EMPLOYEE STOCKHOLDER'S AGREEMENT
Exhibit
10.32
EMPLOYEE
STOCKHOLDER'S AGREEMENT
This
Employee Stockholder's Agreement (this "Agreement") is
entered into as of July 25, 2002 between BRW Acquisition, Inc., a Delaware
corporation (the "Company"), and
the undersigned, as set forth on the signature page hereof (the "Employee
Stockholder"), (the
Company and the Employee Stockholder being hereinafter collectively referred to
as the "Parties").
WHEREAS,
this Agreement is one of several other agreements ("Other
Employee and Management Stockholders' Agreements") which
have been, or which in the future will be, entered into between the Company and
other individuals who are or will be key employees of the Company or one of its
subsidiaries (collectively, the "Other
Employee and Management Stockholders"); and
WHEREAS,
the Company and the Employee Stockholder have agreed that the Employee
Stockholder may purchase a certain number of shares of common stock, par value
$.01 per share, of the Company (the "Common
Stock") and
the Employee Stockholder will receive a certain number of options to purchase
Common Stock ("Options")
pursuant to the terms of the 1998 Option Plan of the Company (the "Option
Plan") and
the "Non-Qualified Stock Option Agreement" attached hereto as Exhibit A.
NOW
THEREFORE, to implement the foregoing and in consideration of the grant of
Options and of the mutual agreements contained herein, the Parties agree as
follows:
1. Common
Stock; Issuance of Options. (a) Subject to the terms and
conditions hereinafter set forth, the Company may, from time to time, choose to
provide the Employee Stockholder with the opportunity to purchase, and the
Employee Stockholder may purchase shares of Common Stock (the "Issued Stock") at
a purchase price per share to be determined at such time as the Company offers
the Employee Stockholder the opportunity to purchase such stock. The number of
shares of Issued Stock to be sold by the Company and purchased by the Employee
Stockholder is set forth on the signature page hereof. The Company shall have no
obligation to sell any Issued Stock to any person who (i) is a resident or
citizen of a state or other jurisdiction in which the sale of the Issued Stock
to him or her would constitute a violation of the securities or "blue sky" laws
of such jurisdiction or (ii) is not an employee of the Company or any of its
subsidiaries on the date hereof.
(b) Subject
to the terms and conditions hereinafter set forth and upon and as of April 29,
2002 (the "Closing
Date"), the
Company shall issue to the Employee Stockholder the Options and the Parties
shall execute and deliver to each other copies of the Non-Qualified Stock Option
Agreement concurrently with the issuance of the Options. For purposes of this
Agreement, the "Base
Price" shall
be $500.00 per share of Common Stock.
2. Employee
Stockholder's Representations, Warranties and Agreements. The Employee
Stockholder agrees and acknowledges that he will not, directly or indirectly,
offer, transfer, sell, assign, pledge, hypothecate or otherwise dispose of (any
such act being referred to herein as a "transfer") any shares of the Issued
Stock and, at the time of exercise, the Common Stock issuable upon exercise of
the Options (the "Option Stock" and, collectively with the Issued Stock, the
"Stock") unless such transfer complies with Section 3 of this Agreement. If the
Employee Stockholder is an "affiliate" (as defined under Rule 405 of the rules
and regulations promulgated under the Act and as interpreted by the Board of
Directors of the Company) of the Company (an "Affiliate"), the Employee
Stockholder also agrees and acknowledges that he will not transfer any shares of
the Stock unless:
(i) the
transfer is pursuant to an effective registration statement under the Securities
Act of 1933, as amended, and the rules and regulations in effect thereunder (the
"Act"), and
in compliance with applicable provisions of state securities laws
or
(ii) (A)
counsel for the Employee Stockholder (which counsel shall be reasonably
acceptable to the Company) shall have furnished the Company with an opinion,
satisfactory in form and substance to the Company, that no such registration is
required because of the availability of an exemption from registration under the
Act and (B) if the Employee Stockholder is a citizen or resident of any country
other than the United States, or the Employee Stockholder desires to effect any
transfer in any such country, counsel for the Employee Stockholder (which
counsel shall be reasonably satisfactory to the Company) shall have furnished
the Company with an opinion or other advice reasonably satisfactory in form and
substance to the Company to the effect that such transfer will comply with the
securities laws of such jurisdiction.
Notwithstanding
the foregoing, the Company acknowledges and agrees that any of the following
transfers are deemed to be in compliance with the Act and this Agreement and no
opinion of counsel is required in connection therewith: (x) a transfer made
pursuant to Section 4, 5 or 6 hereof, (y) a transfer upon the death of the
Employee Stockholder to his executors, administrators, testamentary trustees,
legatees or beneficiaries (the "Employee
Stockholder's Estate") or a
transfer to the executors, administrators, testamentary trustees, legatees or
beneficiaries of a person who has become a holder of Stock in accordance with
the terms of this Agreement, provided that it is expressly understood that any
such transferee shall be bound by the provisions of this Agreement and (z) a
transfer made after the Closing Date in compliance with the federal securities
laws to a trust or custodianship the beneficiaries of which may include only the
Employee Stockholder, his spouse or his lineal descendants (a "Employee
Stockholder's Trust"),
provided that such transfer is made expressly subject to this Agreement and that
the transferee agrees in writing to be bound by the terms and conditions
hereof.
(b) The
certificate (or certificates) representing the Stock shall bear the following
legend:
"THE
SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED, SOLD, ASSIGNED,
PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS SUCH TRANSFER, SALE,
ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION COMPLIES WITH THE
PROVISIONS OF THE EMPLOYEE STOCKHOLDER'S AGREEMENT DATED AS OF JULY 25, 2002
BETWEEN BRW ACQUISITION, INC. (THE "COMPANY") AND THE EMPLOYEE STOCKHOLDER NAMED
ON THE FACE HEREOF (A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
COMPANY)."
(c) The
Employee Stockholder acknowledges that he has been advised that (i) a
restrictive legend in the form heretofore set forth shall be placed on the
certificates representing the Stock and (ii) a notation shall be made in the
appropriate records of the Company indicating that the Stock is subject to
restrictions on transfer and appropriate stop- transfer restrictions will be
issued to the Company's transfer agent with respect to the Stock. If the
Employee Stockholder is an Affiliate, the Employee Stockholder also acknowledges
that (1) the Stock must be held indefinitely and the Employee Stockholder must
continue to bear the economic risk of the investment in the Stock unless it is
subsequently registered under the Act or an exemption from such registration is
available, (2) when and if shares of the Stock may be disposed of without
registration in reliance on Rule 144 of the rules and regulations promulgated
under the Act, such disposition can be made only in limited amounts in
accordance with the terms and conditions of such Rule and (3) if the Rule 144
exemption is not available, public sale without registration will require
compliance with some other exemption under the Act.
(d) If any
shares of the Stock are to be disposed of in accordance with Rule 144 under the
Act or otherwise, the Employee Stockholder shall promptly notify the Company of
such intended disposition and shall deliver to the Company at or prior to the
time of such disposition such documentation as the Company may reasonably
request in connection with such sale and, in the case of a disposition pursuant
to Rule 144, shall deliver to the Company an executed copy of any notice on Form
144 required to be filed with the Securities and Exchange Commission (the
"SEC").
(e) The
Employee Stockholder agrees that, if any shares of the Common Stock of the
Company are offered to the public pursuant to an effective registration
statement under the Act (other than registration of securities issued under an
employee plan), the Employee Stockholder will not effect any public sale or
distribution of any shares of the Common Stock not covered by such registration
statement from the time of the receipt of a notice from the Company that the
Company has filed or imminently intends to file such registration statement to,
or within 180 days after, the effective date of such registration statement,
unless otherwise agreed to in writing by the Company.
(f) The
Employee Stockholder represents and warrants that (i) with respect to the Issued
Stock, if any, he has received and reviewed the document(s) comprising the
Private Placement Memorandum, dated March 31, 2001, (the "Private
Placement Memorandum,")
relating to the Issued Stock, if any, and the documents referred to therein,
certain of which documents set forth the rights, preferences, and restrictions
relating to the Issued Stock, and (ii) he has been given the opportunity to
obtain any additional information or documents and to ask questions and receive
answers about such information, the Company and the business and prospects of
the Company which he deems necessary to evaluate the merits and risks related to
his investment in the Issued Stock, if any, and to verify the Private Placement
Memorandum and the information contained in the information received as
indicated in this Section 2(f)(ii), and he has relied solely on such
information.
(g) The
Employee Stockholder further represents and warrants that (i) his financial
condition is such that he can afford to bear the economic risk of holding the
Stock for an indefinite period of time and has adequate means for providing for
his current needs and personal contingencies, (ii) he can afford to suffer a
complete loss of his or her investment in the Stock, (iii) he understands and
has taken cognizance of all risk factors related to the purchase of the Stock
and (iv) his knowledge and experience in financial and business matters are such
that he is capable of evaluating the merits and risks of his purchase of the
Stock as contemplated by this Agreement.
3. Restriction
on Transfer. Except for transfers permitted by clauses (x), (y) and (z) of
Section 2(a) or a sale of shares of Stock pursuant to an effective registration
statement under the Act filed by the Company or pursuant to the Sale
Participation Agreement (as defined below), the Employee Stockholder agrees that
he will not transfer any shares of the Stock at any time prior to the fifth
anniversary of the Closing Date. No transfer of any such shares in violation
hereof shall be made or recorded on the books of the Company and any such
transfer shall be void and of no effect.
4. Right
of First Refusal. If, prior to the later of the fifth anniversary of the
Closing Date or a Public Offering (as hereinafter defined), the Employee
Stockholder receives a bona fide offer to purchase any or all of his shares of
Stock (the "Offer") from a third party (the "Offeror") which the Employee
Stockholder wishes to accept, the Employee Stockholder shall cause the Offer to
be reduced to writing and shall notify the Company in writing of his wish to
accept the Offer. The Employee Stockholder's notice shall contain an irrevocable
offer to sell such shares of Stock to the Company (in the manner set forth
below) at a purchase price equal to the price contained in, and on the same
terms and conditions of, the Offer, and shall be accompanied by a copy of the
Offer (which shall identify the Offeror). At any time within 30 days after the
date of the receipt by the Company of the Employee Stockholder's notice, the
Company shall have the right and option to purchase, or to arrange for a third
party to purchase, all of the shares of Stock covered by the Offer either (i) at
the same price and on the same terms and conditions 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
Company's Board of Directors, by delivering a certified bank check or checks in
the appropriate amount (and any such non-cash consideration to be paid) to the
Employee Stockholder at the principal office of the Company against delivery of
certificates or other instruments representing the shares of Stock so purchased,
appropriately endorsed by the Employee Stockholder. If at the end of such 30 day
period, the Company has not tendered the purchase price for such shares in the
manner set forth above, the Employee Stockholder may during the succeeding 60
day period sell not less than all of the shares of Stock covered by the Offer to
the Offeror at a price and on terms no less favorable to the Employee
Stockholder than those contained in the Offer. Promptly after such sale, the
Employee Stockholder 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. If,
at the end of 60 days following the expiration of the 30 day period for the
Company to purchase the Stock, the Employee Stockholder has not completed the
sale of such shares of the Stock as aforesaid, all the restrictions on sale,
transfer or assignment contained in this Agreement shall again be in effect with
respect to such shares of the Stock.
