FORM OF
PARTICIPATION AGREEMENT
(ALL AWARDS)
This Participation Agreement (the "AGREEMENT") is made and entered into
as of January 28, 2000 by and between ▇▇▇▇▇▇▇ Corporation, a Minnesota
corporation ("▇▇▇▇▇▇▇") and _____________, an individual residing at
______________ (the "EMPLOYEE").
W I T N E S S E T H
WHEREAS, on December 20, 1999, the Board of Directors and shareholders of
▇▇▇▇▇▇▇ adopted the 1999 ▇▇▇▇▇▇▇ Corporation Stock Option Plan (the "OPTION
PLAN") authorizing the Compensation Committee of the Board of Directors of
▇▇▇▇▇▇▇ to ▇▇▇▇▇ stock options to employees and independent contractors of
▇▇▇▇▇▇▇ or any subsidiary of ▇▇▇▇▇▇▇ pursuant to the terms and conditions of the
Option Plan.
WHEREAS, on December 20, 1999, the Board of Directors and shareholders of
▇▇▇▇▇▇▇ adopted the 1999 ▇▇▇▇▇▇▇ Corporation Direct Investment Plan (the "DI
PLAN") authorizing the Compensation Committee of the Board of Directors of
▇▇▇▇▇▇▇ to sell shares of ▇▇▇▇▇▇▇'▇ voting class B common stock, $0.01 par value
(the "COMMON STOCK") to employees and independent contractors of ▇▇▇▇▇▇▇ or any
subsidiary of ▇▇▇▇▇▇▇ pursuant to the terms and conditions of the DI Plan.
WHEREAS, on or about December 21, 1999, the Employee received an award
letter (the "ELIGIBILITY NOTICE") from ▇▇▇▇▇▇▇ informing the Employee that
▇▇▇▇▇▇▇ was offering the Employee (1) the opportunity to purchase Coinvestment
Shares (as defined in the DI Plan) pursuant to the terms and conditions of the
DI Plan, (2) the opportunity to purchase Reinvestment Shares (as defined in the
DI Plan) pursuant to the terms and conditions of the DI Plan and (3) an option
to purchase shares of Common Stock.
WHEREAS, the Employee must execute and deliver this Agreement as a
condition to participating in the DI Plan and Option Plan and receive the awards
the Employee was granted in the Eligibility Notice.
WHEREAS, all capitalized terms not otherwise defined in this Agreement or
the attachments to this Agreement shall have such meanings given such terms in
the Option Plan and DI Plan, respectively.
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto hereby agree as follows:
1. STOCK OPTION GRANT.
1.1. As of the date of this Agreement ("DATE OF GRANT") ▇▇▇▇▇▇▇ hereby
grants to the Employee the right, privilege, and option (the "OPTION") to
purchase ____________ shares (the "OPTION SHARES") of Common Stock,
according to the terms and subject to the conditions set forth in this
Agreement, the "Terms and Conditions of Non-Statutory Stock Option
Awards" attached to this Agreement and the Option Plan. The Option is
NOT intended to be an "incentive stock option," as that term is used in
Section 422 of the Internal Revenue Code of 1986, as amended (the
"CODE").
1.2. The per share price to be paid by Employee in the event of an
exercise of the Option will be $22.00 per share.
1.3. The Option will become exercisable with respect to fifty percent
(50%) of the Option Shares in accordance with the "Time Vesting Option
Schedule" attached to this Agreement, and the remaining fifty percent
(50%) of the Option Shares will become exercisable in accordance with the
"Performance Vesting Option Schedule" attached to this Agreement.
1.4. The Employee hereby acknowledges and agrees that by executing this
Agreement, the Employee will be bound by the terms and conditions set
forth in the "Terms and Conditions of Non-Statutory Stock Options"
attached to this Agreement.
2. STOCK PURCHASE GRANT.
2.1. The Employee hereby subscribes to purchase _____________
Coinvestment Shares (the "COINVESTMENT SHARES") for a purchase price of
$22.00 per share and upon the terms and conditions set forth in the
"Terms and Conditions of Purchase of Common Stock" attached to this
Agreement. As payment for the Coinvestment Shares, the Employee:
(a) Has delivered to ▇▇▇▇▇▇▇ along with the executed copy of
this Agreement a check or other cash payment payable to "▇▇▇▇▇▇▇
Corporation" in an amount equal to thirty-five percent (35%) of
the total purchase price for the Coinvestment Shares (or
$__________).
(b) Promises to pay to the order of ▇▇▇▇▇▇▇, its successors and
assigns, at its office at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, or such other place as the holder hereof may designate in
writing from time to time, an amount equal to sixty-five percent
(65%) of the total purchase price for the Coinvestment Shares, or
the principal sum of $______________ in lawful money of the United
States (the "PURCHASE LOAN"), together with interest from the date
hereof on the unpaid balance of the Purchase Loan at a fixed rate
of eight percent (8%) per annum (the "INTEREST RATE"). Interest on
the Purchase Loan shall be computed on the actual number of days
elapsed and a 365-day year. Interest will not be payable during
the term of the Purchase Loan pursuant to the "Terms and
Conditions of the Nonrecourse Purchase Loan" attached to this
Agreement, but will be paid on the Maturity Date (as defined in
the "Terms and Conditions of the Nonrecourse Purchase Loan"
attached to this Agreement). All accrued but unpaid interest on
the Purchase Loan will be in addition to the principal balance of
the Purchase Loan. The Employee hereby acknowledges and agrees
that by executing this Agreement, the Employee will be bound by
the terms and conditions set forth in the "Terms and Conditions of
the Nonrecourse Purchase Loan" attached to this Agreement.
(c) Grants to ▇▇▇▇▇▇▇, as collateral for the Purchase Loan, a
security interest in the Coinvestment Shares pursuant to the terms
and conditions set forth in the "Terms and Conditions of the
Pledge and Custody Agreement" attached to this Agreement. The
Employee hereby acknowledges and agrees that by executing this
Agreement, the Employee will be bound by the terms and conditions
set forth in the "Terms and Conditions of the Pledge and Custody
Agreement" attached to this Agreement.
2.2. The Employee hereby subscribes to purchase _____________
Reinvestment Shares (the "REINVESTMENT SHARES") for a purchase price of
$22.00 per share and upon the terms and conditions set forth in the
"Terms and Conditions of Purchase of Common Stock" attached to this
Agreement. A check or other cash payment payable to "▇▇▇▇▇▇▇
Corporation" in the amount of $___________ for the Reinvestment Shares is
also delivered to ▇▇▇▇▇▇▇ with an executed copy of this Agreement.
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2.3. All Coinvestment Shares purchased by the Employee shall vest in
accordance with the "Coinvestment Shares Vesting Schedule" attached to
this Agreement.
2.4. The Employee acknowledges that ▇▇▇▇▇▇▇ is relying upon the
accuracy and completeness of the representations contained in this
Agreement and in the "Terms and Conditions of Purchase of Common Stock"
attached to this Agreement in complying with its obligations under
applicable securities laws and that the purchase of the Reinvestment
Shares and Coinvestment Shares may be rejected for any reason.
2.5. The Employee represents and warrants to ▇▇▇▇▇▇▇ that the Employee
is a bona fide resident of the State listed as Employee's residence in
the introductory paragraph herein.
2.6. The Reinvestment Shares and Coinvestment Shares purchased by the
Employee will be held in such Employee's individual name.
3. INVESTORS' AGREEMENT.
3.1. In connection with the Employee's purchase of Common Stock upon
the exercise of the Option pursuant to the Option Plan or upon the
purchase of Coinvestment Shares and/or Reinvestment Shares pursuant to
the DI Plan, the Employee hereby acknowledges and agrees that Employee
has received and reviewed a copy of the Investors' Agreement, dated
November 23, 1999, by and among ▇▇▇▇▇▇▇ and its shareholders (the
"INVESTORS' AGREEMENT"). By execution of this Agreement, the Employee
hereby acknowledges and agrees to be bound by the terms and conditions of
the Investors' Agreement, as amended from time to time, in the same
manner and to the same effect as if the Employee were an original party
thereto, including, without limitation, acknowledgment that the Employee
shall be considered a "Co-invest Management Stockholder" or "Other
Stockholder" as such terms are defined in the Investors' Agreement. The
other shareholders of ▇▇▇▇▇▇▇, and the Board of Directors of ▇▇▇▇▇▇▇,
shall be entitled to rely on this Agreement in the same manner as if a
counterpart of the Investors' Agreement were executed by the Employee,
and ▇▇▇▇▇▇▇'▇ Board of Directors may utilize this Agreement as evidence
of the signature of the Employee and attach the same to a copy of the
Investors' Agreement, with this Agreement having the same validity, force
and effect as if the Investor's Agreement and any amendments thereto had
been executed by the Employee.
3.2. Upon the exercise of the Option and pursuant to the Option Plan,
unless otherwise notified by the Company, the Employee shall be deemed an
"other" Stockholder within the meaning of the Investors' Agreement as of
12:01 a.m., January 28, 2000 (the "EFFECTIVE DATE"), the Date of Grant of
the Option to the Employee for all purposes of the Investors' Agreement.
3.3. Upon the issuance of the Reinvestment Shares and/or Coinvestment
Shares and pursuant to the DI Plan, unless otherwise notified by the
Company, the Employee shall be deemed an "other" Stockholder within the
meaning of the Investors' Agreement as of the Effective Date for the
issuance of Reinvestment Shares and/or Coinvestment Shares to the
Employee for all purposes of the Investors' Agreement.
