no
force and effect. In the event the Securityholders Agreement is no longer in
effect, and if any Person or group of Persons makes an offer to purchase all
outstanding Units of the Company from all Members (a "Tender Offer"), then the
Members (other than any Members who are Affiliates of the Person making the
Tender Offer) who hold 70% or more of the total number of Voting Units held by
Members who are not Affiliates of
46
the Persons making the Tender Offer (the "Approving Members") may require all
other Members ("Minority Members") to sell their Units pursuant to the Tender
Offer. To exercise this right, the Approving Members must deliver a written
notice to the Minority Members describing the terms and conditions of the Tender
Offer. If such an exercise has been made by the Approving Members, then each
Minority Member shall be obligated to sell all of its Units pursuant to the
Tender Offer. Notwithstanding the foregoing, no Member shall be obligated to
sell any Units pursuant to the Tender Offer unless the portion of the purchase
price therefor payable at the closing of such sale shall be paid in cash or
readily marketable securities. Any amounts to be received by Members or
Assignees in connection with a Transfer of Units under this Section 14.2 shall
be allocated in accordance with Section 15.5 hereof.
ARTICLE XV
DISSOLUTION, LIQUIDATION AND TERMINATION
Section 15.1 No Dissolution. The Company shall not be
dissolved by the admission of Additional Members or Substitute Members in
accordance with the terms of this Agreement.
Section 15.2 Events Causing Dissolution. The Company shall be
dissolved and its affairs shall be wound up upon the occurrence of any of the
following events:
(a) the expiration of the term of the Company, as provided in
Section 2.3 hereof;
(b) the written consent of all Members;
(c) the sale of all or substantially all of the assets of the
Company (other than pursuant to the Contribution) and the expiration of any
indemnity period or escrow or the payment of any deferred payment relating to
such sale;
(d) the death, insanity, bankruptcy, retirement, resignation,
expulsion or dissolution of any Member or the occurrence of any other event
under the Delaware Act that terminates the continued membership of a Member in
the Company (other than a resignation described in Sections 5.4 or 13.6 hereof,
which resignation shall not cause the Company to be dissolved and the business
of the Company shall continue without dissolution) unless, within 90 days after
the occurrence of such an event, the remaining Members holding a majority of
capital and Profits interests of the Company agree in writing to continue the
business of the Company and to the appointment, if necessary or desired,
effective as of the date of such event, of one or more Additional Members;
47
(e) the entry of a decree of judicial dissolution under
Section 18-802 of the Delaware Act; or
(f) on the first anniversary of the initial Public Offering,
whereupon the Company will immediately liquidate and all securities then held by
the Company will be immediately distributed to the Members in accordance with
Section 15.4.
Except as provided in Section 15.2(d), the death, insanity,
bankruptcy, retirement, resignation, expulsion or dissolution of a Member shall
not cause the Company to be dissolved and upon the occurrence of such an event
the Company shall be continued without dissolution.
Section 15.3 Notice of Dissolution. Upon the dissolution of
the Company, the Person or Persons approved by a Majority Vote to carry out the
winding up of the Company (the "Liquidating Trustee") shall promptly notify the
Members of such dissolution.
Section 15.4 Liquidation. Upon dissolution of the Company, the
Liquidating Trustee shall immediately commence to wind up the Company's affairs;
provided, however, that a reasonable time shall be allowed for the orderly
liquidation of the assets of the Company (subject to the provisions of Section
15.8 hereof) and the satisfaction of liabilities to creditors so as to enable
the Members to minimize the normal losses attendant upon a liquidation. The
Members shall continue to share Profits and Losses during liquidation in the
same proportions, as specified in Article VIII hereof, as before liquidation.
Each Member shall be furnished with a statement prepared by the Company's
certified public accountants that shall set forth the assets and liabilities of
the Company as of the date of dissolution.
(a) Subject to Section 15.8 hereof, the proceeds of any
liquidation (or of any transaction that is deemed to be a liquidation under
Section 15.5 hereof) shall be distributed, as realized, in the following order
and priority:
(i) to creditors of the Company, including Members
who are creditors, to the extent otherwise permitted by law,
in satisfaction of the liabilities of the Company (whether by
payment or the making of reasonable provision for payment
thereof), other than liabilities for distributions to Members;
and
(ii) to the Members the remaining proceeds of
liquidation in accordance with Section 8.4 hereof, after
giving effect to all contributions, distributions and
allocations for all periods.
(b) Subject to Section 15.8 hereof, if the Liquidating Trustee
shall determine that it is not feasible to liquidate all of the assets of the
Company, then the Liquidating Trustee shall cause the Fair Asset Value of the
assets not so liquidated to be determined. Any unrealized
48
appreciation or depreciation with respect to such assets shall be allocated
among the Members in accordance with Article VIII as though the property were
sold for its Fair Asset Value and distribution of any such assets in kind to a
Member shall be considered a distribution of an amount equal to the assets' Fair
Asset Value. Such assets, as so appraised, shall be retained or distributed by
the Liquidating Trustee as follows:
(i) The Liquidating Trustee shall retain assets
having a Fair Asset Value equal to the amount by which the net
proceeds of liquidated assets are sufficient to satisfy the
requirements of paragraph (a)(i) of this Section 15.4. The
foregoing notwithstanding, the Liquidating Trustee shall, to
the fullest extent permitted by law, have the right to
distribute property subject to liens at the value of the
Company's equity therein.
(ii) The remaining assets (including mortgages and
other receivables) shall be distributed to the Members in such
proportions as shall be equal to the respective amounts to
which each Member is entitled pursuant to Article VIII hereof
giving full effect in the calculation thereof to any previous
distributions made pursuant to this Section 15.4. If, in the
sole and absolute judgment of the Liquidating Trustee, it
shall not be feasible to distribute to each Member an aliquot
share of each asset, the Liquidating Trustee may allocate and
distribute specific assets to one or more Members as
tenants-in-common as the Liquidating Trustee shall determine
to be fair and equitable.
(c) Except as set forth in Section 15.8 hereof, no Member
shall have the right to demand or receive property other than cash upon
dissolution and termination of the Company.
Section 15.5 Sale Transactions. Any sale of all or
substantially all of the Voting Units in a transaction or series of related
transactions, including without limitation pursuant to a Tender Offer, shall be
deemed to be a liquidation of the Company, and any amounts to be received by
Members of Assignees upon the consummation of any such transaction shall be
distributed, as realized, in accordance with Section 15.4(a) hereof.
Section 15.6 Termination. The Company and this Agreement shall
terminate when all of the assets of the Company, after payment of or due
provision for all debts, liabilities and obligations of the Company, shall have
been distributed to the Members in the manner provided for in this Article XV
(including without limitation after the sale of Units pursuant to a Tender Offer
in accordance with Section 14.2 hereof), and the Certificate shall have been
canceled in the manner required by the Delaware Act.
Section 15.7 Claims of the Members. The Members and Assignees
shall look solely to the Company's assets for the return of their Capital
Contributions, and if the assets of
49
the Company remaining after payment of or due provision for all debts,
liabilities and obligations of the Company are insufficient to return such
Capital Contributions, the Members and Assignees shall have no recourse against
the Company or any other Member or the Member Managers or Officers.
Section 15.8 Dissolution Upon a Public Offering. In connection
with any dissolution of the Company following a Public Offering, the Company
shall cause the equity securities of the Public Company held by the Company or
any Subsidiary of the Company to be distributed in accordance with the order and
priority rules set forth in Section 15.4. In the event the Public Company is New
LLC or a successor thereto or is a New LLC Entity, the Members shall have such
registration rights as are set forth in the Securityholders Agreement. In the
event the Public Company is not a New LLC or a successor thereto or a New LLC
Entity or if the Securityholders Agreement is no longer in full force and
effect, then simultaneously with such distributions of equity securities, the
Company shall cause the Public Company to grant the following registration
rights with respect to such equity securities:
(a) The Public Company shall grant to Fenway, Gloriande and
UBS Capital demand registration rights that are substantially the same as the
demand registration rights set forth on Schedule C hereto assuming with respect
to such demand registration rights as set forth on Schedule C that (i) the
Public Company will be "the Company", (ii) Fenway, Gloriande and UBS Capital
will each be a "Demand Holder," and (iii) the equity securities of the Public
Company so distributed to such Members will be the "Registrable Securities", in
each case as such terms are used in Schedule C hereto.
(b) The Public Company shall grant to each other Member or
Assignee piggyback registration rights that are substantially the same as the
piggyback registration rights set forth on Schedule C hereto assuming with
respect to such piggyback registration rights as set forth on Schedule C that
(i) the Public Company will be "the Company", (ii) each such other Member or
Assignee will be a "Holder", and (iii) the equity securities of the Public
Company so distributed to such Members and Assignees will be "Registrable
Securities", in each case as such terms are used in Schedule C hereto.
(c) The Public Company will grant to the holders of
Performance Units and Exceptional Performance Units the piggyback registration
rights described in Section 5(g) of Schedule D hereto. In the event that holders
of Performance Units and Exceptional Performance Units are not permitted to
"tack" the holding period of the Company with respect to the equity securities
of the Public Company distributed to such holders for purposes of Rule 144 under
the Securities Act of 1933, as amended, and such securities are not otherwise
registered under said Act, the Public Company will grant to such holders demand
registration rights reasonably acceptable to the Board and ▇▇▇▇▇▇▇▇.
▇▇
ARTICLE XVI
Members' Rights of Approval
Section 16.1 Approval Requirement. Without the approval of a
Super-Majority Vote of the Members, the Company shall not (and no Member shall
cause the Company to):
(a) Except for transactions between or among the Company and
one or more of its Subsidiaries or between or among the Company's Subsidiaries
themselves, engage in or permit to occur any of the following events (each event
hereinafter described being hereafter referred to as a "Transaction"):
(i) the sale, Transfer, assignment or other
disposition by the Company of any interest in any Other
Subsidiary of the Company, or by any Other Subsidiary of the
Company of any interest in another Other Subsidiary of the
Company, except pursuant to the provisions of the Contribution
Documents;
(ii) the consolidation or merger of the Company with
or into any other Delaware limited liability company or other
business entity (as defined in Section 18-209(a) of the
Delaware Act), or any liquidation, dissolution or winding-up
of the Company other than as provided for herein;
(iii) (A) any consolidation or merger of any Other
Subsidiary of the Company with or into any business entity (as
defined in Section 18-209(a) of the Delaware Act), (B) any
sale by any Other Subsidiary of the Company of all or
substantially all of its assets, or (C) any liquidation,
dissolution or winding-up of any Other Subsidiary of the
Company other than as provided herein;
(iv) the issuance of any equity securities of any
Other Subsidiary of the Company, or any securities convertible
into shares of preferred stock or common stock of any Other
Subsidiary of the Company, other than pursuant to Schedule D
hereto, or as contemplated in Section 15.8 hereof;
(v) the acquisition by the Company or any Other
Subsidiary of the Company of any stock or assets of another
entity or of capital assets, in a single transaction or a
series of related transactions in any 12 month period, for an
aggregate purchase price in excess of $5,000,000;
(vi) the incurrence by the Company or any Other
Subsidiary of the Company of funded debt with a principal
amount in excess of $5,000,000;
51
(vii) the removal of ▇▇▇ ▇. ▇▇▇▇▇▇ as the Chairman of
the Company or any Other Subsidiary of the Company and the
hiring or removal of any successor Chairman or any Chief
Executive Officer of the Company or any Other Subsidiary;
(viii) the amendment to (A) any provision of the
charter of any Other Subsidiary of the Company or (B) any
provision of the By-Laws of any Other Subsidiary of the
Company if such provision by its terms may be amended only
with the approval of a Super-Majority Vote of the Members;
(ix) the declaration of distributions by the Company
(other than Tax Liability Distributions and any distribution
pursuant to the last paragraph of Section 8.3 hereof) or
dividends by any Other Subsidiary of the Company;
(x) the adoption of the Incentive Plan or of any
stock option or incentive compensation plan by the Company or
any Other Subsidiary of the Company or any amendment thereto;
and
(xi) the making of capital expenditures by the
Company and its Other Subsidiaries in an aggregate amount for
any fiscal year in excess of $2,500,000.
(b) Anything in this Section 16.1 to the contrary
notwithstanding and so long as such action is not in contravention of the
Securityholders Agreement, the Company shall not be prevented from engaging in
any Transaction, or from taking any actions, including, but not limited to,
obtaining approval of its Board for, engaging investment bankers, accountants
and attorneys, and entering into letters of intent or binding agreements
relating to any Transaction, so long as
(i) the Company is not contractually obligated or
permitted to proceed with such Transaction until the approval
required under Section 16.1 has been obtained and
(ii) if the approval required under Section 16.1 is
not obtained, the Company shall not be required to pay nor
shall incur or become subject to any commitment or standby
fee, damages, penalty or other break-up or similar fee in
order to terminate any binding obligation which it may have
entered into relating to the matters described in Section 16.1
or otherwise as a result of such approval not having been
obtained.
16.2 Affiliate Transactions. At any time after the date of
this Agreement, neither the Company nor any Other Subsidiary of the Company
shall enter into or engage in any
52
single transaction or series of transactions with any Member (or any Affiliate
of any Member) (other than "Approved Affiliate Transactions" as defined below)
involving the payment of more than $500,000 in the aggregate during any 12-month
period by the Company or any of its Other Subsidiaries to such Member or its
Affiliate, without the approval of Members holding the number of Voting Units
that represents a majority of the total Voting Units held by all Members who are
not (and whose Affiliates are not) a party to such transaction. "Approved
Affiliate Transactions" shall include all transactions between the Company or
any of its Subsidiaries with any Affiliate that are described in or effected
pursuant to the Contribution Documents.
ARTICLE XVII
REGISTRATION RIGHTS
Section 17.1 Registration Rights. In the event the Company or
any surviving entity of a reorganization of the Company (including by the
incorporation thereof) or any successor entity into which the Company merges or
consolidates intends to issue equity securities by way of a public offering, the
Members shall have such registration rights set forth on Schedule C hereto. In
the event that New LLC or any surviving entity of a reorganization of New LLC
(including by the incorporation thereof) or any successor entity into which New
LLC merges or consolidates, or any other New LLC Entity intends to issue equity
securities by way of a public offering, the Members who are signatory to the
Securityholders Agreement shall have such registration rights as are set forth
in the Securityholders Agreement, and the registration rights provided herein
shall have no further force and effect.
ARTICLE XVIII
MISCELLANEOUS
Section 18.1 Notices. All notices provided for in this
Agreement shall be in writing, duly signed by the party giving such notice, and
shall be delivered in person or by an acknowledged overnight delivery service,
telecopied or mailed by registered or certified mail, as follows:
(a) if given to the Company, in care of the President at the
Company's mailing address set forth in Section 2.5 hereof with a copy to the
Chairman and the Chief Executive Officer at such address as each such officer
shall designate to the Company;
53
(b) if given to the Member Managers, at their mailing
addresses set forth on Schedule A attached hereto; or
(c) if given to any Member at the address set forth opposite
its name on Schedule A attached hereto, or at such other address as such Member
may hereafter designate by written notice to the Company.
All such notices shall be deemed to have been given when
received.
Section 18.2 Failure to Pursue Remedies. The failure of any
party to seek redress for violation of, or to insist upon the strict performance
of, any provision of this Agreement shall not prevent a subsequent act, which
would have originally constituted a violation, from having the effect of an
original violation.