5. Employee
Stockholder's Resale of Stock and Options to the Company Upon The Employee
Stockholder's Death or Disability or in the Case of Certain Terminations of
Employment. (a) Except as otherwise provided herein,
if, prior to the fifth anniversary of the Closing Date, (x)(i) the Employee
Stockholder is still in the employ of the Company or any subsidiary of the
Company or (ii) the Employee Stockholder has retired from the Company and its
subsidiaries at age 65 or over (or such other age as may be approved by the
Board of Directors of the Company) after having been employed by the Company or
any subsidiary for at least three years after the Closing Date and (y) the
Employee Stockholder either dies or becomes permanently disabled, then the
Employee Stockholder, the Employee Stockholder's Estate or a Employee
Stockholder's Trust (each, an "Employee Stockholder Entity"), shall, for twelve
(12) months following the date of death or permanent disability, have the right:
(A) with
respect to the Stock, to sell to the Company, and the Company shall be required
to purchase, on one occasion, all or any portion of the shares of Stock then
held by the applicable Employee Stockholder Entities, at the Section 5(a)
Repurchase Price, as determined in accordance with Section 7; and
(B) with
respect to the Options, to require the Company to pay to the applicable Employee
Stockholder Entities, an additional amount equal to the Option Excess Price, if
any, as provided in Section 8(b), in respect of the termination of all or any
portion of outstanding exercisable Options held by the applicable Employee
Stockholder, and all other outstanding Options will be dealt with in accordance
with Section 8(c) hereof.
(b) In the
event the applicable Employee Stockholder Entities intend to exercise their
rights pursuant to Section 5(a), such Entities shall send written notice to the
Company of their intention to sell shares of Stock in exchange for the payment
referred in Section 5(a)(A) and/or to terminate such Options in exchange for the
payment referred to in Section 5(a)(B) and shall indicate the number of shares
of Stock to be sold and the number of Options to be terminated with payment in
respect thereof (the "Redemption Notice"). The completion of the purchase shall
take place at the principal office of the Company on the tenth business day
after the giving of the Redemption Notice. The applicable Repurchase Price and
any payment with respect to the Options as described above shall be paid by
delivery to the applicable Employee Stockholder Entities, of a certified bank
check or checks in the appropriate amount payable to the order of each of the
applicable Employee Stockholder Entities, against delivery of certificates or
other instruments representing the Stock so purchased and appropriate documents
cancelling the Options so terminated appropriately endorsed or executed by the
applicable Employee Stockholder Entities or any duly authorized representative.
For purposes of this Agreement, the Employee Stockholder shall be deemed to have
a "permanent disability" if the Employee Stockholder is unable to engage in the
activities required by the Employee Stockholder's job by reason of any medically
determined physical or mental impairment which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
not less than twelve (12) months.
(c) Notwithstanding
anything in Section 5(a) to the contrary and subject to Section 11(a), if there
exists and is continuing a default or an event of default on the part of the
Company or any subsidiary of the Company under any loan, guarantee or other
agreement under which the Company or any subsidiary of the Company has borrowed
money or if the repurchase referred to in Section 5(a) would result in a default
or an event of default on the part of the Company or any subsidiary of the
Company under any such agreement or if a repurchase would not be permitted under
the Delaware General Corporation Law (the "DGCL") or
would otherwise violate the DGCL (or if the Company reincorporates in another
state, the business corporation law of such state) (each such occurrence being
an "Event"), the
Company shall not be obligated to repurchase any of the Stock or the Options
from the applicable Employee Stockholder Entities, until the first business day
which is 10 calendar days after all of the foregoing Events have ceased to exist
(the "Repurchase
Eligibility Date");
provided,
however, that
(i) the number of shares of Stock subject to repurchase under this Section 5(c)
shall be that number of shares of Stock, and (ii) in the case of a repurchase
pursuant to Section 5(a), the number of Exercisable Option Shares (as defined in
Section 8) for purposes of calculating the Option Excess Price payable under
this Section 5(c) shall be the number of Exercisable Option Shares, specified in
the Redemption Notice and held by the applicable Employee Stockholder Entities,
at the time of delivery of a Redemption Notice in accordance with Section 5(b)
hereof; provided,
further, that
the Repurchase Calculation Date shall be determined in accordance with Section 7
as of the Repurchase Eligibility Date (unless, in a repurchase pursuant to
Section 5(a), the Section 5(a) Repurchase Price would be greater if the
Repurchase Calculation Date had been determined as if no Event had occurred in
which case, solely for purposes of this proviso, the
Repurchase Calculation Date shall be determined as if no Event had occurred).
All Options exercisable as of the date of a Redemption Notice, in the case of a
repurchase pursuant to Section 5(a), shall continue to be exercisable until the
repurchase of such Options pursuant to such Redemption Notice, provided that to
the extent any Options are exercised after the date of such Redemption Notice,
the number of Exercisable Option Shares for purposes of calculating the Option
Excess Price shall be reduced accordingly.
6. The
Company's Option to Repurchase Stock and Options of Employee
Stockholder. (a) If, prior to the fifth anniversary
of the Closing Date, (i) the Employee Stockholder's active employment with the
Company (and/or, if applicable, its subsidiaries) is terminated by the Company
with Cause, (ii) the beneficiaries of a Employee Stockholder's Trust shall
include any person or entity other than the Employee Stockholder, his spouse or
his lineal descendants, or (iii) the Employee Stockholder shall effect a
transfer of any of the Stock other than as permitted in this Agreement (each, a
"Section 6(a) Call Event"), then the Company shall have the
right:
(A) with
respect to the Stock, to purchase all or any portion of the shares of the Stock
then held by the applicable Employee Stockholder Entities at the Section 6(a)
Repurchase Price determined in accordance with Section 7 hereof;
and
(B) with
respect to the Options, if the Company exercises the call rights granted under
this Section 6(a), all Options (whether or not then exercisable) held by the
applicable Employee Stockholder Entities will terminate immediately without
payment in respect thereof.
(b) If, prior
to the fifth anniversary of the Closing Date, (i) the Employee Stockholder's
employment is terminated as a result of the death or permanent disability of the
Employee Stockholder or (ii) if the Employee Stockholder dies or becomes
permanently disabled after the retirement of the Employee Stockholder from the
Company or any of its subsidiaries at age 65 or over (or such other age as may
be approved by the Board of Directors of the Company) after having been employed
by the Company or any subsidiary for at least three years after the Closing
Date, (each a "Section
6(b) Call Event"), then
the Company shall have the right:
(A) with
respect to the Stock, to purchase all or any portion of the shares of Stock then
held by the applicable Employee Stockholder Entities at the Section 5(a)
Repurchase Price determined in accordance with Section 7 hereof;
and
(B) with
respect to the Options, if the Company exercises the call rights granted under
this Section 6(b) to an additional amount equal to the Option Excess Price, if
any, as provided in Section 8(b), in respect of the outstanding exercisable
Options so called to be paid by the Company and all other outstanding Options
shall be dealt with in accordance with Section 8(c) hereof.
(c) If, prior
to the fifth anniversary of the Closing Date, the Employee Stockholder's
employment is terminated as a result of a termination (i) by the Employee
Stockholder with Good Reason or (ii) upon the retirement of the Employee
Stockholder from the Company or any of its subsidiaries at age 65 or over (or
such other age as may be approved by the Board of Directors of the Company)
after having been employed by the Company or any subsidiary for at least three
years after the Closing Date, or (iii) by the Company without Cause (each, a
"Section 6(c) Call Event"), then the Company shall have the right:
(A) with
respect to the Stock, to purchase all or any portion of the shares of Stock then
held by the applicable Employee Stockholder Entities at the Section 6(c)
Repurchase Price determined in accordance with Section 7 hereof; and
(B) with
respect to the Options, if the Company exercises the call rights granted under
this Section 6(c), then the Company may purchase all or any portion of
exercisable Options for an amount equal to the Option Excess Price, as provided
in Section 8(b), and all other outstanding Options will be dealt with in
accordance with the terms of Section 8(b) and 8(c) hereof.
(d) If, prior
to the fifth anniversary of the Closing Date, the Employee Stockholder's active
employment with the Company (and/or, if applicable, its subsidiaries) is
terminated by the Employee Stockholder without Good Reason (a "Section 6(d) Call
Event"), then the Company shall have the right:
(i) with
respect to the Stock, to purchase all or any portion of the shares of the Stock
then held by the applicable Employee Stockholder Entities at the Section 6(d)
Repurchase Price determined in accordance with Section 7 hereof; and
(ii) with
respect to the Options, if the Company exercises the call rights granted under
this Section 6(d), the Company may purchase all or any portion of exercisable
Options held by the applicable Employee Stockholder Entities, for an amount
equal to the Option Excess Price, as provided in Section 8(b), and all other
outstanding Options will be dealt with in accordance with the terms of Section
8(b) and 8(c) hereof.
(e) The
Company shall have a period of (i) twelve (12) months from the date of a Section
6(b) Call Event and (ii) sixty (60) days from the date of any other Call Event
(or, if later, with respect to a Section 6(a) Call Event, the date of discovery
of an impermissible transfer constituting a Section 6(a) Call Event), in which
to give notice in writing to the Employee Stockholder of its election to
exercise its rights pursuant to this Section 6 ("Call
Notice"). The
completion of the purchases pursuant to the foregoing shall take place at the
principal office of the Company on the tenth business day after the giving of
the Call Notice. The applicable Repurchase Price and any payment with respect to
the Options as described in this Section 6 shall be paid by delivery to the
applicable Employee Stockholder Entities of a certified bank check or checks in
the appropriate amount payable to the order of each of the applicable Employee
Stockholder Entities against delivery of certificates or other instruments
representing the Stock so purchased and appropriate documents cancelling the
Options so terminated, appropriately endorsed or executed by the applicable
Employee Stockholder Entities or its authorized representative.