3.4. ▇▇▇▇▇▇▇ shall notify the Employee promptly if the Employee's
status for purposes of the Investors' Agreement changes for any reason
pursuant to the terms and conditions of the Option Plan and DI Plan,
respectively.
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4. CONFIDENTIALITY AND NONCOMPETE AGREEMENT.
4.1. Upon the execution of this Agreement, the Employee hereby
acknowledges and agrees to be bound by the terms and conditions of the
"Confidentiality and Noncompete Provisions" attached to this Agreement.
5. SECTION 83(b) ELECTION.
5.1. The Employee acknowledges and agrees that the Employee (i) has
reviewed with the Employee's own tax advisors the federal, state, local
and foreign tax consequences of the purchase of the Shares and the other
transactions contemplated by the DI Plan, and (ii) is relying solely on
such advisors and not on any statements or representations of ▇▇▇▇▇▇▇ or
any of its agents. ▇▇▇▇▇▇▇ strongly encourages the Employee to consult
with such Employee's own tax advisor with respect to the making of an
election pursuant to Section 83(b) of the Code. THE EMPLOYEE
ACKNOWLEDGES THAT IT IS THE EMPLOYEE'S SOLE RESPONSIBILITY AND NOT
▇▇▇▇▇▇▇'▇ RESPONSIBILITY TO FILE SUCH ELECTION ON A TIMELY BASIS, EVEN IF
THE EMPLOYEE REQUESTS THAT ▇▇▇▇▇▇▇ OR ITS REPRESENTATIVES MAKE SUCH
FILING ON BEHALF OF THE EMPLOYEE.
5.2. ▇▇▇▇▇▇▇ has attached to this Agreement an 83(b) Election Form that
may be used by the Employee in the event the Employee decides to make
such an election. Any such election, if made, must be filed with the
Internal Revenue Service within thirty (30) days of the purchase of such
Shares.
6. TRUTH-IN-LENDING DISCLOSURE.
6.1. If Employee's Purchase Loan is less than or equal to $25,000, the
Employee acknowledges and agrees that by executing this Agreement, the
Employee has received and reviewed the "Truth-in-Lending Disclosure" and
the related "Itemization of Amount Financed" attached to this Agreement
prior to the Employee's execution of this Agreement.
7. MISCELLANEOUS.
7.1. EMPLOYMENT OR SERVICE. Nothing in this Agreement or any
attachments hereto will interfere with or limit in any way the right of
▇▇▇▇▇▇▇ or any Subsidiary to terminate the employment or other service of
the Employee at any time, nor confer upon the Employee any right to
continue in the employ or other service of ▇▇▇▇▇▇▇ or any Subsidiary at
any particular position or rate of pay or for any particular period of
time. Furthermore, if the Employee was an at-will employee prior to
executing this Agreement, the Employee shall be an at-will employee after
executing this Agreement, and if the Employee was bound by a written
employment agreement prior to executing this Agreement, the Employee will
continue to be bound by such agreement after executing this Agreement;
provided, however, that such written agreement shall be subject to the
terms and conditions in this Agreement and shall be deemed to be amended
and superseded with respect to the subject matter contained in this
Agreement.
7.2. BINDING EFFECT. This Agreement, including all the attachments
hereto, will be binding upon the heirs, executors, administrators and
successors of the parties to this Agreement.
7.3. GOVERNING LAW. This Agreement, including all the attachments
hereto, and all rights and obligations under it will be construed in
accordance with the Option Plan and the DI Plan,
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respectively, and governed by the laws of the State of Minnesota,
without regard to conflicts of laws provisions. Any legal proceeding
related to this Agreement, including all the attachments hereto, will
be brought in an appropriate Minnesota court, and the parties to this
Agreement consent to the exclusive jurisdiction of the court for this
purpose.
7.4. ENTIRE AGREEMENT. This Agreement, including all attachments
hereto, the Option Plan and the DI Plan set forth the entire agreement
and understanding of the parties to this Agreement with respect to the
grant and exercise of the Option, the administration of the Option Plan,
the purchase of Reinvestment Shares and/or Coinvestment Shares, the
administration of the DI Plan, and supersede all prior agreements,
arrangements, plans and understandings relating to the foregoing.
7.5. AMENDMENT AND WAIVER. Other than as provided in this Agreement,
including all attachments hereto, the Option Plan or the DI Plan, none of
the terms or provisions of this Agreement, including all attachment to
this Agreement may be amended, waived, supplemented, canceled or
otherwise modified only by a written instrument executed by the parties
to this Agreement or, in the case of a waiver, by the party waiving
compliance.
7.6. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall constitute an original, but all of
which, when taken together, shall constitute but one agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first set forth above.
▇▇▇▇▇▇▇ CORPORATION:
By
--------------------------------
Its
--------------------------------
EMPLOYEE:
----------------------------------
Signature
----------------------------------
Name Typed or Printed
----------------------------------
Address
----------------------------------
City, State and Zip Code
----------------------------------
Social Security Number
* * * * * * * *
Upon execution of this Agreement the Employee acknowledges having been delivered
and reviewed a copy of the Option Plan, DI Plan, a Summary Plan Description for
each of the Option Plan and the DI Plan, the Investors' Agreement, the
Information Statement and all attachments to this Agreement.
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TIME VESTING OPTION SCHEDULE
The following table sets forth the initial dates of exercisability of each
installment and the percentage of Option Shares as to which this Time Vesting
Option will become exercisable on such dates:
------------------------------------------------------- -----------------------------------------------------
PERCENTAGE OF OPTION SHARES
DATE OF EXERCISABILITY AVAILABLE FOR EXERCISE
------------------------------------------------------- -----------------------------------------------------
One year from Date of Grant 0% of Option Shares
------------------------------------------------------- -----------------------------------------------------
Two years from Date of Grant 0% of Option Shares
------------------------------------------------------- -----------------------------------------------------
Three years from Date of Grant 25% of Option Shares
------------------------------------------------------- -----------------------------------------------------
Four years from Date of Grant 50% of Option Shares
------------------------------------------------------- -----------------------------------------------------
Five years from Date of Grant 75% of Option Shares
------------------------------------------------------- -----------------------------------------------------
Six years from Date of Grant 100% of Option Shares
------------------------------------------------------- -----------------------------------------------------
In no event will this Time Vesting Option be exercisable after, and this Time
Vesting Option will become void and expire as to all unexercised Option Shares
at, 5:00 p.m. (St. ▇▇▇▇, Minnesota time) on December 20, 2009 (the "TIME OF
TERMINATION").
If a DLJMB Liquidation Event (as defined below) occurs, then, unless otherwise
provided by the Committee in its sole discretion, all unvested Time Vesting
Options will become immediately vested in full.
For purposes of this Time Vesting Option Schedule, the following terms shall
have the meanings set forth below:
1. "DLJMB ENTITIES" shall mean DLJ Merchant Banking Partners II, L.P. and
all its affiliated entities as described in the Investors' Agreement.
2. "DLJMB LIQUIDATION EVENT" means, except for transfers to Permitted
Transferees (as defined in the Investors' Agreement), (i) a sale or other
transfer by the DLJMB Entities of 90% or more of its shares of common
equity in ▇▇▇▇▇▇▇ (including all common equity originally purchased by
the DLJMB Entities and any additional common equity purchased by the
DLJMB Entities thereafter, whether voting, Class B or any other class of
common equity created by ▇▇▇▇▇▇▇) to one or more persons or entities (in
one transaction or in a series of related transactions) other than in
connection with a public offering of ▇▇▇▇▇▇▇'▇ common equity, (ii) the
sale, lease, exchange or
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other transfer, directly or indirectly, of substantially all of the
assets of ▇▇▇▇▇▇▇ (in one transaction or in a series of related
transactions) to a person or entity that is not controlled by ▇▇▇▇▇▇▇,
or (iii) a merger or consolidation to which ▇▇▇▇▇▇▇ is a party if the
shareholders of ▇▇▇▇▇▇▇ immediately prior to the effective date of such
merger or consolidation do not have "beneficial ownership" (as defined
in Rule 13d-3 under the Exchange Act) immediately following the
effective date of such merger or consolidation of more than 50% of the
combined voting power of the surviving corporation's outstanding
securities ordinarily having the right to vote at elections of directors.
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PERFORMANCE VESTING OPTION SCHEDULE
This Performance Vesting Option will become vested and exercisable on the dates
and in the proportions indicated in Table 1 below if ▇▇▇▇▇▇▇ attains the Target
Implied Common Equity Value (as defined below) for the relevant fiscal years as
indicated in Table 1 below, but in any event will vest in full eight (8) years
from the Date of Grant. If a DLJMB Liquidation Event (as defined below) of the
DLJMB Entities (as defined below) occurs prior to eight (8) years from the Date
of Grant, however, and such Liquidation Event causes the DLJMB Entities to
realize a DLJMB IRR (as defined below) of at least 25%, the portion of the
Performance Vesting Option which has not previously become vested and
exercisable at the time of the DLJMB Liquidation Event will become vested and
exercisable based upon the level of the DLJMB IRR as indicated in Table 2.
For purposes of this Performance Vesting Option Schedule, the following terms
shall have the meanings set forth below:
1. "DLJMB ENTITIES" shall mean DLJ Merchant Banking Partners II, L.P. and
all its affiliated entities as described in the Investors' Agreement.
