EXHIBIT 10.17
EXECUTION COPY
MANAGEMENT SHAREHOLDERS
AGREEMENT
THIS MANAGEMENT SHAREHOLDERS AGREEMENT, dated as of November
22, 2000 (this "Agreement"), is entered into by and among New SAC, a limited
company incorporated in the Cayman Islands (the "Company"), the parties
identified on the signature pages hereto as "Management Shareholders" and each
other individual who from time to time executes a Joinder Agreement as
contemplated by Section 7.2 hereof (collectively, the "Management
Shareholders").
RECITALS:
A. Suez Acquisition Company (Cayman) Limited ("SAC"), Seagate
Technology, Inc. ("Seagate") and Seagate Software Holdings, Inc. ("SSHI"),
entered into a Stock Purchase Agreement, dated as of March 29, 2000, as amended
by the Consolidated Amendment to Stock Purchase Agreement, Agreement and Plan of
Merger and Reorganization, and Indemnification Agreement, and Consent, dated as
of August 29, 2000, among SAC, Seagate, SSHI, VERITAS Software Corporation
("VERITAS") and Victory Merger Sub, Inc. ("Merger Sub") and Consolidated
Amendment No. 2 to Stock Purchase Agreement, Agreement and Plan of Merger and
Reorganization, and Indemnification Agreement, and Consent, dated as of October
18, 2000, among SAC, Seagate, SSHI, VERITAS and Merger Sub (as so amended, and
as it may be further amended, supplemented or otherwise modified from time to
time, the "Stock Purchase Agreement");
B. Pursuant to an Assignment and Assumption Agreement, dated as
of November 22, 2000, between SAC and the Company, SAC assigned all of its
rights and obligations under the Stock Purchase Agreement to the Company;
C. Pursuant to the Stock Purchase Agreement, the Company will
purchase all of Seagate's operating assets and assume substantially all of its
liabilities by acquiring the stock of a company into which Seagate has
transferred such assets and liabilities;
D. In connection with the Stock Purchase Agreement, certain
management employees of Seagate ("Rollover Management Shareholders") will
acquire on the date hereof (i) ordinary shares, par value $0.0001 per share (the
"Ordinary Shares"), of the Company, and (ii) Preferred Shares, par value $0.0001
per share (the "Preferred Shares"), of the Company; and
E. The Management Shareholders and the Company wish to provide
for certain matters relating to the equity interests of the Management
Shareholders in their respective holdings in and the governance of the Company.
NOW THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties hereto agree as follows:
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ARTICLE I. INTRODUCTORY MATTERS
1.1 Defined Terms. In addition to the terms defined elsewhere
herein, the following terms have the following meanings when used with initial
capital letters:
"Affiliate" has the meaning given to that term in Rule 405
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promulgated under the Securities Act; provided that officers, directors
or employees of the Company will not be deemed to be Affiliates of a
shareholder of the Company for purposes hereof solely by reason of
being officers, directors or employees of the Company.
"Agreement" means this Agreement, as the same may be amended,
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supplemented or otherwise modified from time to time in accordance with
the terms hereof.
"Assumption Agreement" means a writing substantially in the
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form of Exhibit A hereto whereby a Permitted Transferee or other
transferee pursuant to Section 2.4 becomes a party to, and agrees to be
bound to the same extent as its transferor by the terms of, this
Agreement.
"Board" means the Board of Directors of the Company.
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"Business Day" means a day other than a Saturday, Sunday,
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federal, New York or California State holiday or other day on which
commercial banks in New York City or San Francisco are authorized or
required by law to close.
"Call Rights" has the meaning given that term in Section
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3.1(a).
"Cause" with respect to the termination of employment by the
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Company of any Management Shareholder, means (i) such Management
Shareholder's continued failure substantially to perform the material
duties of his or her office (other than as a result of total or partial
incapacity due to physical or mental illness), (ii) the embezzlement or
theft by such Management Shareholder of the Company's property, (iii)
the commission of an act or acts on such Management Shareholder's part
resulting in the conviction of such Management Shareholder of a felony
under the laws of the United States or any state thereof, (iv) such
Management Shareholder's willful malfeasance or willful misconduct in
connection with his or her duties to the Company or any other act or
omission which is materially injurious to the financial condition or
business reputation of the Company or any of its subsidiaries or
affiliates, or (v) a material breach by such Management Stockholder of
the material terms of his or her employment agreement, this Agreement,
any other shareholders agreement or any non-compete, non-solicitation
or confidentiality provisions to which such Management Shareholder is
subject. However, no termination shall be deemed for Cause under clause
(i), (iv) or (v) unless such Management Shareholder is first given
written notice by the Company of the specific acts or omissions which
the Company deems constitute grounds for a termination for Cause and is
provided with at least 30 days after such notice to cure the specified
deficiency.
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"Change of Control" means (i) the sale or disposition, in one
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or a series of related transactions, of all or substantially all of the
assets of the Company to any "person" or "group" (as such terms are
defined in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) other
than the Investors (or their Permitted Transferees (as defined in the
Investor Shareholders Agreement)) or (ii) any person or group, other
than the Investors (or their Permitted Transferees (as defined in the
Investor Shareholders Agreement)) or their respective Affiliates, is or
becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5
under the Exchange Act), directly or indirectly, of more than 50% of
the total voting power of the voting stock of the Company, including by
way of merger, consolidation or otherwise, and the representatives of
the Investors (or their Permitted Transferees (as defined in the
Investor Shareholders Agreement)) or their respective Affiliates cease
to comprise, in the aggregate, a majority of the Board.
"Closing" has the meaning given that term in the Stock
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Purchase Agreement.
"Closing Date" means November 22, 2000.
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"Code" means the Internal Revenue Code of 1986, as amended.
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"Cost" means the price per share paid by the Management
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Shareholders, in each case, as proportionately adjusted for all
subsequent stock splits, stock dividends and other recapitalizations
and reclassifications.
"Custody Period" has the meaning given that term in Section
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3.2.
"Exchange Act" means the Securities Exchange Act of 1934, as
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amended, and the rules and regulations of the SEC promulgated
thereunder, as the same may be amended from time to time.
"Fair Market Value" with respect to a particular date, means
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(i) if there is a public market for the Shares of a particular class as
of such date, the average of the high and low closing bid prices of
such Shares on such stock exchange on which such Shares are principally
trading on such date, or, if there were no sales on such date, on the
closest preceding date on which there were sales of such Shares or (ii)
if there is no public market for such Shares on such date, the fair
market value of such Shares as determined in good faith by the Board
(provided that, in all cases, the Fair Market Value of Preferred Shares
shall not be greater than the Liquidation Preference (as defined in the
Amended and Restated Memorandum and Articles of Association of the
Company) in respect thereof).