(f) Notwithstanding
any other provision of this Section 6 to the contrary and subject to Section
11(a), if there exists and is continuing any Event, the Company shall delay the
repurchase of any of the Stock or the Options (pursuant to a Call Notice timely
given in accordance with Section 6(e) hereof) from the applicable Employee
Stockholder Entities until the Repurchase Eligibility Date; provided,
however, that
(i) the number of shares of Stock subject to repurchase under this Section 6
shall be that number of shares of Stock, and (ii) in the case of a repurchase
pursuant to Section 6(c) or 6(d), the number of Exercisable Option Shares for
purposes of calculating the Option Excess Price payable under this Section 6
shall be the number of Exercisable Option Shares, held by the applicable
Employee Stockholder Entities at the time of delivery of a Call Notice in
accordance with Section 6(e) hereof; and provided,
further, that
the Repurchase Calculation Date shall be determined in accordance with Section 7
based on the Repurchase Eligibility Date (unless (x) in the case of a Section
6(b) Call Event, a Section 6(c) Call Event or a Section 6(d) Call Event, the
applicable Repurchase Price would be greater if the Repurchase Calculation Date
had been determined as if no Event had occurred, in which case the Repurchase
Calculation Date shall be determined as if no Event had occurred, and (y) in the
case of a Section 6(a) Call Event, the applicable Repurchase Price would be less
if the Repurchase Calculation Date had been determined as if no Event had
occurred, in which case the Repurchase Calculation Date shall be determined as
if no Event had occurred); and provided,
further, that
such delay shall in no event exceed twelve months. All Options exercisable as of
the date of a Call Notice, in the case of a repurchase pursuant to Section 6(c)
or 6(d), shall continue to be exercisable until the repurchase of such Options
pursuant to such Call Notice, provided that to the extent that any Options are
exercised after the date of such Call Notice, the number of Exercisable Option
Shares for purposes of calculating the Option Excess Price shall be reduced
accordingly.
(g) Section
6(a) Call Events, Section 6(b) Call Events, Section 6(c) Call Events, and
Section 6(d) Call Events shall be collectively referred to as "Call
Events."
7. Determination
of Repurchase Price. (a) The
Section 5(a) Repurchase Price, Section 6(a) Repurchase Price, Section 6(c)
Repurchase Price and the Section 6(d) Repurchase Price are hereinafter
collectively referred to as the "Repurchase Price". The Repurchase Price
shall be calculated as of the last day of the month preceding the later of (i)
the month in which the event giving rise to the repurchase occurs and (ii) the
month in which the Repurchase Eligibility Date occurs (hereinafter called the
"Repurchase Calculation Date"); provided, however, for the
purpose of the calculation of the Section 5(a) Repurchase Price, the Repurchase
Calculation Date shall be the last day of the month preceding the month in which
the Redemption Notice is served. The event giving rise to the repurchase shall
be the death, permanent disability, retirement or termination of employment, of
the Employee Stockholder, not the giving of any notice required pursuant to
Section 5 or 6.
(b) The
Section 5(a) Repurchase Price shall be a per share Repurchase Price equal to the
Fair Market Value Per Share (as defined in Section 7(g)) as of the Repurchase
Calculation Date.
(c) The
Section 6(a) Repurchase Price shall be a per share Repurchase Price equal to the
lesser of (i) the Base Price and (ii) the Book Value Per Share (or, after a
Public Offering, the Market Price Per Share) as of the Repurchase Calculation
Date (but shall not be less than zero).
(d) The
Section 6(c) Repurchase Price shall be a per share Repurchase Price (i) with
respect to all Stock other than Option Stock, equal to the Fair Market Value Per
Share and (ii) with respect to Option Stock, (A) in the event that a Section
6(c) Call Event described in Section 6(i) or (ii) has occurred, equal to the
Book Value Per Share (or, after a Public Offering, the Market Price Per Share)
and (B) in the event that a Section 6(c) Call Event described in Section 6(c)
(iii) has occurred equal to the lesser of (x) Fair Market Value Per Share and
(y) Base Price.
(e) The
Section 6(d) Repurchase Price shall be a per share Repurchase Price (i) with
respect to all Stock other than Option Stock, (A) prior to a Public Offering,
equal to the lesser of (x) Fair Market Value Per Share and (y) the Base Price
plus (1) the Applicable Percentage multiplied by (2)
the excess, if any, of Fair Market Value Per Share over the Base Price and (B)
after a Public Offering, equal to Market Price Per Share and (ii) with respect
to all Option Stock, equal to the lesser of (x) the Book Value Per Share (or,
after a Public Offering, the Market Price Per Share) and (y) the Base Price plus
(1) the Applicable Percentage multiplied by (2)
the excess, if any, of Book Value Per Share over the Base Price. The
"Applicable Percentage" shall
mean zero prior to the first anniversary of the Closing Date, twenty-five
percent (25%) during the period commencing on the first anniversary of the
Closing Date, fifty percent (50%) during the period commencing the second
anniversary of Closing Date, seventy-five percent (75%) during the period
commencing on the third anniversary of Closing Date and on and after the fourth
anniversary of the Closing Date, 100%.
(f) For
purposes of this Agreement the following definitions shall apply: "Cause" shall
mean (i) the Employee Stockholder's willful and continued failure to perform
Employee Stockholder's duties with respect to the Company or its subsidiaries
which continues after a demand for substantial performance is delivered to
Employee Stockholder by the Company, (ii) willful misconduct by Employee
Stockholder involving dishonesty or breach of trust in connection with Employee
Stockholder's employment, (iii) an indictment of Employee Stockholder for a
felony or misdemeanor involving moral turpitude, or (iv) any material breach by
the Employee Stockholder of the provisions of Section 25 hereof or (v) violation
of any written Company policy, and "Good Reason" shall mean (i) a reduction in
Employee Stockholder's base salary (other than any general salary reduction
affecting at least the majority of the employees of the Company), (ii) a
material and adverse change in the Employee Stockholder's duties and
responsibilities or (iii) a transfer of the Employee Stockholder's primary
workplace by more than fifty (50) miles from the Employee Stockholder's
workplace as of the date hereof.
(g) As used
herein, "Fair Market Value Per Share" shall mean (i) after a Public Offering,
Market Price Per Share, or (ii) prior to a Public Offering, the fair market
value per share of Common Stock, as determined within six (6) months of the
Repurchase Calculation Date by the Board of Directors of the Company in good
faith (the "Board
Determination").
(h) As used
herein, "Book Value Per Share" shall be the quotient of (a) (i) $92,120,000
plus (ii) the
aggregate net income of the Company from and after July 10, 1998 (as
decreased by any net losses from and after July 10, 1998) excluding the effect
of adjustments required or permitted by Accounting Principals Board Opinions
Nos. 16 and 17 with respect to assets acquired or liabilities assumed by the
Company in the Closing transactions and any related transactions plus (iii)
the aggregate dollar amount contributed to (or credited to common stockholders'
equity of) the Company after the July 10, 1998 as equity of the Company
(including consideration to be received upon exercise of the Options and other
stock equivalents) plus (iv) to
the extent reflected as deductions to Book Value Per Share in clause (ii) above
(or minus, to the
extent reflected as additions to Book Value Per Share in clause (ii) above)
unusual or other items recognized by the Company (including, without limitation,
extraordinary charges, one time or accelerated write-offs of good will), in each
case, if and to the extent determined in the sole discretion of the Board of
Directors of the Company, minus (v) the
aggregate dollar amount of any dividends paid by the Company after July 10, 1998
and a Public Offering, divided by (b)
the sum of the number of shares of Common Stock then outstanding and the number
of shares of Common Stock issuable upon the exercise of all outstanding stock
options and other rights to acquire Common Stock and the conversion of all
securities convertible into shares of Common Stock. The items referred to in the
calculations set forth in clauses (a)(ii) through (a)(iv) of the immediately
preceding sentence shall be determined in good faith and, to the extent
possible, in accordance with generally accepted accounting principles applied on
a basis consistent with any prior periods as reflected in the consolidated
financial statements of the Company.
(i) As used
herein the term "Public Offering" shall mean the sale of shares of Common Stock
to the public subsequent to the date hereof pursuant to a registration statement
under the Act which has been declared effective by the SEC (other than a
registration statement on Form S-8 or any other similar form). A "Qualified
Public Offering" shall mean a Public Offering pursuant to an effective
registration statement and either (i) such registration statement is for the
sale of shares of the Common Stock held by Kohlberg Kravis ▇▇▇▇▇▇▇ & Co.
L.P. (the "KKR
Partnership") or its
affiliates under such registration statement or (ii) thereafter an active
trading market in 40% or more of the Common Stock exists.
(j) As used
herein, the term "Market Price Per Share" shall mean the price per share equal
to the average of the last sale price of the Common Stock on the Repurchase
Calculation Date on each exchange on which the Common Stock may at the time be
listed or, if there shall have been no sales on any of such exchanges on the
Repurchase Calculation Date, the average of the closing bid and asked prices on
each such exchange at the end of the Repurchase Calculation Date or if there is
no such bid and asked price on the Repurchase Calculation Date on the next
preceding date when such bid and asked price occurred or, if the Common Stock
shall not be so listed, the average of the closing sales prices as reported by
NASDAQ at the end of the Repurchase Calculation Date in the over-the-counter
market.
(k) In
determining the Repurchase Price, appropriate adjustments shall be made for any
stock dividends, splits, combinations, recapitalizations or any other adjustment
in the number of outstanding shares of Common Stock in order to maintain, as
nearly as practicable, the intended operation of the provisions of this Section
7.
8. Stock
Issued to Employee Stockholder Upon Exercise of Stock Options; Termination and
Expiration of Options. (a) The
Company may from time to time grant to the Employee Stockholder, in addition to
the Options, options under the Option Plan to purchase shares of Common Stock at
the Base Price or at a different option exercise price.
(b) (i)
In the case of an exercise of the put rights described above in Section 5(a)(B)
or of the call rights described above in Sections 6(b)(B), 6(c)(B) or 6(d)(ii),
all outstanding exercisable Options for which such put or call is exercised that
had been granted to the Employee Stockholder under the Option Plan will be
automatically terminated upon the payment by the Company to the Employee
Stockholder of an amount equal to the applicable Option Excess Price, as
provided below; provided,
however, in the
event the Option Excess Price is zero or a negative number, all outstanding
exercisable stock options granted to the Employee Stockholder under the Option
Plan shall be automatically terminated without any payment in respect thereof.