Section 18.3 Cumulative Remedies. The rights and remedies
provided by this Agreement are cumulative and the use of any one right or remedy
by any party shall not preclude or waive its right to use any or all other
remedies. Said rights and remedies are given in addition to any other rights the
parties may have by law, statute, ordinance or otherwise.
Section 18.4 Binding Effect. This Agreement shall be binding
upon and inure to the benefit of all of the parties and, to the extent permitted
by this Agreement, their successors, legal representatives and assigns.
Section 18.5 Interpretation. Throughout this Agreement, nouns,
pronouns and verbs shall be construed as masculine, feminine, neuter, singular
or plural, whichever shall be applicable. All references herein to "Articles,"
"Sections" and paragraphs shall refer to corresponding provisions of this
Agreement unless otherwise indicated.
Section 18.6 Severability. The invalidity or unenforceability
of any particular provision of this Agreement shall not affect the other
provisions hereof, and this Agreement shall be construed in all respects as if
such invalid or unenforceable provision were omitted.
Section 18.7 Counterparts. This Agreement may be executed in
any number of counterparts with the same effect as if all parties hereto had
signed the same document. All counterparts shall be construed together and shall
constitute one instrument.
Section 18.8 Integration. This Agreement, together with
Schedules A, B, C and D hereto and the Securityholders Agreement constitutes the
entire agreement among the parties hereto pertaining to the subject matter
hereof and supersedes all prior agreements and understandings pertaining
thereto.
54
Section 18.9 Governing Law. This Agreement, together with
Schedules A, B, C and D hereto and the rights of the parties hereunder shall be
interpreted in accordance with the laws of the State of Delaware, and all rights
and remedies shall be governed by such laws without regard to principles of
conflict of laws.
Section 18.10 Inconsistency. In the event of an inconsistency
between the provisions contained in this Agreement, on the one hand, and in the
Securityholders Agreement, on the other hand, the provisions contained in the
Securityholders Agreement will govern.
[the remainder of this page is intentionally left blank]
55
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above stated.
MEMBERS:
DARTFORD PARTNERSHIP L.L.C.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Member
FENWAY PARTNERS CAPITAL FUND, L.P.
by: Fenway Partners, L.P.,
its general partner
by: Fenway Partners Management,
Inc., its general partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title:
GLORIANDE (LUXEMBOURG) SARL
By:
-------------------------
Name:
Title:
UBS CAPITAL LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title:
56
MEMBERS:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
C. ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Attorney-in-Fact for
each of the Members listed above
57
SCHEDULE A-1
To the Limited Liability Company Agreement of
VDK Foods LLC
AMOUNT DISTRIBUTABLE
NAME AND MAILING ADDRESS UNDER SECTION 8.3(i)
------------------------ --------------------
A. Class A Units
1. Fenway Partners Capital Fund, L.P.(1) $22,164,807
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
2. Gloriande (Luxembourg) S.a.r.L. $9,750,482
c/▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Services ▇▇▇
L'Estoril
Avenue Princess ▇▇▇▇▇
▇▇▇▇▇▇
3. UBS Capital LLC $9,750,482
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
4. Dartford Partnership, L.L.C. $270,341
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇. ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
5. The Ian and ▇▇▇▇▇ ▇▇▇▇▇▇ 1998 $168,301
Irrevocable Trust
6. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ $52,595
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------
(1) FPIP, LLC, as Assignee is entitled to $170,583 of the
aggregate amount distributable to Fenway pursuant to
Section 8.3(i) hereof. FPIP Trust, LLC, as Assignee is
entitled to $94,724 of the aggregate amount distributable
to Fenway pursuant to Section 8.3(i) hereof.
A-1
AMOUNT DISTRIBUTABLE
NAME AND MAILING ADDRESS UNDER SECTION 8.3(i)
------------------------ --------------------
7. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ $17,883
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇. ▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
8. C. ▇▇▇▇▇ ▇▇▇▇▇ $17,883
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇. ▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
9. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ $17,883
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
10. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ $17,725
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
11. ▇▇▇▇ ▇▇▇▇▇ $40,915
▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
12. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ $14,727
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
13. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ $8,415
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
14. ▇▇▇▇▇ ▇▇▇▇▇▇ $7,148
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
15. ▇▇▇ ▇▇▇▇ $8,990
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
16. ▇▇▇▇▇ ▇▇▇▇▇▇ $9,946
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
17. ▇▇▇▇▇▇ ▇▇▇▇▇▇ $9,946
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
A-2
AMOUNT DISTRIBUTABLE
NAME AND MAILING ADDRESS UNDER SECTION 8.3(i)
------------------------ --------------------
18. ▇▇▇▇ ▇▇▇▇▇▇▇▇ $5,597
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
19. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ $1,913
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
20. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. $8,537
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
21. ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ $10,473
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
22. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ $4,780
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
23. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ $9,330
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
24. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ $4,664
▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
25. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ $2,799
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
26. ▇▇▇ ▇▇▇▇▇▇▇▇ $7,576
27. ▇▇▇▇▇ ▇▇▇▇▇▇▇ $6,053
28. ▇▇▇▇▇ ▇▇▇▇▇▇▇ $3,018
29. ▇▇▇▇ ▇▇▇▇▇ $2,260
30. ▇▇▇▇ ▇▇▇▇▇ $1,507
31. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ $1,507
A-3
AMOUNT DISTRIBUTABLE
NAME AND MAILING ADDRESS UNDER SECTION 8.3(i)
------------------------ --------------------
32. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ $1,518
A-4
SCHEDULE A
To the Limited Liability Company Agreement of
VDK Foods LLC
CAPITAL NUMBER
NAME AND MAILING ADDRESS CONTRIBUTION OF UNITS
------------------------ ------------ --------
A. Class A Units
1. Fenway Partners Capital Fund, L.P. $20,015,596.00 20,015.6(2)
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
2. Gloriande (Luxembourg) S.a.r.L. $7,184,333.00 7,184.3
c/▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Services ▇▇▇
L'Estoril
Avenue Princess ▇▇▇▇▇
▇▇▇▇▇▇
3. UBS Capital LLC $7,184,333.00 7,184.3
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
4. Dartford Partnership, L.L.C. $183,571.00 183.6
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇. ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
5. The Ian and ▇▇▇▇▇ ▇▇▇▇▇▇ 1998 $114,286.00 114.3
Irrevocable Trust
6. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ $35,714.00 35.72
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
7. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ $12,143.00 12.1
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇. ▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------
(2) FPIP, LLC is the Assignee of 153.87855076 of these Class A
Units. FPIP Trust, LLC is the Assignee of 85.44835613 of these
Class A Units.
A-1
CAPITAL NUMBER
NAME AND MAILING ADDRESS CONTRIBUTION OF UNITS
------------------------ ------------ --------
8. C. ▇▇▇▇▇ ▇▇▇▇▇ $12,143.00 12.1
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇. ▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
9. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ $12,143.00 12.1
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
10. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ $12,143.00 12.1
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
11. ▇▇▇▇ ▇▇▇▇▇ $29,429.00 29.4
▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
12. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ $10,000.00 10.0
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
13. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ $5,714.00 5.7
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
14. ▇▇▇▇▇ ▇▇▇▇▇▇ $4,999.00 5.0
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
15. ▇▇▇ ▇▇▇▇ $6,428.00 6.4
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
16. ▇▇▇▇▇ ▇▇▇▇▇▇ $7,142.00 7.1
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
17. ▇▇▇▇▇▇ ▇▇▇▇▇▇ $7,142.00 7.1
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
18. ▇▇▇▇ ▇▇▇▇▇▇▇▇ $4,001.00 4.0
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
A-2
CAPITAL NUMBER
NAME AND MAILING ADDRESS CONTRIBUTION OF UNITS
------------------------ ------------ --------
19. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ $1,429.00 1.4
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
20. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. $6,429.00 6.4
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
21. ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ $7,858.00 7.9
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
22. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ $3,571.00 3.6
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
23. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ $7,143.00 7.1
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
24. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ $3,571.00 3.6
▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
25. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ $2,143.00 2.1
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
26. ▇▇▇ ▇▇▇▇▇▇▇▇ $7,143.00 7.1
27. ▇▇▇▇▇ ▇▇▇▇▇▇▇ $5,714.00 5.7
28. ▇▇▇▇▇ ▇▇▇▇▇▇▇ $2,857.00 2.9
29. ▇▇▇▇ ▇▇▇▇▇ $2,143.00 2.1
30. ▇▇▇▇ ▇▇▇▇▇ $1,429.00 1.4
31. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ $1,429.00 1.4
32. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ $1,429.00 1.4
B. Class B Units
A-3
CAPITAL NUMBER
NAME AND MAILING ADDRESS CONTRIBUTION OF UNITS
------------------------ ------------ --------
1. Fenway Partners Capital Fund, L.P. $62,430,404.00 62,430.4(3)
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
2. Gloriande Industries, Inc. $22,410,667.00 22,410.7
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇. ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
3. UBS Capital LLC $22,410,667.00 22,410.7
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
4. Dartford Partnership, L.L.C. $591,390.00 591.3856
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇. ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
5. The Ian and ▇▇▇▇▇ ▇▇▇▇▇▇ 1998 $685,753.00 685.7144
Irrevocable Trust
6. Ray and ▇▇▇▇▇▇ ▇▇▇▇▇ Children's Trust $200,000.00 200.0
f/b/o ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
7. Ray and ▇▇▇▇▇▇ ▇▇▇▇▇ Children's Trust $200,000.00 200.0
f/b/o ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
8. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Trustee f/b/o ▇▇▇▇▇▇▇ ▇. $15,000.00 15.0
▇▇▇▇▇▇
9. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Trustee f/b/o ▇▇▇ ▇. $15,000.00 15.0
▇▇▇▇▇▇
10. ▇. ▇▇▇▇ ▇▇▇▇▇▇, Trustee f/b/o Blake $20,000.00 20.0
▇▇▇▇▇▇
11. ▇. ▇▇▇▇ ▇▇▇▇▇▇, Trustee f/b/o Scott $20,000.00 20.0
▇▇▇▇▇▇
---------------
(3) FPIP, LLC is the Assignee of 479.96060449 of these Class B
Units. FPIP Trust, LLC is the Assignee of 266.52086635 of
these Class B Units.
A-4
CAPITAL NUMBER
NAME AND MAILING ADDRESS CONTRIBUTION OF UNITS
------------------------ ------------ --------
12. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Trustee f/b/o ▇▇▇ $20,000.00 20.0
▇▇▇▇▇▇▇▇▇▇
13. ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ $20,000.00 20.0
14. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ $214,285.00 214.3
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
15. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ $72,857.00 72.9
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇. ▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
16. C. ▇▇▇▇▇ ▇▇▇▇▇ $72,857.00 72.9
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇. ▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
17. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ $72,857.00 72.9
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
18. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ $72,857.00 72.9
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
19. ▇▇▇▇ ▇▇▇▇▇ $176,571.00 176.6
▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
20. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ $60,000.00 60.0
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
21. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ $34,286.00 34.3
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
22. ▇▇▇▇▇ ▇▇▇▇▇▇ $30,001.00 30.0
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
23. ▇▇▇ ▇▇▇▇ $38,572.00 38.6
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
A-5
CAPITAL NUMBER
NAME AND MAILING ADDRESS CONTRIBUTION OF UNITS
------------------------ ------------ --------
24. ▇▇▇▇▇ ▇▇▇▇▇▇ $42,858.00 42.9
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
25. ▇▇▇▇▇▇ ▇▇▇▇▇▇ $42,858.00 42.9
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
26. ▇▇▇▇ ▇▇▇▇▇▇▇▇ $23,999.00 24.0
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
27. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ $8,571.00 8.6
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
28. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. $38,571.00 38.6
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
29. ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ $47,142.00 47.1
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
30. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ $21,429.00 21.4
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
31. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ $42,857.00 42.9
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
32. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ $21,429.00 21.4
▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
33. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ $12,857.00 12.9
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
34. ▇▇▇ ▇▇▇▇▇▇▇▇ $42,857.00 42.9
35. ▇▇▇▇▇ ▇▇▇▇▇▇▇ $34,286.00 34.3
A-6
CAPITAL NUMBER
NAME AND MAILING ADDRESS CONTRIBUTION OF UNITS
------------------------ ------------ --------
36. ▇▇▇▇▇ ▇▇▇▇▇▇▇ $17,143.00 17.1
37. ▇▇▇▇ ▇▇▇▇▇ $12,857.00 12.9
38. ▇▇▇▇ ▇▇▇▇▇ $8,571.00 8.6
39. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ $8,571.00 8.6
40. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ $8,571.00 8.6
C. Class C Units
Dartford Partnership, L.L.C. $1,500.00 4,750.0
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇. ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
D. Class D Units
Dartford Partnership, L.L.C. $500.00 1,300.0
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇. ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
E. Class E Units (the Capital Contribution of and Number of Class E Units
held by each of the Class E Holders are on file with the
records of the Company)
1. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
2. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇. ▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
3. C. ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇. ▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
4. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
A-7
CAPITAL NUMBER
NAME AND MAILING ADDRESS CONTRIBUTION OF UNITS
------------------------ ------------ --------
5. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
6. ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
7. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
8. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
9. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
10. ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
11. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
12. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
13. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
14. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
15. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
A-8
CAPITAL NUMBER
NAME AND MAILING ADDRESS CONTRIBUTION OF UNITS
------------------------ ------------ --------
16. ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
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▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
19. ▇▇▇▇▇ ▇▇▇▇▇
20. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
21. ▇▇▇▇▇ ▇▇▇▇▇▇▇
22. ▇▇▇▇ ▇▇▇▇▇
23. ▇▇▇▇▇ ▇▇▇▇▇▇
24. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
25. ▇▇▇▇▇ ▇▇▇▇▇▇▇
26. ▇▇▇▇ ▇▇▇▇▇
All Persons identified on this Schedule A as holders of Class A Units, Class B
Units, Class C Units and Class D Units are Members of the Company. All Persons
identified as holders of Class E Units shall become Members when and to the
extent their Class E Units become Vested Class E Units in accordance with
Schedule B.
A-9
SCHEDULE B
To the Second Amended and Restated
Limited Liability Company Agreement
of VDK Foods LLC
(the "LLC Agreement")
1. [intentionally omitted]
2. Forfeiture. In the event a Public Offering occurs and the provisions
of Section 3 below apply, the Class E Units held by a Class E Holder shall no
longer be subject to forfeiture other than upon the termination of the
employment of the Class E Holder with Cause.
(i) Termination With Cause. In the event that a Class E Holder's
employment by the Company and/or a New LLC Entity terminates because of
discharge or termination of the Class E Holder by the Company or such New LLC
Entity with Cause (as defined below), then all Class E Units held by such Class
E Holder shall be forfeited to the Company without the payment of any
consideration to the Class E Holder by the Company therefor.