"Good Reason," with respect to the resignation from employment
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with the Company by any Management Shareholder means such a resignation
as a result of, any of the following actions, which actions remain
uncured for at least 30 days following written notice from the
resigning Management Shareholder to the Company describing the
occurrence of such events and asserting that such events constitute
grounds for a
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"Good Reason" resignation, provided notice of such resignation is
given to the Company within sixty (60) days after the expiration of
such cure period: (i) without the Management Shareholder's express
written consent, any material reduction in the Management
Shareholder's authority or responsibilities from those set forth in an
employment agreement between the Company and the Management
Shareholder (an "Employment Agreement") (or if such Management
Shareholder is not a party to an Employment Agreement, from the
authority and responsibilities initially assigned to such Management
Shareholder by the Company after the Closing Date), (ii) without the
Management Shareholder's express written consent, a reduction of 10%
or more in the level of the base salary, target annual bonus or
employee benefits to be provided to the Management Shareholder under
an Employment Agreement (or if such Management Shareholder is not a
party to an Employment Agreement, a reduction of 10% or more in the
level of base salary, target annual bonus or employee benefits
provided to such Management Shareholder immediately prior to the
Closing Date), other than a reduction implemented with the consent of
the Management Shareholder or a reduction that is equivalent to
reduction in base salaries, bonus opportunities and/or employee
benefits, as applicable, imposed on all other senior executives of the
Company at a similar level within the Company (provided that the use
of private aircraft shall not be deemed an employee benefit for these
purposes); or (iii) the relocation of the Management Shareholder to a
principal place of employment more than 50 miles from the Management
Shareholder's current principal place of employment, without the
Management Shareholder's express written consent.
"Governmental Authority" means any Federal, state or local
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court or governmental or regulatory authority or agency, domestic or
foreign.
"Investor Shareholders Agreement" means the shareholders
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agreement, dated as of the date hereof, by and among the Company and
the Investors, as the same may be amended, supplemented or otherwise
modified from time to time.
"Investors" shall mean, collectively, the Persons who are
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parties to the Investor Shareholders Agreement, other than the Company.
"Joinder Agreement" has the meaning given that term in Section
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7.2.
"Lapse Date" means (a) with respect to each Tier I Senior
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Manager, the fifth anniversary of the Closing Date and (b) with respect
to each Senior Manager other than a Tier I Senior Manager, the second
anniversary of the Closing Date.
"Majority Investors" has the meaning given that term in
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Section 2.5.
"Offer" has the meaning assigned to it in Section 2.6(a).
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"Offeree" has the meaning given that term in Section 2.6(a).
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"Offeror" has the meaning given that term in Section 2.6(a).
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"Ordinary Shares" has the meaning given that term in the
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Recitals to this Agreement.
"Permitted Transferee" means with respect to any Management
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Shareholder, (i) upon the death of such Management Shareholder, his or
her executors, administrators, testamentary trustees, legatees or
beneficiaries, (ii) his or her Family Members, (iii) a trust or
custodianship the beneficiaries of which include only such Management
Shareholder and/or his or her Family Members, (iv) a trust in which the
Management Shareholder and/or his or her Family Members have 100% of
the beneficial ownership, (v) a foundation in which the Management
Shareholder and/or his or her Family Members control the management of
the assets and (vi) any other entity in which the Management
Shareholder and/or his or her Family Members own more than fifty
percent of the voting interest, provided that any such Permitted
Transferee complies with Section 2.2(a) hereof. For purposes of this
definition, "Family Member" means the Management Shareholder's spouse,
lineal descendants, siblings, nephews and nieces, parents and
grandparents, and stepchildren and stepparents, including any such
persons by adoptive relationships.
"Person" means any individual, corporation, limited liability
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company, partnership, trust, joint stock company, business trust,
unincorporated association, joint venture, governmental authority or
other legal entity of any nature whatsoever.
"Preferred Shares" has the meaning given that term in the
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Recitals to this Agreement.
"Public Offering" means the sale of common equity securities
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to the public pursuant to an effective registration statement (other
than a registration statement on Form S-4 or Form S-8 or any similar or
successor form) filed under the Securities Act.
"Qualified Public Offering" means the sale of (i) at least 15%
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of the outstanding Ordinary Shares pursuant to an initial Public
Offering by the Company or (ii) Ordinary Shares pursuant to a Public
Offering by the Company which results in gross proceeds to the Company
of at least $250 million.
"Register" means the register of the Company on which the
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Company records the legal title to the shares of the Company.
"Restricted Share Agreement" with respect to any Management
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Shareholder, means the Restricted Share Agreement with the Company
relating to certain Shares owned by such Management Shareholder.
"Rollover Management Shareholders" has the meaning given that
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term in the Recitals to this Agreement.
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"Sale Notice" has the meaning given that term in Section
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2.6(a).
"SEC" means the Securities and Exchange Commission.
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"Section 2.2 Transfer" means a Transfer provided for in
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Section 2.2.
"Securities Act" means the Securities Act of 1933, as amended,
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and the rules and regulations of the SEC promulgated thereunder, as
they may be amended from time to time.
"Senior Managers" means those Management Shareholders who are
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listed on Schedule I hereto.
"Shares" means the Ordinary Shares and the Preferred Shares.
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"Silver Lake" has the meaning given that term in the Investor
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Shareholders Agreement.
"Subsidiary" means, with respect to any Person, any
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corporation, partnership, association or other business entity of which
fifty percent (50%) or more of the total voting power of shares of
capital stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees
thereof, or fifty percent (50%) or more of the equity interest therein,
which is at the time owned or controlled, directly or indirectly, by
any Person or one or more of the other Subsidiaries of such Person or a
combination thereof.
"Third Party" means any Person other than the Company, the
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Investors, the Management Shareholders and each of their Permitted
Transferees (with respect to the Investors only, as such term in
defined in the Investor Shareholders Agreement) and Affiliates.
"Tier I Senior Manager" means those Management Shareholders
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who are listed on Schedule II hereto.
"TPG" means SAC Investments, L.P., a Cayman limited
partnership.
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"Transfer" means, with respect to any Shares (or direct or
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indirect economic or other interest therein), a transfer, sale,
assignment, pledge, hypothecation or other disposition, whether
directly or indirectly (pursuant to the creation of a derivative
security or otherwise), the grant of an option or other right or the
imposition of a restriction on disposition or voting or by operation of
law. When used as a verb, "Transfer" shall have the correlative
meaning. In addition, "Transferred" and "Transferee" shall have the
correlative meanings.
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"Transfer Restriction Termination Date" has the meaning given
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that term in Section 2.1(a).
"Unvested Share Legend" has the meaning given that term in
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Section 2.1(c).
"Vested Share Legend" has the meaning given that term in
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Section 2.1(c)."
1.2 Construction. The language used in this Agreement will be deemed
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to be the language chosen by the parties to express their mutual intent, and no
rule of strict construction will be applied against any party. Unless the
context otherwise requires: (a) "or" is disjunctive but not exclusive, (b) words
in the singular include the plural, and in the plural include the singular, and
(c) the words "hereof", "herein" and "hereunder" and words of similar import
when used in this Agreement refer to this Agreement as a whole and not to any
particular provision of this Agreement, and Section and Exhibit references are
to this Agreement unless otherwise specified.