2. "DLJMB IRR" means, as to the DLJMB Entities, the annual discount rate at
which the net present value of (i) all investments and capital
contributions by the DLJMB Entities in shares of ▇▇▇▇▇▇▇'▇ common equity
and (ii) all distributions from ▇▇▇▇▇▇▇ to the DLJMB Entities and other
amounts realized (whether from ▇▇▇▇▇▇▇ or third parties, including
amounts realized upon a DLJMB Liquidation Event) by the DLJMB Entities
with respect to the DLJMB Entities' shares of ▇▇▇▇▇▇▇'▇ common equity,
equals zero. The DLJMB IRR calculation shall be determined from and
including the date upon which each investment and capital contribution is
made by the DLJMB Entities to and including the date any distribution is
made or other amount is realized on account thereof, calculated on the
actual number of days elapsed over a 365 or 366-day year, as the case may
be. All calculations of the DLJMB IRR shall be determined on a pro-forma
basis reflecting the Option Shares that have become vested prior to a
DLJMB Liquidation Event and the Option Shares becoming vested as of the
DLJMB Liquidation Event.
3. "DLJMB LIQUIDATION EVENT" means, except for transfers to Permitted
Transferees (as defined in the Investors' Agreement), (i) a sale or other
transfer by the DLJMB Entities of 90% or more of its shares of common
equity in ▇▇▇▇▇▇▇ (including all common equity originally purchased by
the DLJMB Entities and any additional common equity purchased by the
DLJMB Entities thereafter, whether voting, Class B or any other class of
common equity created by ▇▇▇▇▇▇▇) to one or more persons or entities (in
one transaction or in a series of related transactions) other than in
connection with a public offering of ▇▇▇▇▇▇▇'▇ common equity, (ii) the
sale, lease, exchange or other transfer, directly or indirectly, of
substantially all of the assets of ▇▇▇▇▇▇▇ (in one transaction or in a
series of related transactions) to a person or entity that is not
controlled by ▇▇▇▇▇▇▇, or (iii) a merger or consolidation to which
▇▇▇▇▇▇▇ is a party if the shareholders of ▇▇▇▇▇▇▇ immediately prior to
the effective date of such merger or consolidation do not have
"beneficial ownership" (as defined in Rule 13d-3 under the Exchange Act)
immediately following the effective date of such merger or consolidation
of more than 50% of the combined voting power of the surviving
corporation's outstanding securities ordinarily having the right to vote
at elections of directors.
4. "ENTERPRISE VALUE" means a value equal to six times the Pro-Forma EBITDA
as shown on ▇▇▇▇▇▇▇'▇ consolidated statement of operations for its most
recent fiscal year end.
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5. "PRO-FORMA EBITDA" means earnings before interest, taxes, depreciation,
amortization and non-cash expense as computed using generally accepted
accounting principles on a pro-forma basis as allowed by Regulation S-X
of the Securities Act.
6. "TARGET IMPLIED COMMON EQUITY VALUE" shall mean a value calculated using
the following formula: Enterprise Value - Total Debt - Total Preferred
Stock + Total Cash.
7. "TOTAL CASH" means the total amount of cash and cash equivalents shown on
▇▇▇▇▇▇▇'▇ consolidated balance sheet as of its most recent fiscal year
end.
8. "TOTAL DEBT" means any indebtedness of ▇▇▇▇▇▇▇ in respect of borrowed
money or evidenced by bonds, notes, debentures or similar instruments or
letters of credit (or reimbursement agreements in respect thereof) or
banker's acceptances, except any such balance that constitutes an accrued
expense, trade payable or customer contract advance, if and to the extent
that any of the foregoing (other than letters of credit) would appear as
a liability on ▇▇▇▇▇▇▇'▇ consolidated balance sheet as of its most recent
fiscal year end.
9. "TOTAL PREFERRED STOCK" means the total amount of the liquidation
preference on all of ▇▇▇▇▇▇▇'▇ issued and outstanding preferred stock as
of its most recent fiscal year end.
TABLE 1
------------------------------------- ----------------------------------- -----------------------------------
FISCAL YEAR ENDED TARGET IMPLIED COMMON PERCENTAGE OF OPTION
JANUARY 31,* EQUITY VALUE SHARES AVAILABLE FOR
EXERCISE**
------------------------------------- ----------------------------------- -----------------------------------
2001 $150,000,000 20% of Option Shares
------------------------------------- ----------------------------------- -----------------------------------
2002 $220,000,000 40% of Option Shares
------------------------------------- ----------------------------------- -----------------------------------
2003 $330,000,000 60% of Option Shares
------------------------------------- ----------------------------------- -----------------------------------
2004 $450,000,000 80% of Option Shares
------------------------------------- ----------------------------------- -----------------------------------
2005 $520,000,000 100% of Option Shares
------------------------------------- ----------------------------------- -----------------------------------
* The percentage of Option Shares available for exercise shall vest on the last
day of the Fiscal Year indicated above.
** All such vesting shall be cumulative, i.e., the percentage set forth for each
Fiscal Year shall be vested as of the end of such Fiscal Year if the Target
Implied Common Equity Value for such Fiscal Year is achieved as of such date,
regardless of whether the Target Implied Common Equity Values have been achieved
in any previous year.
--------------------------------------------------------------------------------
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TABLE 2
------------------------------------------------------- -----------------------------------------------------
DLJMB IRR PERCENTAGE OF UNVESTED CLIFF VESTING
SHARES AS TO WHICH THE PERFORMANCE
VESTING OPTION BECOMES VESTED
ON DLJMB LIQUIDATION EVENT
------------------------------------------------------- -----------------------------------------------------
40% or greater 100%
------------------------------------------------------- -----------------------------------------------------
35.0 - 39.9% 75%
------------------------------------------------------- -----------------------------------------------------
30.0 - 34.9% 50%
------------------------------------------------------- -----------------------------------------------------
25.0 - 29.9% 25%
------------------------------------------------------- -----------------------------------------------------
Less than 25% 0
------------------------------------------------------- -----------------------------------------------------
This Performance Vesting Option will not be exercisable after, and will become
void and expire as to all unexercised Option Shares at, 5:00 p.m. (St. ▇▇▇▇,
Minnesota time), on the earlier of (i) December 20, 2009 or (ii) the day
immediately following the completion of a DLJMB Liquidation Event (the "TIME OF
TERMINATION").
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TERMS AND CONDITIONS
OF
NON-STATUTORY STOCK OPTION AWARDS
Upon execution of the Participation Agreement, the Employee hereby
acknowledges and agrees to be bound by the following terms and conditions
relating to the Option:
1. DURATION OF OPTION AND TIME OF EXERCISE.
1.1. TERMINATION OF EMPLOYMENT OR OTHER SERVICE.
(a) TERMINATION FOR CAUSE. In the event the Employee's employment
or other service with ▇▇▇▇▇▇▇ and all Subsidiaries is terminated by
▇▇▇▇▇▇▇ or any Subsidiary for Cause, all rights of the Employee
under the Option Plan with respect to the Option and the
Participation Agreement will immediately terminate without notice
of any kind, and the Option, whether exercisable or not on the date
of termination, will immediately terminate without notice of any
kind, and ▇▇▇▇▇▇▇ will also have the right to repurchase (the
"REPURCHASE RIGHT") from the Employee all shares of Common Stock
previously acquired upon exercise of the Option at a price equal to
the exercise price paid by the Employee to acquire such shares of
Common Stock in the manner set forth in Section 2 below.
(b) TERMINATION FOR REASONS OTHER THAN CAUSE. In the event the
Employee's employment or other service with ▇▇▇▇▇▇▇ and all
Subsidiaries is terminated other than for Cause by reason of
voluntary resignation, death, Disability or Retirement, the Option
will remain exercisable, to the extent exercisable as of the date
of such termination, for a period of one year following the date
the Employee's employment or other service is terminated, and any
portion of the Option which is not exercisable as of the date of
such termination will immediately terminate without notice of any
kind.
(c) PARTIAL TERMINATIONS. In the event of a Partial Termination,
the Committee shall have the right in its sole discretion to modify
the terms of any unvested Options then held by the Employee at the
time of the Partial Termination, including, without limitation, the
right to immediately terminate without notice of any kind all
rights the Employee has in any unvested Options then held by the
Employee at the time of the Partial Termination.
2. EXERCISABILITY OF REPURCHASE RIGHT.
If ▇▇▇▇▇▇▇ elects to exercise its Repurchase Right, ▇▇▇▇▇▇▇ shall give the
Employee written notice of its intent to exercise its Repurchase Right (the
"NOTICE OF REPURCHASE") within sixty (60) days of such Employee's termination of
employment or other service. The Notice of Repurchase shall specify (i) the
number of shares of Common Stock ▇▇▇▇▇▇▇ intends to repurchase, (ii) the
applicable purchase price for such shares of Common Stock, and (iii) the date
▇▇▇▇▇▇▇ expects to purchase such shares of Common Stock from the Employee which
date shall be no later than thirty (30) days following the Valuation Date in the
fiscal year immediately following the fiscal year in which the Employee's
employment or other service is terminated (the "REPURCHASE DATE"). On or before
the Repurchase Date, the Employee shall deliver to ▇▇▇▇▇▇▇ the stock
certificates representing the shares of Common Stock being purchased by ▇▇▇▇▇▇▇,
properly endorsed for transfer. By such delivery of such certificates, the
Employee warrants that (i) the Employee has good title to, the right to
possession of, and the right to sell, the shares of Common Stock, (ii) such
shares of Common Stock are free and clear of all pledges, liens, encumbrances,
charges,
12
proxies, restrictions, options, transfers and other adverse claims, except
such as have been imposed by the Option Plan or the Investors' Agreement, and
except such restrictions on transfer as may be imposed by federal or state
securities laws, and (iii) the Employee shall hold harmless ▇▇▇▇▇▇▇ from all
costs, expenses and fees incurred in defending title and right to possession.