(ii) Cause. For purposes of this Schedule B, the Company and the New
LLC Entities shall have "Cause" to discharge or terminate a Class E Holder upon
(i) the indictment of the Class E Holder for any crime which constitutes a
felony, (ii) if the Class E Holder is party to a written employment agreement
with the Company or any New LLC Entity, the failure or inability of the Class E
Holder to cure or remedy, within 30 days after written notice of such failure
from the Company or such New LLC Entity, either (A) the Class E Holder's failure
to satisfactorily discharge all of his or her duties and obligations under such
employment agreement or (B) any gross negligence or willful misconduct on the
party of the Class E Holder in the course of rendering services thereunder, or
(iii) if the Class E Holder is not a party to a written employment agreement
with the Company or any New LLC Entity, the failure or inability of the Class E
Holder to cure or remedy, within 30 days after written notice of such failure
from the Company or such New LLC Entity, either (A) the Class E Holder's
substantial and continuing failure to satisfactorily discharge all of his or her
material duties and obligations owed to the Company or such New LLC Entity or
(B) any gross negligence or willful misconduct on the part of the Class E Holder
in the course of rendering services to the Company or such New LLC Entity.
(iii) Forfeited Class E Units. In the event any Class E Units are
forfeited in accordance with this Schedule B or otherwise, the Board may, but
shall not be required to,
B-1
reissue such Class E Units. Any such issuance shall be made in accordance with
Section 12.1 of the LLC Agreement.
3. Public Offering On or Before September 30, 1998. For purposes of
Section 3 and Section 4 of this Schedule B, capitalized terms used herein but
not otherwise defined shall have the meaning given such terms in Schedule D to
this Agreement.
(i) Conditions. In the event any New LLC Entity including without
limitation any surviving entity of a reorganization (including an
incorporation), merger or consolidation of one or more such entities (such
issuer being the "Public Company") intends to effect a Public Offering and such
Public Offering closes on or before September 30, 1998, the provisions of this
Section 3 shall govern the valuation of Class E Units, the vesting of Class E
Units and the time and manner of payments with respect thereto in lieu of the
other provisions of this Schedule B. The provisions of this Section 3 shall be
effective immediately prior to the consummation of the initial Public Offering
(the "E Unit Effective Time").
(ii) Vesting. At the E Unit Effective Time, any then outstanding but
unvested Class E Units held by such Class E Holder shall become Vested Class E
Units. In addition, Class E Units held by a Class E Holder shall be subject to
forfeiture only upon the termination of the employment of the Class E Holder
with Cause pursuant to Section 2 above.
(iii) Valuation and Distribution of Shares. Upon the closing date of
the initial Public Offering, each Vested Class E Unit shall be valued as
hereinafter set forth and the holders of such Units shall become entitled to be
distributed, at the times and in the manner set forth below in this Section 3,
shares of common stock of the Public Company based on such valuation.
(iv) Valuation of Class E Units. The value of Vested Class E Units
and the number of shares of common stock of the Public Company distributable on
account of Vested Class E Units is set forth in this paragraph (d). Upon the
closing date of the initial Public Offering, a computation of Total Profits,
Total Distributions and Total Vested Class E Unit Value shall be made on a basis
as if all of the Company's direct or indirect equity interests in the Public
Company (but excluding any such equity interests either sold in the initial
Public Offering by Aurora/VDK LLC or distributed by Aurora/VDK LLC in connection
with the initial Public Offering in respect of a special distribution by
Aurora/VDK LLC of $50,900,000 in the aggregate to the Company and MBW Investors
LLC) had been valued at a per share price equal to the Gross IPO Price and as if
such value had been distributed by the Company in accordance with Section 8.3 of
this Agreement.
The holder of each Vested Class E Unit shall thereupon be entitled to
receive with respect to such Unit a number of shares of common stock of the
Public Company (of the same class as sold in the Public Offering) equal to the
sum of (x) the quotient of (A) the Vested Class E Unit Value under this
paragraph (d) divided by (B) the Gross IPO Price plus (y) the Per Unit
Additional Share Increment.
B-2
"Additional Share Increment" means the number of shares equal to the
quotient of (x) the Additional Increment divided by (y) 125% of the Gross IPO
Price.
"Additional Increment" means the excess, if any, of (x) Total Vested Class
E Unit Value calculated as if all of the Company's direct or indirect equity
interests in the Public Company (excluding any interests sold in the Public
Offering directly or indirectly for the Company's account) had been valued at a
per share price equal to 125% of the Gross IPO Price and as if such value had
been distributed by the Company in accordance with Section 8.3 of the LLC
Agreement over (y) Total Vested Class E Unit Value calculated as the product of
(1) as if all of the Company's direct or indirect equity interests in the Public
Company (but excluding any such equity interests either sold in the initial
Public Offering by Aurora/VDK LLC or distributed to VDK LLC in respect of a
special distribution by Aurora/VDK LLC of $50,900,000 in the aggregate to the
Company and MBW Investors LLC) had been valued at a per share price equal to the
Gross IPO Price and as if such value had been distributed by the Company in
accordance with Section 8.3 of the LLC Agreement and (2) 125%.
"Per Unit Additional Share Increment" means the Additional Share Increment
divided by the aggregate number of Vested Class E Units outstanding.
Any shares of common stock of the Public Company distributable to
Class E Holders pursuant to this Section 3 are hereinafter referred to as
"Distributable Shares".
For the purpose hereof, the term "Gross IPO Price" shall mean the
price to the public per share at which securities of the Public Company were
sold in the Public Offering without reduction for underwriter's commissions and
other expenses relating to the Public Offering.
"Total Vested Class E Unit Value" means the value of all Vested Class E
Units, which shall equal the product of P multiplied by Total Profits, where P
is a percentage that equals 3.6% multiplied by the fraction in which the
numerator is the number of Vested Class E Units and the denominator is 720.
"Vested Class E Unit Value" means the value of a single Vested Class E
Unit, which shall equal the percentage of Total Vested Class E Unit Value
obtained by dividing one by the aggregate number of Vested Class E Units
outstanding.
(v) Time of Payment. Following a Public Offering, distributions of
Distributable Shares payable on account of Total Class E Unit Value shall be
made as of the following dates and at the following times:
1) as of the effective date of each Secondary Sale prior to the
Final Date, in an amount equal to the total number of Distributable
Shares which all holders of Vested Class E Units and would be
entitled to include in such Secondary Sale pursuant to the piggyback
registration rights provisions under the Securityholders Agreement,
assuming for such purpose that the Company had distributed all shares
of the Public Company
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held by it pursuant to this Agreement and the VDK Holdings Plan;
provided, however, in lieu of distributing such shares to the holders
of such Units, all or any portion of such shares will instead be sold
by the Company (or, if applicable, by the Public Company) in such
Secondary Sale and the net proceeds of such sale shall be distributed
to the holders of such Class E Units pro rata in accordance with
their respective interests in the shares that otherwise would have
been distributed.
2) upon the Final Date, with the payments of Distributable
Shares with respect to the Final Date to be made at the same time as
any Distributions to Investors under this Agreement arising from the
Final Date.
(vi) Manner of Payment. Any payment to Class E Holders with respect
to Units that is made pursuant to paragraphs (c) or (d) of this Section 3 shall
be made in Distributable Shares distributed by the Company to Class E Holders.
4. [intentionally omitted]
B-4
SCHEDULE C
To The Amended and Restated Limited Liability
Company Agreement of VDK Foods LLC
REGISTRATION RIGHTS
1.1. General. This Schedule C describes the duties and the obligations of
the Company (which for purposes of this Schedule C shall include any successor
entity of VDK Foods LLC by way of merger or consolidation) and the Members with
respect to the registration of certain securities of the Company.
1.2. Certain Definitions. As used in this Schedule C, the following
capitalized terms shall have the following meanings:
(a) "Commission" means the Securities and Exchange Commission, or any
other federal agency at the time administering the Securities Act.
(b) "Demand Holder" means any of Fenway, National Sun or UBS Capital.
(c) "Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
(d) "Holder" means any Member or Assignee or other holder of
outstanding Registrable Securities that have not been sold to the public.
(e) "Prospectus" means the prospectus which is part of a Registration
Statement.
(f) "Register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and the declaration or ordering of the
effectiveness of such registration statement by the Commission.
(g) "Registrable Securities" means any Unit (other than Class E Units
that are not Vested Class E Units), or any limited liability company interest or
other equity security of the Company issued to Members upon the merger or
consolidation of the Company or upon any Unit or stock split, Unit or stock
dividend, recapitalization, reorganization or similar event.
(h) "Registration Expenses" means all expenses incurred by the
Company in compliance with Section 1.3 hereof, including, without limitation,
all registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company, blue sky fees and expenses, and the expense of any
special audits incident to or required by any such registration (but excluding
the compensation of regular employees of the Company, which shall be paid in
C-1
any event by the Company) and the expenses associated with the Company's
obligations under Section 1.5 hereof.
(i) "Registration Statement" means a registration statement filed
with the Commission under the Securities Act.
(j) "Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
(k) "Selling Expenses" means all underwriting discounts and selling
commissions, brokerage fees and transfer taxes applicable to the sale of
Registrable Securities in a registered offering and all fees and disbursements
of any counsel, accountants or other representatives retained by any Holder.
(l) "Selling Holder" means a Holder whose Registrable Securities are
included in a Registration Statement hereunder.
1.3. Piggyback Registration Rights.
(a) Request for Registration. If at any time the Company shall elect
to register any Registerable Securities for the account of any Holder or any
equity securities for its own account, the Company will:
(i) promptly give to each Holder written notice thereof (which notice
shall advise such Holder of his or its rights to have any or all Registrable
Securities then held by such Holder included among the securities to be covered
by such registration statement and shall offer such Holder, for a period of 15
days beginning on the date of delivery of such notice, the opportunity to notify
the Company of such Holder's wish to have its or his Registrable Securities
included in such registration statement and a list of the jurisdictions in which
the Company shall qualify such securities under the applicable blue sky or other
state securities laws);
(ii) include in such registration (and any related qualification
under state blue sky laws and other compliance filings, and in any underwriting
involved therein) on the same terms and conditions as the other securities
included therein, all the Registrable Securities specified in a written request
or requests given by any Holder within 15 days after such written notice from
the Company described in clause (i) above is delivered; and
(iii) file and keep effective such registration statement for a
period of not less than 90 days, or such shorter period which will terminate
when all Registrable Securities covered by such registration statement have been
sold or withdrawn (but not prior to the period referred to in Section 4(3) of
the Securities Act and Rule 174 thereunder, if applicable).
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(b) Certain Restrictions.
(i) If the registration of which the Company gives notice is for a
registered public offering involving an underwriting, the Company shall so
advise the Holders as part of the written notice given pursuant to Section
1.3(a)(i) above. In such event, the right of any Holder to registration pursuant
to this Section 1.3 shall be conditioned upon such Holder's participation in
such underwriting and the inclusion of such Holder's Registrable Securities in
the underwriting on the same terms and conditions as such offering. All Holders
proposing to distribute their Registrable Securities through such underwriting
shall (together with the Company and any other persons distributing their
securities through such underwriting) enter into an underwriting agreement in
customary form with the representative of the underwriters selected or approved
for underwriting by the Company.
(ii) If a representative of the underwriters advises the Company in
writing that in its opinion, or, in the case of a registration not being
underwritten, the Company shall reasonably determine after consultation with an
independent investment banker that, the number of securities proposed to be sold
exceeds the number which can be effectively sold in, or would have a material
adverse effect on, such offering, then the Company will include in such
registration the number of securities which, in the opinion of such
representative or the Company, as the case may be, can be sold, as follows: (A)
first, any securities the Company proposes to sell, (B) second, the Registrable
Securities requested by Holders to be included in such registration selected pro
rata among such Holders and (C) third, other securities requested to be included
in such registration. If any Holder disapproves of the terms of any such
underwriting, such person may elect to withdraw therefrom by written notice to
the Company and the representative of the underwriters. Any Registrable
Securities or other securities excluded or withdrawn from such underwriting
shall be withdrawn from such registration.
1.4. Demand Registration Rights.
(a) Right to Demand. Subject to Sections 1.4(b) and (c) below, at any
time after the 90th day after the first registration of the Company's equity
securities under the Securities Act (other than a registration on Forms S-4 or
S-8 or a similar form), Demand Holders may make a written request for
registration under and in accordance with the provisions of the Securities Act
of all or part of their Registrable Securities (a "Demand Registration"). After
receipt of such request, the Company will promptly give to each holder written
notice (the "Notice") of such registration request to all Holders and the
Company will include in such registration all Registrable Securities of Holders
with respect to which the Company has received written requests for inclusion
therein within 15 days after the receipt by the applicable Holder of the Notice.
All requests made pursuant to this paragraph (a) will specify the aggregate
number of the Registrable Securities to be registered and will also specify the
intended methods of disposition thereof.
C-3
(b) Restrictions on Demand Rights.
(i) The Company shall not be obligated to effect any Demand
Registration if (A) such Demand Registration covers Registrable Securities
having an aggregate proposed sales price of less than $5,000,000, (B) the need
for any special audit or restatement of the Company's audited financial
statements in connection with such Demand Registration could, in the reasonable
judgment of the Company, be avoided by a one-time deferral of such Demand
Registration for a period of not more than 120 days, or (C) less than six months
has elapsed from the effectiveness of a Registration Statement filed pursuant to
Section 1.4(a).
(ii) If a representative of the underwriters of a Demand
Registration advises the Company in writing that in its opinion, or, in the case
of a Demand Registration not being underwritten, the Company shall reasonably
determine after consultation with an independent investment banker that, the
number of securities proposed to be sold in such Demand Registration exceeds the
number which can be effectively sold in, or would have a material adverse effect
on, such offering, then the Company will include in such registration only the
number of securities which, in the opinion of such representative or the
Company, as the case may be, can be sold, selected pro rata among Holders which
have requested to be included in such Demand Registration based on the number of
securities of each Holder included in the offering; provided that if any Holder
has requested inclusion in such Demand Registration and 66 2/3% or less of the
securities so requested to be included have been included, such Holder shall be
entitled to an additional Demand Registration hereunder on the same terms and
conditions as would have applied to such Holder had such earlier Demand
Registration not been made.
(c) Number of Demand Registrations. The Demand Holders shall be
entitled to the following number of Demand Registrations: Fenway -- two; UBS
Capital -- one; and National Sun -- one, the expenses of which shall be borne by
the Company. A Demand Registration shall not be counted as a Demand Registration
hereunder until such Demand Registration has been declared effective and
maintained continuously effective for a period of at least 90 days or such
shorter period ending when all Registrable Securities included therein have been
sold in accordance with any such Demand Registration; provided, however, if any
Demand Registration shall be withdrawn prior to effectiveness thereof at the
request of the Selling Holders holding a majority of the Registrable Securities
included therein due to reasons other than material adverse changes in the
condition, financial or otherwise, of the Company, such Demand Registration
shall be counted hereunder unless such Selling Holders shall agree to pay the
expenses incurred by the Company in connection therewith.
1.5. Expenses of Registration. Except as set forth in Section 1.4(a)
above, all Registration Expenses incurred pursuant to this Section 1 shall be
borne by the Company. All Selling Expenses shall be borne by the Holders of the
securities so registered.