ARTICLE II. TRANSFERS
2.1 Limitations on Transfer.
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(a) Each Management Shareholder agrees that he or she will not Transfer any
Shares prior to the earliest of (i) a Qualified Public Offering of Ordinary
Shares, (ii) a Change of Control and (iii) the Lapse Date with respect to such
Management Shareholder (such earliest date, the "Transfer Restriction
Termination Date"), except for Transfers which are permitted pursuant to
Sections 2.2, 2.3 or 2.5 hereof or Article III hereof. After the Transfer
Restriction Termination Date with respect to such Management Shareholder, such
Management Shareholder may Transfer Shares only in accordance with, and subject
to the provisions of, this Agreement.
(b) In the event of any purported Transfer by a Management
Shareholder of any Shares in violation of the provisions of this Agreement, such
purported Transfer will be void and of no effect, and the Company will not give
effect to such Transfer.
(c) (i) Each certificate representing Shares held by a Management
Shareholder which are subject to a Restricted Share Agreement will bear a legend
on the face thereof substantially to the following effect (with such additions
thereto or changes therein as the Company may be advised by counsel are required
by law or necessary to give full effect to this Agreement, the "Unvested Share
Legend"):
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO (I) A
MANAGEMENT SHAREHOLDERS AGREEMENT AMONG NEW SAC (THE "COMPANY") AND THE
MANAGEMENT SHAREHOLDERS LISTED THEREIN, DATED AS OF NOVEMBER 22, 2000,
AS AMENDED AND SUPPLEMENTED FROM TIME TO TIME IN ACCORDANCE WITH THE
TERMS THEREOF, AND (II) A RESTRICTED SHARE AGREEMENT WITH THE COMPANY
RELATING TO SUCH SHARES, A COPY OF EACH OF WHICH IS ON FILE WITH THE
SECRETARY OF THE COMPANY. THE
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MANAGEMENT SHAREHOLDERS AGREEMENT CONTAINS, AMONG OTHER THINGS,
CERTAIN PROVISIONS RELATING TO THE VOTING AND TRANSFER OF THE SHARES
SUBJECT TO THE AGREEMENT, AND THE RESTRICTED SHARE AGREEMENT CONTAINS,
AMONG OTHER THINGS, CERTAIN PROVISIONS RELATING TO THE VESTING OF SUCH
SHARES. NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE,
DIRECTLY OR INDIRECTLY, MAY BE MADE EXCEPT IN ACCORDANCE WITH THE
PROVISIONS OF SUCH MANAGEMENT SHAREHOLDERS AGREEMENT AND RESTRICTED
SHARE AGREEMENT. THE HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE OF THIS
CERTIFICATE, AGREES TO BE BOUND BY ALL OF THE PROVISIONS OF SUCH
MANAGEMENT SHAREHOLDERS AGREEMENT AND RESTRICTED SHARE AGREEMENT."
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS THEY HAVE BEEN REGISTERED UNDER THAT ACT
OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE."
(ii) Each certificate representing Shares held by a Management
Shareholder which are not subject to a Restricted Share Agreement will
bear a legend on the face thereof substantially to the following
effect (with such additions thereto or changes therein as the Company
may be advised by counsel are required by law or necessary to give
full effect to this Agreement, the "Vested Share Legend"):
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
MANAGEMENT SHAREHOLDERS AGREEMENT AMONG NEW SAC (THE "COMPANY") AND THE
MANAGEMENT SHAREHOLDERS LISTED THEREIN, DATED AS OF NOVEMBER 22, 2000,
AS AMENDED AND SUPPLEMENTED FROM TIME TO TIME IN ACCORDANCE WITH THE
TERMS THEREOF, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
COMPANY. THE MANAGEMENT SHAREHOLDERS AGREEMENT CONTAINS, AMONG OTHER
THINGS, CERTAIN PROVISIONS RELATING TO THE VOTING AND TRANSFER OF THE
SHARES SUBJECT TO THE AGREEMENT. NO TRANSFER, SALE, ASSIGNMENT, PLEDGE,
HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES REPRESENTED BY
THIS CERTIFICATE, DIRECTLY OR INDIRECTLY, MAY BE MADE EXCEPT IN
ACCORDANCE WITH THE PROVISIONS OF SUCH MANAGEMENT SHAREHOLDERS
AGREEMENT. THE HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE OF THIS
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CERTIFICATE, AGREES TO BE BOUND BY ALL OF THE PROVISIONS OF SUCH
MANAGEMENT SHAREHOLDERS AGREEMENT."
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS THEY HAVE BEEN REGISTERED UNDER THAT ACT
OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE."
(iii) The Unvested Share Legend or the Vested Share Legend, as
applicable, will be removed by the Company by the delivery of
substitute certificates without such Unvested Share Legend or Vested
Share Legend, as the case may be, in the event of a Transfer permitted
by this Agreement and in which the Transferee is not required to enter
into an Assumption Agreement pursuant to Section 2.4; provided,
however, that the second paragraph of each of the Unvested Share
Legend and the Vested Share Legend will only be removed at such time
as it is no longer required for purposes of applicable securities
laws.
(d) Notwithstanding any other provision of this Agreement to the
contrary (other than Section 2.2), a Management Shareholder shall be permitted
to Transfer any Shares which are subject to a Restricted Share Agreement only to
the extent that such Management Shareholder's interest in such Shares has fully
vested, as of the date of such transfer, in accordance with the terms of the
applicable Restricted Share Agreement. However, Ordinary Shares which are not
otherwise vested at the time of Transfer may be transferred to any Permitted
Transferee, provided that such Permitted Transferee agrees to be bound by all of
the restrictions and forfeiture provisions to which the transferred Ordinary
Shares are subject at the time of such Transfer.
(e) Without the prior written consent of Silver Lake and TPG, no
Management Shareholder may Transfer all or a portion of his or her interests in
the Company or take any other action, if such transfer or action would create a
material risk of the Company becoming a "publicly traded partnership," within
the meaning of Section 7704 of the Code and the regulations promulgated
thereunder.
2.2 Certain Permitted Transfers. (a) Any Management Shareholder may
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Transfer any or all of the Shares held by him or her to any Permitted Transferee
of such Management Shareholder who duly executes and delivers an Assumption
Agreement, provided that such Transfer shall not be effective unless and until
the Company shall have been furnished with information reasonably satisfactory
to it demonstrating that such Transfer is exempt from or not subject to the
provisions of Section 5 of the Securities Act and any other applicable
securities laws.
(b) Each Permitted Transferee of any Management Shareholder to which
Shares are transferred shall, and such Management Shareholder shall cause such
Permitted Transferee
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to, transfer back to such Management Shareholder (or to another Permitted
Transferee of such Management Shareholder) any Shares it owns prior to such
Permitted Transferee ceasing to be a Permitted Transferee of such Management
Shareholder.
(c) Subject to the other provisions of this Agreement, each Management
Shareholder may Transfer any or all of the Shares held by him or her: (i) with
the consent of the Board, to another Management Shareholder; (ii) to the
Company; or (iii) to Silver Lake, TPG or any of their respective Affiliates.