In the event the Employee Stockholder's employment is terminated for any reason,
all unexercisable Options (whose exercisability is not otherwise accelerated
pursuant to the terms of a Non-Qualified Stock Option Agreement) automatically
and immediately upon such termination of employment, terminate without payment
in respect thereof.
(ii) In the
case of an exercise of the put rights described above in Section 5(a) or of the
call rights described above in Section 6(b), with respect to each Option, the
"Option
Excess Price" is the
excess, if any, of the Section 5(a) Repurchase Price over the Option Exercise
Price (as defined below), multiplied by the number of Exercisable Option Shares
thereunder.
(iii) In the
case of an exercise of the call rights described above in Section 6(c), with
respect to each Option, the "Option
Excess Price" is the
excess, if any, of the Section 6(c) Repurchase Price, as such price is
determined on the basis of Section 7(e) (ii), over the Option Exercise Price,
multiplied by the number of Exercisable Option Shares thereunder.
(iv) In the
case of an exercise of the call rights described above in Section 6(d), with
respect to each Option, the "Option
Excess Price" is the
(x) Applicable Percentage multiplied by (y) the excess, if any, of Book Value
Per Share over the Option Exercise Price, multiplied by (z) the number of
Exercisable Option Shares thereunder.
For
purposes hereof, "Option
Exercise Price" shall
mean the exercise price of the shares of Common Stock covered by the applicable
Option and "Exercisable
Option Shares" shall
mean the shares of Common Stock which, at the time of determination of the
Option Excess Price could be purchased by the Employee Stockholder upon exercise
of his or her outstanding Options.
(c) With
respect to the Options in the event that any termination of employment or other
event giving rise to the right to put or call Stock or Options occurs and no
such put or call is exercised in accordance with the provisions of this
Agreement, then the remaining portion of any outstanding exercisable Options
shall expire, subject to Sections 5(c) and 6(f) hereof, in accordance with the
terms of Article 3 of the Employee Stockholder's Non-Qualified Stock Option
Agreement.
9. The
Company's Representations and Warranties. The
Company represents and warrants to the Employee Stockholder that (i) this
Agreement has been duly authorized, executed and delivered by the Company and
(ii) the Issued Stock, when issued and delivered in accordance with the terms
hereof, will be duly and validly issued, fully paid and
nonassessable.
(b) The
Company will file the reports required to be filed by it under the Act and the
Exchange Act and the rules and regulations adopted by the SEC thereunder, to the
extent required from time to time to enable the Employee Stockholder to sell
shares of Stock without registration under the Act within the limitations of the
exemptions provided by (A) Rule 144 under the Act, as such Rule may be amended
from time to time, or (B) any similar rule or regulation hereafter adopted by
the SEC. Notwithstanding anything contained in this Section 9(b), the Company
may de-register under Section 12 of the Exchange Act if it is then permitted to
do so pursuant to the Exchange Act and the rules and regulations thereunder and,
in such circumstances, shall not be required hereby to file any reports which
may be necessary in order for Rule 144 or any similar rule or regulation under
the Act to be available. Nothing in this Section 9(b) shall be deemed to limit
in any manner the restrictions on sales of Stock contained in this
Agreement.
10. "Piggyback"
Registration Rights. Effective
upon the date of this Agreement, until the later of (i) five years from the date
hereof and (ii) the first occurrence of a Qualified Public Offering (as defined
in Section 7(j) above), the Employee Stockholder hereby agrees to be bound by
all of the terms, conditions and obligations of the Registration Rights
Agreement dated as of July 9, 1998 among the Company, Bristol West Associates
LLC, a Delaware limited liability company ("Associates"), KKR 1996 Fund
L.P. and KKR Partners II, L.P. (the "Registration Rights Agreement") and,
in the case of a Qualified Public Offering and subject to the limitations set
forth in this Section 10, shall have all of the rights and privileges of the
Registration Rights Agreement, in each case as if the Employee Stockholder were
an original party (other than the Company) thereto; provided, however,
that at no time shall the Employee Stockholder have any rights to request
registration under Section 3 of the Registration Rights Agreement; and
provided further, that the Employee Stockholder shall not be bound by any
amendments to the Registration Rights Agreement unless the Employee Stockholder
consents thereto provided that such consent will not be unreasonably withheld.
Notwithstanding anything to the contrary contained in the Registration Rights
Agreement, the Employee Stockholder's rights and obligations under the
Registration Rights Agreement shall be subject to the limitations and additional
obligations set forth in this Section 10. All Stock purchased or held by the
applicable Employee Stockholder Entities pursuant to this Agreement shall be
deemed to be Registrable Securities as defined in the Registration Rights
Agreement.
(b) The
Company will promptly notify the Employee Stockholder in writing (a "Notice") of
any proposed registration (a "Proposed
Registration") in
connection with a Qualified Public Offering. If within 15 days of the receipt by
the Employee Stockholder of such Notice, the Company receives from the
applicable Employee Stockholder Entities a written request (a "Request") to
register shares of Stock held by the applicable Employee Stockholder Entities
(which Request will be irrevocable unless otherwise mutually agreed to in
writing by the Employee Stockholder and the Company), shares of Stock will be so
registered as provided in this Section 10; provided,
however, that
for each such registration statement only one Request, which shall be executed
by the applicable Employee Stockholder Entities, may be submitted for all
Registrable Securities held by the applicable Employee Stockholder
Entities.
(c) The
maximum number of shares of Stock which will be registered pursuant to a Request
will be the lowest of (i) the number of shares of Stock then held by the
Employee Stockholder Entities, including all shares of Stock which the Employee
Stockholder Entities are then entitled to acquire under an unexercised Option to
the extent then exercisable, multiplied by a fraction, the numerator of which is
the number of shares of Stock being sold by Associates and investment
partnerships and investment limited liability companies affiliated with the KKR
Partnership and the denominator of which is the number of shares of Stock owned
by Associates and investment partnerships and investment limited liability
companies affiliated with the KKR Partnership or (ii) the maximum number of
shares of Stock which the Company can register in the Proposed Registration
without adverse effect on the offering in the view of the managing underwriters
(reduced pro rata with all Other Employee Stockholders and all Other Employee
Stockholders) as more fully described in subsection (d) of this Section 10 or
(iii) the maximum number of shares which the Employee Stockholder (pro rata
based upon the aggregate number of shares of Common Stock the Employee
Stockholder, all Other Employee Stockholders, and all Other Employee
Stockholders have requested to be registered) and all Other Employee
Stockholders are permitted to register under the Registration Rights
Agreement.
(d) If a
Proposed Registration involves an underwritten offering and the managing
underwriter advises the Company in writing that, in its opinion, the number of
shares of Stock requested to be included in the Proposed Registration exceeds
the number which can be sold in such offering, so as to be likely to have an
adverse effect on the price, timing or distribution of the shares of Stock
offered in such Qualified Public Offering as contemplated by the Company, then
the Company will include in the Proposed Registration (i) first, 100% of the
shares of Stock the Company proposes to sell and (ii) second, to the extent of
the number of shares of Stock requested to be included in such registration
which, in the opinion of such managing underwriter, can be sold without having
the adverse effect referred to above, the number of shares of Stock which the
"Holders" (as defined in the Registration Rights Agreement), including, without
limitation, the Employee Stockholder, Other Employee Stockholders, and all Other
Employee Stockholders have requested to be included in the Proposed
Registration, such amount to be allocated pro rata among all requesting Holders
on the basis of the relative number of shares of Stock then held by each such
Holder (including the exercisable Options) (provided that any shares thereby
allocated to any such Holder that exceed such Holder's request will be
reallocated among the remaining requesting Holders in like
manner).
(e) Upon
delivering a Request the Employee Stockholder will, if requested by the Company,
execute and deliver a custody agreement and power of attorney in form and
substance satisfactory to the Company with respect to the shares of Stock to be
registered pursuant to this Section 10 (a "Custody
Agreement and Power of Attorney"). The
Custody Agreement and Power of Attorney will provide, among other things, that
the Employee Stockholder will deliver to and deposit in custody with the
custodian and attorney-in-fact named therein a certificate or certificates
representing such shares of Stock (duly endorsed in blank by the registered
owner or owners thereof or accompanied by duly executed stock powers in blank)
and irrevocably appoint said custodian and attorney-in-fact as the Employee
Stockholder's agent and attorney-in-fact with full power and authority to act
under the Custody Agreement and Power of Attorney on the Employee Stockholder's
behalf with respect to the matters specified therein.
(f) The
Employee Stockholder agrees that he or she will execute such other agreements as
the Company may reasonably request to further evidence the provisions of this
Section 10.
11. Pro
Rata Repurchases; Dividends. (a) Notwithstanding
anything to the contrary contained in Section 5, 6 or 7, if at any time
consummation of all purchases and payments to be made by the Company pursuant to
this Agreement and the Other Employee Stockholders' Agreements would result in
an Event, then the Company shall make purchases from, and payments to, the
Employee Stockholder and Other Employee Stockholders pro rata (on the basis of
the proportion of the number of shares of Stock and the number of Options each
such Employee Stockholder and all Other Employee Stockholders have elected or
are required to sell to the Company) for the maximum number of shares of Stock
and shall pay the Option Excess Price for the maximum number of Options
permitted without resulting in an Event (the "Maximum Repurchase
Amount"). The provisions of Section 5(c) and 6(f) shall apply in their
entirety to payments and repurchases with respect to Options and shares of Stock
which may not be made due to the limits imposed by the Maximum Repurchase Amount
under this Section 11(a). Until all of such Stock and Options are purchased and
paid for by the Company, the Employee Stockholder and the Other Employee
Stockholders whose Stock and Options are not purchased in accordance with this
Section 11(a) shall have priority, on a pro rata basis, over other purchases of
Common Stock and Options by the Company pursuant to this Agreement and Other
Employee Stockholders' Agreements.
(b) No
dividends on the common stock are expected to be paid by the Company prior to a
Public Offering. In the event any dividends are paid with respect to the Common
Stock, the Employee Stockholder will be treated in the same manner as all other
stockholders with respect to shares of Common Stock then owned by the Employee
Stockholder.
12. Rights
to Negotiate Repurchase Price. Nothing in this Agreement shall be deemed to
restrict or prohibit the Company from purchasing shares of Stock or Options from
the Employee Stockholder, at any time, upon such terms and conditions, and for
such price, as may be mutually agreed upon between the Parties, whether or not
at the time of such purchase circumstances exist which specifically grant the
Company the right to purchase, or the Employee Stockholder the right to sell,
shares of Stock or the Company has the right to pay, or the Employee Stockholder
has the right to receive, the Option Excess Price under the terms of this
Agreement.