1.6. Registration Procedures. In the case of each registration effected by
the Company pursuant to this Section 1, the Company will advise each Holder in
writing as to the initiation
C-4
of such registration and as to the completion thereof. The Company will, as
expeditiously as practicable:
(a) prepare and file with the Commission a Registration Statement
which includes the Registrable Securities and use its best efforts to cause such
Registration Statement to become and remain effective as provided herein;
provided that before filing any amendments or supplements to a Registration
Statement or Prospectus, including documents incorporated by reference after the
initial filing of the Registration Statement, the Company will furnish to the
Selling Holders and the underwriters, if any, copies of all such documents
proposed to be filed at least two business days prior thereto, which documents
will be subject to the reasonable review of such Selling Holders and
underwriters, and the Company will not file an amendment to a Registration
Statement or Prospectus or any supplement thereto (including such documents
incorporated by reference) to which Selling Holders holding a majority of the
Registrable Securities covered by such Registration Statement or the
underwriters, if any, shall reasonably object;
(b) prepare and file with the Commission such amendments and
post-effective amendments to the Registration Statement as may be necessary to
keep the Registration Statement effective for a period of not less than 90 days,
or such shorter period which will terminate when all Registrable Securities
covered by such Registration Statement have been sold or withdrawn (but not
prior to the expiration of the 90-day period referred to in Section 4(3) of the
Securities Act and Rule 174 thereunder, if applicable); cause the Prospectus to
be supplemented by any required Prospectus supplement, and as so supplemented to
be filed pursuant to Rule 424 under the Securities Act; and comply with the
provisions of the Act applicable to it with respect to the disposition of all
securities covered by such Registration Statement during the applicable period
in accordance with the intended methods of disposition by the sellers thereof
set forth in such Registration Statement or supplement to the Prospectus; the
Company shall be deemed to have used its best efforts to keep a Registration
Statement effective during the applicable period if it complies with all rules
and regulations under the Securities Act relating to it and the noncompliance
with which would result in Selling Holders not being able to sell their
Registrable Securities covered by such Registration Statement during that
period;
(c) furnish to any Seller Holder and the underwriter or underwriters,
if any, without charge, at least one signed copy of the Registration Statement
and any post-effective amendment thereto, upon request, and such number of
conformed copies thereof and such number of copies of the Prospectus (including
each preliminary Prospectus) and any amendments or supplements thereto, and any
documents incorporated by reference therein, as such Selling Holder or
underwriter may reasonably request in order to facilitate the disposition of the
Registrable Securities being sold by such Selling Holder (it being understood
that the Company consents to the use of the Prospectus and any amendment or
supplement thereto by each Selling Holder and the underwriter or underwriters,
if any, in connection with the offering and sale of the Registrable Securities
covered by the Prospectus or any amendment or supplement thereto);
C-5
(d) notify each Selling Holder at any time when a Prospectus relating
to Registrable Securities of any Selling Holder included in a Registration
Statement is required to be delivered under the Act, when the Company becomes
aware of the happening of any event as a result of which the Prospectus included
in such Registration Statement (as then in effect) contains any untrue statement
of a material fact or omits to state a material fact necessary to make the
statements therein (in the case of the Prospectus or any preliminary Prospectus,
in light of the circumstances under which they were made) not misleading and, as
promptly as practicable thereafter, prepare and file with the Commission and
furnish to Selling Holders a supplement or amendment to such Prospectus so that,
as thereafter delivered to the purchasers of such Registrable Securities, such
Prospectus will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(e) enter into customary agreements (including, if applicable, an
underwriting agreement in customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the disposition of such
Registrable Securities;
(f) make reasonably available for inspection by any Selling Holder,
any underwriter participating in any disposition pursuant to the Registration
Statement, and any attorney, accountant or other agent retained by any such
Seller Holder or underwriter (collectively, the "Inspectors"), all pertinent
financial and other records, pertinent corporate documents and properties of the
Company (collectively, the "Records") as shall be reasonably necessary to enable
them to exercise their due diligence responsibility, and cause the Company's
officers, directors and employees to supply all information reasonably requested
by any such Inspector in connection with such Registration Statement. Records
and other information which the Company determines, in good faith, to be
confidential and which it notifies the Inspectors are confidential shall not be
disclosed by the Inspectors unless (i) the disclosure of such Records in the
opinion of counsel reasonably acceptable to the Company is necessary to avoid or
correct a misstatement or omission in the Registration Statement or (ii) the
release of such records is ordered pursuant to a subpoena or other order from a
court of competent jurisdiction. The Selling Holder agrees that it will, upon
learning that disclosure of such Records is sought in a court of competent
jurisdiction, give notice to the Company and allow the Company, at the Company's
expense, to undertake appropriate action to prevent disclosure of the Records
deemed confidential;
(g) use its best efforts to obtain a "cold comfort" letter from the
Company's independent public accountants in customary from and covering such
matters of the type customarily covered by "cold comfort" letters as the Selling
Holders holding a majority of the Registrable Securities being sold or the
managing underwriter reasonably requests;
(h) use its best efforts to obtain an opinion or opinions from
counsel for the Company in customary form;
C-6
(i) use its best efforts to cause all Registrable Securities included
in such Registration Statement to be listed, by the date of the first sale of
Registrable Securities pursuant to such Registration Statement, on each
securities exchange on which the Company's securities of the same class are then
listed or proposed to be listed, if any;
(j) make generally available to its securityholders an earnings
statement, which need not be audited, satisfying the provisions of Section 11(a)
of the Securities Act no later than 45 days after the end of the 12-month period
beginning with the first month of the Company's first fiscal quarter commencing
after the effective date of the Registration Statement, which statements shall
cover said 12-month period;
(k) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of the Registration Statement at the earliest
possible moment;
(l) if requested by the managing underwriter or underwriters or any
Selling Holder promptly incorporate in a Prospectus supplement or post-effective
amendment such information as the managing underwriter or underwriters or such
Selling Holder requests to be included therein, including, without limitation,
information with respect to the number of Registrable Securities being sold by
such Selling Holder to such underwriter or underwriters, the purchase price
being paid therefor by such underwriter or underwriters and information with
respect to any other terms of the underwritten offering of the Registrable
Securities to be sold in such offering; and make all required filings of such
Prospectus supplement or post-effective amendment as soon as possible after
being notified of the matters to be incorporated in such Prospectus supplement
or post-effective amendment;
(m) as promptly as practicable after filing with the Commission of
any document which is incorporated by reference into a Registration Statement,
deliver a copy of such document to each Selling Holder;
(n) on or prior to the date on which the Registration Statement is
declared effective, use its best efforts to register or qualify, and cooperate
with the Selling Holders, the underwriter or underwriters, if any, and their
counsel, in connection with the registration or qualification of, the
Registrable Securities covered by the Registration Statement for offer and sale
under the securities or blue sky laws of each state and other jurisdiction of
the United States as any Selling Holder or underwriter reasonably requests in
writing, to use its best efforts to keep each such registration or qualification
effective, including through new filings, or amendments or renewals, during the
period such Registration Statement is required to be kept effective and to do
any and all other acts or things necessary or advisable to enable the
disposition in all such jurisdictions of the Registrable Securities covered by
the Registration Statement; provided that the Company will not be required to
(i) qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this paragraph (c)(14), (ii) consent to
general service of process in any such jurisdiction or (iii) subject itself to
general taxation in any such jurisdiction;
C-7
(o) cooperate with the Selling Holders and the managing underwriter
or underwriters, if any, to facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legends) representing securities to be
sold under the Registration Statement, and enable such securities to be in such
denominations and registered in such names as the managing underwriter or
underwriters, if any, or such Selling Holders may request; and
(p) use its best efforts to cause the Registrable Securities covered
by the Registration Statement to be registered with or approved by such other
governmental agencies or authorities within the United States as may be
necessary to enable the Selling Holders or the underwriter or underwriters, if
any, to consummate the disposition of such securities.
1.7. Indemnification.
(a) Whenever pursuant to Section 1.3 or 1.4 hereof a registration
statement relating to Registrable Securities is filed under the Securities Act,
the Company will indemnify and hold harmless each Holder selling Registrable
Securities covered thereby, each person, if any, who controls any such Holder,
each underwriter of any such Registrable Securities and each person, if any, who
controls any such underwriter, against any losses, claims, damages or
liabilities, joint or several, to which such Holder, any such underwriter or any
such controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement, or alleged
untrue statement, of any material fact contained in such registration statement,
or preliminary prospectus or final or summary prospectus that may be a part
thereof, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse the Holders selling Registrable Securities, each such
underwriter and each such controlling person for all legal or other expenses
reasonably incurred by it in connection with investigating or defending against
such loss, claim, damage, liability or action; provided that the Company shall
not be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in said registration
statement, said preliminary, final or summary prospectus, or said amendment or
supplement, in reliance upon and in conformity with information furnished to the
Company by any Holder in writing selling Registrable Securities, such
underwriter or such controlling person for use in preparation thereof.
(b) Whenever pursuant to Section 1.3 or 1.4 hereof a registration
statement relating to Registrable Securities is filed under the Securities Act,
each Holder selling Registrable Securities will indemnify and hold harmless the
Company, each of its directors, each of its officers who have signed such
registration statement, each other Holder and each other person, if any, who
controls the Company or such other Holder against all losses, claims, damages or
liabilities, joint or several, to which the Company or other Holder, or any such
director, officer or controlling person may become subject under the Securities
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based
C-8
upon any untrue statement, or alleged untrue statement, of any material fact
contained in such registration statement, or preliminary prospectus or final or
summary prospectus contained therein, or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, but only if, and to the extent that, such
statement or omission was in reliance upon and in conformity with information
furnished to the Company by such Holder in writing selling Registrable
Securities specifically for use in the preparation thereof, and will reimburse
the Company, each such other Holder and such directors, officers or controlling
persons for all legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action.
(c) Any Person entitled to indemnification hereunder will (i) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification and (ii) unless in such indemnified party's
reasonable judgment a conflict of interest may exist between such indemnified
and indemnifying parties with respect to such claim, permit such indemnifying
party to assume the defense of such claim with counsel reasonably satisfactory
to the indemnified party. Whether or not such defense is assumed by the
indemnifying party, the indemnifying party will not be subject to any liability
for any settlement made without its consent (but such consent will not be
unreasonably withheld). No indemnifying party will consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party
of a release from all liability in respect of such claim or litigation. An
indemnifying party who is not entitled to, or elects not to, assume the defense
of a claim will not be obligated to pay the fees and expenses of more than one
counsel for all parties indemnified by such indemnifying party with respect to
such claim, unless in the reasonable judgment of any indemnified party a
conflict of interest may exist between such indemnified party and any other of
such indemnified parties with respect to such claim, in which event the
indemnifying party shall be obligated to pay the fees and expenses of such
additional counsel or counsels.
(d) If for any reason the indemnification provided for in Sections
1.6(a) and 1.6(b) above is unavailable to an indemnified party as contemplated
by such Sections, then the indemnifying party shall contribute to the amount
paid or payable by the indemnified party as a result of such loss, claim, damage
or liability in such proportion as is appropriate to reflect not only the
relative benefits received by the indemnified party and the indemnifying party,
but also the relative fault of the indemnified party and the indemnifying party,
as well as any other relevant equitable considerations.
1.8. Information from Holder. Each Holder shall furnish to the Company
such information regarding such Holder and the distribution proposed by such
Holder as the Company may reasonably request in writing and as shall be
reasonably required in connection with any registration, qualification or
compliance referred to in this Schedule C.
1.9. Rule 144. The Company agrees that at all times after it has filed a
registration statement pursuant to the requirements of the Securities Act
relating to any securities of the
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Company, it will use its best efforts to file in a timely manner all reports
required to be filed by it pursuant to the Exchange Act and, at any time and
upon request of a Holder, will furnish such Holder and others with such
information as may be necessary to enable the Holder to effect sales of
Registrable Securities without registration pursuant to Rule 144 under the
Securities Act. Notwithstanding the foregoing, the Company may deregister any
class of its securities under Section 12 of the Exchange Act or suspend its duty
to file reports with respect to any class of its securities pursuant to Section
15(d) of the Exchange Act if it is then permitted to do so pursuant to the
Exchange Act and the rules and regulations thereunder.
1.10. "Market Stand-Off" Agreement. Each Holder agrees, if requested by
the Company and the underwriter for any underwritten offering of the Company's
securities, not to sell (including sales under Rule 144) or otherwise Transfer
any Registerable Securities of the Company held by it during the 15 days prior
to, and during the 120-day period following, the effective date of any
registration statement of the Company filed under the Securities Act with
respect to an underwritten public offering of securities by the Company (except
as part of such registered offering). Such agreement shall be in writing in a
form satisfactory to the Company and the underwriter. The Company may impose
stop-transfer instructions with respect to the securities subject to the
foregoing restrictions until the end of such 120-day period.
C-10
SCHEDULE D to the
Second Amended and Restated Limited
Liability Company
Agreement of VDK Foods LLC
AMENDED AND RESTATED VDK
INCENTIVE COMPENSATION PLAN
1. Purpose. The purpose of this Amended and Restated VDK Incentive
Compensation Plan (this "Plan") is to provide a means by which certain employees
of, consultants to and other persons having key business relations with VDK
Foods LLC (the "Company") and certain New LLC Entities (such employees,
consultants and other persons being hereinafter referred to individually as a
"Key Person" and collectively as "Key Personnel"), may be given an opportunity
to benefit from the appreciation in the value of the Company through the
issuance of (i) incentive compensation units ("Performance Units") whose value,
as described below, is based on the achievement of certain earnings targets and
(ii) incentive compensation units ("Exceptional Performance Units") whose value,
as described below, is based on the rate of return achieved by certain investors
in the Company. Performance Units and Exceptional Performance Units are
hereinafter referred to as "Units." This Plan is intended to advance the
interests of the Company by encouraging long-term employment with and diligent
service to the Company and certain New LLC Entities on the part of the Key
Personnel, by enabling the Company and certain New LLC Entities to retain their
services and by providing such Key Personnel with an incentive to advance the
success of the Company and certain New LLC Entities.
2. General Terms and Conditions of Rights; Definitions.
(a) General Terms. The Board of Member Managers of the Company (the
"Board") has granted and may grant Units to one or more Key Persons from time to
time pursuant to this Plan; provided that each time a Key Person is granted
Units, the number of Performance Units in such grant shall equal the number of
Exceptional Performance Units in such grant. The maximum number of Performance
Units that may be granted under this Plan is 2,000. The maximum number of
Exceptional Performance Units that may be granted under this Plan is 2,000.
(b) Units Agreements. Units that have been granted shall be evidenced
by written agreements (each a "Units Agreement") and, except as specifically
approved by the Board or any Committee designated thereby, shall not be
inconsistent with this Plan.
(c) No Effect on Employment. Nothing in this Plan or a Unit or Units
Agreement issued hereunder shall govern the rights and duties relating to
employment or other services
D-1
between the holder of any Units and the Company or any New LLC Entity. Neither
this Plan, nor any grant of Units pursuant thereto, shall constitute an
employment or other form of service or supply agreement among such parties or
establish a right of continued employment or a continued relationship with the
Company or any New LLC Entity and the holder of any Unit.
(d) Definitions. Capitalized terms used in this Plan shall have the
respective meanings set forth in Section 11.
(e) Relationship of this Plan to the VDK Holdings, Inc. Incentive
Compensation. The Company has amended and restated this Plan pursuant to the New
Compensation Agreement. Under the New Compensation Agreement, the Company agreed
to amend and restate this Plan so that it would have the same terms and
provisions of the VDK Holdings Plan and grant to each holder of Performance
Units and Exceptional Performance Units under this Plan a number of PUs and EPUs
under the VDK Holdings Plan that is identical to the number of Performance Units
and Exceptional Performance Units held by such person under this Plan as of
April 8, 1998. VDK Holdings will make payments to Unit Holders under the VDK
Holdings Plan, and any payments made under the VDK Holdings Plan will replace
any payments due under the this Plan.