2.3 Tag-Along Rights. (a) So long as (i) this Agreement shall remain
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in effect and (ii) no Qualified Public Offering of Ordinary Shares shall have
occurred, each Management Shareholder shall, with respect to such Management
Shareholder's Shares, have the right to exercise the rights of a Tagging
Shareholder pursuant to Section 2.4 of the Investor Shareholders Agreement in
connection with any Proposed Sale (as defined in the Investor Shareholders
Agreement) of Shares by any Selling Holder (as defined in the Investor
Shareholders Agreement) thereunder, provided that, in the case of a Proposed
Sale, such Management Shareholder shall be permitted to participate in any such
Proposed Sale only with respect to those Shares which are not subject to a
Restricted Share Agreement or with respect to which such Management
Shareholder's interest has fully vested as of the date of the closing of such
Proposed Sale (including Shares that are vested as a result of such Proposed
Sale), in accordance with the terms of the applicable Restricted Share
Agreement.
2.4 Rights and Obligations of Transferees. Any Transferee of Shares
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(other than Transferees who acquire Shares pursuant to the exercise of rights
set forth in Section 2.5 or Section 4.1 or, following the initial Public
Offering by the Company, in a bona fide sale to the public pursuant to Rule 144
under the Securities Act or pursuant to an effective registration statement
under the Securities Act) will be required, at the time of and as a condition to
such Transfer, to become a party to this Agreement by executing and delivering
an Assumption Agreement and, upon executing and delivering an Assumption
Agreement, will be treated as a Management Shareholder for all purposes hereof;
provided, however, that no such Transferee will acquire any rights (but will be
subject to the obligations) under Section 2.3 and 4.1 or be subject to the Call
Right under Article III, unless such Transferee is a Permitted Transferee.
2.5 Take-Along Rights. Each Management Shareholder agrees that if any
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Investor or Investors holding, in the aggregate, at least a majority of the
outstanding Ordinary Shares (such Investor or Investors, the "Majority
Investors") receive an offer from a third party to purchase or otherwise acquire
at least a majority of the outstanding Ordinary Shares, such Management
Shareholder shall, at the request of such Majority Investors, be required to
Transfer that percentage of his or her vested Preferred Shares and that
percentage of his or her vested Ordinary Shares equal to the percentage of the
Preferred Shares and/or Ordinary Shares (as the case may be) held by the
Majority Investors being transferred at the same price per Preferred Share
and/or Ordinary Share (as the case may be) and upon the terms, conditions, and
provisions, if any, of the offer so accepted by the Majority Investors,
including making the same representations, warranties, covenants, indemnities
and agreements that the Majority Investors
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agree to make (except that, in the case of representations, warranties,
conditions, covenants, indemnities and agreements pertaining specifically to the
Majority Investors, each such Management Shareholder shall make the comparable
representations, warranties, covenants, indemnities and agreements and shall
agree to comparable conditions, in each case to the extent applicable and
pertaining specifically to itself and only to itself); provided that all
representations, warranties, covenants, indemnities and agreements (other than
those referred to in the immediately preceding exception) shall be made by each
Majority Investor and each such Management Shareholder severally and not jointly
and that any liability of the Majority Investor and such Management Shareholders
thereunder shall be borne by each of them on a pro rata basis determined
according to the number of Shares sold by each of them. In the event that any
such Transfer is structured as a merger, consolidation or similar business
combination, each such Management Shareholder agrees to vote in favor of the
transaction and take all action to waive any dissenters, appraisal or other
similar rights.
2.6 Rights of First Refusal. (a) If, following the Transfer
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Restriction Termination Date and prior to an initial Public Offering, a
Management Shareholder (for this purpose, an "Offeree") receives a bona fide
offer to purchase any or all of his or her Shares that are not subject to a
Restricted Share Agreement or which have vested pursuant to the applicable
Restricted Share Agreement (in each case, the "Offer") from a Third Party (the
"Offeror"), which Offer such Management Shareholder wishes to accept and that
could be consummated without violating the terms of this Agreement, then (i) the
Offeree shall cause the Offer to be reduced to writing and shall notify the
Company in writing of his or her wish to accept the Offer (the "Sale Notice"),
(ii) the Company or its designee(s) shall have the right to purchase all (but
not less than all) of such Shares pursuant to this Section 2.6 and (iii) the
Offeree agrees not to sell such Shares prior to the earlier of (a) the 30-day
period set forth in the second succeeding paragraph of this Section 2.6(a) and
(b) the communication to the Offeree of the decision by the Company to not
purchase any or all of such Shares.
The Sale Notice shall contain an irrevocable offer to sell
such Shares to the Company or its designee(s) in the manner set forth in this
Section 2.6(a) at a purchase price equal to the price contained in and otherwise
on substantially the same terms, conditions and other provisions of the Offer
and shall be accompanied by a true and complete written copy of the Offer (which
shall identify the Offeror).
At any time within 30 days from the date of the receipt by the
Company of the Sale Notice, the Company shall have the option to purchase, or to
arrange for one or more Persons designated by the Company to purchase, all (but
not less than all) of the Shares covered by the Offer either (i) for the same
consideration and on substantially the same terms, conditions and other
provisions as the Offer or (ii) if the Offer includes any consideration other
than cash, then, at the sole option of the Company, at the equivalent all cash
price, determined in good faith by the Board, and otherwise on the same terms,
conditions and other provisions as the Offer. The Company agrees to notify the
Offeree as promptly as practicable of its decision regarding the right of first
refusal set forth in this Section 2.6(a) but, in no event, shall it notify the
Offeree later than the end of such 30-day period.
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(b) If the option set forth in Section 2.6(a) is exercised by the
Company, the Company (or its designee(s)) shall arrange with the Offeree a
mutually convenient time (not later than ninety (90) days after the date of the
Sale Notice) to consummate such purchase and sale and, at that time, shall pay
to the Offeree cash consideration for the Shares subject to such purchase and
sale, by delivering a certified bank check or checks or by wiring same day funds
upon the instructions of the Offeree in the amount of the purchase price for
such Shares and shall deliver the relevant non-cash consideration, if any, to
the Offeree against delivery to the Company by the Offeree of (i) if the Shares
have been issued in certificated form, certificates representing the Shares
being purchased, appropriately endorsed by the Offeree or (ii) if the Shares
have been issued in book-entry form, instructions regarding the transfer of
registration of the Shares being sold to the Company on the Register.
(c) If, at the end of the 30-day period referred to in Section 2.6(a),
the Company (or its designee(s)) has not exercised the right of first refusal in
the manner set forth above, the Offeree may, during the next succeeding 60
Business Days, sell not less than all of the Shares covered by the Offer to the
Offeror at a price and on terms, conditions and other provisions no less
favorable to the Offeree than those contained in the Offer. Promptly after such
sale, (i) the Offeree shall notify the Company of the consummation thereof and
shall furnish such evidence of the completion and time of completion of such
sale and of the terms thereof as may reasonably be requested by the Company and,
thereafter, (ii) the Company shall deliver (A) if the Shares have been issued in
certificated form, new certificates representing the Shares sold to the Offeror
who has purchased such Shares upon delivery of old certificates issued to the
Offeree and representing such Shares or (B) if the Shares have been issued in
book-entry form, notices to the Offeree and the Offeror who has purchased such
Shares of the registration of Transfer of such Shares. If, at the end of the
60-Business Day period referred to in this Section 2.6(c), the Offeree has not
completed the sale of such Shares as aforesaid, all the restrictions on transfer
contained herein shall again be in effect with respect to such Shares.