On the Repurchase Date, ▇▇▇▇▇▇▇ shall pay to the Employee the total purchase
price for the shares of Common Stock to be purchased by ▇▇▇▇▇▇▇.
Notwithstanding anything to the contrary in the Option Plan, however, ▇▇▇▇▇▇▇
shall only be required to pay for such shares of Common Stock as rapidly as
permissible without violating any loan covenants or other contractual
restrictions applicable to, and binding upon, ▇▇▇▇▇▇▇, and any amounts not
paid to the Employee on the Repurchase Date will bear interest at a fixed
rate of interest equal to eight percent (8%) per annum; provided, however,
that such interest rate shall not exceed the rate permitted by applicable
law. ▇▇▇▇▇▇▇ shall only be required to repurchase shares of Common Stock
pursuant to this Section 2 to the extent that such repurchase does not
violate any applicable laws.
3. MANNER OF OPTION EXERCISE.
3.1. NOTICE. The Option may be exercised by the Employee in whole or in
part from time to time, subject to the conditions contained in the
Option Plan and in the Participation Agreement, by delivery, in person,
by facsimile or electronic transmission (with written confirmation via
the mail to follow such electronic transmission) or through the mail, to
▇▇▇▇▇▇▇ at its principal executive office in St. ▇▇▇▇, Minnesota
(Attention: Secretary), of a written notice of exercise. Such notice
must be in a form satisfactory to the Committee, must identify the
Option, must specify the number of Option Shares with respect to which
the Option is being exercised, and must be signed by the person or
persons so exercising the Option. Such notice must be accompanied by
payment in full of the total purchase price of the Option Shares
purchased. In the event that the Option is being exercised, as provided
by the Option Plan and the Participation Agreement, by any person or
persons other than the Employee, the notice must be accompanied by
appropriate proof of right of such person or persons to exercise the
Option. As soon as practicable after the effective exercise of the
Option, the Employee will be recorded on the stock transfer books of
▇▇▇▇▇▇▇ as the owner of the Option Shares purchased, and ▇▇▇▇▇▇▇ will
deliver to the Employee one or more duly issued stock certificates
evidencing such ownership.
3.2. PAYMENT. At the time of exercise of the Option, the Employee must
pay the total purchase price of the Option Shares to be purchased
entirely in cash (including a check, bank draft or money order, payable
to the order of ▇▇▇▇▇▇▇); provided, however, that the Committee, in its
sole discretion, may allow such payment to be made, in whole or in part,
by tender of a promissory note (on terms acceptable to the Committee in
its sole discretion) or a Broker Exercise Notice or Previously Acquired
Shares (as such terms are defined in the Option Plan), or by a
combination of such methods. In the event the Employee is permitted to
pay the total purchase price of the Option in whole or in part with
Previously Acquired Shares, the value of such shares will be equal to
their Fair Market Value on the date of exercise of the Option.
4. DLJMB LIQUIDATION EVENT.
4.1. ACCELERATION OF VESTING. Without limiting the authority of the
Committee under the Option Plan, if a DLJ Liquidation Event (as defined
in the Option Plan) occurs, then, unless otherwise provided by the
Committee in its sole discretion all unvested Options will become
immediately vested in full.
4.2. LIMITATION ON PAYMENTS IN CONNECTION WITH A DLJMB LIQUIDATION
EVENT. Notwithstanding anything in Section 4.1 above to the contrary,
if, with respect to an Employee, the acceleration of the vesting of
Options as provided in Section 4.1 (which acceleration or
13
payment could be deemed a "payment" within the meaning of Section
280G(b)(2) of the Code), together with any other "payments" that such
Employee has the right to receive from ▇▇▇▇▇▇▇ or any corp oration that
is a member of an "affiliated group" (as defined in Section 1504(a) of
the Code without regard to Section 1504(b) of the Code) of which ▇▇▇▇▇▇▇
is a member, would constitute a "parachute payment" (as defined in
Section 280G(b)(2) of the Code), then the "payments" to such Employee
pursuant to Section 4.1 will be reduced to the largest amount as will
result in no portion of such "payments" being subject to the excise tax
imposed by Section 4999 of the Code; provided, however, that if an
Employee is subject to a separate agreement with ▇▇▇▇▇▇▇ or a Subsidiary
that expressly addresses the potential application of Sections 280G or
4999 of the Code (including, without limitation, that "payments" under
such agreement or otherwise will be reduced, that the Employee will have
the discretion to determine which "payments" will be reduced, that such
"payments" will not be reduced or that such "payments" will be "grossed
up" for tax purposes), then this Section 4.2 will not apply, and any
"payments" to the Employee pursuant to Section 4.1 will be treated as
"payments" arising under such separate agreement.
5. RIGHTS OF EMPLOYEE; TRANSFERABILITY.
5.1. EMPLOYMENT OR SERVICE. Nothing in the Participation Agreement or
any attachments thereto will interfere with or limit in any way the
right of ▇▇▇▇▇▇▇ or any Subsidiary to terminate the employment or other
service of the Employee at any time, nor confer upon the Employee any
right to continue in the employ or other service of ▇▇▇▇▇▇▇ or any
Subsidiary at any particular position or rate of pay or for any
particular period of time.
5.2. RIGHTS AS A SHAREHOLDER. The Employee will have no rights as a
shareholder unless and until all conditions to the effective exercise of
the Option (including, without limitation, the conditions set forth in
Sections 3 and 6 of this attachment to the Participation Agreement) have
been satisfied and the Employee has become the holder of record of such
shares. No adjustment will be made for dividends or distributions with
respect to the Option as to which there is a record date preceding the
date the Employee becomes the holder of record of such shares, except as
may otherwise be provided in the Option Plan or determined by the
Committee in its sole discretion.
5.3. RESTRICTIONS ON TRANSFER. Unless approved by the Committee in its
sole discretion, no right or interest of any Employee in an Option prior
to the exercise of such Option will be assignable or transferable, or
subjected to any lien, during the lifetime of the Employee, either
voluntarily or involuntarily, directly or indirectly, by operation of
law or otherwise; provided, however, once an Employee exercises an
Option all shares of Common Stock issued upon exercise of the Option
will be subject to the transfer restrictions and other provisions set
forth in the Investors' Agreement.
6. RESTRICTIONS REGARDING EMPLOYMENT OR SERVICE.
6.1. EFFECT OF ADVERSE ACTION. Notwithstanding anything in the Option
Plan, the Participation Agreement or any attachments thereto and all
attachments thereto to the contrary, in the event that an Employee takes
an Adverse Action with respect to ▇▇▇▇▇▇▇ or any Subsidiary (1) prior to
such Employee's termination of employment or other service with ▇▇▇▇▇▇▇
and all its Subsidiaries or (2) during the period ending twelve (12)
months following the date of the Employee's termination of employment or
other service with ▇▇▇▇▇▇▇ and all Subsidiaries without Cause, the
Committee in its sole discretion will have the authority to terminate
immediately all rights of the Employee under the Option Plan and any
agreement evidencing Options then held by the Employee without notice of
any kind. In addition, to the extent that the Employee takes such
Adverse Action during
14
the period beginning twelve (12) months prior to, and ending twelve (12)
months following, such date of termination of employment or other
service, the Committee in its sole discretion will have the authority to
rescind the exercise of any Options of the Employee that were exercised
during such period and to require the Participant to pay to ▇▇▇▇▇▇▇,
within ten (10) days of receipt from ▇▇▇▇▇▇▇ of notice of such
rescission, the amount of any gain realized as a result of such
rescinded exercise. Such payment will be made in cash (including check,
bank draft or money order) or, with the Committee's consent, shares of
Common Stock with a Fair Market Value on the date of payment equal to
the amount of such payment. ▇▇▇▇▇▇▇ will be entitled to withhold and
deduct from future wages of the Employee (or from other amounts that may
be due and owing to the Employee from ▇▇▇▇▇▇▇ or a Subsidiary) or make
other arrangements for the collection of all amounts necessary to
satisfy such payment obligations.
6.2. DEFINITION OF ADVERSE ACTION. An "ADVERSE ACTION" will mean any
action by an Employee that the Committee, in its sole discretion,
determines to be adverse to the interests of ▇▇▇▇▇▇▇ or any Subsidiary,
including, without limitation, (i) disclosing confidential information
of ▇▇▇▇▇▇▇ or any Subsidiary to any person not authorized by ▇▇▇▇▇▇▇ or
Subsidiary to receive it, (ii) engaging, directly or indirectly, in any
commercial activity that in the judgment of the Committee competes with
the business of ▇▇▇▇▇▇▇ or any Subsidiary or (iii) interfering with the
relationships of ▇▇▇▇▇▇▇ or any Subsidiary and their respective
employees and customers.