13. Covenant
Regarding 83(b) Election. Except as the Company may otherwise agree in
writing, the Employee Stockholder hereby covenants and agrees that he will make
an election provided pursuant to Treasury Regulation 1.83-2 with respect to the
Stock, including without limitation, the Stock to be acquired pursuant to
Section 1 and the Stock to be acquired upon each exercise of the Employee
Stockholder's Non-Qualified Options; and Employee Stockholder further covenants
and agrees that he will furnish the Company with copies of the forms of election
the Employee Stockholder files within 30 days after the date hereof, and within
30 days after each exercise of Employee Stockholder's Non-Qualified Options and
with evidence that each such election has been filed in a timely manner.
14. Notice
of Change of Beneficiary. Immediately prior to any transfer of Stock to a
Employee Stockholder's Trust, the Employee Stockholder shall provide the Company
with a copy of the instruments creating the Employee Stockholder's Trust and
with the identity of the beneficiaries of the Employee Stockholder's Trust. The
Employee Stockholder shall notify the Company as soon as practicable prior to
any change in the identity of any beneficiary of the Employee Stockholder's
Trust.
15. Expiration
of Certain Provisions. The provisions contained in Sections 4, 5 and 6 of
this Agreement and the portion of any other provision of this Agreement which
incorporates the provisions of Sections 4, 5 and 6, shall terminate and be of no
further force or effect with respect to any shares of Stock sold by the Employee
Stockholder (i) pursuant to an effective registration statement filed by the
Company pursuant to Section 10 hereof or (ii) pursuant to the terms of the Sale
Participation Agreement of even date herewith, among the Employee Stockholder,
KKR 1996 Fund L.P., Associates and KKR Partners II, L.P.
16. Recapitalizations,
etc. The provisions of this Agreement shall apply, to the full extent set
forth herein with respect to the Stock or the Options, to any and all shares of
capital stock of the Company or any capital stock, partnership units or any
other security evidencing ownership interests in any successor or assign of the
Company (whether by merger, consolidation, sale of assets or otherwise) which
may be issued in respect of, in exchange for, or substitution of the Stock or
the Options, by reason of any stock dividend, split, reverse split, combination,
recapitalization, liquidation, reclassification, merger, consolidation or
otherwise.
17. State
Securities Laws. The Company hereby agrees to use its best efforts to comply
with all state securities or "blue sky" laws which might be applicable to the
sale of the Stock and the issuance of the Options to the Employee
Stockholder.
18. Binding
Effect. The provisions of this Agreement shall be binding upon and accrue to
the benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns. In the case of a transferee permitted
under Section 2(a) hereof, such transferee shall be deemed the Employee
Stockholder hereunder; provided, however, that no transferee (including without
limitation, transferees referred to in Section 2(a) hereof) shall derive any
rights under this Agreement unless and until such transferee has delivered to
the Company a valid undertaking and becomes bound by the terms of this
Agreement.
19. Amendment.
This Agreement may be amended only by a written instrument signed by the Parties
hereto.
20. Closing.
Except as otherwise provided herein, the closing of each purchase and sale of
shares of Stock and the payment of the Option Excess Price, if any, pursuant to
this Agreement shall take place at the principal office of the Company on the
tenth business day following delivery of the notice by either Party to the other
of its exercise of the right to purchase or sell such Stock hereunder or to
cause the payment of the Option Excess Price, if any.
21. Applicable
Law. The laws of the state of New York shall govern the interpretation,
validity and performance of the terms of this Agreement, regardless of the law
that might be applied under principles of conflicts of law. Any suit, action or
proceeding against the Employee Stockholder or the Company, with respect to this
Agreement, or any judgment entered by any court in respect of any thereof, may
be brought in any court of competent jurisdiction in the State of Delaware (or
if the Company reincorporates in another state, in that state) or New York and
the Company and the Employee Stockholder each hereby submits to the exclusive
jurisdiction of such courts for the purpose of any such suit, action, proceeding
or judgment. The Company and the Employee Stockholder hereby irrevocably waive
any objections which either of them may now or hereafter have to the laying of
the venue of any suit, action or proceeding arising out of or relating to this
Agreement brought in any court of competent jurisdiction in the State of
Delaware (or if the Company reincorporates in another state, in that state) or
New York, and hereby further irrevocably waive any claim that any such suit,
action or proceeding brought in any such court has been brought in any
inconvenient forum. No suit, action or proceeding against the Company or the
Employee Stockholder with respect to this Agreement may be brought in any court,
domestic or foreign, or before any similar domestic or foreign authority other
than in a court of competent jurisdiction in the State of Delaware (or if the
Company reincorporates in another state, in that state) or New York, and the
Company and the Employee Stockholder hereby irrevocably waive any right which
either of them may otherwise have had to bring such an action in any other
court, domestic or foreign, or before any similar domestic or foreign authority.
Each Party hereto hereby irrevocably and unconditionally waives trial by jury in
any legal action or proceeding in relation to this Agreement and for any
counterclaim therein.
22. Assignability
of Certain Rights by the Company. The Company shall have the right to assign
any or all of its rights or obligations to purchase shares of Stock pursuant to
Sections 4, 5 and 6 hereof; provided, however, that the Company shall remain
obligated to perform its obligations notwithstanding such assignment in the
event that such assignee fails to perform the obligations so assigned to
it.
23. Miscellaneous.
(a) In this Agreement all references to "dollars" or "$" are to United
States dollars.
(b) If any
provision of this Agreement shall be declared illegal, void or unenforceable by
any court of competent jurisdiction, the other provisions shall not be affected,
but shall remain in full force and effect.
(c) The
Company shall have the right to deduct from any cash payment made under this
Agreement to the applicable Employee Stockholder Entities any federal, state or
local income or other taxes required by law to be withheld with respect to such
payment.
24. Notices.
All notices and other communications provided for herein shall be in writing and
shall be deemed to have been duly given if delivered by hand (whether by
overnight courier or otherwise) or sent by registered or certified mail, return
receipt requested, postage prepaid, or by overnight delivery or telecopy, to the
Party to whom it is directed:
|
(a) |
If
to the Company, to it at the following address: | |
|
BRW
Acquisition, Inc. | ||
|
▇/▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. | ||
|
▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ | ||
|
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ | ||
|
Attn:
▇▇▇▇▇ ▇▇▇▇▇▇ | ||
|
with
a copy to: | ||
|
Kohlberg
Kravis ▇▇▇▇▇▇▇ & Co. | ||
|
▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ | ||
|
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ | ||
|
Attn:
▇▇▇▇▇ ▇▇▇▇▇▇ | ||
|
with
a copy to: | ||
|
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ | ||
|
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | ||
|
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ | ||
|
Attn: |
▇▇▇▇▇
▇▇▇▇▇, Esq. | |
|
▇▇▇▇
▇▇▇▇▇▇▇▇, Esq. | ||
(b) If to the
Employee Stockholder, to him at the address set forth below under his signature;
or at such other address as either party shall have specified by notice in
writing to the other.
25. Covenant
Not to Compete; Severance; Confidential Information. (a)
In
consideration of the Company entering into this Agreement with the Employee
Stockholder, the Employee Stockholder hereby agrees effective as of the Closing
Date, without the Company's prior written consent, the Employee Stockholder
shall not, directly or indirectly, (i) at any time during or after the Employee
Stockholder's employment with the Company, disclose any Confidential Information
(as hereinafter defined) pertaining to the business of the Company or any of its
subsidiaries, except when required by law; or (ii) at any time during the
Employee Stockholder's employment with the Company and for one year thereafter,
directly or indirectly (A) be engaged in or have financial interest (other than
an ownership position of less than 5% in any company whose shares are publicly
traded or any non-voting non-convertible debt securities in any company) in any
business in Competition (as hereinafter defined) or (B) solicit or offer
employment to any person who has been employed by the Company or any of its
subsidiaries at any time during the 12 months immediately preceding such
solicitation. In the event of a termination of employment by the Company or one
of its subsidiaries without Cause or by the Employee Stockholder for Good
Reason, for a period for twelve months following either such termination, so
long as the Employee Stockholder does not violate the restrictive covenants of
this Section 26(a), the Company shall pay, or shall cause the applicable
subsidiary to pay, the Employee Stockholder an amount equal to the Employee
Stockholder's annual compensation as such compensation was in effect for the
year prior to the year in which the termination of employment occurred. Such
amount shall be paid in substantially equal installments in a manner consistent
with the normal payroll practices of the Company or the applicable subsidiary.
As used in this Agreement, the term "Confidential Information" means all
non-public information concerning the financial data, strategic business plans,
and other non-public, proprietary, and confidential information of the Company,
its subsidiaries, the KKR Partnership, and their affiliates (the "Restricted
Group") as in existence during the Employee Stockholder's employment with the
Company and as of the date of any termination of such employment. As used in
this Agreement, a business shall be in "Competition" if it is principally
engaged in any business active in the personal auto insurance industry within
the United States or any state thereof; provided, however, that the Employee
Stockholder's new employer shall not be in Competition, even if other
subsidiaries, divisions or business units controlling, controlled by or under
common control with such new employer are otherwise in Competition with the
Restricted Group, so long as the Employee Stockholder is employed by a
subsidiary, division or other business unit which is not in the personal auto
insurance industry, and which provides no advice, services or other assistance
to such competing entities. If the Employee Stockholder is bound by any other
agreement with the Company regarding the use or disclosure of confidential
information, the provisions of this Agreement shall be read in such a way as to
further restrict and not to permit any more extensive use or disclosure of
confidential information.
(b) Notwithstanding
clause (a) above, if at any time a court holds that the restrictions stated in
such clause (a) are unreasonable or otherwise unenforceable under circumstances
then existing, the parties hereto agree that the maximum period, scope or
geographic area determined to be reasonable under such circumstances by such
court will be substituted for the stated period, scope or area. Because the
Employee Stockholder's services are unique and because the Employee Stockholder
has had access to Confidential Information, the parties hereto agree that money
damages will be an inadequate remedy for any breach of this Agreement. In the
event of a breach or threatened breach of this Agreement, the Company or its
successors or assigns may, in addition to other rights and remedies existing in
their favor, apply to any court of competent jurisdiction for specific
performance and/or injunctive relief in order to enforce, or prevent any
violations of, the provisions hereof (without the posting of a bond or other
security).