(f) Obligation of VDK Foods LLC to Fund Payments. Any cash,
securities or other property payable by VDK Holdings to Unit Holders under the
VDK Holdings Plan with respect to the obligations of VDK Holdings (other than
the Gross-Up Obligation) under the VDK Holdings Plan shall be contributed by the
Company to VDK Holdings. To the extent the Company does not contribute such
cash, securities or other property to VDK Holdings, the Company shall be
required to make the payment due to Unit Holders under this Plan and VDK
Holdings shall have no obligation to make the payment due to Unit Holders under
the VDK Holdings Plan.
3. [intentionally omitted]
4. [intentionally omitted]
5. Payment and Valuation with respect to a Public Offering. In the event
either VDK Holdings or any other New LLC Entity (including without limitation
any surviving entity of a reorganization (including an incorporation), merger or
consolidation of one or more of such entities) (such issuer being the "Public
Company") intends to effect a Public Offering, the provisions of this Section 5
shall govern the valuation of Units, the vesting of Units, and the time and
manner of payments with respect thereto, except as provided in this Section 5
and Annex 1 hereto. In the event the closing date of the initial Public Offering
occurs on or prior to September 30, 1998, the valuation of Units, the vesting of
Units and the time or manner of payments with respect thereto shall be governed
by Annex 1 hereto. This Section 5 and Annex 1 hereto shall be effective
immediately prior to the closing date of the initial Public Offering (the "IC
Plan Effective Time.")
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6. Forfeiture. In the event a Public Offering occurs and the provisions of
Annex 1 hereto apply, the Units held by a Unit Holder shall be subject to
forfeiture only upon the termination of the employment or engagement of the Unit
Holder with Cause (as defined below); provided, that in the event the employment
of a member of Dartford who is an employee of the Company is terminated for
Cause, such employee's allocable share of Dartford's Units as determined in
accordance with the governing documents of Dartford then in effect shall be
subject to forfeiture under this Section 6.
(a) Termination With Cause. In the event that a Unit Holder's
employment by the Company and/or any New LLC Entity terminates prior to the date
on which Total Performance Unit Value or Total Exceptional Performance Unit
Value, as applicable, are determinable in accordance with this Plan because of
discharge or termination of the Unit Holder by the Company or any New LLC Entity
with Cause (as defined below), then all Units held by such Unit Holder shall be
forfeited to the Company without the payment of any consideration to the Unit
Holder by the Company therefor.
(b) Cause. For purposes of this Plan, the Company or a New LLC Entity
shall have "Cause" to discharge or terminate a Unit Holder upon (i) the
indictment of the Unit Holder for any crime which constitutes a felony, (ii) if
the Unit Holder is party to a written employment, consulting or similar
agreement with the Company or a New LLC Entity, the failure or inability of the
Unit Holder to cure or remedy, within 30 days after written notice of such
failure from the Company or such New LLC Entity either (A) the Unit Holder's
failure to satisfactorily discharge all of his, her or its duties and
obligations under such agreement or (B) any gross negligence or willful
misconduct on the part of the Unit Holder in the course of rendering services
thereunder, or (iii) if the Unit Holder is not a party to a written employment,
consulting or similar agreement with the Company or any New LLC Entity, the
failure or inability of the Unit Holder to cure or remedy, within 30 days after
written notice of such failure from the Company or such New LLC Entity either
(A) the Unit Holder's substantial and continuing failure to satisfactorily
discharge all of his, her or its material duties and obligations owed to the
Company or such New LLC Entity or (B) any gross negligence or willful misconduct
on the part of the Unit Holder in the course of rendering services to the
Company or such New LLC Entity.
(c) Forfeited Units. Forfeited Units shall not be taken into account
for purposes of the computations under Sections 5 or 7. In the event any Units
are forfeited in accordance with this Section 6 or otherwise, the Board may, but
shall not be required to, grant such Units to Key Personnel of the Company
pursuant to this Plan.
7. Special Provisions. The following special provisions shall apply to the
valuation of the Units provided for in this Plan.
(a) Golden Parachute Gross-Up. Anything herein to the contrary
notwithstanding, in the event that the excise tax provided by IRC Sections
4999, or any amended or successor provision, applies to any payment to a Unit
Holder hereunder, at Dartford's election
D-3
exercisable by written notice to the Board, the amount of such payment shall be
increased sufficiently, but not in excess of 15% thereof, so that the amount
distributed to such Unit Holder net of such excise tax is approximately equal to
the amount that would have been distributed had no such excise tax been imposed.
All calculations made under this Plan shall be made after taking into account
any such gross-up payments such that Total Distributions and IRR of the Business
are based on the actual amounts received by Investors.
(b) Capital Gains Gross-Up. Anything herein to the contrary
notwithstanding, in the event that the U.S. federal income tax rate on capital
gains is less than the U.S. federal income tax rate on ordinary income and the
payments to Unit Holders are subject to tax at such ordinary income rates, at
Dartford's election exercisable by written notice to the Board, the amount of
any payment to any Unit Holder shall be increased sufficiently so that such
amount, net of any such U.S. federal income tax at ordinary rates, equals the
payment that would otherwise have been made to such Unit Holder net of U.S.
federal income tax at capital gains rates; provided, that in the event of a
Public Offering occurs and the provisions of Annex 1 apply, Dartford shall be
deemed to have automatically made such election and no notice to the Board shall
be required. The aggregate amount of such increased amounts payable to Unit
Holders are hereinafter referred to as the "Gross-Up Obligation". The Gross-Up
Obligation shall be paid by VDK Holdings to Unit Holders in cash at the same
time as the corresponding payment to Unit Holders giving rise to such Gross-Up
Obligation is payable. The obligation of VDK Holdings to pay the Gross-Up
Obligation shall be subject to VDK Holdings (or its successor) having the right
to accrue a deduction for tax purposes for such payment but shall not be subject
to such deduction reducing the amount of taxes otherwise payable by VDK Holdings
(or its successor) in the year in which such deduction accrues. The payment of
such Gross-Up Obligation is a direct obligation of VDK Holdings, and the Company
has no obligation to fund the payment of the Gross-Up Obligation; provided, that
to the extent VDK Holdings fails to pay the Gross-Up Obligation then due
(whether or not the reason for such failure is the inability of VDK Holdings to
accrue the deduction for tax purposes described above), the Company shall be
required to pay to Unit Holders an amount in cash equal to the amount of the
unpaid Gross-Up Obligation.
8. Administration. This Plan shall be administered by the Board subject to
the express terms and conditions of this Plan. From and after the effective date
of this Plan, the Board shall have full power to grant Units under this Plan. No
member of the Board or VDK Board shall be liable for any action or determination
made in good faith with respect to this Plan or to any Unit.
9. Effective Date; Termination; Successors.
(a) The original effective date of this Plan was as of September 19,
1995. The effective date of this Plan as hereby amended and restated is as of
April 8, 1998.
(b) This Plan shall terminate upon all Units being retired as a
result of payments or forfeiture.
D-4
(c) This Plan shall be binding on and inure to the benefit of the
Company and its successors and assigns, including without limitation any
successor or assign of the Company by reason of the merger, consolidation or
reorganization of the Company with such successor or assign to be the "Company"
for purposes of this Plan.
10. Amendments. From time to time, this Plan may be altered, amended,
suspended or discontinued, even if such action alters an outstanding Units
Agreement to the detriment of the Unit Holder without his consent, upon the
mutual agreement of the Board, the VDK Board and Dartford; provided, that at any
time when the next succeeding proviso is not applicable, any such action applies
to each Unit Holder in a consistent manner; provided, further, that in the event
that neither Dartford nor its members are providing management services to the
Company (whether in a member's capacity as a senior executive officer of the
Company or otherwise), then any such alteration, amendment, suspension or
discontinuance shall be effective upon the mutual agreement of the Board, the
VDK Board and (A) insofar as any Units held by Dartford are affected by such
amendment, Dartford, and (B) insofar as any Units held by Persons other than
Dartford are affected by such amendment, such other Persons holding a majority
of such Units.
11. Definitions. As used in this Plan, the following terms shall have the
meanings set forth below.
"Affiliate" means any parent or subsidiary corporation of the Company as
defined in Section 424(e) and (f) respectively of the Internal Revenue Code of
1986, but only for so long as such relationship is maintained.
"Aurora/VDK LLC" means Aurora/VDK LLC, a Delaware limited liability
company and the holder of all of the issued and outstanding capital stock of the
Company on the effective date of this Plan.
"Board" has the meaning set forth in Section 2.
"Cause" has the meaning set forth in Section 6.
"Class B LLC Units" means the "Class B" Units of limited liability company
interest of the Company.
"Class D LLC Units" means the "Class D" Units of limited liability company
interest of the Company.
"Company" has the meaning set forth in Section 1.
"Dartford" means Dartford Partnership L.L.C.
D-5
"Distributions" means amounts paid, payable or deemed paid or payable to
any holder of Voting LLC Units, Non-Voting LLC Units, Units under this Plan, or
PUs or EPUs under the VDK Holdings Plan, whether such amounts are in cash,
equity securities (not including equity securities issuable as pursuant to
splits or recapitalizations) or other property either as (i) distributions of
profits, (ii) distributions in redemption, liquidation or otherwise, or (iii) in
accordance with Section 5 hereof.
"EPUs" means the Exceptional Performance Units (as such term is defined
therein) granted under the VDK Holdings Plan.
"Exceptional Performance Units" has the meaning set forth in Section 1.
"Final Date" means the first anniversary of the closing date of the
initial Public Offering or, if earlier, the date of the dissolution of the
Company.
"Gross-Up Obligation" has the meaning set forth in Section 7(b).
"Investor" means any holder of Class B LLC Units on the effective date of
this Plan.
"Key Person" and "Key Personnel" have the meaning set forth in Section 1.
"LLC Agreement" means the Second Amended and Restated Limited Liability
Company Agreement of VDK Foods LLC, dated as of April 8, 1998, as amended.
"New Compensation Agreement" means the New Compensation Agreement, dated
as of April 8, 1998, by and among the Company, Aurora/VDK LLC, MBW Investors
LLC, VDK Holdings and certain other parties signatory thereto.
"New LLC Entities" has the meaning set forth in the LLC Agreement.
"Non-Public Shareholders" has the meaning set forth in the LLC Agreement.
"Non-Voting LLC Units" means, collectively, the "Class D" and "Class E"
Units of limited liability company interest of the Company.
"Performance Units" has the meaning set forth in Section 1.
"Person" means any individual, corporation, association, partnership
(general or limited), joint venture, trust, estate, limited liability company,
or other legal entity or organization.
"Public Company" has the meaning set forth in Section 5.
"Public Offering" has the meaning set forth in the LLC Agreement.
D-6
"PUs" means the Performance Units (as such term is defined therein)
granted under the VDK Holdings Plan.
"Secondary Sale" means any sale by one or more Non-Public Shareholders, on
or after the effective date of a Public Offering, of equity securities issued by
the Public Company and held by such Non-Public Shareholder (but not originally
issued by the Public Company pursuant to a Public Offering), whether such sale
is pursuant to a registered public offering under the Securities Act of 1933, as
amended, an exemption from the registration requirements thereof, or otherwise.
"Total Distributions" means the aggregate amount of Distributions to
holders of Voting LLC Units and holders of Non-Voting LLC Units and to the Unit
Holders pursuant to this Plan or the VDK Holdings Plan.
"Total Exceptional Performance Unit Value" has the meaning set forth in
Section 4(b)(iii).
"Total Performance Unit Value" has the meaning set forth in Section
4(a)(iii).
"Total Profits" means the sum of all amounts distributed or distributable
under Sections 8.3(vi), 8.3(vii), 8.3(viii) and 8.3(ix) of the LLC Agreement
(which includes all amounts distributed or distributable to Unit Holders under
this Plan or the VDK Holdings Plan).
"Unit Holder" means any holder of Performance Units or Exceptional
Performance Units.
"Units" has the meaning set forth in Section 1.
"Units Agreement" has the meaning set forth in Section 2(b).
"Van ▇▇ ▇▇▇▇'▇" means Van ▇▇ ▇▇▇▇'▇, Inc., a Delaware corporation and
wholly-owned subsidiary of VDK Holdings as of the effective date of this Plan.
"VDK Board" means the Board of Directors of VDK Holdings or of its
successor (including the Public Company).
"VDK Holdings" means VDK Holdings Inc., a Delaware corporation and
wholly-owned subsidiary of Aurora/VDK LLC as of the effective date of this Plan.
"VDK Holdings Plan" means the VDK Holdings, Inc. Incentive Compensation
Plan.
"Vested Class E Units" has the meaning given such term in the LLC
Agreement.
D-7
"Vested Exceptional Performance Units" means those Exceptional Performance
Units that have vested pursuant to Section 5 or 7 hereof.
"Vested Performance Units" means those Performance Units that have vested
pursuant to Section 5 or 7 hereof.
"Voting LLC Units" means, collectively, the Class B LLC Units and the
"Class C" Units of limited liability company interest of the Company.
D-8
ANNEX 1 TO THE AMENDED AND RESTATED
VDK INCENTIVE COMPENSATION PLAN
(a) Public Offering On or Before September 30, 1998. In the event the
Public Company effects a Public Offering and the closing date of the Public
Offering occurs on or prior to September 30, 1998, the provisions of this Annex
1 shall govern the valuation of Units, the vesting of Units, and the time and
manner of payments with respect thereto.
(b) Vesting. At the IC Plan Effective Time, each Unit Holder shall:
(i) have any outstanding but unvested Performance Units held by
such Unit Holder become Vested Performance Units; and
(ii) have any outstanding but unvested Exceptional Performance
Units held by such Unit Holder become Vested Exceptional Performance
Units.
In addition, Units held by a Unit Holder shall no longer be subject to
forfeiture other than upon the termination of the employment or engagement of
the Unit Holder with Cause pursuant to Section 6(a) of this Plan.
(c) Valuation and Distribution of Shares. Upon the closing date of
the Public Offering, each Vested Performance Unit and each Vested Exceptional
Performance Unit shall be valued as hereinafter set forth and the holders of
such Units shall become entitled to be distributed, at the times and in the
manner set forth below, shares of common stock of the Public Company (of the
same class sold in the initial Public Offering) based on such valuation.
(d) Valuation of Performance Units. The value of Vested Performance
Units and the number of shares of common stock of the Public Company
distributable on account of Vested Performance Units is set forth in this
paragraph (d). Upon the closing date of the initial Public Offering, a
computation of Total Profits, Total Distributions and Total Performance Unit
Value shall be made on a basis as if all of the Company's direct or indirect
equity interests in the Public Company (but excluding any such equity interests
either sold in the initial Public Offering by Aurora/VDK LLC or distributed by
Aurora/VDK LLC in connection with the initial Public Offering in respect of a
special distribution by Aurora/VDK LLC of $50,900,000 in the aggregate to the
Company and MBW Investors LLC) had been valued at a per share price equal to the
Gross IPO Price and as if such value had been distributed by the Company in
accordance with Section 8.3 of the Company Agreement. For the purpose hereof,
the term "Gross IPO Price" shall mean the price to the public per share at which
securities of the Public Company were sold in the initial Public Offering
without
1
reduction for underwriter's commissions and other expenses relating to the
initial Public Offering.