2.7 Distributions Upon Initial Public Offering of Designated
--------------------------------------------------------
Subsidiaries. Upon any distribution contemplated by Section 2.7 of the Investor
------------
Shareholders Agreement where an additional shareholders agreement is entered
into pursuant to Section 2.7, each Management Shareholder shall enter into a
shareholders agreement with the Company having substantially identical terms and
conditions as this Agreement, provided that (i) all references in this Agreement
to the Company shall be changed in such additional shareholders agreement to
references to the relevant Designated Subsidiary (as such term is defined in the
Investor Shareholders Agreement) and (ii) all references in this Agreement to
the Investor Shareholders Agreement shall be changed in such additional
shareholders agreement to the applicable additional shareholders agreement
entered into pursuant to the terms of the Investor Shareholders Agreement.
ARTICLE III. CALL RIGHTS
3.1 Call Rights. (a) If the employment with the Company or any of its
-----------
Subsidiaries of any Management Shareholder terminates for any reason (including,
without
13
limitation, due to death or disability of such Management Shareholder) prior to
the Lapse Date with respect to such Management Shareholder, the Company (or its
designee(s)) shall have the option to purchase (the "Call Rights"), and such
Management Shareholder shall be required to sell to the Company (or to any such
designee(s)), if the Company exercises the Call Rights, any or all Shares held
by such Management Shareholder, at a price per share equal to the applicable
purchase price determined pursuant to Section 3.2 hereof; provided, however,
that in the case of a termination of employment without Cause, a resignation
from employment with Good Reason or the death or disability of the employee, the
Company may exercise its Call Rights only with the approval of one Management
Director (as such term is defined in the Investor Shareholders Agreement).
(b) If the Company does not exercise its Call Rights with respect to
such Management Shareholder within 60 days of such Management Shareholder's
termination of employment (other than becasuse of a failure to obtain the
approval of one Management Director as contemplated by the proviso of Section
3.1(a)), then the Investors and the Tier I Senior Managers shall have the same
Call Rights for a period of 30 days effective immediately upon the expiration of
the 60-day period described in this Section 3.1(b). If more than one Investor or
Tier I Senior Manager exercises its Call Rights with respect to such Management
Shareholder, each such Investor or Tier I Senior Manager shall have the right to
purchase the number of such Shares equal to the product of (i) the number of
Shares subject to such Call Rights and (ii) the quotient of (A) such Investor's
or Tier I Senior Manager's percentage ownership in the Ordinary Shares and (B)
the aggregate percentage ownership in the Ordinary Shares of such Investor or
Tier I Senior Manager and all other Investors and Tier I Senior Managers
exercising such Call Rights; provided, that for purposes of determining such
quotient only Ordinary Shares held by Tier I Senior Managers which are not
subject to a Restricted Share Agreement or with respect to which such Tier I
Senior Managers' interests have fully vested as of the date of the exercise of
such Call Rights, in accordance with the terms of the applicable Restricted
Share Agreements, shall be taken into account.
(c) Upon the termination of such Management Shareholder's employment,
the Company shall deliver written notice to such Management Shareholder within
60 days (if at all) of such termination indicating its intention to exercise its
Call Rights. The Company's decision whether to exercise its Call Rights in the
case of a termination of employment of a Rollover Management Shareholder without
Cause or for Good Reason shall, subject to the proviso of Section 3.1(a), be
determined by the Compensation Committee of the Board. Any Investor or Tier I
Senior Manager exercising its Call Rights pursuant to Section 3.1(b) hereof
shall deliver written notice to such Management Shareholder of such exercise
within 30 days of the expiration of the 60-day period referred to in Section
3.1(b) hereof.
(d) Regardless of whether the Company or any of the Investors or Tier I
Senior Managers exercise their respective Call Rights within the period
prescribed by this Section 3.1, if a Management Shareholder continues to own
Shares, then he or she shall continue to be bound by the terms of this
Agreement.
14
3.2 Procedures for Exercise of Call Rights. In the event of a
--------------------------------------
purchase by the Company, any Investor or any Tier I Senior Manager and the sale
by such Management Shareholder pursuant to Section 3.1 hereof, then the purchase
price shall be:
(i) in the case of a termination of or resignation from employment for
any reason other than as provided in clauses (ii) and (iii) below, the Fair
Market Value of the Shares to be purchased on the date on which notice of
exercise of Call Rights is delivered pursuant to Section 3.1;
(ii) in the case of a termination of employment for Cause, the lower of
(a) the Fair Market Value of the Shares to be purchased on the date of
termination of employment and (b) the original cost at which such
Management Shareholder acquired such Shares (provided that the original
cost of (i) any Ordinary Shares acquired on the date hereof shall be deemed
to be zero and (ii) any Preferred Shares shall be equal to the Liquidation
Preference (as defined in the articles of association of the Company) in
respect thereof); or
(iii) in the case of a termination of employment of a Rollover
Management Shareholder (but not Management Shareholders who are not
Rollover Management Shareholders) without Cause or a resignation from
employment thereby with Good Reason, the higher of (a) the Fair Market
Value of the Shares to be purchased on the date on which notice of the
exercise of the Call Rights is delivered pursuant to Section 3.1 and (b)
the original cost at which such Management Shareholder acquired such Shares
(provided that the original cost of (i) any Ordinary Shares acquired on the
date hereof shall be deemed to be zero and (ii) any Preferred Shares shall
be equal to the Liquidation Preference (as defined in the articles of
association of the Company) in respect thereof).
If the Company, any Investor or any Tier I Senior Manager
purchases Shares from a terminated Management Shareholder pursuant to Section
3.1(a) hereof, the purchasing party shall arrange a mutually convenient time
(not later than ninety (90) days after the effective date of the Management
Shareholder's termination of employment) to consummate such purchase and sale
and, at that time, shall pay such Management Shareholder the purchase price
against delivery by such Management Shareholder of (i) if the Shares have been
issued in certificated form, certificates representing such Shares appropriately
endorsed by such Management Shareholder or (ii) if the Shares have been issued
in book-entry form, instructions from the terminated Management Shareholder to
register the Transfer of Shares effected by the exercise of such Call Right on
the Register. The purchase price for such Shares shall be paid by delivering a
certified bank check or checks or by wiring same day funds upon the instruction
of such Management Shareholder. The Company shall deliver to the terminated
Management Shareholder (i) if the Shares to be purchased have been issued in
certificated form, certificates representing the balance of the Shares held by
such Management Shareholder which remain unsold (if any) after the purchase
pursuant to this Section 3.1 and which otherwise have not been forfeited (if
any) or (ii) if such Shares have been issued in book-entry form, notice to the
terminated Management Shareholder of the registration of Transfer of the Shares
sold to the
15
Company or the Investors upon the exercise of the Call Rights of such party. In
the event that the Company or any Investor or Tier I Senior Manager exercises
its Call Rights with repect to any Shares held by any Management Shareholder
that have been vested pursuant to a Restricted Share Agreement for less than six
months (the period from the date of such vesting until six months after such
date, the "Custody Period"), the Company shall hold such Shares in custody for
the benefit of such Management Shareholder until the expiration of the Custody
Period with respect to such Shares; provided, however, that such Management
Shareholder shall not have any rights with respect to such Shares (including,
without limitation, any rights to Transfer or vote such Shares). The purchase
and sale of such Shares shall be consummated after the expiration of the Custody
Period. Notwithstanding anything to the contrary contained herein, the Fair
Market Value of any Shares to be purchased after the expiration of any Custody
Period shall be determined as of the date of the consummation of the purchase
and sale of Shares. Notwithstanding anything to the contrary contained herein,
in the event of a termination of employment of a Rollover Management Shareholder
without Cause or for Good Reason, the Call Rights herein provided for will not
apply to any Ordinary Shares other than those issued in respect of the
cancellation of equity interests of Seagate pursuant to the Management
Shareholder's Rollover Agreement with the Company dated November 13, 2000.