7. SECURITIES LAW AND OTHER RESTRICTIONS.
Notwithstanding any other provision of the Option Plan, the Participation
Agreement or any attachments thereto and all attachments thereto, ▇▇▇▇▇▇▇ will
not be required to issue, and the Employee may not sell, assign, transfer or
otherwise dispose of, any Option Shares, unless (i) there is in effect with
respect to the Option Shares a registration statement under the Securities Act
of 1933, as amended, and any applicable state or foreign securities laws or an
exemption from such registration, and (ii) there has been obtained any other
consent, approval or permit from any other regulatory body which the Committee,
in its sole discretion, deems necessary or advisable. ▇▇▇▇▇▇▇ may condition such
issuance, sale or transfer upon the receipt of any representations or agreements
from the parties involved, and the placement of any legends on certificates
representing Option Shares, as may be deemed necessary or advisable by ▇▇▇▇▇▇▇
in order to comply with such securities law or other restrictions.
8. WITHHOLDING TAXES.
8.1. GENERAL RULES. ▇▇▇▇▇▇▇ is entitled to (i) withhold and deduct from
future wages of the Employee (or from other amounts that may be due and
owing to the Employee from ▇▇▇▇▇▇▇ or a Subsidiary), or make other
arrangements for the collection of, all legally required amounts
necessary to satisfy any and all foreign, federal, state and local
withholding and employment-related tax requirements attributable to the
Option, including, without limitation, the grant or exercise of the
Option or a disqualifying disposition of stock received upon exercise of
an Incentive Stock Option, or (ii) require the Employee promptly to
remit the amount of such withholding to ▇▇▇▇▇▇▇ before taking any
action, including issuing any shares of Common Stock, with respect to
the Option.
8.2. SPECIAL RULES. The Committee may, in its sole discretion and upon
terms and conditions established by the Committee, permit or require an
Employee to satisfy, in whole or in part, any withholding or
employment-related tax obligation described in Section 8.1 of the Option
Plan by electing to tender Previously Acquired Shares, a Broker Exercise
Notice or a promissory note (on terms acceptable to the Committee in its
sole discretion), or by a combination of such methods.
15
9. ADJUSTMENTS.
In the event that the Committee determines that any reorganization,
merger, consolidation, recapitalization, liquidation, reclassification, stock
dividend, stock split, combination of shares, rights offering, divestiture or
extraordinary dividend (including a spin-off) or any other similar change in the
corporate structure or shares of ▇▇▇▇▇▇▇, affects the Option such that an
adjustment is determined by the Committee, in its sole discretion, to be
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Option Plan, the
Committee (or, if ▇▇▇▇▇▇▇ is not the surviving corporation in any such
transaction, the board of directors of the surviving corporation) shall, in such
manner as it deems equitable, adjust any or all of (i) the number of shares of
Common Stock of ▇▇▇▇▇▇▇ (or number and kind of other securities or property)
available for issuance or payment under the Option Plan, (ii) the number of
shares of Common Stock or other securities of ▇▇▇▇▇▇▇ (or number and kind of
other securities or property) subject to outstanding Options, and (iii) the
grant or exercise price with respect to any Options, or, if deemed appropriate,
make provisions for a cash payment to the holder of an outstanding Option.
10. SUBJECT TO OPTION PLAN.
The Option and the Option Shares granted and issued pursuant to the
Participation Agreement and the attachments thereto have been granted and issued
under, and are subject to the terms of, the Option Plan. The terms of the Option
Plan are incorporated by reference in the Participation Agreement and the
attachments thereto in their entirety, and the Employee, by execution of the
Participation Agreement, acknowledges having received a copy of the Option Plan.
The provisions of the Participation Agreement and attachments thereto will be
interpreted as to be consistent with the Option Plan, and any ambiguities in the
Participation Agreement or the attachments thereto will be interpreted by
reference to the Option Plan. In the event that any provision of the
Participation Agreement or the attachments thereto are inconsistent with the
terms of the Option Plan, the terms of the Option Plan will prevail.
16
TERMS AND CONDITIONS
OF PURCHASE OF COMMON STOCK
Upon execution of the Participation Agreement, the Employee acknowledges and
represents as follows:
1. The Employee has received copies of all documents and any other information
requested from ▇▇▇▇▇▇▇ and has had an opportunity to ask questions of and
receive answers from the management of ▇▇▇▇▇▇▇ concerning the terms and
conditions of the employee offering and to obtain any additional
information desired or has elected to waive such opportunity. The Employee
confirms that the Employee is fully informed regarding the financial
condition of ▇▇▇▇▇▇▇, the administration of its business affairs and its
prospects for the future, and that ▇▇▇▇▇▇▇ makes no assurance whatsoever
concerning the present and prospective value of the Reinvestment Shares or
Coinvestment Shares to be acquired.
2. The Employee realizes that the Reinvestment Shares and Coinvestment Shares,
as an investment, are speculative and involve a high degree of risk. The
Employee believes that an investment in the Reinvestment Shares and/or
Coinvestment Shares is suitable for the Employee based upon the Employee's
investment objectives and financial needs, and the Employee has the
financial means to undertake the risks of an investment in the Reinvestment
Shares and/or Coinvestment Shares, to hold the Reinvestment Shares and/or
Coinvestment Shares for an indefinite period of time, and to withstand a
complete loss of the Employee's investment in the Reinvestment Shares
and/or Coinvestment Shares.
3. The Employee, either alone or with the assistance of a professional
advisor, has such knowledge and experience in financial and business
matters that the Employee is capable of evaluating the merits and risks of
an investment in the Reinvestment Shares and/or Coinvestment Shares. The
Employee has obtained, to the extent deemed necessary, personal
professional advice with respect to the risks inherent in, and the
suitability of, an investment in the Reinvestment Shares and/or
Coinvestment Shares in light of the Employee's financial condition and
investment needs.
4. The Reinvestment Shares and/or Coinvestment Shares are being purchased by
the Employee for investment purposes in the Employee's name solely for the
Employee's own beneficial interest and not as nominee for, or for the
beneficial interest of, or with the intention to transfer to, any other
person, trust or organization.
5. The Employee acknowledges that (i) the Employee must bear the economic risk
of an investment in the Reinvestment Shares and/or Coinvestment Shares for
an indefinite period of time because neither the Reinvestment Shares or
Coinvestment Shares have been registered under the Securities Act of 1933,
as amended, or any applicable state securities laws and therefore may not
be sold, transferred, assigned or otherwise disposed of unless such
disposition is subsequently registered under such laws or exemptions from
such registrations are available, and (ii) a legend will be placed on the
certificate evidencing the Reinvestment Shares and/or Coinvestment Shares
stating that the Reinvestment Shares and/or Coinvestment Shares have not
been registered under the Securities Act of 1933, as amended, and
referencing the restrictions on the transferability of the Reinvestment
Shares and/or Coinvestment Shares.
17
TERMS AND CONDITIONS
OF
NONRECOURSE PURCHASE LOAN
This Purchase Loan is made under the terms and provisions of the DI Plan and in
connection with the Employee's purchase of Coinvestment Shares. To the extent
the provisions of the DI Plan and this attachment to the Participation Agreement
are inconsistent, the terms of the DI Plan shall govern.
Upon execution of the Participation Agreement, the Employee and ▇▇▇▇▇▇▇ hereby
acknowledge and agree to be bound by the following terms and conditions relating
to the Purchase Loan:
The entire outstanding principal amount of the Purchase Loan, together with all
accrued and unpaid interest thereon from the date of the Purchase Loan, shall be
due and payable by the Employee in a single payment on the earliest of the
following dates (the "MATURITY DATE") and in the following manner; provided,
however, that ▇▇▇▇▇▇▇ in its sole discretion may extend the Maturity Date of the
Purchase Loan pursuant to the DI Plan:
(i) All outstanding principal and accrued interest shall be due
and payable upon the Repurchase Date in the fiscal year
immediately following the fiscal year in which the Employee's
employment or other service with ▇▇▇▇▇▇▇ and all its
Subsidiaries is terminated, regardless of the reason for such
termination;
(ii) All outstanding principal and accrued interest shall be due
and payable upon a DLJMB Liquidation Event;
(iii) All outstanding principal and accrued interest shall be due
and payable upon a sale or transfer of the Coinvestment Shares
in accordance with the terms and conditions of the Investors'
Agreement, other than transfers to Permitted Transferees (as
defined in the Investors' Agreement) or hardship repurchases
under the DI Plan;
(iv) Within 120 days following an initial public offering of
▇▇▇▇▇▇▇'▇ equity securities in which case the outstanding
principal amount of the Purchase Loan and all accrued and
unpaid interest thereon must be paid in cash or the Committee
in its sole discretion may allow ▇▇▇▇▇▇▇ to repurchase the
Employee's Reinvestment Shares and vested Coinvestment Shares
at Fair Market Value, and the Employee's unvested Coinvestment
Shares at a purchase price determined by the Committee in its
sole discretion, and apply the proceeds ▇▇▇▇▇▇▇ owes the
Employee against the outstanding balance of the Purchase Loan
and all accrued and unpaid interest thereon; provided,
however, that if the Employee elects to repay the Purchase
Loan and all accrued and unpaid interest with the Employee's
Shares, the Employee will not be required to repay the
Purchase Loan and all accrued interest if the total purchase
price paid for such Shares does not exceed the outstanding
balance of the Purchase Loan, all accrued and unpaid interest
thereon and any tax liability of the Employee associated with
the sale of the Shares; or
(v) All outstanding principal and accrued interest shall be due
and payable on the eighth anniversary of the date of the
Participation Agreement.
The principal of the Purchase Loan may be prepaid in full or in part at any
time, without premium or penalty. Each such prepayment shall be accompanied by
the interest accrued on the amount prepaid to the date of the prepayment.
▇▇▇▇▇▇▇ shall be entitled to apply any payments ▇▇▇▇▇▇▇ owes the Employee for
18
the repurchase of the Coinvestment Shares pursuant to the DI Plan, and all
dividends paid with respect to Coinvestment Shares (net of any tax withholdings)
to the outstanding principal balance and interest under the Purchase Loan. All
such payments shall be applied first to the payment of accrued interest and the
remainder to the outstanding principal of the Purchase Loan.
The Employee represents and warrants that the proceeds of the Purchase Loan will
be used solely for the purpose of purchasing Coinvestment Shares pursuant to the
DI Plan.
As security for the timely payment of all amounts due or to become due under the
Purchase Loan, the Employee pledges and grants to ▇▇▇▇▇▇▇ a security interest,
pursuant to the Participation Agreement and the attachments thereto, in (i) the
Coinvestment Shares to be acquired by the Employee pursuant to the DI Plan, (ii)
all securities, instruments and other property, rights or interests of any kind
at any time issued or issuable as an addition to, in substitution or exchange
for, or with respect to, the Coinvestment Shares, and (iii) all cash, dividends,
proceeds or other income or property accrued and hereafter accruing, received,
receivable or otherwise distributed in respect of, in exchange for, or upon the
sale or other disposition of the Coinvestment Shares. ▇▇▇▇▇▇▇ further
represents, and the Employee acknowledges, that the Purchase Loan is nonrecourse
against the Employee and that if the value of the Coinvestment Shares,
dividends, distributions and proceeds thereof pledged as security for repayment
of the Purchase Loan and all accrued interest on the Purchase Loan is
insufficient to repay the outstanding principal and interest thereunder, ▇▇▇▇▇▇▇
may not proceed against the Employee to collect any remaining amount due
hereunder.
If an Event of Default, as defined below, shall occur, or if the Employee's
employment or other service with ▇▇▇▇▇▇▇ and all its Subsidiaries is terminated
or terminates for any reason, whether voluntary or involuntary, and whether
caused by death, Disability, Retirement or otherwise, ▇▇▇▇▇▇▇ may, without
notice, demand, presentment for payment and notice of nonpayment, all of which
the Employee hereby expressly waives, declare the indebtedness represented by
the Purchase Loan immediately due and payable and ▇▇▇▇▇▇▇ or other holder hereof
may, without notice, immediately exercise any and all rights and remedies
available at law or in equity for the collection of the Purchase Loan,
including, without limitation, enforcement of the security interest granted
herein. The term "Event of Default" shall mean any of the following events:
(i) the Employee shall default in the payment when due of any
principal or interest on the Purchase Loan;
(ii) the actual or attempted sale, conveyance, alienation, lease,
succession, assignment or other transfer of all or any part of
the Coinvestment Shares in violation of the DI Plan or the
Investors' Agreement;
(iii) the insolvency, bankruptcy, receivership, or occurrence of any
other adverse change in the financial condition of the
Employee; or
(iv) the Employee shall default in any of its obligations under the
Participation Agreement, including any attachments thereto.
If the Purchase Loan is placed with any attorney(s) for collection upon any
default, the Employee agrees to pay to ▇▇▇▇▇▇▇ or other holder its reasonable
attorneys' fees and all lawful costs and expenses of collection, whether or not
a suit is commenced.
Time is of the essence. No delay or omission on the part of ▇▇▇▇▇▇▇ or other
holder hereof in exercising any right or remedy hereunder shall operate as a
waiver of such right or of any other right or remedy
19
under the Purchase Loan or any other document or agreement executed in
connection herewith. All waivers by ▇▇▇▇▇▇▇ must be in writing to be
effective and a waiver on any occasion shall not be construed as a bar to or
a waiver of any similar right or remedy on a future occasion.
The Employee hereby consents to any extension or alteration of the time or terms
of payment hereon, any renewal, any release of all or any part of any security
given for the payment hereof, any acceptance of additional security of any kind,
and any release of, or resort to any party liable for payment hereof. Any
extension of time to pay of all or any part of the amount owing on the Purchase
Loan or any variation, modification or waiver of any term or condition of the
Purchase Loan shall not affect the liability of the Employee, and the Employee
shall be absolutely and primarily liable at all times for the payment of the
indebtedness evidenced by the Purchase Loan and all accrued interest thereon
until such amounts are actually paid in full, subject to the non-recourse
provisions set forth above. ▇▇▇▇▇▇▇ shall be entitled to offset against any
amounts owed to it under the Purchase Loan against any amounts owed by ▇▇▇▇▇▇▇
to the Employee with respect to the Pledged Securities, including, without
limitation, any amounts owed by ▇▇▇▇▇▇▇ to the Employee in connection with the
repurchase by ▇▇▇▇▇▇▇ of the Coinvestment Shares pursuant to the DI Plan, and
any dividends or distributions owed by ▇▇▇▇▇▇▇ to the Employee on the
Coinvestment Shares.
No provision of the Participation Agreement or any attachment thereto shall
require the payment or permit the collection of interest in excess of the rate
permitted by applicable law.
Any payment due on any non-business day of ▇▇▇▇▇▇▇ shall be due upon the next
business day.
The Purchase Loan represents a loan negotiated, executed and to be performed in
the State of Minnesota and shall be construed, interpreted and governed by the
laws of said State.
The Employee hereby consents to the personal jurisdiction of the state and
federal courts located in the State of Minnesota in connection with any
controversy related to the Purchase Loan, and waives any argument that venue in
such forums is not convenient.
20
TERMS AND CONDITIONS
OF
PLEDGE AND CUSTODY AGREEMENT
1. DEFINED TERMS. Unless otherwise defined herein, terms which are defined
in the DI Plan, the Participation Agreement or the attachments thereto and used
herein are used as so defined, and the following terms shall have the following
meanings:
"COLLATERAL" means the Pledged Securities and all Proceeds.
"COMMON STOCK" means the voting class B common stock, $0.01 par value per
share, of ▇▇▇▇▇▇▇ Corporation.
"EVENT OF DEFAULT" means any event defined as such in the "Terms and
Conditions of the Nonrecourse Purchase Loan" attached to the Participation
Agreement.
"OBLIGATIONS" means the unpaid principal of and interest on the Purchase
Loan and any other obligations of the Employee under the Participation
Agreement, including all attachments to the Participation Agreement, and the DI
Plan.
"PLEDGED SECURITIES" means any Coinvestment Shares purchased by the
Employee pursuant to the DI Plan which are required to be pledged by the
Employee under the DI Plan and the Participation Agreement, and designated as
such on the books of ▇▇▇▇▇▇▇.
"PROCEEDS" means all "proceeds" as such term is defined in the Uniform
Commercial Code and, in any event, shall include, without limitation, all
dividends or other income from or distributions with respect to the Pledged
Securities or proceeds from the sale, disposition or other liquidation thereof.
2. PLEDGE; GRANT OF SECURITY INTEREST. The Employee grants to ▇▇▇▇▇▇▇ a
first priority security interest in the Collateral, as collateral security for
the prompt and complete payment and performance when due of the Obligations.
The Employee agrees and acknowledges that the pledge and security interest
granted hereby is a continuing security interest and shall continue in full
force and effect until the Purchase Loan, and all accrued and unpaid interest on
the Purchase Loan, is paid in full.
3. CUSTODY; PERFECTION. Promptly after the issuance of any Pledged
Securities in certificated form under the terms of the DI Plan, the Employee
shall deliver to ▇▇▇▇▇▇▇ the stock certificates representing the Pledged
Securities, together with stock transfer powers therefor executed in blank
granting ▇▇▇▇▇▇▇ the power to endorse and transfer the Pledged Securities. If
at any time the Pledged Securities are in uncertificated form, ▇▇▇▇▇▇▇ as issuer
thereof may register itself as the owner thereof and comply with its own
instructions with respect thereto without further consent from the Employee.
4. COVENANTS. The Employee covenants and agrees with ▇▇▇▇▇▇▇ that, from and
after the date of the Participation Agreement until the Obligations are paid in
full, unless permitted by the terms of the DI Plan or the Investors' Agreement:
4.1. Without the prior written consent of ▇▇▇▇▇▇▇, the Employee will
not (i) sell, assign, transfer, exchange or otherwise dispose of, or
grant any option with respect to, the Collateral, or (ii) create, incur
or permit to exist any lien or option in favor of, or claim of any person
or entity with respect to, any of the Collateral, or any interest
therein.
21
4.2. At any time and from time to time, upon the written request of
▇▇▇▇▇▇▇, and at the sole expense of the Employee, the Employee will
promptly and duly execute and deliver such further instruments and
documents and take such further actions as ▇▇▇▇▇▇▇ may reasonably request
for the purposes of obtaining or preserving the full benefits of the
Participation Agreement, including any attachments thereto and of the
rights and powers herein granted.
5. ADJUSTMENTS TO PLEDGED SECURITIES. In the event that the aggregate
market value of the Pledged Securities increases, due to market appreciation, to
more than the Employee's Obligations, ▇▇▇▇▇▇▇ may in its sole discretion
pursuant to the terms of the DI Plan, upon request of the Employee, release to
the Employee such number of Pledged Securities representing any such excess.
6. RIGHTS OF ▇▇▇▇▇▇▇.
6.1. Immediately and without further notice, ▇▇▇▇▇▇▇ shall have the
right to require any and all Proceeds be held as Collateral or to receive
any and all Proceeds paid in respect of the Pledged Securities and make
application thereof to the Obligations in such order as it may determine
in its sole discretion, including, without limitation, the right to apply
such Proceeds against the balance of the Purchase Loan and any accrued
interest thereon and, subject to Section 7 hereof, to exercise all rights
pertaining to the Pledged Securities as if ▇▇▇▇▇▇▇ were the absolute
owner thereof, including, without limitation, the right to exercise all
conversion, exchange, subscription or other rights, privileges or
options, pertaining to any of the Pledged Securities and, in connection
therewith, to deliver any of the Pledged Securities to any committee,
depository, transfer agent, registrar or other designated agency upon
such terms and conditions as may be determined, all without liability
except to account for property actually received by it. ▇▇▇▇▇▇▇, however,
shall not have any duty to exercise any of the aforesaid rights,
privileges or options and shall not be responsible for any failure to do
so or delay in so doing.
6.2. The rights of ▇▇▇▇▇▇▇ hereunder shall not be conditioned or
contingent upon the pursuit by ▇▇▇▇▇▇▇ of any right or remedy against the
Employee or against any other person or entity which may be or become
liable in respect of all or any part of the Obligations or against any
other collateral security therefor, guarantee thereof or right of offset
with respect thereto. ▇▇▇▇▇▇▇ shall not be liable for any failure to
demand, collect or realize upon all or any part of the Collateral or for
any delay in doing so, nor shall it be under any obligation to sell or
otherwise dispose of any Collateral upon the request of the Employee or
any other person or entity or to take any other action whatsoever with
regard to the Collateral or any part thereof.
7. RIGHTS OF THE EMPLOYEE. The Employee shall be entitled to exercise any
and all voting and/or consensual rights and powers relating to or pertaining to
the Pledged Securities for any purpose not inconsistent with the terms of the
Participation Agreement or any attachment thereto or the DI Plan; provided,
however, that no vote shall be cast, and no consent shall be given or action
taken which would have the effect of impairing the position or interest of
▇▇▇▇▇▇▇ in the Collateral.
8. REMEDIES. If an Event of Default shall occur and be continuing, ▇▇▇▇▇▇▇
may exercise, in addition to all other rights and remedies granted in the
Participation Agreement or any attachment thereto, the DI Plan or the
Investors' Agreement, all rights and remedies of a secured party under the
Minnesota Uniform Commercial Code. Without limiting the generality of the
foregoing, ▇▇▇▇▇▇▇, without demand of performance or other demand, presentment,
protest, advertisement or notice of any kind (except any notice required by law
referred to below) to or upon the Employee (all and each of which demands,
defenses, advertisements and notices are hereby expressly waived), may in such
circumstances upon at least ten (10) days prior written notice to the Employee,
forthwith collect, receive, appropriate and realize upon the Collateral, or any
part thereof, or interest therein, and/or may deliver the Collateral or any part
22
thereof (or contract to do any of the foregoing) at public or private sale or
sales, upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. ▇▇▇▇▇▇▇ shall have the right upon any such
public sale, and, to the extent permitted by law, upon any such private sale, to
purchase the whole or any part of the Collateral so sold, free of any right or
equity or redemption in the Employee, which right or equity is hereby expressly
waived and released. Any disposition made in accordance with the provisions of
this Section 8 shall be deemed to have been commercially reasonable. ▇▇▇▇▇▇▇
shall apply any Proceeds from time to time held by it and the net proceeds of
any such collection, recovery, receipt, appropriation, realization or sale,
after deducting all reasonable costs and expenses of every kind incurred
therein, including, without limitation, reasonable attorneys' fees and
disbursements, to the payment in whole or in part of the Obligations. The
Employee agrees that if any Collateral is sold at any public or private sale,
▇▇▇▇▇▇▇ may elect to sell only to a buyer who will give further assurances,
satisfactory in form and substance to ▇▇▇▇▇▇▇, respecting compliance with the
requirements of the Securities Act of 1933, as amended, and applicable state
laws and regulations ("BLUE SKY LAWS"), and a sale subject to such condition
shall be deemed commercially reasonable. If at any time when ▇▇▇▇▇▇▇ shall
determine to exercise its right to sell all or any part of the Collateral
pursuant to this Section 8, such Collateral or the part thereof to be sold shall
not, for any reason whatsoever, be effectively registered under the Securities
Act or registered or qualified under applicable Blue Sky Laws, as then in
effect. The Employee further agrees that in any sale of any of the Collateral,
▇▇▇▇▇▇▇ is hereby authorized to comply with any limitation or restriction in
connection with such sale as it may be advised by counsel is necessary in order
to avoid any violation of applicable law (including, without limitation,
compliance with such procedures as may restrict the number of prospective
bidders and purchasers and/or further restrict such prospective bidders or
purchasers to persons who will represent and agree that they are purchasing for
their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any governmental regulatory authority or official,
and the Employee further agrees that such compliance shall not result in such
sale being considered or deemed not to have been made in a commercially
reasonable manner, nor shall ▇▇▇▇▇▇▇ be liable or accountable to the Employee
for any discount allowed by reason of the fact that such Collateral is sold in
compliance with any such limitation or restriction.
9. LIMITATION ON DUTIES REGARDING COLLATERAL. ▇▇▇▇▇▇▇'▇ sole duty with
respect to the custody, safekeeping and physical preservation of the Collateral
in its possession shall be to deal with it in the same manner as ▇▇▇▇▇▇▇ deals
with similar securities, instruments and property for its own account. Neither
▇▇▇▇▇▇▇ nor any of its affiliates, directors, officers, employees or agents
shall be liable for failure to demand, collect or realize upon any of the
Collateral or for any delay in doing so or shall be under any obligation to sell
or otherwise dispose of any of the Collateral upon the request of the Employee
or otherwise.
10. POWERS COUPLED WITH AN INTEREST. All authorizations and agencies herein
contained with respect to the Collateral or any part thereof are irrevocable and
powers coupled with an interest.
11. SEVERABILITY. Any provision of the Participation Agreement, including
any attachment thereto, which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
12. NO WAIVER: CUMULATIVE REMEDIES. ▇▇▇▇▇▇▇ shall not by any act (except by
a written instrument pursuant to paragraph 12 hereof), delay, indulgence,
omission or otherwise be deemed to have waived any right or remedy hereunder or
to have acquiesced in any default or Event of Default or in any breach of any of
the terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of
23
▇▇▇▇▇▇▇, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. A waiver by ▇▇▇▇▇▇▇ of any
right or remedy hereunder on any one occasion shall not be construed as a bar
to any right or remedy which ▇▇▇▇▇▇▇ would otherwise have on any future
occasion. The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any rights or
remedies provided by law.
24
COINVESTMENT SHARES VESTING SCHEDULE
On the Closing Date thirty-five percent (35%) of the Coinvestment Shares
purchased by the Employee shall immediately vest, and the vesting schedule for
the Coinvestment shall be as follows:
------------------------------------------------------------ ---------------------------------------------------------
PERCENTAGE OF COINVESTMENT SHARES
VESTING DATE VESTED AS OF THE VESTING DATE*
------------------------------------------------------------ ---------------------------------------------------------
One Year from Closing Date 35% of the Coinvestment Shares
purchased by the Employee
------------------------------------------------------------ ---------------------------------------------------------
Two Years from Closing Date 35% of the Coinvestment Shares
purchased by the Employee
------------------------------------------------------------ ---------------------------------------------------------
Three Years from Closing Date 57% of the Coinvestment Shares
purchased by the Employee
------------------------------------------------------------ ---------------------------------------------------------
Four Years from Closing Date 79% of the Coinvestment Shares
purchased by the Employee
------------------------------------------------------------ ---------------------------------------------------------
Five Years from Closing Date 100% of Coinvestment Shares
purchased by the Employee
------------------------------------------------------------ ---------------------------------------------------------
* In the event that the vesting of any Coinvestment Shares results in a
fractional Coinvestment Share, such fractional Coinvestment Share shall be
rounded up to the nearest whole Coinvestment Share.
25
CONFIDENTIALITY AND NONCOMPETE PROVISIONS
You are being offered equity participation benefits (see accompanying
documents). In consideration of these benefits, you agree to be bound by the
restrictions described below. In addition, if you have a written employment
agreement, you also agree to the compensation modifications of that employment
agreement as described below. If any provision of this Confidentiality Agreement
conflicts with any provision of your underlying employment agreement, the
provisions of this Confidentiality Agreement will control and govern the
interpretation of both documents. Minnesota law governs the interpretation of
this Confidentiality Agreement.
If you are working under a term employment agreement that covers all or part of
FY 01 (2/1/00-1/31/01), your FY 01 salary will be as stated in your agreement.
However, for any subsequent fiscal years covered by the term of your agreement,
your salary will be the lesser of either your salary as stated in your agreement
or 120% of what your total compensation (salary and bonus) would have otherwise
been under the ▇▇▇▇▇▇▇ compensation plan in effect during the previous year.