The holder of each Vested Performance Unit shall thereupon be
entitled to receive with respect to such Unit a number of shares of common stock
of the Public Company (of the same class as sold in the Public Offering) equal
to the quotient of (A) the value of a single Vested Performance Unit computed as
set forth in the following paragraph with respect to the Total Performance Unit
Value determined under this paragraph (d) divided by (B) the Gross IPO Price.
The value of a single Vested Performance Unit shall equal the
percentage of Total Performance Unit Value (as determined under the following
sentence) obtained by dividing one by the aggregate number of Vested Performance
Units outstanding. The value of all Vested Performance Units ("Total Performance
Unit Value") shall equal the product of P multiplied by Total Profits, where P
is a percentage that equals 5% multiplied by the fraction in which the numerator
is the number of Vested Performance Units and the denominator is 2,000.
(e) Valuation of Exceptional Performance Units. The value of Vested
Exceptional Performance Units and the number of shares of common stock the
Public Company distributable on account of Vested Exceptional Performance Units
is set forth in this paragraph (e). Upon the closing date of the initial Public
Offering, a computation of Total Profits, Total Distributions and Total Vested
Exceptional Performance Unit Value shall be made on a basis as if all of the
Company's direct or indirect equity interests in the Public Company (but
excluding any such equity interests either sold in the initial Public Offering
by Aurora/VDK LLC or distributed by Aurora/VDK LLC in connection with the
initial Public Offering in respect of a special distribution by Aurora/VDK LLC
of $50,900,000 in the aggregate to the Company and MBW Investors LLC) had been
valued at a per share price equal to the Gross IPO Price and as if such value
had been distributed by the Company in accordance with Section 8.3 of the LLC
Agreement.
The holder of each Vested Exceptional Performance Unit shall
thereupon be entitled to receive with respect to such Unit a number of shares of
common stock of the Public Company (of the same class as sold in the Public
Offering) equal to the sum of (x) the quotient of (A) the Exceptional
Performance Unit Value computed with respect to Total Exceptional Performance
Unit Value determined under this paragraph (e) divided by (B) the Gross IPO
Price plus (y) the Per Unit Additional Share Increment.
"Additional Share Increment" means the number of shares equal to the
quotient of (x) the Additional Increment divided by (y) 125% of the Gross IPO
Price.
"Additional Increment" means the excess, if any, of (x) Total Exceptional
Performance Unit Value calculated as if all of the Company's direct or indirect
equity interests in the Public Company (excluding any interests either sold in
the initial Public
2
Offering by Aurora/VDK LLC or distributed to the Company in respect of a special
distribution by Aurora/VDK LLC of $50,900,000 in the aggregate to the Company
and MBW Investors LLC) had been valued at a per share price equal to 125% of the
Gross IPO Price and as if such value had been distributed by the Company in
accordance with Section 8.3 of the LLC Agreement over (y) Total Exceptional
Performance Unit Value calculated for this purpose as the product of (1) as if
all of the Company's direct or indirect equity interests in the Public Company
(but excluding any such equity interests either sold in the initial Public
Offering by Aurora/VDK LLC or distributed to the Company in respect of a special
distribution by Aurora/VDK LLC of $50,900,000 in the aggregate to the Company
and MBW Investors LLC) had been valued at a per share price equal to the Gross
IPO Price and as if such value had been distributed by the Company in accordance
with Section 8.3 of the LLC Agreement and (2) 125%.
"Exceptional Performance Unit Value" means the value of a single Vested
Exceptional Performance Unit, which shall equal the percentage of Total
Exceptional Performance Unit Value obtained by dividing one by the aggregate
number of Vested Exceptional Performance Units outstanding.
"Per Unit Additional Share Increment" means the Additional Share Increment
divided by the aggregate number of Vested Exceptional Performance Units
outstanding.
"Total Exceptional Performance Unit Value" means the value of all Vested
Exceptional Performance Units, which shall equal the product of P multiplied by
the Total Profits, where P is the percentage that equals 5% multiplied by the
fraction in which the numerator is the number of Vested Exceptional Performance
Units and the denominator is 2,000.
Any shares of common stock of the Public Company distributable to
Unit Holders pursuant to this Annex 1 are hereinafter referred to as
"Distributable Shares".
(f) Time of Payment. Following the initial Public Offering,
distributions of Distributable Shares payable on account of Total Performance
Unit Value and Total Exceptional Performance Unit Value shall be made as of the
following dates and at the following times:
(i) as of the effective date of each Secondary Sale prior to the
Final Date, in an amount equal to the total number of Distributable
Shares which all holders of Vested Performance Units and Vested
Exceptional Performance Units would be entitled to include in such
Secondary Sale pursuant to the piggyback registration rights
provisions under the Securityholders Agreement, assuming for such
purpose that the Company had distributed all shares of the Public
Company held by it pursuant to this Agreement and the VDK Holdings
Plan; provided, however, in lieu of distributing such shares to the
holders of such Units, all or any portion of such shares will instead
be sold by the Company (or, if applicable, by Aurora/VDK LLC
3
or the Public Company) in such Secondary Sale and the net proceeds of
such sale shall be distributed to the holders of such Units pro rata
in accordance with their respective interests in the shares that
otherwise would have been distributed.
(ii) upon the Final Date; and
(g) Manner of Payment. Any payment to Unit Holders under the VDK
Holdings Plan with respect to PUs and EPUs that is due pursuant to paragraphs
(d) or (e) of Annex 1 to the VDK Holdings Plan shall be made in Distributable
Shares contributed by the Company to VDK Holdings. To the extent the Company
does not contribute Distributable Shares to VDK Holdings, VDK Holdings shall
have no obligation to distribute securities of the Public Company, cash or any
other property to Unit Holders pursuant to the VDK Holdings Plan with respect to
the payment then due and the Company shall then be obligated to make such
payment pursuant to this Plan. When the aggregate number of Distributable Shares
required to be paid under this Plan or the VDK Holdings Plan has been paid in
full, then all distributions required to be made on account of Units under this
Plan or on account of Vested Plan Units under the LLC Agreement shall be deemed
to have been made.
4
FIRST AMENDMENT TO THE SECOND
AMENDED AND RESTATED LIMITED LIABILITY
COMPANY AGREEMENT OF VDK FOODS LLC
This First Amendment is made by and among the Member of VDK Foods LLC
signatory hereto. Capitalized terms used but not defined herein shall have the
respective meanings given such terms in the Second Amended and Restated Limited
Liability Company Agreement of VDK Foods LLC, dated as of April 8, 1998 (the
"LLC Agreement").
The undersigned Members hereby agree to amend the LLC Agreement as
follows:
1. Definitions.
(a) The defined term "Management Services Agreement" is deleted in
its entirety.
(b) The following additional defined term is inserted:
"VDK Holdings Plan" means the VDK Holdings, Inc. Incentive Compensation
Plan adopted by VDK Holdings, Inc., a Delaware corporation which has merged with
and into the Public Company, and which was effective as of immediately prior to
the initial Public Offering.
2. Section 4.6(c). Section 4.6(c) is hereby amended by deleting the words
"payable in cash", inserting after the end of the first parenthetical the words
"with such amount to be payable with the consideration contemplated in the last
paragraph of Section 8.3", and inserting at the end of such section the words
"with such amount payable in cash".
3. Section 8.3.
(c) The last paragraph of Section 8.3 is amended by inserting the
following at the end thereof:
Distributions under this paragraph of the amounts allocated on
Schedule A-1 hereto shall be distributed as follows: (A) UBS and
Gloriande shall be distributed shares of common stock of the Public
Company (of the same class sold in the initial Public Offering) with
a per share value equal to the Gross IPO Price (as defined below),
and (B) all other members shall be distributed cash. For the purpose
hereof, the term "Gross IPO Price" shall mean the price to the public
per share at which securities of the Public Company were sold in the
initial Public Offering without reduction for underwriter's
commissions and other expenses relating to the Public Offering.
1
4. Section 15.4.
(d) Section 15.4 is hereby amended by inserting the following
paragraph (d) at the end thereof:
(d) Notwithstanding any other provision of this Agreement to the
contrary, upon the liquidation of the Company following a Public
Offering, holders of Class E Units shall be distributed in the
aggregate the number of shares of common stock of the Public Company
(of the same class sold in the Public Offering) determined in
accordance with Schedule B hereto, with the number of such shares
distributable to the Class E Holders to be allocated among the Class
E Holders in accordance with their respective Class E Units.
5. Section 15.9. The following paragraph shall be inserted as a new
Section 15.9 of the LLC Agreement:
Section 15.9. Agreement with Respect to Performance Units and
Exceptional Performance Units. Notwithstanding any other provision of
this Agreement to the contrary, the Company agrees to contribute to
the Public Company (as successor to VDK Holdings, Inc.) or to the VDK
Holdings Plan in the aggregate the number of shares ("Plan Shares")
of common stock of the Public Company (of the same class sold in the
Public Offering) necessary to satisfy the Company's obligation to
fund the payment obligations of the Public Company under the VDK
Holdings Plan. The Company shall make such contribution on or
immediately prior to the Final Date; provided, that at the election
of Dartford, the Company shall make such contribution at an earlier
date selected by Dartford so long as distributions to holders of
units under the VDK Holdings Plan shall be made at the times and in
accordance with the terms thereof. To the extent the Company fails to
contribute all or part of the Plan Shares to the Public Company, the
Company shall be obligated to either (i) distribute to the holders of
units under the VDK Holdings Plan, on a pro rata basis, the number of
Plan Shares not contributed by the Company to the Public Company, or
(ii) make such distributions as are required under Schedule D to this
Agreement.
6. Schedule A-1. Schedule A-1 to the LLC Agreement is amended and restated
in its entirety as attached hereto.
7. Schedule B. Schedule B to the LLC Agreement is amended and restated to
read in its entirety as attached hereto.
8. Schedule D. Schedule D to the LLC Agreement is hereby amended and
restated to read in its entirety as attached hereto.
2
This First Amendment shall be effective upon the execution by Members
holding at least 95% of the outstanding Voting Units. In the event an initial
Public Offering does not occur on or before September 30, 1998, this First
Amendment shall automatically be void ab initio and of no force and effect.
This First Amendment may be executed in one or more original facsimile
counterparts.
3
IN WITNESS WHEREOF, the undersigned parties have executed this First
Amendment as of this ____ day of June 1998.
DARTFORD PARTNERSHIP L.L.C.
By:
------------------------------------------
Name:
Title:
FENWAY PARTNERS CAPITAL FUND, L.P.
by: Fenway Partners, L.P.,
its general partner
by: Fenway Partners Management,
Inc., its general partner
By:
------------------------------------------
Name:
Title:
GLORIANDE (LUXEMBOURG) SARL
By:
------------------------------------------
Name:
Title:
UBS CAPITAL LLC
By:
------------------------------------------
Name:
Title:
By:
------------------------------------------
Name:
Title:
4
SCHEDULE A-1
To the Limited Liability Company Agreement of
VDK Foods LLC
AMOUNT DISTRIBUTABLE
NAME AND MAILING ADDRESS UNDER SECTION 8.3(i)
------------------------ --------------------
A. Class A Units
1. Fenway Partners Capital Fund, L.P.4 $22,164,807
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
2. Gloriande (Luxembourg) S.a.r.L. $9,750,482
c/▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Services ▇▇▇
L'Estoril
Avenue Princess ▇▇▇▇▇
▇▇▇▇▇▇
3. UBS Capital LLC $9,750,482
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
4. Dartford Partnership, L.L.C. $270,341
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇. ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
5. The Ian and ▇▇▇▇▇ ▇▇▇▇▇▇ 1998 $168,301
Irrevocable Trust
6. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ $52,595
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------
4 FPIP, LLC, as Assignee is entitled to $170,583 of the
aggregate amount distributable to Fenway pursuant to
Section 8.3(i) hereof. FPIP Trust, LLC, as Assignee is
entitled to $94,724 of the aggregate amount distributable
to Fenway pursuant to Section 8.3(i) hereof.
A-1
7. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ $17,883
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇. ▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
8. C. ▇▇▇▇▇ ▇▇▇▇▇ $17,883
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇. ▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
9. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ $17,883
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
10. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ $17,725
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
11. ▇▇▇▇ ▇▇▇▇▇ $40,915
▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
12. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ $14,727
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
13. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ $8,415
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
14. ▇▇▇▇▇ ▇▇▇▇▇▇ $7,148
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
15. ▇▇▇ ▇▇▇▇ $8,990
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
16. ▇▇▇▇▇ ▇▇▇▇▇▇ $9,946
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
17. ▇▇▇▇▇▇ ▇▇▇▇▇▇ $9,946
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
A-2
18. ▇▇▇▇ ▇▇▇▇▇▇▇▇ $5,597
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
19. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ $1,913
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
20. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. $8,537
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
21. ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 10,473
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
22. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ $4,780
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
23. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ $9,330
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
24. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ $4,664
▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
25. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ $2,799
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
26. ▇▇▇ ▇▇▇▇▇▇▇▇ $7,576
27. ▇▇▇▇▇ ▇▇▇▇▇▇▇ $6,053
28. ▇▇▇▇▇ ▇▇▇▇▇▇▇ $3,018
29. ▇▇▇▇ ▇▇▇▇▇ $2,260
30. ▇▇▇▇ ▇▇▇▇▇ $1,507
31. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ $1,507
A-3
32. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ $1,518
A-4
SCHEDULE B
To the Second Amended and Restated
Limited Liability Company Agreement
of VDK Foods LLC
(the "LLC Agreement")
1. [intentionally omitted]
2. Forfeiture. In the event a Public Offering occurs and the provisions of
Section 3 below apply, the Class E Units held by a Class E Holder shall no
longer be subject to forfeiture other than upon the termination of the
employment of the Class E Holder with Cause.
(i) Termination With Cause. In the event that a Class E Holder's
employment by the Company and/or a New LLC Entity terminates because of
discharge or termination of the Class E Holder by the Company or such New LLC
Entity with Cause (as defined below), then all Class E Units held by such Class
E Holder shall be forfeited to the Company without the payment of any
consideration to the Class E Holder by the Company therefor.
(ii) Cause. For purposes of this Schedule B, the Company and the New LLC
Entities shall have "Cause" to discharge or terminate a Class E Holder upon (i)
the indictment of the Class E Holder for any crime which constitutes a felony,
(ii) if the Class E Holder is party to a written employment agreement with the
Company or any New LLC Entity, the failure or inability of the Class E Holder to
cure or remedy, within 30 days after written notice of such failure from the
Company or such New LLC Entity, either (A) the Class E Holder's failure to
satisfactorily discharge all of his or her duties and obligations under such
employment agreement or (B) any gross negligence or willful misconduct on the
party of the Class E Holder in the course of rendering services thereunder, or
(iii) if the Class E Holder is not a party to a written employment agreement
with the Company or any New LLC Entity, the failure or inability of the Class E
Holder to cure or remedy, within 30 days after written notice of such failure
from the Company or such New LLC Entity, either (A) the Class E Holder's
substantial and continuing failure to satisfactorily discharge all of his or her
material duties and obligations owed to the Company or such New LLC Entity or
(B) any gross negligence or willful misconduct on the part of the Class E Holder
in the course of rendering services to the Company or such New LLC Entity.