IN
WITNESS WHEREOF, the Parties have executed this Agreement as of the date first
above written.
|
BRW
ACQUISITION, INC. |
||
|
By:
/s/ ▇▇▇ ▇▇▇▇▇ |
||
|
Name:
▇▇▇ ▇▇▇▇▇ |
||
|
Title:President |
||
|
/s/
▇▇▇▇▇ ▇▇▇▇▇▇ |
||
|
▇▇▇▇▇
▇▇▇▇▇▇ |
||
|
Employee
Stockholder |
||
|
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ |
||
|
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇ |
||
|
|
||
|
Address
of the Employee Stockholder |
||
|
150 |
||
|
Number
of Shares to be Purchased |
||
|
by
the Employee Stockholder |
Exhibit
A
NON-QUALIFIED
STOCK OPTION AGREEMENT
THIS
AGREEMENT, dated as of July 25, 2002, is made by and between BRW ACQUISITION,
INC. a Delaware corporation (hereinafter referred to as the "Company"), and
▇▇▇▇▇ ▇▇▇▇▇▇, an employee of the Company or a Subsidiary (as defined below) or
Affiliate (as defined below) of the Company (hereinafter referred to as
"Optionee").
WHEREAS,
the Company wishes to afford the Optionee the opportunity to purchase shares of
its Common Stock, par value $.01 per share (the "Common
Stock");
WHEREAS,
the Company wishes to carry out the Plan (as hereinafter defined), the terms of
which are hereby incorporated by reference and made a part of this Agreement;
and
WHEREAS,
the Committee (as hereinafter defined), appointed to administer the Plan, has
determined that it would be to the advantage and best interest of the Company
and its stockholders to grant the Non-Qualified Options provided for herein to
the Optionee as an incentive for increased efforts during his term of office
with the Company or its Subsidiaries or Affiliates, and has advised the Company
thereof and instructed the undersigned officers to issue said
Options;
NOW,
THEREFORE, in consideration of the mutual covenants herein contained and other
good and valuable consideration, receipt of which is hereby acknowledged, the
parties hereto do hereby agree as follows:
ARTICLE
I
DEFINITIONS
Whenever
the following terms are used in this Agreement, they shall have the meaning
specified in the Plan or below unless the context clearly indicates to the
contrary.
|
Section
1.1 |
-
Affiliate |
"Affiliate"
shall mean, with respect to the Company, any person or entity directly or
indirectly controlling, controlled by, or under common control with, the Company
or any other entity designated by the Board of Directors of the Company in which
the Company or an Affiliate has an interest. For purposes of this definition and
the definition of "Subsidiary" set forth below, the term "control" of a person
or entity means the possession, direct or indirect, of the power to (i) vote 50%
or more of the voting securities of such person or entity or (ii) direct or
cause the direction of the management and policies of such person or entity,
whether by contract or otherwise.
|
Section
1.2 |
-
Cause |
"Cause"
shall mean (i) the Optionee's willful and continued failure to perform
Optionee's duties with respect to the Company or its subsidiaries after a demand
by Optionee's superior for substantial performance is made or delivered to the
Optionee by the Company, (ii) willful misconduct by Optionee involving
dishonesty or breach of trust in connection with Optionee's employment, (iii) an
indictment of Optionee for a felony or misdemeanor involving moral turpitude,
(iv) if applicable, any material breach by an Optionee of the provisions of
Section 26 of the Employee Stockholder's Agreement, or (v) violation of any
written Company policy.
|
Section
1.3 |
-
Change
of Control |
"Change
of Control" means (i) sales of all or substantially all of the assets of the
Company to a Person who is not an Affiliate of Kohlberg Kravis ▇▇▇▇▇▇▇ &
Co., LLC ("KKR"), (ii) a sale by KKR or any of its respective Affiliates
resulting in more than 50% of the voting stock of the Company being held by a
person or group that does not include KKR or any of its Affiliates or (iii) a
merger or consolidation of the Company into another Person which is not an
Affiliate of KKR; if and only if any such event results in the inability of KKR
or any of its Affiliates to elect a majority of the Board of Directors of the
Company (or the resulting entity).
|
Section
1.4 |
-
Code |
"Code"
shall mean the Internal Revenue Code of 1986, as amended.
|
Section
1.5 |
-
Committee |
"Committee"
shall mean the Compensation Committee of the Company.
|
Section
1.6 |
-
Employee
Stockholder's Agreement |
"Employee
Stockholder's Agreement" shall mean that certain Employee Stockholder's
Agreement dated as of the date hereof between the Optionee and the
Company.
|
Section
1.7 |
-
Grant
Date |
"Grant
Date" shall mean the date on which the Options provided for in this Agreement
were granted, which shall be the date of this Agreement.
|
Section
1.8 |
-
Group |
"Group"
means two or more Persons acting together as a partnership, limited partnership,
syndicate or other group for the purpose of acquiring, holding or disposing of
securities of the Company.
Section
1.9 -
Options
"Options"
shall mean the non-qualified options to purchase Common Stock granted under this
Agreement.
Section
1.10 -
Permanent
Disability
The
Optionee shall be deemed to have a "Permanent Disability" if the Optionee is
unable to engage in the activities required by the Optionee's job by reason of
any medically determined physical or mental impairment which can be expected to
result in death or which has lasted or can be expected to last for a continuous
period of not less than twelve (12) months.
Section
1.11 -
Person
"Person"
means an individual, partnership, corporation, business trust, joint stock
company, trust, unincorporated association, joint venture, governmental
authority or other entity of whatever nature.
Section
1.12 -
Plan
"Plan"
shall mean the 1998 Stock Option Plan for Management and Key Employees of BRW
Acquisition, Inc. and Subsidiaries.
Section
1.13 -
Pronouns
The
masculine pronoun shall include the feminine and neuter, and the singular the
plural, where the context so indicates.
Section
1.14 -
Retirement
"Retirement"
shall mean the time at which the Optionee terminates his/her employment at age
65 or over (or such other age as may be approved by the Board of Directors of
the Company) after having been employed by the Company or a Subsidiary for at
least three (3) years after the Vesting Date.
Section
1.15 -
Secretary
"Secretary"
shall mean the Secretary of the Company.
Section
1.16 -
Subsidiary
"Subsidiary"
shall mean any corporation, partnership, joint venture or other entity which the
Company controls, directly or indirectly through one or more
intermediaries.
Section
1.17 -
Vesting
Date
"Vesting
Date" shall mean April 29, 2002.
ARTICLE
II
GRANT
OF OPTIONS
|
Section
2.1 |
-
Grant
of Options |
For good
and valuable consideration, on and as of the date hereof the Company irrevocably
grants to the Optionee an Option to purchase any part or all of the number of
shares of the Company's Common Stock set forth on the signature page hereof upon
the terms and conditions set forth in this Agreement.
|
Section
2.2 |
-
Exercise
Price |
Subject
to Section 2.4, the exercise price of the shares of stock covered by the Options
(the "Option Exercise Price") shall be $500.00
per share without commission or other charge.
|
Section
2.3 |
-
No
Right to Employment |
Nothing
in this Agreement or in the Plan shall confer upon the Optionee any right to
continue in the employ of the Company or any Subsidiary or Affiliate or shall
interfere with or restrict in any way the rights of the Company and its
Subsidiaries or Affiliates, which are hereby expressly reserved, to terminate
the employment of the Optionee at any time for any reason whatsoever, with or
without Cause.
|
Section
2.4 |
-
Adjustments
in Options Pursuant to Merger, Consolidation,
etc. |
Subject
to Section 9 of the Plan, in the event that the outstanding shares of the stock
subject to an Option are, from time to time, changed into or exchanged for a
different number or kind of shares of the Company or other securities of the
Company by reason of a merger, consolidation, recapitalization,
reclassification, stock split, stock dividend, combination of shares, or
otherwise, the Committee shall make an adjustment in the number and kind of
shares and/or the amount of consideration as to which or for which, as the case
may be, such Option, or portions thereof then unexercised, shall be exercisable,
in such manner as the Committee determines is reasonably necessary to maintain
as nearly as practicable the rights, benefits and obligations that the parties
would have had absent such event. Any such adjustment made by the Committee
shall be final and binding upon the Optionee, the Company and all other
interested persons.
ARTICLE
III
PERIOD OF
EXERCISABILITY
|
Section
3.1 |
-
Commencement of Exercisability |
(a) Unless
otherwise provided in this Agreement, the Option shall become exercisable as
follows:
Date
Option Becomes Exercisable |
Percentage
of Option Shares Granted
as
to Which Option Is Exercisable | |
|
After
the first anniversary of the Vesting Date |
50% | |
|
After
the second anniversary of the Vesting Date |
100% |
(b) Notwithstanding
the foregoing, no Option shall become exercisable as to any additional shares of
Common Stock following the termination of employment of the Optionee for any
reason, and any Option which is not and does not become exercisable as of the
Optionee's termination of employment shall be immediately
cancelled.
|
Section
3.2 |
-
Acceleration
Events |
Notwithstanding
anything in this Article III to the contrary, the Option shall become
immediately exercisable as to 100% of the shares of Common Stock subject to such
Option (but only to the extent such Option has not otherwise terminated or
become exercisable) upon a Change of Control.
|
Section
3.3 |
-
Expiration
of Options |
Except as
otherwise provided in Section 5 or 6 of the Employee Stockholder's Agreement,
the Options may not be exercised to any extent by the Optionee after the first
to occur of the following events:
(a) The
tenth anniversary of the Grant Date; or
(b) The
first anniversary of the date of the Optionee's termination of employment by
reason of death, Permanent Disability or Retirement; or
(c) Immediately
upon Optionee's termination of employment for Cause; or
(d) The
first business day which is ninety (90) calendar days after termination of
employment of the Optionee for any reason other than death, Permanent
Disability, Retirement or termination for Cause; provided, however, that such
Options shall not terminate where the extension of the exercise of a put or call
right is delayed in accordance with the terms of the Employee Stockholder's
Agreement; or
(e) The
date of purchase of the Option pursuant to a put or call right under the
Employee Stockholder's Agreement; or
(f ) At
the discretion of the Company, in the event of certain business combinations
(including, without limitation, any acquisition, merger, consolidation,
exchange, liquidation, dissolution or other event) after the Optionee has had a
reasonable opportunity to exercise his Options prior to such business
combination.