ARTICLE IV. PIGGYBACK REGISTRATION RIGHTS
4.1 Piggyback Rights. Each Management Shareholder hereby agrees to be
----------------
bound by all of the terms, conditions and obligations of Article III
(Registration Rights) of the Investor Shareholders Agreement and all other
provisions of the Investor Shareholders Agreement (and any subsequent
shareholder agreements entered into pursuant to Section 2.7 of the Investor
Shareholders Agreement) necessary to give effect to Article III thereof. Subject
to the limitations set forth in this Section 4.1, after both (i) the initial
Public Offering by the Company and (ii) the Investors have sold for value to one
or more Third Parties 15% or more of the number of Ordinary Shares owned in the
aggregate by the Investors on the date hereof (as adjusted for any stock
dividends, combinations, splits and the like with respect to such Ordinary
Shares), each Management Shareholder shall have all of the rights and privileges
of Article III of the Investor Shareholders Agreement (other than Section 3.2),
in each case as if the Management Shareholder were an original party (other than
the Company) thereto.
4.2 Additional Registration Rights. As soon as practicable following
------------------------------
a Qualified Public Offering, the Company shall use its reasonable best efforts
to register all outstanding options to purchase Shares held by the Management
Shareholders or their Permitted Transferees under one or more employee option
plans of the Company or its Affiliates on a Form S-8 registration statement (or
any successor form of registration statement) with the SEC and shall also, at
the time of such registration, use its reasonable best efforts to register for
resale on a Form S-3 reoffer prospectus (or any successor form of reoffer
prospectus) any Shares previously issued to the Management Shareholders in
connection with their rollover equity in the Company or their employment with
the Company and held by such Management Shareholders or their Permitted
Transferees at the time, if and to the extent such reoffer prospectus is
permitted to be filed with the SEC in conjunction with the filing of the S-8
registration statement. The Company
16
shall use its reasonable best efforts to keep such reoffer prospectus current
and in effect for at least one year following the expiration of any lock-up or
market standoff period imposed on the Management Shareholders in connection with
the Qualified Public Offering. The foregoing obligations of the Company shall
also be binding upon any successor entity, whether through merger, consolidation
or other change in control or ownership transaction.
ARTICLE V. REPRESENTATIONS AND WARRANTIES
5.1 Representations and Warranties of the Management Shareholders.
-------------------------------------------------------------
Each Management Shareholder, severally and not jointly, represents and warrants
to the Company as follows:
(a) Authority; Enforceability. Such Management Shareholder has the
-------------------------
legal capacity and all requisite power and authority to enter into this
Agreement, to perform his or her obligations hereunder and to consummate the
transactions contemplated hereby. This Agreement constitutes a valid and binding
obligation of such Management Shareholder, enforceable against him or her in
accordance with its terms. With respect to any Person who joins and enters into
this Agreement after the date hereof pursuant to the terms of this Agreement,
such Person will be deemed to represent and warrant to the Company, in addition
to the other representations and warranties contained herein, that his or her
joining and entering into this Agreement has been duly authorized and approved
and that this Agreement constitutes a valid and binding obligation of such
Person, enforceable against him or her in accordance with its terms.
(b) No Conflicts. (i) No filing with, and no permit, authorization,
------------
consent or approval of, any Governmental Authority or any other Person is
necessary for the execution of this Agreement by such Management Shareholder and
the consummation by him or her of the transactions contemplated hereby and (ii)
the execution and delivery of this Agreement by such Management Shareholder, the
consummation of the transactions contemplated hereby and the compliance with the
terms hereof by such Management Shareholder will not conflict with, or result in
any violation or default (with or without notice or lapse of time or both) under
any other agreement to which such Management Shareholder is a party, including
any voting agreement, shareholders agreement, voting trust, trust agreement,
pledge agreement, loan or credit agreement, note, bond, mortgage, indenture,
lease or other agreement, instrument, permit, concession, franchise or license,
or violate any judgment, order, notice, decree, statute, law, ordinance, rule or
regulation applicable to such Management Shareholder or to his or her property
or assets. With respect to any Person who joins and enters into this Agreement
after the date hereof pursuant to the terms hereof, such Person will be deemed
to represent and warrant to the Company, in addition to the other
representations and warranties contained herein, that the execution and delivery
of this Agreement by such Person, the consummation of the transactions
contemplated hereby and the compliance with the terms hereof by such Person will
not cause any violation of its certificate of incorporation or by-laws or
analogous organizational documents.
17
(c) Ownership, Etc. of Securities. Such Management Shareholder is the
-----------------------------
beneficial or record owner of the equity interests in Seagate set forth opposite
such Management Shareholder's name on Schedule III hereto. Such Management
Shareholder has good and marketable title to such interests, free and clear of
any encumbrances, agreements, adverse claims, liens or other arrangements with
respect to the ownership thereof.
(d) Accredited Investors. Each Tier I Senior Manager represents and
--------------------
warrants to the Company that he or she is an "accredited investor" as defined
under Regulation D of the Securities Act.