(iii) Forfeited Class E Units. In the event any Class E Units are
forfeited in accordance with this Schedule B or otherwise, the Board may, but
shall not be required to,
B-1
reissue such Class E Units. Any such issuance shall be made in accordance with
Section 12.1 of the LLC Agreement.
3. Public Offering On or Before September 30, 1998. For purposes of Section 3
and Section 4 of this Schedule B, capitalized terms used herein but not
otherwise defined shall have the meaning given such terms in Schedule D to this
Agreement.
(i) Conditions. In the event any New LLC Entity including without
limitation any surviving entity of a reorganization (including an
incorporation), merger or consolidation of one or more such entities (such
issuer being the "Public Company") intends to effect a Public Offering and such
Public Offering closes on or before September 30, 1998, the provisions of this
Section 3 shall govern the valuation of Class E Units, the vesting of Class E
Units and the time and manner of payments with respect thereto in lieu of the
other provisions of this Schedule B. The provisions of this Section 3 shall be
effective immediately prior to the consummation of the initial Public Offering
(the "E Unit Effective Time").
(ii) Vesting. At the E Unit Effective Time, any then outstanding but
unvested Class E Units held by such Class E Holder shall become Vested Class E
Units. In addition, Class E Units held by a Class E Holder shall be subject to
forfeiture only upon the termination of the employment of the Class E Holder
with Cause pursuant to Section 2 above.
(iii) Valuation and Distribution of Shares. Upon the closing date of the
initial Public Offering, each Vested Class E Unit shall be valued as hereinafter
set forth and the holders of such Units shall become entitled to be distributed,
at the times and in the manner set forth below in this Section 3, shares of
common stock of the Public Company based on such valuation.
(iv) Valuation of Class E Units. The value of Vested Class E Units and the
number of shares of common stock of the Public Company distributable on account
of Vested Class E Units is set forth in this paragraph (d). Upon the closing
date of the initial Public Offering, a computation of Total Profits, Total
Distributions and Total Vested Class E Unit Value shall be made on a basis as if
all of the Company's direct or indirect equity interests in the Public Company
(but excluding any such equity interests either sold in the initial Public
Offering by Aurora/VDK LLC or distributed by Aurora/VDK LLC in connection with
the initial Public Offering in respect of a special distribution by Aurora/VDK
LLC of $50,900,000 in the aggregate to the Company and MBW Investors LLC) had
been valued at a per share price equal to the Gross IPO Price and as if such
value had been distributed by the Company in accordance with Section 8.3 of this
Agreement.
The holder of each Vested Class E Unit shall thereupon be entitled to
receive with respect to such Unit a number of shares of common stock of the
Public Company (of the same class as sold in the Public Offering) equal to the
sum of (x) the quotient of (A) the
B-2
Vested Class E Unit Value under this paragraph (d) divided by (B) the Gross IPO
Price plus (y) the Per Unit Additional Share Increment.
"Additional Share Increment" means the number of shares equal to the quotient
of (x) the Additional Increment divided by (y) 125% of the Gross IPO Price.
"Additional Increment" means the excess, if any, of (x) Total Vested Class E
Unit Value calculated as if all of the Company's direct or indirect equity
interests in the Public Company (excluding any interests sold in the Public
Offering directly or indirectly for the Company's account) had been valued at a
per share price equal to 125% of the Gross IPO Price and as if such value had
been distributed by the Company in accordance with Section 8.3 of the LLC
Agreement over (y) Total Vested Class E Unit Value calculated as the product of
(1) as if all of the Company's direct or indirect equity interests in the Public
Company (but excluding any such equity interests either sold in the initial
Public Offering by Aurora/VDK LLC or distributed to VDK LLC in respect of a
special distribution by Aurora/VDK LLC of $50,900,000 in the aggregate to the
Company and MBW Investors LLC) had been valued at a per share price equal to the
Gross IPO Price and as if such value had been distributed by the Company in
accordance with Section 8.3 of the LLC Agreement and (2) 125%.
"Per Unit Additional Share Increment" means the Additional Share Increment
divided by the aggregate number of Vested Class E Units outstanding.
Any shares of common stock of the Public Company distributable to Class E
Holders pursuant to this Section 3 are hereinafter referred to as "Distributable
Shares".
For the purpose hereof, the term "Gross IPO Price" shall mean the price to
the public per share at which securities of the Public Company were sold in the
Public Offering without reduction for underwriter's commissions and other
expenses relating to the Public Offering.
"Total Vested Class E Unit Value" means the value of all Vested Class E Units,
which shall equal the product of P multiplied by Total Profits, where P is a
percentage that equals 3.6% multiplied by the fraction in which the numerator is
the number of Vested Class E Units and the denominator is 720.
"Vested Class E Unit Value" means the value of a single Vested Class E Unit,
which shall equal the percentage of Total Vested Class E Unit Value obtained by
dividing one by the aggregate number of Vested Class E Units outstanding.
(v) Time of Payment. Following a Public Offering, distributions of
Distributable Shares payable on account of Total Class E Unit Value shall be
made as of the following dates and at the following times:
B-3
1) as of the effective date of each Secondary Sale prior to the
Final Date, in an amount equal to the total number of Distributable Shares
which all holders of Vested Class E Units and would be entitled to include
in such Secondary Sale pursuant to the piggyback registration rights
provisions under the Securityholders Agreement, assuming for such purpose
that the Company had distributed all shares of the Public Company held by
it pursuant to this Agreement and the VDK Holdings Plan; provided,
however, in lieu of distributing such shares to the holders of such Units,
all or any portion of such shares will instead be sold by the Company (or,
if applicable, by the Public Company) in such Secondary Sale and the net
proceeds of such sale shall be distributed to the holders of such Class E
Units pro rata in accordance with their respective interests in the shares
that otherwise would have been distributed.
2) upon the Final Date, with the payments of Distributable Shares
with respect to the Final Date to be made at the same time as any
Distributions to Investors under this Agreement arising from the Final
Date.
(vi) Manner of Payment. Any payment to Class E Holders with respect to
Units that is made pursuant to paragraphs (c) or (d) of this Section 3 shall be
made in Distributable Shares distributed by the Company to Class E Holders.
4. [intentionally omitted]
B-4
SCHEDULE D to the
Second Amended and Restated Limited
Liability Company
Agreement of VDK Foods LLC
AMENDED AND RESTATED VDK
INCENTIVE COMPENSATION PLAN
1. Purpose. The purpose of this Amended and Restated VDK Incentive
Compensation Plan (this "Plan") is to provide a means by which certain employees
of, consultants to and other persons having key business relations with VDK
Foods LLC (the "Company") and certain New LLC Entities (such employees,
consultants and other persons being hereinafter referred to individually as a
"Key Person" and collectively as "Key Personnel"), may be given an opportunity
to benefit from the appreciation in the value of the Company through the
issuance of (i) incentive compensation units ("Performance Units") whose value,
as described below, is based on the achievement of certain earnings targets and
(ii) incentive compensation units ("Exceptional Performance Units") whose value,
as described below, is based on the rate of return achieved by certain investors
in the Company. Performance Units and Exceptional Performance Units are
hereinafter referred to as "Units." This Plan is intended to advance the
interests of the Company by encouraging long-term employment with and diligent
service to the Company and certain New LLC Entities on the part of the Key
Personnel, by enabling the Company and certain New LLC Entities to retain their
services and by providing such Key Personnel with an incentive to advance the
success of the Company and certain New LLC Entities.
2. General Terms and Conditions of Rights; Definitions.
(i) General Terms. The Board of Member Managers of the Company (the
"Board") has granted and may grant Units to one or more Key Persons from time to
time pursuant to this Plan; provided that each time a Key Person is granted
Units, the number of Performance Units in such grant shall equal the number of
Exceptional Performance Units in such grant. The maximum number of Performance
Units that may be granted under this Plan is 2,000. The maximum number of
Exceptional Performance Units that may be granted under this Plan is 2,000.
(ii) Units Agreements. Units that have been granted shall be evidenced by
written agreements (each a "Units Agreement") and, except as specifically
approved by the Board or any Committee designated thereby, shall not be
inconsistent with this Plan.
(iii) No Effect on Employment. Nothing in this Plan or a Unit or Units
Agreement issued hereunder shall govern the rights and duties relating to
employment or
D-1
other services between the holder of any Units and the Company or any New LLC
Entity. Neither this Plan, nor any grant of Units pursuant thereto, shall
constitute an employment or other form of service or supply agreement among such
parties or establish a right of continued employment or a continued relationship
with the Company or any New LLC Entity and the holder of any Unit.
(iv) Definitions. Capitalized terms used in this Plan shall have the
respective meanings set forth in Section 11.
(v) Relationship of this Plan to the VDK Holdings, Inc. Incentive
Compensation. The Company has amended and restated this Plan pursuant to the New
Compensation Agreement. Under the New Compensation Agreement, the Company agreed
to amend and restate this Plan so that it would have the same terms and
provisions of the VDK Holdings Plan and grant to each holder of Performance
Units and Exceptional Performance Units under this Plan a number of PUs and EPUs
under the VDK Holdings Plan that is identical to the number of Performance Units
and Exceptional Performance Units held by such person under this Plan as of
April 8, 1998. VDK Holdings will make payments to Unit Holders under the VDK
Holdings Plan, and any payments made under the VDK Holdings Plan will replace
any payments due under the this Plan.
(vi) Obligation of VDK Foods LLC to Fund Payments. Any cash, securities or
other property payable by VDK Holdings to Unit Holders under the VDK Holdings
Plan with respect to the obligations of VDK Holdings (other than the Gross-Up
Obligation) under the VDK Holdings Plan shall be contributed by the Company to
VDK Holdings. To the extent the Company does not contribute such cash,
securities or other property to VDK Holdings, the Company shall be required to
make the payment due to Unit Holders under this Plan and VDK Holdings shall have
no obligation to make the payment due to Unit Holders under the VDK Holdings
Plan.
3. [intentionally omitted]
4. [intentionally omitted]
5. Payment and Valuation with respect to a Public Offering. In the event
either VDK Holdings or any other New LLC Entity (including without limitation
any surviving entity of a reorganization (including an incorporation), merger or
consolidation of one or more of such entities) (such issuer being the "Public
Company") intends to effect a Public Offering, the provisions of this Section 5
shall govern the valuation of Units, the vesting of Units, and the time and
manner of payments with respect thereto, except as provided in this Section 5
and Annex 1 hereto. In the event the closing date of the initial Public Offering
occurs on or prior to September 30, 1998, the valuation of Units, the vesting of
Units and the time or manner of payments with respect thereto shall be governed
by Annex 1 hereto. This Section 5 and Annex 1 hereto shall be effective
immediately prior to the closing date of the initial Public Offering (the "IC
Plan Effective Time.")
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6. Forfeiture. In the event a Public Offering occurs and the provisions of
Annex 1 hereto apply, the Units held by a Unit Holder shall be subject to
forfeiture only upon the termination of the employment or engagement of the Unit
Holder with Cause (as defined below); provided, that in the event the employment
of a member of Dartford who is an employee of the Company is terminated for
Cause, such employee's allocable share of Dartford's Units as determined in
accordance with the governing documents of Dartford then in effect shall be
subject to forfeiture under this Section 6.
(i) Termination With Cause. In the event that a Unit Holder's employment
by the Company and/or any New LLC Entity terminates prior to the date on which
Total Performance Unit Value or Total Exceptional Performance Unit Value, as
applicable, are determinable in accordance with this Plan because of discharge
or termination of the Unit Holder by the Company or any New LLC Entity with
Cause (as defined below), then all Units held by such Unit Holder shall be
forfeited to the Company without the payment of any consideration to the Unit
Holder by the Company therefor.
(ii) Cause. For purposes of this Plan, the Company or a New LLC Entity
shall have "Cause" to discharge or terminate a Unit Holder upon (i) the
indictment of the Unit Holder for any crime which constitutes a felony, (ii) if
the Unit Holder is party to a written employment, consulting or similar
agreement with the Company or a New LLC Entity, the failure or inability of the
Unit Holder to cure or remedy, within 30 days after written notice of such
failure from the Company or such New LLC Entity either (A) the Unit Holder's
failure to satisfactorily discharge all of his, her or its duties and
obligations under such agreement or (B) any gross negligence or willful
misconduct on the part of the Unit Holder in the course of rendering services
thereunder, or (iii) if the Unit Holder is not a party to a written employment,
consulting or similar agreement with the Company or any New LLC Entity, the
failure or inability of the Unit Holder to cure or remedy, within 30 days after
written notice of such failure from the Company or such New LLC Entity either
(A) the Unit Holder's substantial and continuing failure to satisfactorily
discharge all of his, her or its material duties and obligations owed to the
Company or such New LLC Entity or (B) any gross negligence or willful misconduct
on the part of the Unit Holder in the course of rendering services to the
Company or such New LLC Entity.
(iii) Forfeited Units. Forfeited Units shall not be taken into account for
purposes of the computations under Sections 5 or 7. In the event any Units are
forfeited in accordance with this Section 6 or otherwise, the Board may, but
shall not be required to, grant such Units to Key Personnel of the Company
pursuant to this Plan.
7. Special Provisions. The following special provisions shall apply to the
valuation of the Units provided for in this Plan.
(i) Golden Parachute Gross-Up. Anything herein to the contrary
notwithstanding, in the event that the excise tax provided by IRC Sections
4999, or any amended or successor provision, applies to any payment to a Unit
Holder hereunder, at ▇▇▇▇▇▇▇▇'▇
▇-▇
election exercisable by written notice to the Board, the amount of such payment
shall be increased sufficiently, but not in excess of 15% thereof, so that the
amount distributed to such Unit Holder net of such excise tax is approximately
equal to the amount that would have been distributed had no such excise tax been
imposed. All calculations made under this Plan shall be made after taking into
account any such gross-up payments such that Total Distributions and IRR of the
Business are based on the actual amounts received by Investors.
(ii) Capital Gains Gross-Up. Anything herein to the contrary
notwithstanding, in the event that the U.S. federal income tax rate on capital
gains is less than the U.S. federal income tax rate on ordinary income and the
payments to Unit Holders are subject to tax at such ordinary income rates, at
Dartford's election exercisable by written notice to the Board, the amount of
any payment to any Unit Holder shall be increased sufficiently so that such
amount, net of any such U.S. federal income tax at ordinary rates, equals the
payment that would otherwise have been made to such Unit Holder net of U.S.
federal income tax at capital gains rates; provided, that in the event of a
Public Offering occurs and the provisions of Annex 1 apply, Dartford shall be
deemed to have automatically made such election and no notice to the Board shall
be required. The aggregate amount of such increased amounts payable to Unit
Holders are hereinafter referred to as the "Gross-Up Obligation". The Gross-Up
Obligation shall be paid by VDK Holdings to Unit Holders in cash at the same
time as the corresponding payment to Unit Holders giving rise to such Gross-Up
Obligation is payable. The obligation of VDK Holdings to pay the Gross-Up
Obligation shall be subject to VDK Holdings (or its successor) having the right
to accrue a deduction for tax purposes for such payment but shall not be subject
to such deduction reducing the amount of taxes otherwise payable by VDK Holdings
(or its successor) in the year in which such deduction accrues. The payment of
such Gross-Up Obligation is a direct obligation of VDK Holdings, and the Company
has no obligation to fund the payment of the Gross-Up Obligation; provided, that
to the extent VDK Holdings fails to pay the Gross-Up Obligation then due
(whether or not the reason for such failure is the inability of VDK Holdings to
accrue the deduction for tax purposes described above), the Company shall be
required to pay to Unit Holders an amount in cash equal to the amount of the
unpaid Gross-Up Obligation.
8. Administration. This Plan shall be administered by the Board subject to the
express terms and conditions of this Plan. From and after the effective date of
this Plan, the Board shall have full power to grant Units under this Plan. No
member of the Board or VDK Board shall be liable for any action or determination
made in good faith with respect to this Plan or to any Unit.
9. Effective Date; Termination; Successors.
(i) The original effective date of this Plan was as of September 19, 1995.
The effective date of this Plan as hereby amended and restated is as of April 8,
1998.
(ii) This Plan shall terminate upon all Units being retired as a result of
payments or forfeiture.
D-4
(iii) This Plan shall be binding on and inure to the benefit of the
Company and its successors and assigns, including without limitation any
successor or assign of the Company by reason of the merger, consolidation or
reorganization of the Company with such successor or assign to be the "Company"
for purposes of this Plan.
10. Amendments. From time to time, this Plan may be altered, amended, suspended
or discontinued, even if such action alters an outstanding Units Agreement to
the detriment of the Unit Holder without his consent, upon the mutual agreement
of the Board, the VDK Board and Dartford; provided, that at any time when the
next succeeding proviso is not applicable, any such action applies to each Unit
Holder in a consistent manner; provided, further, that in the event that neither
Dartford nor its members are providing management services to the Company
(whether in a member's capacity as a senior executive officer of the Company or
otherwise), then any such alteration, amendment, suspension or discontinuance
shall be effective upon the mutual agreement of the Board, the VDK Board and (A)
insofar as any Units held by Dartford are affected by such amendment, Dartford,
and (B) insofar as any Units held by Persons other than Dartford are affected by
such amendment, such other Persons holding a majority of such Units.
11. Definitions. As used in this Plan, the following terms shall have the
meanings set forth below.
"Affiliate" means any parent or subsidiary corporation of the Company as
defined in Section 424(e) and (f) respectively of the Internal Revenue Code of
1986, but only for so long as such relationship is maintained.
"Aurora/VDK LLC" means Aurora/VDK LLC, a Delaware limited liability company and
the holder of all of the issued and outstanding capital stock of the Company on
the effective date of this Plan.
"Board" has the meaning set forth in Section 2.
"Cause" has the meaning set forth in Section 6.
"Class B LLC Units" means the "Class B" Units of limited liability company
interest of the Company.
"Class D LLC Units" means the "Class D" Units of limited liability company
interest of the Company.
"Company" has the meaning set forth in Section 1.
"Dartford" means Dartford Partnership L.L.C.
D-5
"Distributions" means amounts paid, payable or deemed paid or payable to any
holder of Voting LLC Units, Non-Voting LLC Units, Units under this Plan, or PUs
or EPUs under the VDK Holdings Plan, whether such amounts are in cash, equity
securities (not including equity securities issuable as pursuant to splits or
recapitalizations) or other property either as (i) distributions of profits,
(ii) distributions in redemption, liquidation or otherwise, or (iii) in
accordance with Section 5 hereof.
"EPUs" means the Exceptional Performance Units (as such term is defined
therein) granted under the VDK Holdings Plan.
"Exceptional Performance Units" has the meaning set forth in Section 1.
"Final Date" means the first anniversary of the closing date of the initial
Public Offering or, if earlier, the date of the dissolution of the Company.
"Gross-Up Obligation" has the meaning set forth in Section 7(b).
"Investor" means any holder of Class B LLC Units on the effective date of this
Plan.
"Key Person" and "Key Personnel" have the meaning set forth in Section 1.
"LLC Agreement" means the Second Amended and Restated Limited Liability Company
Agreement of VDK Foods LLC, dated as of April 8, 1998, as amended.
"New Compensation Agreement" means the New Compensation Agreement, dated as of
April 8, 1998, by and among the Company, Aurora/VDK LLC, MBW Investors LLC, VDK
Holdings and certain other parties signatory thereto.
"New LLC Entities" has the meaning set forth in the LLC Agreement.
"Non-Public Shareholders" has the meaning set forth in the LLC Agreement.
"Non-Voting LLC Units" means, collectively, the "Class D" and "Class E" Units
of limited liability company interest of the Company.
"Performance Units" has the meaning set forth in Section 1.
"Person" means any individual, corporation, association, partnership (general
or limited), joint venture, trust, estate, limited liability company, or other
legal entity or organization.
"Public Company" has the meaning set forth in Section 5.
"Public Offering" has the meaning set forth in the LLC Agreement.
D-6
"PUs" means the Performance Units (as such term is defined therein) granted
under the VDK Holdings Plan.
"Secondary Sale" means any sale by one or more Non-Public Shareholders, on or
after the effective date of a Public Offering, of equity securities issued by
the Public Company and held by such Non-Public Shareholder (but not originally
issued by the Public Company pursuant to a Public Offering), whether such sale
is pursuant to a registered public offering under the Securities Act of 1933, as
amended, an exemption from the registration requirements thereof, or otherwise.
"Total Distributions" means the aggregate amount of Distributions to holders of
Voting LLC Units and holders of Non-Voting LLC Units and to the Unit Holders
pursuant to this Plan or the VDK Holdings Plan.
"Total Exceptional Performance Unit Value" has the meaning set forth in
Section 4(b)(iii).
"Total Performance Unit Value" has the meaning set forth in Section 4(a)(iii).
"Total Profits" means the sum of all amounts distributed or distributable under
Sections 8.3(vi), 8.3(vii), 8.3(viii) and 8.3(ix) of the LLC Agreement (which
includes all amounts distributed or distributable to Unit Holders under this
Plan or the VDK Holdings Plan).
"Unit Holder" means any holder of Performance Units or Exceptional Performance
Units.
"Units" has the meaning set forth in Section 1.
"Units Agreement" has the meaning set forth in Section 2(b).
"Van ▇▇ ▇▇▇▇'▇" means Van ▇▇ ▇▇▇▇'▇, Inc., a Delaware corporation and
wholly-owned subsidiary of VDK Holdings as of the effective date of this Plan.
"VDK Board" means the Board of Directors of VDK Holdings or of its successor
(including the Public Company).
"VDK Holdings" means VDK Holdings Inc., a Delaware corporation and wholly-owned
subsidiary of Aurora/VDK LLC as of the effective date of this Plan.
"VDK Holdings Plan" means the VDK Holdings, Inc. Incentive Compensation Plan.
"Vested Class E Units" has the meaning given such term in the LLC Agreement.
D-7
"Vested Exceptional Performance Units" means those Exceptional Performance
Units that have vested pursuant to Section 5 or 7 hereof.
"Vested Performance Units" means those Performance Units that have vested
pursuant to Section 5 or 7 hereof.
"Voting LLC Units" means, collectively, the Class B LLC Units and the "Class C"
Units of limited liability company interest of the Company.
D-8
ANNEX 1 TO THE AMENDED AND RESTATED
VDK INCENTIVE COMPENSATION PLAN
(i) Public Offering On or Before September 30, 1998. In the event the Public
Company effects a Public Offering and the closing date of the Public Offering
occurs on or prior to September 30, 1998, the provisions of this Annex 1 shall
govern the valuation of Units, the vesting of Units, and the time and manner of
payments with respect thereto.
(ii) Vesting. At the IC Plan Effective Time, each Unit Holder shall:
1) have any outstanding but unvested Performance Units held by such
Unit Holder become Vested Performance Units; and
2) have any outstanding but unvested Exceptional Performance Units
held by such Unit Holder become Vested Exceptional Performance Units.
In addition, Units held by a Unit Holder shall no longer be subject to
forfeiture other than upon the termination of the employment or engagement of
the Unit Holder with Cause pursuant to Section 6(a) of this Plan.
(iii) Valuation and Distribution of Shares. Upon the closing date of the
Public Offering, each Vested Performance Unit and each Vested Exceptional
Performance Unit shall be valued as hereinafter set forth and the holders of
such Units shall become entitled to be distributed, at the times and in the
manner set forth below, shares of common stock of the Public Company (of the
same class sold in the initial Public Offering) based on such valuation.
(iv) Valuation of Performance Units. The value of Vested Performance Units
and the number of shares of common stock of the Public Company distributable on
account of Vested Performance Units is set forth in this paragraph (d). Upon the
closing date of the initial Public Offering, a computation of Total Profits,
Total Distributions and Total Performance Unit Value shall be made on a basis as
if all of the Company's direct or indirect equity interests in the Public
Company (but excluding any such equity interests either sold in the initial
Public Offering by Aurora/VDK LLC or distributed by Aurora/VDK LLC in connection
with the initial Public Offering in respect of a special distribution by
Aurora/VDK LLC of $50,900,000 in the aggregate to the Company and MBW Investors
LLC) had been valued at a per share price equal to the Gross IPO Price and as if
such value had been distributed by the Company in accordance with Section 8.3 of
the Company Agreement. For the purpose hereof, the term "Gross IPO Price" shall
mean the price to the public per share at which securities of the Public Company
were sold in the initial Public Offering without
1
reduction for underwriter's commissions and other expenses relating to the
initial Public Offering.
The holder of each Vested Performance Unit shall thereupon be entitled to
receive with respect to such Unit a number of shares of common stock of the
Public Company (of the same class as sold in the Public Offering) equal to the
quotient of (A) the value of a single Vested Performance Unit computed as set
forth in the following paragraph with respect to the Total Performance Unit
Value determined under this paragraph (d) divided by (B) the Gross IPO Price.
The value of a single Vested Performance Unit shall equal the percentage
of Total Performance Unit Value (as determined under the following sentence)
obtained by dividing one by the aggregate number of Vested Performance Units
outstanding. The value of all Vested Performance Units ("Total Performance Unit
Value") shall equal the product of P multiplied by Total Profits, where P is a
percentage that equals 5% multiplied by the fraction in which the numerator is
the number of Vested Performance Units and the denominator is 2,000.
(v) Valuation of Exceptional Performance Units. The value of Vested
Exceptional Performance Units and the number of shares of common stock the
Public Company distributable on account of Vested Exceptional Performance Units
is set forth in this paragraph (e). Upon the closing date of the initial Public
Offering, a computation of Total Profits, Total Distributions and Total Vested
Exceptional Performance Unit Value shall be made on a basis as if all of the
Company's direct or indirect equity interests in the Public Company (but
excluding any such equity interests either sold in the initial Public Offering
by Aurora/VDK LLC or distributed by Aurora/VDK LLC in connection with the
initial Public Offering in respect of a special distribution by Aurora/VDK LLC
of $50,900,000 in the aggregate to the Company and MBW Investors LLC) had been
valued at a per share price equal to the Gross IPO Price and as if such value
had been distributed by the Company in accordance with Section 8.3 of the LLC
Agreement.
The holder of each Vested Exceptional Performance Unit shall thereupon be
entitled to receive with respect to such Unit a number of shares of common stock
of the Public Company (of the same class as sold in the Public Offering) equal
to the sum of (x) the quotient of (A) the Exceptional Performance Unit Value
computed with respect to Total Exceptional Performance Unit Value determined
under this paragraph (e) divided by (B) the Gross IPO Price plus (y) the Per
Unit Additional Share Increment.
"Additional Share Increment" means the number of shares equal to the quotient
of (x) the Additional Increment divided by (y) 125% of the Gross IPO Price.
"Additional Increment" means the excess, if any, of (x) Total Exceptional
Performance Unit Value calculated as if all of the Company's direct or indirect
equity interests in the Public Company (excluding any interests either sold in
the initial Public
2
Offering by Aurora/VDK LLC or distributed to the Company in respect of a special
distribution by Aurora/VDK LLC of $50,900,000 in the aggregate to the Company
and MBW Investors LLC) had been valued at a per share price equal to 125% of the
Gross IPO Price and as if such value had been distributed by the Company in
accordance with Section 8.3 of the LLC Agreement over (y) Total Exceptional
Performance Unit Value calculated for this purpose as the product of (1) as if
all of the Company's direct or indirect equity interests in the Public Company
(but excluding any such equity interests either sold in the initial Public
Offering by Aurora/VDK LLC or distributed to the Company in respect of a special
distribution by Aurora/VDK LLC of $50,900,000 in the aggregate to the Company
and MBW Investors LLC) had been valued at a per share price equal to the Gross
IPO Price and as if such value had been distributed by the Company in accordance
with Section 8.3 of the LLC Agreement and (2) 125%.
"Exceptional Performance Unit Value" means the value of a single Vested
Exceptional Performance Unit, which shall equal the percentage of Total
Exceptional Performance Unit Value obtained by dividing one by the aggregate
number of Vested Exceptional Performance Units outstanding.
"Per Unit Additional Share Increment" means the Additional Share Increment
divided by the aggregate number of Vested Exceptional Performance Units
outstanding.
"Total Exceptional Performance Unit Value" means the value of all Vested
Exceptional Performance Units, which shall equal the product of P multiplied by
the Total Profits, where P is the percentage that equals 5% multiplied by the
fraction in which the numerator is the number of Vested Exceptional Performance
Units and the denominator is 2,000.
Any shares of common stock of the Public Company distributable to Unit
Holders pursuant to this Annex 1 are hereinafter referred to as "Distributable
Shares".
(vi) Time of Payment. Following the initial Public Offering, distributions
of Distributable Shares payable on account of Total Performance Unit Value and
Total Exceptional Performance Unit Value shall be made as of the following dates
and at the following times:
1) as of the effective date of each Secondary Sale prior to the
Final Date, in an amount equal to the total number of Distributable Shares
which all holders of Vested Performance Units and Vested Exceptional
Performance Units would be entitled to include in such Secondary Sale
pursuant to the piggyback registration rights provisions under the
Securityholders Agreement, assuming for such purpose that the Company had
distributed all shares of the Public Company held by it pursuant to this
Agreement and the VDK Holdings Plan; provided, however, in lieu of
distributing such shares to the holders of such Units, all or any portion
of such shares will instead be sold by the Company (or, if applicable, by
3
Aurora/VDK LLC or the Public Company) in such Secondary Sale and the net
proceeds of such sale shall be distributed to the holders of such Units
pro rata in accordance with their respective interests in the shares that
otherwise would have been distributed.
2) upon the Final Date; and
(vii) Manner of Payment. Any payment to Unit Holders under the VDK
Holdings Plan with respect to PUs and EPUs that is due pursuant to paragraphs
(d) or (e) of Annex 1 to the VDK Holdings Plan shall be made in Distributable
Shares contributed by the Company to VDK Holdings. To the extent the Company
does not contribute Distributable Shares to VDK Holdings, VDK Holdings shall
have no obligation to distribute securities of the Public Company, cash or any
other property to Unit Holders pursuant to the VDK Holdings Plan with respect to
the payment then due and the Company shall then be obligated to make such
payment pursuant to this Plan. When the aggregate number of Distributable Shares
required to be paid under this Plan or the VDK Holdings Plan has been paid in
full, then all distributions required to be made on account of Units under this
Plan or on account of Vested Plan Units under the LLC Agreement shall be deemed
to have been made.
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