ARTICLE IV
EXERCISE
OF OPTIONS
|
Section
4.1 |
-Person
Eligible to Exercise |
Except as
provided in the Employee Stockholder's Agreement, during the lifetime of the
Optionee, only the Optionee may exercise an Option or any portion thereof. After
the death of the Optionee, any exercisable portion of an Option may, prior to
the time when an Option becomes unexercisable under Section 3.3, be exercised by
the Optionee's personal representative or by any person empowered to do so under
the Optionee's will or under the then applicable laws of descent and
distribution.
|
Section
4.2 |
-Partial
Exercise |
Any exercisable portion of an Option or the entire Option, if then wholly
exercisable, may be exercised in whole or in part at any time prior to the time
when the Option or portion thereof becomes unexercisable under Section 3.3;
provided, however, that any partial exercise shall be for whole shares of Common
Stock only.
|
Section
4.3 |
-Manner
of Exercise |
An
Option, or any exercisable portion thereof, may be exercised solely by
delivering to the Secretary or his office all of the following prior to the time
when the Option or such portion becomes unexercisable under Section
3.3:
(a) Notice
in writing signed by the Optionee or the other person then entitled to exercise
the Option or portion thereof, stating that the Option or portion thereof is
thereby exercised, such notice complying with all applicable rules established
by the Committee;
(b) Full
payment in cash, by check or by a combination thereof or, subject to limitations
imposed by the Committee, in shares of Common Stock or by a combination thereof,
for the shares with respect to which such Option or portion thereof is
exercised;
(c) A
bona fide written representation and agreement, in a form satisfactory to the
Committee, signed by the Optionee or other person then entitled to exercise such
Option or portion thereof, stating that the shares of stock are being acquired
for his own account, for investment and without any present intention of
distributing or reselling said shares or any of them except as may be permitted
under the Securities Act of 1933, as amended (the "Act"), and then applicable
rules and regulations thereunder, and that the Optionee or other person then
entitled to exercise such Option or portion thereof will indemnify the Company
against and hold it free and harmless from any loss, damage, expense or
liability resulting to the Company if any sale or distribution of the shares by
such person is contrary to the representation and agreement referred to above;
provided, however, that the Committee may, in its absolute discretion, take
whatever reasonable additional actions it deems appropriate to ensure the
observance and performance of such representation and agreement and to effect
compliance with the Act and any other federal or state securities laws or
regulations;
(d) Full
payment to the Company at the time of exercise of the Option of all amounts
which, under federal, state or local law, it is required to withhold upon
exercise of the Option, which amounts may, at the Optionee's election, be paid
in full from wages or other income payable to the Optionee by the Company in
lieu of any direct payment of such withholding payment provided, however, that
in the event the Optionee elects to use shares of Common Stock held for at least
six months, such shares may only be used to satisfy the minimum amount which,
under federal, state or local law, the Company is required to withhold;
and
(e) In
the event the Option or portion thereof shall be exercised pursuant to Section
4.1 by any person or persons other than the Optionee, appropriate proof of the
right of such person or persons to exercise the option.
Without
limiting the generality of the foregoing, the Committee may require an opinion
of counsel acceptable to it to the effect that any subsequent transfer of shares
acquired on exercise of an Option does not violate the Act, and may issue
stop-transfer orders covering such shares. Share certificates evidencing stock
issued on exercise of this Option shall bear an appropriate legend referring to
the provisions of subsection (c) above and the agreements herein. The written
representation and agreement referred to in subsection (c) above shall, however,
not be required if the shares to be issued pursuant to such exercise have been
registered under the Act, and such registration is then effective in respect of
such shares.
|
Section
4.4 |
-Conditions
to Issuance of Stock
Certificates |
The
shares of stock deliverable upon the exercise of an Option, or any portion
thereof, may be either previously authorized but unissued shares or issued
shares which have then been reacquired by the Company. Such shares shall be
validly issued, fully paid and nonassessable. The Company shall not be required
to issue or deliver any certificate or certificates for shares of stock
purchased upon the exercise of an Option or portion thereof prior to fulfillment
of all of the following conditions:
(a) The
obtaining of approval or other clearance from any state or federal governmental
agency which the Committee shall, in its absolute discretion, determine to be
reasonably necessary or advisable; and
(b) The
lapse of such reasonable period of time following the exercise of the Option as
the Committee may from time to time establish for reasons of administrative
convenience.
|
Section
4.5 |
-Rights
as Stockholder |
The
holder of an Option shall not be, nor have any of the rights or privileges of, a
stockholder of the Company in respect of any shares purchasable upon the
exercise of the Option or any portion thereof unless and until certificates
representing such shares shall have been issued by the Company to such
holder.
ARTICLE
V
MISCELLANEOUS
|
Section
5.1 |
-Administration |
The
Committee shall have the power to interpret the Plan and this Agreement and to
adopt such rules for the administration, interpretation and application of the
Plan as are consistent therewith and to interpret or revoke any such rules. All
actions taken and all interpretations and determinations made by the Committee
shall be final and binding upon the Optionee, the Company and all other
interested persons. No member of the Committee shall be personally liable for
any action, determination or interpretation made in good faith with respect to
the Plan or the Options. In its absolute discretion, the Board of Directors may
at any time and from time to time exercise any and all rights and duties of the
Committee under the Plan and this Agreement.
|
Section
5.2 |
-Options
Not Transferable |
Except as
provided in the Employee Stockholder's Agreement, neither the Options nor any
interest or right therein or part thereof shall be liable for the debts,
contracts or engagements of the Optionee or his successors in interest or shall
be subject to disposition by transfer, alienation, anticipation, pledge,
encumbrance, assignment or any other means whether such disposition be voluntary
or involuntary or by operation of law by judgment, levy, attachment, garnishment
or any other legal or equitable proceedings (including bankruptcy), and any
attempted disposition thereof shall be null and void and of no effect; provided,
however, that this Section 5.2 shall not prevent transfers by will or by the
applicable laws of descent and distribution.
|
Section
5.3 |
-Shares
to Be Reserved |
The
Company shall at all times during the term of the Options reserve and keep
available such number of shares of stock as will be sufficient to satisfy the
requirements of this Agreement.
|
Section
5.4 |
-Notices |
Any
notice to be given under the terms of this Agreement to the Company shall be
addressed to the Company in care of its Secretary, and any notice to be given to
the Optionee shall be addressed to him at the address given beneath his
signature hereto. By a notice given pursuant to this Section 5.4, either party
may hereafter designate a different address for notices to be given to him. Any
notice which is required to be given to the Optionee shall, if the Optionee is
then deceased, be given to the Optionee's personal representative if such
representative has previously informed the Company of his status and address by
written notice under this Section 5.4. Any notice shall have been deemed duly
given when enclosed in a properly sealed envelope or wrapper addressed as
aforesaid, deposited (with postage prepaid) in a post office or branch post
office regularly maintained by the United States Postal Service, or when sent by
overnight delivery or telecopy.
|
Section
5.5 |
-Titles |
Titles
are provided herein for convenience only and are not to serve as a basis for
interpretation or construction of this Agreement.
|
Section
5.6 |
-Applicability
of Plan and Employee Stockholder's
Agreement |
The
Options and the shares of Common Stock issued to the Optionee upon exercise of
the Options shall be subject to all of the terms and provisions of the Plan and
the Employee Stockholder's Agreement, to the extent applicable to the Options
and such shares. In the event of any conflict between this Agreement and the
Plan, the terms of the Plan shall control. In the event of any conflict between
this Agreement or the Plan and the Employee Stockholder's Agreement, the terms
of the Employee Stockholder's Agreement shall control.
|
Section
5.7 |
-Amendment |
This
Agreement may be amended only by a writing executed by the parties hereto which
specifically states that it is amending this Agreement.
|
Section
5.8 |
-Governing
Law |
The laws
of the State of Delaware (or if the Company reincorporates in another state, the
laws of that state) shall govern the interpretation, validity and performance of
the terms of this Agreement regardless of the law that might be applied under
principles of conflicts of laws.
|
Section
5.9 |
-Jurisdiction |
Any suit,
action or proceeding against the Optionee or the Company with respect to this
Agreement, or any judgment entered by any court in respect of any thereof, may
be brought in any court of competent jurisdiction in the State of Delaware (or
if the Company reincorporates in another state, in that state) or New York, as
the Company may elect in its sole discretion, and the Optionee and the Company
each hereby submit to the exclusive jurisdiction of such courts for the purpose
of any such suit, action, proceeding or judgment. The Optionee or the Company
each hereby irrevocably waive any objections which either of them may now or
hereafter have to the laying of the venue of any suit, action or proceeding
arising out of or relating to this Agreement brought in any court of competent
jurisdiction in the State of Delaware (or if the Company reincorporates in
another state, in that state) or New York, and hereby further irrevocably waive
any claim that any such suit, action or proceeding brought in any such court has
been brought in any inconvenient forum. No suit, action or proceeding against
the Company or the Optionee with respect to this Agreement may be brought in any
court, domestic or foreign, or before any similar domestic or foreign authority
other than in a court of competent jurisdiction in the State of Delaware (or if
the Company reincorporates in another state, in that state) or New York, and the
Optionee and the Company each hereby irrevocably waive any right which either of
them may otherwise have had to bring such an action in any other court, domestic
or foreign, or before any similar domestic or foreign authority. The Company and
the Optionee each hereby submit to the jurisdiction of such courts for the
purpose of any such suit, action or proceeding. The Optionee and the Company
each hereby irrevocably and unconditionally waive trial by jury in any legal
action or proceeding in relation to this Agreement and for any counterclaim
therein.
IN
WITNESS WHEREOF, this Agreement has been executed and delivered by the parties
hereto.
| BRW ACQUISITION, INC. | ||
| |
|
|
| Date: | By: | /s/ ▇▇▇ ▇▇▇▇▇ |
|
Name: ▇▇▇ ▇▇▇▇▇ | ||
| Title: President | ||
| /s/ ▇▇▇▇▇ ▇▇▇▇▇▇ | |||
|
▇▇▇▇▇
▇▇▇▇▇▇ |
|||
|
Name: |
Number
of Shares Subject | ||
|
to
the Option: |
710 | ||
|
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ |
|||
|
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇ |
|||
|
Address |
|||
|
Optionee's
Taxpayer |
|||
|
Identification
Number: |
|||
Contract
A
Exhibit
B
SALE
PARTICIPATION AGREEMENT
| July 25, 2002 |
▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Dear ▇▇.
▇▇▇▇▇▇:
You have
entered into an Employee Stockholder's Agreement, dated as of July 25, 2002 (the
"Stockholder's Agreement") between BRW Acquisition, Inc., a Delaware corporation
("the Company"), and you relating to your ownership and/or purchase of shares of
the common stock, par value $.01 per share (the "Common Stock") of the Company.
The undersigned, Bristol West Associates LLC, a Delaware limited liability
corporation ("Associates"), an affiliate of KKR Partners II, L.P., a Delaware
limited partnership ("KKR Partners") and KKR 1996 Fund L.P., a Delaware limited
partnership ("KKR 1996"), also has acquired shares of Common Stock of the
Company and hereby agree with you as follows, effective upon the Closing (as
defined in the Stockholder's Agreement) or, in the event that you entered into
such Stockholder's Agreement subsequent to the Closing, upon the purchase of
Common Stock by you:
In the
event that at any time KKR Partners, Associates, KKR 1996 or any investment
partnerships affiliated with the foregoing entities, as the case may be (each, a
"Selling Party" and collectively, the "Selling Parties"), proposes to sell for
cash or any other consideration any shares of Common Stock of the Company owned
by it, in any transaction other than a Qualified Public Offering (as defined in
the Stockholder's Agreement) or a sale to an affiliate of KKR Partners,
Associates or KKR 1996, as the case may be, the Selling Party will notify you or
your Employee Stockholder's Estate or Employee Trust (as such terms are defined
in Section 2 of the Stockholder's Agreement; and, collectively, the "Employee
Stockholder Entities"), as the case may be, in writing (a "Notice") of such
proposed sale (a "Proposed Sale") and the material terms of the Proposed Sale,
including the number of shares of Common Stock proposed to be sold by the
Selling Party and the consideration to be received therefor as of the date of
the Notice (the "Material Terms") promptly, and in any event not less than 15
days prior to the consummation of the Proposed Sale and not more than 5 days
after the execution of the definitive agreement relating to the Proposed Sale,
if any (the "Sale Agreement"). If within 10 days of the Employee Stockholder
Entities' receipt of such Notice the Selling Party receives from an Employee
Stockholder Entity a written request (a "Request") to include Common Stock held
pursuant to the Stockholder's Agreement by any Employee Stockholder Entity in
the Proposed Sale (which Request shall be irrevocable unless (a) there shall be
a material adverse change in the Material Terms or (b) if otherwise mutually
agreed to in writing by any Employee Stockholder Entity and the Selling Party),
the Common Stock so held by you will be so included as provided herein; provided
that only one Request, which shall be executed by any Employee Stockholder
Entity, may be delivered with respect to any Proposed Sale for all Common Stock
held by such Employee Stockholder Entity. Any Common Stock held by any Employee
Stockholder Entity which is not subject to the terms and conditions of the
Stockholder's Agreement shall not be included in any Proposed Sale, and
references to Common Stock herein shall be construed accordingly. Promptly upon
receipt of a Request the Selling Party will furnish the Employee Stockholder
Entities with a copy of the Sale Agreement, if any.
2. The
number of shares of Common Stock which the Employee Stockholder Entities will be
permitted to include in a Proposed Sale pursuant to a Request will be the lesser
of (a) the sum of the number of shares of Common Stock then owned by the
Employee Stockholder Entities (and held pursuant to the Stockholder's
Agreement), plus all shares of Common Stock which you are then entitled to
acquire under an unexercised Option (as defined in the Stockholder's Agreement)
to purchase shares of Common Stock, to the extent such Option is then vested or
would become vested as a result of the consummation of the Proposed Sale and (b)
(i) the sum of the shares of Common Stock then owned by the Employee Stockholder
Entities, plus all shares of Common Stock which you are entitled to acquire
under an unexercised Option to purchase shares of Common Stock, that are
exercisable, multiplied by (ii) a percentage calculated by dividing the
aggregate number of shares of Common Stock proposed to be sold in the Proposed
Sale by the total number of shares of Common Stock owned by the Selling Parties,
the Employee Stockholder Entities, and other holders of shares of Common Stock
who have been granted the same rights granted to the Employee Stockholder
Entities to participate in the Proposed Sale. If one or more holders of shares
of Common Stock who have been granted the same rights to participate in the
Proposed Sale granted to the Employee Stockholder Entities hereunder elect not
to include the maximum number of shares of Common Stock which such holders would
have been permitted to include in a Proposed Sale (the "Eligible Shares"), any
Selling Party or such remaining holders of shares of Common Stock shall be
permitted to sell in the Proposed Sale a number of additional shares of Common
Stock up to their respective requested amounts owned by them equal to their pro
rata portion of the number of Eligible Shares not included in the Proposed Sale,
based on the relative number of shares of Common Stock then held by each such
holder, and such additional shares of Common Stock which any such holder or
holders propose to sell shall not be included in any calculation made pursuant
to the first sentence of this Paragraph 2 for the purpose of determining the
number of shares of Common Stock which the Employee Stockholder Entities will be
permitted to include in a Proposed Sale. The Selling Parties, or any of them,
may sell in the Proposed Sale additional shares of Common Stock owned by any of
them equal to any remaining Eligible Shares which will not be included in the
Proposed Sale pursuant to the foregoing.
3. Except as
may otherwise be provided herein, shares of Common Stock subject to a Request
will be included in a Proposed Sale pursuant hereto and in any agreements with
purchasers relating thereto on the same terms and subject to the same conditions
applicable to the shares of Common Stock which the Selling Party proposes to
sell in the Proposed Sale. Such terms and conditions shall include, without
limitation: the sales price; the payment of fees, commissions and expenses; the
provision of, and representation and warranty as to, information requested by
the Selling Party; and the provision of requisite indemnifications; provided
that any indemnification provided by the Employee Stockholder Entities shall be
pro rata in proportion with the number of shares of Common Stock to be
sold.
4. Upon
delivering a Request, the Employee Stockholder Entities will, if requested by
the Selling Party, execute and deliver a custody agreement and power of attorney
in form and substance satisfactory to the Selling Party with respect to the
shares of Common Stock which are to be sold by the Employee Stockholder Entities
pursuant hereto (a "Custody Agreement and Power of Attorney"). The Custody
Agreement and Power of Attorney will provide, among other things, that the
Employee Stockholder Entities will deliver to and deposit in custody with the
custodian and attorney-in-fact named therein a certificate or certificates
representing such shares of Common Stock (duly endorsed in blank by the
registered owner or owners thereof) and irrevocably appoint said custodian and
attorney-in-fact as the Employee Stockholder Entities' agent and
attorney-in-fact with full power and authority to act under the Custody
Agreement and Power of Attorney on the Employee Stockholder Entities' behalf
with respect to the matters specified therein, but only to the extent such
actions are consistent with the Material Terms as specified in the
Notice.
5. The
Employee Stockholder Entities' right pursuant hereto to participate in a
Proposed Sale shall be contingent on the Employee Stockholder Entities'
compliance with each of the provisions hereof and the Employee Stockholder
Entities' willingness to execute such documents that are consistent therewith
and as may be reasonably requested by the Selling Party.
6. In the
event of a Proposed Sale pursuant to Section 1 hereof, the Selling Party may
elect, by so specifying in the Notice, to require the Employee Stockholder
Entities to, and the Employee Stockholder Entities will, participate in such
Proposed Sale in accordance with the terms and provisions of Section 2, 3 and 4
hereof.
7. The
obligations of the Selling Parties hereunder shall extend only to the Employee
Stockholder Entities, and no other of the Employee Stockholder Entities'
successors or assigns shall have any rights pursuant hereto.
8. This
Agreement shall terminate and be of no further force and effect on the fifth
anniversary of the first occurrence of a Public Offering (as defined in the
Stockholder's Agreement).
9. All
notices and other communications provided for herein shall be in writing and
shall be deemed to have been duly given when delivered to the party to whom it
is directed:
|
(a) |
If
to the Selling Parties, to them at the following
address: |
|
▇/▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. | |
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▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ | |
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▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ | |
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Attn:
▇▇▇▇▇ ▇▇▇▇▇▇ | |
|
with
a copy to: | |
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▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ | |
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▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | |
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▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ | |
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Attn:
▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq. |
|
(b) |
If
to you, to you at the address first set forth above
herein; |
|
(c) |
If
to the Employee Stockholder Entities, at the address provided to such
parties by such entity; |
or at
such other address as any of the above shall have specified by notice in writing
delivered to the others by certified mail, overnight delivery or
telecopy.
10. The laws
of the State of Delaware shall govern the interpretation, validity and
performance of the terms of this Agreement. No suit, action or proceeding with
respect to this Agreement may be brought in any court or before any similar
authority other than in a court of competent jurisdiction in the States of
Delaware (or if the Company reincorporates in another state, of that state) or
New York and you and the Selling Parties hereby submit to the exclusive
jurisdiction of such courts for the purpose of such suit, proceeding or
judgment. You and the Selling Parties hereby irrevocably waive any right which
you and the Selling Parties may have had to bring such an action in any other
court, domestic or foreign, or before any similar domestic or foreign authority.
You and the Selling Parties hereby irrevocably and unconditionally waive trial
by jury in any legal action or proceeding in relation to this Agreement and for
any counterclaim therein.
11. If KKR
Partners, Associates or KKR 1996 transfers its interest in the Company to an
affiliate of KKR Partners, Associates or KKR 1996, as the case may be, such
affiliate shall assume the obligations hereunder of KKR Partners, Associates or
KKR 1996, as the case may be.
12. Notwithstanding
any other provision of this Agreement, neither the general partner nor the
limited partners, nor any future general or limited partner of KKR Partners or
KKR 1996, nor any member or managing member of Associates, shall have any
personal liability for performance of any obligation of such entity under this
Agreement.
It is the
understanding of the undersigned that you are aware that no Proposed Sale
presently is contemplated and that such a sale may never occur.
If the
foregoing accurately sets forth our agreement, please acknowledge your
acceptance thereof in the space provided below for that purpose.
|
Very
truly yours, | |
|
KKR
PARTNERS II, L.P. | |
|
By:
KKR Associates, | |
|
its General Partner | |
|
By:
/s/▇▇▇▇▇
▇▇▇▇▇▇ | |
|
General Partner | |
|
KKR
1996 FUND L.P. | |
|
By:
KKR Associates 1996 L.P., | |
|
its General Partner, | |
|
By:
KKR 1996 GP LLC, | |
|
its General Partner | |
|
By:
/s/▇▇▇▇▇
▇▇▇▇▇▇ | |
|
Member | |
|
BRISTOL
WEST ASSOCIATES LLC | |
|
By:
KKR 1996 Fund, L.P., | |
|
its Member | |
|
By:
KKR Associates 1996 L.P., | |
|
its General Partner, | |
|
By:
KKR 1996 GP L.L.C, | |
|
its General Partner | |
|
By:
/s/▇▇▇▇▇
▇▇▇▇▇▇ | |
|
Member |
Accepted
and agreed to:
By:
/s/
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▇▇▇▇▇
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