(e) Access to Information, Etc. Such Management Shareholder
---------------------------
represents and acknowledges that:
(i) he or she has been supplied with, or otherwise has had access
to, adequate information and the opportunity to ask questions of
representatives of the Company in order to make his or her own
independent decision to retain or acquire the Shares in connection
with this Agreement;
(ii) the Shares may be required to be held indefinitely and the
Management Shareholder must continue to bear the economic risk of the
retention of the Ordinary Shares unless the offer and sale of such
Shares is subsequently registered under the Securities Act and all
applicable state securities laws or an exemption or exception from
such registration is available and the Management Shareholder
otherwise complies with the terms of this Agreement;
(iii) there is no market for the Shares and it is not anticipated
that there will be any public market for the Shares;
(iv) Rule 144 promulgated under the Securities Act is not
presently available with respect to the sale of any securities of the
Company (including the Shares), and the Company has made no agreement
or covenant to make such rule available;
(v) when and if Shares may be Transferred without registration
under the Securities Act in reliance on Rule 144, such Transfer can be
made only in limited amounts in accordance with the terms and
conditions of such Rule;
(vi) if the exemption provided under Rule 144 is not available,
the public offer or sale of Shares without registration will require
compliance with some other exemption or exception under the Securities
Act and applicable state securities laws;
(vii) if any of the Shares are at any time Transferred in
accordance with Rule 144, the Management Shareholder will deliver to
the Company at or prior to the time of such Transfer an executed Form
144 (if required by Rule 144) and
18
such other documentation as the Company may reasonably require in
connection with such sale;
(viii) a restrictive legend in the form heretofore set forth in
Section 2.1(c) hereof shall be placed on the certificates representing
Shares, if such Shares have been issued in certificated form;
(ix) a notation shall be made in the appropriate records of the
Company indicating that the Shares are subject to restrictions on
transfer and, if the Company should at some time in the future engage
the services of a securities transfer agent, appropriate stop-transfer
instructions will be issued to such transfer agent with respect to the
Shares;
(x) the Management Shareholder's financial situation is such that
he or she can afford to bear the economic risk of holding the Shares
for an indefinite period of time, has adequate means for providing for
his or her current needs and personal contingencies, and can afford to
suffer a complete loss of his or her retention of the Shares;
(xi) the Management Shareholder's knowledge and experience in
financial and business matters are such that he or she is capable of
evaluating the merits and risks of owning the Shares;
(xii) the Management Shareholder understands that the Shares are
securities which involve a high degree of risk (including the risk of
total loss), there are substantial restrictions on the transferability
of the Shares, and on the Closing Date and for an indefinite period
following the Closing Date, there will be no public market for the
Shares and accordingly it may not be possible for the Management
Shareholder to liquidate his or her Shares, including in case of
emergency, if at all;
(xiii) the Management Shareholder understands and has taken
cognizance of all the risk factors related to the purchase of the
Shares, and no representations or warranties have been made to the
Management Shareholder or his or her representatives concerning the
Shares, these risks, the Company or any of its Subsidiaries or their
prospects or other related matters;
(xiv) in making his or her election to retain or acquire Shares,
the Management Shareholder has relied upon independent investigations
made by him or her and, to the extent believed by the Management
Shareholder to be appropriate, his or her representatives, including
his or her own professional, legal, financial, tax and other advisors;
and
(xv) he or she has elected to retain or acquire Shares solely for
investment purposes for his or her own account and not as a nominee or
agent for
19
any other person and not with a view to, or for resale in connection
with, the distribution or other disposition thereof; provided that
this last representation does not prejudice the right of any
Management Shareholder to Transfer Shares in compliance with the terms
of this Agreement, the Securities Act and applicable state securities
laws.
5.2 Representations and Warranties of the Company. The Company
---------------------------------------------
represents and warrants to each Management Shareholder as follows:
(a) Authority. It is duly incorporated, validly existing and in good
---------
standing as an exempted company under the laws of the Cayman Islands. It has all
requisite limited liability company power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby. This Agreement
has been duly authorized, executed and delivered by it and constitutes its valid
and binding obligations, enforceable against it in accordance with its terms.
(b) No Conflicts; Enforceability. (i) No filing with, and no permit,
----------------------------
authorization, consent or approval of, any Governmental Authority or any other
person is necessary for the execution of this Agreement by the Company and the
consummation by it of the transactions contemplated hereby, and (ii) the
execution and delivery of this Agreement by the Company, the consummation by it
of the transactions contemplated hereby and its compliance with the terms hereof
will not conflict with, or result in any violation of, or default (with or
without notice or lapse of time or both) under any provision of, its memorandum
and articles of association or any other agreement to which it is a party,
including any voting agreement, shareholders agreement, voting trust, trust
agreement, pledge agreement, loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession, franchise
or license, or violate any judgment, order, notice, decree, statute, law,
ordinance, rule or regulation applicable to the Company or to its property and
assets.
ARTICLE VI. TAX MATTERS
6.1 Tax Matters. Each Management Shareholder hereby agrees to be
-----------
bound by all of the terms, conditions, and obligations of Article VI (Tax
Matters) of the Investor Shareholders Agreement and all other provisions of the
Investor Shareholders Agreement necessary to give effect to Article VI thereof.
6.2 Section 83(b) Election. Promptly after the date of this
----------------------
Agreement, each Management Shareholder shall, with respect to the Shares held by
such Management Shareholder, make a timely election under Section 83(b) of the
Code, in accordance with the applicable regulations promulgated thereunder.
6.3 Income Tax Information. The Company agrees to prepare and send,
----------------------
or cause to be prepared and sent, to the Management Shareholders such
information as may reasonably be required for applicable income tax reporting
purposes.
20
ARTICLE VII. MISCELLANEOUS
7.1 Additional Shares Subject to Agreement. Each Management
--------------------------------------
Shareholder agrees that any shares of the Company that he or she shall hereafter
acquire by any means of a stock split, stock dividend, distribution, exercise of
options or otherwise (other than pursuant to a Public Offering) shall be subject
to the provisions of this Agreement to the same extent as if held as of the
Closing Date and such Management Shareholder shall as promptly as practicable
notify the Company of the terms of such acquisition or receipt, including the
number of shares acquired, their price and the other terms and provisions of the
acquisition, including the Person from whom they were acquired.
7.2 Joinder. After the Closing Date, employees of the Company may
-------
from time to time acquire Shares and may be required in connection with such
acquisition, to enter into this agreement with the Company as a Management
Shareholder. Any such employee shall become a party to this Agreement by
executing and delivering to the company a Joinder Agreement in substantially the
form attached hereto as Exhibit B. Each such executed definitive Joinder
Agreement shall become effective as between such employee and the Company upon
its execution and delivery by such employee to the Company and its agreement and
acknowledgment by the Company, and it shall not require the execution or consent
of any other party hereto.
7.3 Termination. Other than as specified below, the provisions of
-----------
this Agreement will terminate and be of no further force and effect upon the
date on which at least 50% of the number of issued and outstanding Ordinary
Shares are listed on, or being actively traded on a national securities exchange
or interdealer quotation system. Notwithstanding the foregoing, Section 4.1 of
this Agreement shall survive the termination of this Agreement until such time
as all Registrable Securities (as defined in the Investor Shareholders
Agreement) held by the Management Shareholders cease to be Registrable
Securities.
7.4 Notices. (a) if to the Company:
-------
New SAC
c/o Silver Lake Partners, L.P.
ββββ ββββ ββββ ββββ
ββββββββ β, βββββ βββ
βββββ ββββ, ββ βββββ
Attention: βββββ ββββ
Telecopy: (βββ) βββ-ββββ
with copies to:
βββββββ βββββββ & ββββββββ
βββ βββββββββ ββββββ
βββ ββββ, ββ βββββ
Attention: βββββββ β. ββββββ, Esq.
21
Telecopy: (βββ) βββ-ββββ
-and-
Cleary, Gottlieb, βββββ & ββββββββ
βββ βββββββ βββββ
βββ ββββ, ββ βββββ
Attention: ββββ β. ββββ, Esq.
Telecopy: (βββ) βββ-ββββ
(b) if to a Management Shareholder, to him or her at his or her
address or facsimile number set forth in the books and records of the Company.
7.5 Further Assurances. The parties hereto will sign such further
------------------
documents, cause such meetings to be held, resolutions passed, exercise their
votes and do and perform and cause to be done such further acts and things as
may be necessary in order to give full effect to this Agreement and every
provision hereof.