For example, if your salary is $100,000 per year and during FY 01 your
revenues/margins do not cover your $100,000 salary but instead cover only a
$60,000 salary, your salary for FY 02 would be $72,000 (120% of $60,000, which
is less than $100,000). Then, if during FY 02 your revenues/margins cover a
total compensation of $120,000 (in other words, you would receive a total bonus
for FY 02 of $48,000), your salary for FY 03 would return to $100,000 (which is
less than $144,000 [120% of $120,000]).
Should your salary be reduced as described above, your bonus during a reduced
salary year will be calculated and paid out on a quarterly basis, instead of the
normal annual basis. In most situations, the maximum quarterly bonus will be the
difference between your quarterly salary and your original quarterly guarantee.
In other words, under the example above during FY 02, you would be entitled to a
quarterly bonus if your revenues/margins are on pace to cover $100,000. For
example, if your revenues/margins coverage stream for the quarters were:
- 1st qtr: $45,000
- 2nd qtr: $5,000
- 3rd qtr: $15,000
- 4th qtr: $55,000
you would receive:
- a $7,000 bonus for the first quarter ($7,000 makes up the
difference between your quarterly salary of $18,000 and your
original quarterly guarantee of $25,000);
- another $7,000 bonus for the second quarter (since you remain on
pace to cover $100,000, you still receive a bonus);
- no bonus for the third quarter (you are now not on pace to cover
$100,000); and
- a $34,000 bonus for the fourth quarter (for the entire year, you
would be entitled to a $48,000 bonus, but since you have already
received $14,000 from earlier quarters, you get the balance at
year-end).
26
Similarly, using this same example, if you covered nothing for your first
quarter, but covered $50,000 in the second quarter, you would get no bonus for
the first quarter, but would get a $14,000 bonus for the second quarter (since
you are on pace to cover $100,000, you will now in effect receive two quarterly
bonuses for your second quarter efforts).
These compensation modifications are not intended to alter the length of the
term of your agreement.
▇▇▇▇▇▇▇ invests a significant amount of time and money on technology and
research in order to develop and maintain its goodwill and success. During your
employment, you will have access to ▇▇▇▇▇▇▇'▇ confidential information, which is
information that belongs to ▇▇▇▇▇▇▇ and is not generally known by third parties.
Confidential information includes, by way of example only, trade secrets,
financial information, customer lists, business plans and strategies, and
research and development work. You acknowledge that during your employment with
▇▇▇▇▇▇▇ and for an indefinite period of time following the termination of your
employment, ▇▇▇▇▇▇▇ is entitled to protection from the use of such information
by you or a third party, or disclosure of such information to a third party. You
therefore agree that you will never disclose such information to any third
party, or use such information for your own benefit or for the benefit of
another.
One way ▇▇▇▇▇▇▇ invests in its business is to support your efforts to develop
and maintain close working relationships with ▇▇▇▇▇▇▇'▇ clients. You acknowledge
that for one year following the termination of your employment, ▇▇▇▇▇▇▇ is
entitled to protection from the use or disclosure of the client relationships
for the benefit of a third party or for your own benefit. You therefore agree
that for one year following the termination of your employment, you will not
directly or indirectly call upon, solicit, or provide any service or product to
any existing or potential ▇▇▇▇▇▇▇ client serviced by, assigned to, or solicited
by you working alone or in conjunction with another ▇▇▇▇▇▇▇ employee. These
restrictions apply only where the client is solicited to purchase a service or
product that competes with a service or product of ▇▇▇▇▇▇▇. You further agree
that for one year after your employment with ▇▇▇▇▇▇▇, you will not solicit or
cause to be solicited any employee of ▇▇▇▇▇▇▇ for the purpose of employment with
any competitor of ▇▇▇▇▇▇▇.
If you violate these restrictions, you will cause irreparable harm to ▇▇▇▇▇▇▇
and you agree that ▇▇▇▇▇▇▇ will be entitled to injunctive relief, in addition to
any other remedies allowed by law, and the costs incurred in enforcing the
restrictions, including reasonable attorney fees. Should a court rule that a
restriction is unreasonable or otherwise unenforceable, the court shall modify
the restriction to the extent necessary to make the provision enforceable.
You also acknowledge that while performing services for ▇▇▇▇▇▇▇, any "Work
Product" (inventions, improvements, ideas, discoveries, works of authorship,
trademarks, trade secrets, processes, know-how, whether or not such are
patentable or copyrightable, and whether or not in writing or reduced to
practice) conceived or created by you alone or with others, belongs only to
▇▇▇▇▇▇▇. You will promptly disclose to ▇▇▇▇▇▇▇ all Work Product developed by
you. Such Work Product is considered a "work for hire" and is the sole and
exclusive property of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ is the exclusive owner of all such
patents, copyrights and related rights. You will transfer and assign to ▇▇▇▇▇▇▇
all rights to such Work Product and provide ▇▇▇▇▇▇▇ with all of the assistance
it reasonably requires in order for ▇▇▇▇▇▇▇ to perfect, protect, and use its
rights to such Work Product. This section does not apply to Work Product for
which no equipment, supplies, facility or trade secret information of ▇▇▇▇▇▇▇'▇
was used and which was developed entirely on your own time and (1) which does
not relate (a) directly to ▇▇▇▇▇▇▇'▇ business or (b) to ▇▇▇▇▇▇▇'▇ actual or
demonstrably anticipated research or development, or (2) which does not result
from any work performed by you for ▇▇▇▇▇▇▇.
27
83(B) ELECTION FORM
NOTE TO IRS: PLEASE TIME STAMP ONE COPY WITH ENDORSEMENT OF RECEIPT AND RETURN
IN THE ENCLOSED STAMPED, ADDRESSED ENVELOPE.
ELECTION UNDER SECTION 83(B)
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the
Internal Revenue Code of 1986, as amended, to include in the taxpayer's gross
income for the current taxable year, the amount of compensation, if any, taxable
to the taxpayer in connection with the receipt of the property described below:
1. The name, address, taxpayer identification number, and taxable year of the
taxpayer and spouse, if applicable, are as follows:
Name: Taxpayer: __________________________ Spouse:_______________________
Address:_____________________________________________________
Tax ID#:____________________________________________
Taxable Year:______________________________
2. The property with respect to which the election is made is described as
follows: _______ shares of the Class B Common Stock of ▇▇▇▇▇▇▇
Corporation, a Minnesota corporation (the "Company").
3. The date on which the property was transferred is: __________, ______.
4. The property is subject to the following restrictions: The right of
▇▇▇▇▇▇▇ to repurchase the shares, or a portion thereof, at a price per
share as calculated pursuant to the 1999 ▇▇▇▇▇▇▇ Corporation Direct
Investment Plan, in the event of the taxpayer's termination of service with
▇▇▇▇▇▇▇.
5. The fair market value at the time of transfer (determined without regard to
the restrictions) of such property is: $22.00 per share.
6. The amount (if any) paid for the property is: $22.00 per share.
The taxpayer has submitted a copy of this statement to the person for whom the
services were performed in connection with the taxpayer's receipt of the
property. The taxpayer is the person performing the services in connection with
the transfer of such property.
THE UNDERSIGNED UNDERSTANDS THAT THE FOREGOING ELECTION MAY NOT BE REVOKED
EXCEPT WITH THE CONSENT OF THE COMMISSIONER.
Dated:________________________ _______________________________________
(Signature of the Taxpayer)
The undersigned spouse of the taxpayer joins in this election.
Dated:________________________ _______________________________________
(Signature of the Spouse)
28
Truth-in-Lending Disclosure
FOR
CREDIT SALE OF CAPITAL STOCK
ISSUED BY
▇▇▇▇▇▇▇ CORPORATION
-FIRSTNAME- -LASTNAME-
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
ANNUAL PERCENTAGE RATE FINANCE CHARGE AMOUNT FINANCED TOTAL OF PAYMENTS TOTAL SALE PRICE
The Cost of your credit The dollar amount The amount of credit The amount you will The total cost of
as a yearly rate. the credit will cost provided to you or on have paid after you your purchase on
you. your behalf. have made all credit, including
payments as your down- payment of
scheduled. $-Cash_Down-
6.3789%
$-Amt_Financed-
$-Finance_Charge- $-Total_Payments- $-Total_Sale_Price-
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
You have the right to receive at this time an itemization of the Amount
Financed.
/X/ I want an itemization. / / I do not want an itemization.
Your payment schedule will be:
------------------------------ ---------------------------- ----------------------------------------------------------
Number of Payments Amount of Payments When Payments Are Due
------------------------------ ---------------------------- ----------------------------------------------------------
1 $-Total_Payments- January 28, 2008
------------------------------ ---------------------------- ----------------------------------------------------------
------------------------------ ---------------------------- ----------------------------------------------------------
SECURITY: You are giving a security interest in:
/X/ the Coinvestment Shares you purchased pursuant to the Participation
Agreement, dated January 28, 2000, by and between you and ▇▇▇▇▇▇▇ Corporation.
PREPAYMENT: If you pay off early, you
/ / may /X/ will not have to pay a penalty.
See your contract documents for any additional information about nonpayment,
default, any required repayment in full before the schedule date, and prepayment
refunds and penalties.
29
ITEMIZATION OF AMOUNT FINANCED
FOR
CREDIT SALE OF ▇▇▇▇▇▇▇ CORPORATION CAPITAL STOCK
-FIRSTNAME- -LASTNAME-
Itemization of the Amount Financed of $-AMT_FINANCED-
$-AMT_FINANCED- Amount credited to your account
30