7.6 Effective Time of Agreement. This Agreement shall become
---------------------------
effective, with respect to each Management Shareholder, and enforceable against
such Management Shareholder, upon execution of this Agreement by the Company and
such Management Shareholder, without regard to execution by any other Management
Shareholder.
7.7 Assignment. The provisions of this Agreement shall be binding
----------
upon and shall inure to the benefit of the parties hereto and their Permitted
Transferees and their respective successors and permitted assigns. Except as
specifically provided herein, this Agreement may not be assigned by any party
hereto without the express prior written consent of the Investors, and any
attempted assignment, without such consents, will be null and void.
7.8 Amendments; Waivers. This Agreement may be amended only by a
-------------------
written instrument signed by (a) the Company and (b) the Management Shareholders
or their Permitted Transferees who own on a fully diluted basis Ordinary Shares
representing at least a majority of the voting power represented by all Ordinary
Shares owned by Management Shareholders which are outstanding on a fully diluted
basis; provided, however, that this Agreement may be amended, solely with
respect to any Management Shareholder, by a written instrument executed by the
Company and such Management Shareholder. No waiver by any party of any of the
provisions hereof will be effective unless explicitly set forth in writing and
executed by the party so waiving. Except as provided in the preceding sentence,
no action taken pursuant to this Agreement, including without limitation, any
investigation by or on behalf of any party, will be deemed to constitute a
waiver by the party taking such action of compliance with any covenants or
agreements contained herein. The waiver by any party hereto of a breach of any
provision of this Agreement will not operate or be construed as a waiver of any
subsequent breach.
7.9 Third Parties. This Agreement does not create any rights, claims
-------------
or benefits inuring to any person that is not a party hereto nor create or
establish any third party
22
beneficiary hereto, provided that the Investors may rely on and enforce the
representations, warranties, covenants and agreements of the Management
Shareholders contained herein.
7.10 Governing Law. This Agreement will be governed by, and
-------------
construed in accordance with, the laws of the State of New York.
7.11 Jurisdiction. Any action to enforce, which arises out of or in
------------
any way relates to, any of the provisions of this Agreement may be brought and
prosecuted in such court or courts located within the State of New York as
provided by law; and the parties consent to the jurisdiction of such court or
courts located within the State of New York and to service of process by
registered mail, return receipt requested, or by any other manner provided by
the law of such applicable jurisdiction.
7.12 Injunctive Relief. The Management Shareholders acknowledge and
-----------------
agree that a violation of any of the terms of this Agreement will cause the
Company and the Investors irreparable injury for which adequate remedy at law is
not available. Accordingly, it is agreed that each of the Company and the
Investors shall be entitled to an injunction, restraining order or other
equitable relief to prevent breaches of the provisions of this Agreement and to
enforce specifically the terms and provisions hereof in any court of competent
jurisdiction in the United States or any state thereof, in addition to any other
remedy to which they may be entitled at law or equity.
7.13 Entire Agreement. This Agreement contains the entire
----------------
understanding of the parties with respect to the subject matter hereof.
7.14 Titles and Headings. The section headings contained in this
-------------------
Agreement are for reference purposes only and will not affect the meaning or
interpretation of this Agreement.
7.15 Severability. If any provision of this Agreement is declared by
------------
any court of competent jurisdiction to be illegal, void or unenforceable, all
other provisions of this Agreement will not be affected and will remain in full
force and effect.
7.16 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall bedeemed an original, but all of which shall
constitute one and the same instrument.
7.17 Costs. Each of the parties hereto agree that each of them will
-----
bear his or her own costs which arise from this Agreement.
7.18 Other Shareholders' Agreements. None of the Management
------------------------------
Shareholders shall enter into any shareholder agreement or other arrangement of
any kind with any Person with respect to any Shares which is inconsistent with
the provisions of this Agreement or which may impair its ability to comply with
this Agreement.
IN WITNESS WHEREOF, each of the undersigned has executed this
Agreement or caused this Agreement to be executed on its behalf as of the date
first written above.
NEW SAC
By: ___________________________
Name:
Title:
MANAGEMENT SHAREHOLDER:
-------------------------
Name:
SCHEDULE I
LIST OF SENIOR MANAGERS
SCHEDULE II
LIST OF TIER I SENIOR MANAGERS
SCHEDULE III
HOLDINGS OF MANAGEMENT SHAREHOLDERS
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NAME OF MANAGEMENT NUMBER OF SHARES OF
SHAREHOLDER COMMON STOCK
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EXHIBIT A
FORM OF ASSUMPTION AGREEMENT
[DATE]
To the parties to the
Management Shareholders Agreement
referred to below
Ladies and Gentlemen:
Reference is made to the Management Shareholders Agreement
dated as of November 22, 2000 (as the same be amended, supplemented or otherwise
modified from time to time, the "Management Shareholders Agreement") among New
SAC and the Management Shareholders party thereto. This is an Assumption
Agreement referred to in the Management Shareholders Agreement. Capitalized
terms used but not defined herein have the meanings given such terms in the
Management Shareholders Agreement.
The undersigned (the "Transferee") is a proposed transferee of
Shares currently held by [TRANSFEROR NAME] (the "Transferor"), and has received
a copy of the Management Shareholders Agreement as currently in effect. In
connection with the proposed transfer of Shares to the Transferee, the
Transferee hereby assumes, and agrees to be bound to the same extent as the
Transferor by, the Management Shareholders Agreement with respect to such
Shares. From and after the execution and delivery hereof and the consummation of
the transfer of such Shares to the Transferee, the Transferee understands that
it shall be deemed to be a party to the Management Shareholders Agreement as a
Transferee of the Transferor, subject to the limitation on certain rights as
provided in Section 2.4 of the Management Shareholders Agreement.
Very truly yours,
[TRANSFEREE NAME]
By __________________
Name:
Title:
EXHIBIT B
FORM OF JOINDER AGREEMENT
Pursuant to the Management Shareholders' Agreement dated as of
November 22, 2000 (the "Shareholders' Agreement") among New SAC and the
Management Shareholders party thereto, the undersigned hereby agrees that,
having acquired Shares, the undersigned has, by the terms of the Management
Shareholders' Agreement, become bound by the terms and other provisions of the
Management Shareholders' Agreement with all attendant rights, duties and
obligations thereof and, pursuant to Section 2.4 and/or Section 7.2 of the
Management Shareholders' Agreement and by this Joinder Agreement, hereby joins
and enters into the Management Shareholders' Agreement. This is a Joinder
Agreement referred to in the Management Shareholders' Agreement. Capitalized
terms used but not defined in this Joinder shall have the meaning assigned to
them in the Management Shareholders' Agreement.
Listed below is information regarding the Shares of the
undersigned:
Number of Ordinary Shares: ________
-------------------------
Number of Preferred Shares: ________
--------------------------
IN WITNESS WHEREOF, the undersigned has executed this Joinder
as of the date written below.
[NAME]
Name:
Title:
Date: , 2000
Acknowledged by:
NEW SAC
By: ___________________________
Name:
Title:
Date: