Exhibit 10.13
INTEGRATED CIRCUIT SYSTEMS, INC.
CONSULTANT STOCK AGREEMENT
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THIS CONSULTANT STOCK AGREEMENT (this "Agreement") is made and entered into
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as of May 11, 1999 by and between Integrated Circuit Systems, Inc., a
Pennsylvania corporation (the "Company"), and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("Consultant").
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Reference is hereby made to the Agreement and Plan of Merger dated January
20, 1999, as amended, between the Company and ICS Merger Corp., a Pennsylvania
corporation ("ICS"), pursuant to which, as of the date hereof, and simultaneous
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with the execution of this Agreement, ICS has merged with and into the Company
(such merger, the "Merger") with the Company as the surviving corporation.
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The Company and Consultant desire to enter into this Agreement (i) to
provide for certain of the terms and conditions pursuant to which the Company
and Consultant have agreed that certain shares of the Company's common stock
owned by Consultant will be converted into shares of Class A Common and Class L
Common, and (ii) to provide for certain rights and obligations in respect of
shares of Common Stock held by Consultant as hereinafter provided. Capitalized
terms used herein and not otherwise defined are defined in Section 16 hereof.
The parties hereto agree as follows:
1. Rollover and Transfer of Common Stock.
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(a) Upon execution of this Agreement, Consultant will exchange 350,540
shares of common stock of the Company (the "Pre-Recapitalization Stock") for
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3,352,039 shares of Class A Common and 372,449 shares of Class L Common (the
"Rollover").
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(b) Immediately upon consummation of the Rollover, Consultant shall sell
to ▇▇▇▇ Capital Fund VI, L.P., and ▇▇▇▇ Capital Fund VI, L.P. shall purchase
from Consultant, 1,286,539 shares of Class A Common and 142,949 shares of Class
L Common (collectively, the "Acquired Stock"), for an aggregate purchase price
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of $2,858,975, free and clear of all liens, encumbrances or other restrictions.
Upon payment of the purchase price by cash (which may include wire transfer of
immediately available funds) or cashiers check, Consultant shall deliver to ▇▇▇▇
Capital Fund VI, L.P. the stock certificates evidencing the shares of Acquired
Stock, duly endorsed in blank or accompanied by duly executed stock powers.
After transfer of the Acquired Stock, Consultant shall be the record and
beneficial owner of 2,065,500 shares of Class A Common and 229,500 shares of
Class L Common (collectively, the "Post-Recapitalization Stock").
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2. Representations and Warranties; Acknowledgments.
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(a) Representations and Warranties by Consultant. In connection with the
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purchase and sale of Post-Recapitalization Stock hereunder, Consultant
represents and warrants to the Company and to ▇▇▇▇ Capital Fund VI, L.P. that:
(i) The shares of Post-Recapitalization Stock to be acquired by
Consultant pursuant to this Agreement will be acquired for Consultant's own
account and not with a current view to, or intention of, distribution
thereof in violation of the Securities Act or any applicable state
securities laws, and the shares of Post-Recapitalization Stock will not be
disposed of in contravention of the Securities Act or any applicable state
securities laws.
(ii) Consultant is a director of the Company or its Subsidiaries, is
sophisticated in financial matters and is able to evaluate the risks and
benefits of the investment in Post-Recapitalization Stock.
(iii) Consultant is able to bear the economic risk of his investment
in Post-Recapitalization Stock for an indefinite period of time because
Post-Recapitalization Stock has not been registered under the Securities
Act and, therefore, cannot be sold unless subsequently registered under the
Securities Act or an exemption from such registration is available.
(iv) Consultant has had an opportunity to ask questions and receive
answers concerning the terms and conditions of the offering of Post-
Recapitalization Stock and has had full access to such other information
concerning the Company and its Subsidiaries as he has requested. Consultant
has reviewed, or has had an opportunity to review, a copy of the Merger
Agreement, and Consultant is familiar with the transactions contemplated
thereby. Consultant also has reviewed, or has had an opportunity to review
the Offering Memorandum related to certain of the debt financing of the
Merger, the Company's Certificate of Incorporation and the Company's Bylaws
and any credit agreements, notes and related documents to which the Company
is a party.
(v) Consultant has not granted and is not a party to any proxy,
voting trust or other agreement which is inconsistent with, conflicts with
or violates any provision of this Agreement. Consultant shall not grant any
proxy or become party to any voting trust or other agreement which is
inconsistent with, conflicts with or violates any provision of this
Agreement.
(vi) This Agreement constitutes the legal, valid and binding
obligation of Consultant, enforceable in accordance with its terms, and the
execution, delivery and performance of this Agreement by Consultant does
not and will not conflict with, violate or cause a breach of any agreement,
contract or instrument to which Consultant is a party or any judgment,
order or decree to which Consultant is subject.
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(vii) Consultant is a resident of the State of Pennsylvania.
(viii) Consultant is the record and beneficial owner of, and has good
and marketable title to, the Acquired Stock, free and clear of all liens,
encumbrances or other restrictions. Consultant shall transfer to ▇▇▇▇
Capital Fund VI, L.P. good and marketable title to the Acquired Stock, free
and clear of all liens, encumbrances or other restrictions.
(b) Acknowledgment by Consultant. As an inducement to the Company to issue
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the Post-Recapitalization Stock to Consultant, and as a condition thereto,
Consultant acknowledges and agrees that subject to any consulting agreement
between Consultant and the Company or applicable law, neither the issuance of
Post-Recapitalization Stock to Consultant nor any provision contained herein
will entitle Consultant to remain as a consultant to the Company or its
Subsidiaries or affect the right of the Company to terminate Consultant's
consulting relationship at any time for any reason.
(c) Representations and Warranties of the Company. The Company represents
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and warrants to Consultant as follows:
(i) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the Commonwealth of Pennsylvania.
(ii) The Company has all requisite corporate power and corporate
authority to execute, deliver and perform this Agreement and to consummate
the transactions provided for herein.
(iii) The execution, delivery and performance by the Company of this
Agreement and the consummation by the Company of the transactions
contemplated hereby, including, but not limited to, the issuance and sale
of the Post-Recapitalization Stock to be issued by it hereunder, have been
duly authorized, and this Agreement constitutes the valid and binding
obligation of the Company, enforceable against it in accordance with the
terms hereof.
(iv) The Consultant Stock issued to the Consultant hereunder, when
issued in compliance with the provisions of this Agreement, will be validly
issued, fully paid and non-assessable.
(v) As of the Closing, the authorized capital stock of the Company
will consist of (A) 27,000,000 shares of Class A Common, of which
15,612,588 shares will be issued and outstanding immediately after the
Closing, (B) 7,000,000 shares of Class B Common Stock, of which 5,653,079
shares will be issued and outstanding immediately after the Closing, and
(C) 3,000,000 shares of Class L Common Stock, of which 2,362,852 shares
will be issued and outstanding immediately after the Closing. As of the
Closing, other than options to purchase up to 5,734,333 shares of the
Company's Class A Common, options to purchase up to 137,148 shares of the
Company's Class L Common and preemptive rights to purchase shares of the
Company's capital stock granted to certain of the Company's stockholders,
there will be no rights, subscriptions, warrants, options, conversion
rights, or agreements of any
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kind outstanding to purchase from the Company, or otherwise require the
Company to issue, any shares of capital stock of the Company or securities
or obligations of any kind convertible or exchangeable for any shares of
capital stock of the Company; provided, however, that shares of Class A
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Common may be converted into shares of Class B Common and shares of Class B
Common may be converted into shares of Class A Common, all subject to the
terms of the Company's Articles of Incorporation.
3. Right to Purchase Consultant Stock Upon Termination of Employment.
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(a) Repurchase Right. If the Repurchase Date occurs, the Consultant Stock
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(including any Consultant Stock acquired subsequent to the Repurchase Date),
whether held by Consultant or one or more transferees, will be subject to
repurchase by the Bain Stockholders, the Bear ▇▇▇▇▇▇▇ Stockholders and the
Company pursuant to the terms and conditions set forth in this Section 3 (the
"Repurchase Option").
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(b) Repurchase Price. Consultant Stock purchased pursuant to the
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Repurchase Option will be purchased at a price per share equal to the Fair
Market Value of such Consultant Stock as of the Valuation Date.
(c) Repurchase Procedures. The Company may elect or decline to exercise
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the Repurchase Option by delivering written notice (the "Company Repurchase
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Notice") to the holder or holders of each class of the applicable Consultant
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Stock, the Bain Stockholders and the Bear ▇▇▇▇▇▇▇ Stockholders within the later
of the one-year anniversary of this Agreement or 240 days after the applicable
Repurchase Date. To the extent that after giving effect to the Company's option
pursuant to the immediately preceding sentence any portion of the Consultant
Stock is not being repurchased by the Company, the Bain Stockholders and the
Bear ▇▇▇▇▇▇▇ Stockholders may elect or decline to exercise the Repurchase Option
to purchase up to their pro rata share (determined based upon the number of
shares of Class A Common and Class B Common held by each) by delivering written
notice (the "Initial Repurchase Notice") to the Company, the holder or holders
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of Consultant Stock and the other within the later of (i) 10 business days after
receipt of the Company Repurchase Notice or (ii) the expiration of the later of
one-year anniversary of this Agreement or the expiration of the 240 day period
during which the Company was entitled to deliver the Company Repurchase Notice.
To the extent that the Bain Stockholders or the Bear ▇▇▇▇▇▇▇ Stockholders do not
elect to repurchase their full allotment of the remaining Consultant Stock, the
other party shall be entitled to purchase all or any portion of the remaining
Consultant Stock by providing written notice (the "Supplemental Repurchase
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Notice" and together with the Initial Repurchase Notice and Company Repurchase
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Notice, a "Repurchase Notice") to each of the parties receiving the Initial
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Repurchase Notice within ten business days of the expiration of the period
during which the Bain Stockholders and the Bear ▇▇▇▇▇▇▇ Stockholders were
entitled to deliver the Initial Repurchase Notice. Each Repurchase Notice will
set forth the number of shares of each class of Consultant Stock to be acquired
from such holder(s), an estimate of the aggregate consideration to be paid for
such holder's shares of each such class of Consultant Stock and the time and
place for the closing of the transaction. If any shares of any class of
Consultant Stock are held by any transferees of Consultant, the Bain
Stockholders, the Bear ▇▇▇▇▇▇▇ Stockholders and the Company, as the case may be,
will
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purchase such shares of such class elected to be purchased from such holder(s)
of Consultant Stock, pro rata according to the number of shares of such class of
Consultant Stock held by such holder(s) at the time of delivery of such
Repurchase Notice (determined as nearly as practicable to the nearest share).
(d) Closing. Each closing of a repurchase transaction will take place on
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the date designated by the Bain Stockholders, the Bear ▇▇▇▇▇▇▇ Stockholders or
the Company, as the case may be, in the latest Repurchase Notice, which date
will not be more than 60 days after the delivery of such notice, and no earlier
than any date set forth in an earlier Repurchase Notice or the final
determination of Fair Market Value per share of Consultant Stock as of the
Valuation Date and the expiration of any time periods for which a repurchase
election may be revoked pursuant to Section 3(e) (the "Scheduled Closing Date").
The Company will pay for any shares of Consultant Stock to be purchased pursuant
to a Repurchase Option by delivery of cash or cashier's check payable to the
holder(s) of such shares of Consultant Stock in an aggregate amount equal to
their share of the aggregate repurchase price (the "Repurchase Price"); provided
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that any purchase of the Consultant Stock that occurs after the Scheduled
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Closing Date by the Company as a result of the Financing Circumstances (as
defined below) shall include simple interest calculated from the Scheduled
Closing Date to the date of such payment at the rate of 6% per annum on the
Repurchase Price attributable to such shares of Consultant Stock. The Bain
Stockholders and the Bear ▇▇▇▇▇▇▇ Stockholders will pay for any shares of
Consultant Stock to be purchased pursuant to a Repurchase Option by delivery of
cash or cashier's check payable to the holder(s) of such shares of Consultant
Stock in an aggregate amount equal to their share of the aggregate unpaid
Repurchase Price for such shares of Consultant Stock. Notwithstanding anything
to the contrary contained in this Agreement, all repurchases of shares of
Consultant Stock pursuant to this Section 3(d) will be subject to applicable
restrictions and covenants contained in the Pennsylvania Business Corporation
Law of 1988 and in the Company's and its Subsidiaries' debt financing
agreements. If (i) any such restrictions or covenants prohibit the repurchase
of Consultant Stock hereunder which the Company is otherwise entitled to make,
(ii) the Company does not have cash availability, including availability under
its revolver, of at least $15 million on a projected basis for the next six
month period (collectively, the "Financing Circumstances"), or (iii) the
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repurchase would not allow the transactions contemplated by the Merger to
qualify for recapitalization accounting, then the Company will not be required
to make such repurchase (and may defer making such repurchase) until it is
permitted to do so under such restrictions and covenants and until its projected
cash availability is greater than $15 million (with it being understood that the
Company will make the maximum amount of repurchases permitted and may defer
making the remainder of such repurchases until permitted to do so and it being
further understood that any closing of any such repurchase shall not occur on a
date which is later than the second anniversary of the Scheduled Closing Date).
The Bain Stockholders, the Bear ▇▇▇▇▇▇▇ Stockholders and the Company will
receive customary representations and warranties from each seller regarding the
sale of shares of Consultant Stock solely with respect to such seller's
ownership and title to Consultant Stock and capacity to transfer Consultant
Stock.
(e) Revocation of Repurchase Election. Notwithstanding anything contained
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in this Agreement to the contrary, if Consultant objects to Board's
determination of Fair Market Value as
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described in the definition of Fair Market Value, or if the Fair Market Value of
a share of Consultant Stock is otherwise determined to be an amount more than
10% greater than the per share repurchase price for such share of Consultant
Stock in the Initial Repurchase Notice or Supplemental Repurchase Notice, each
of the Company, the Bain Stockholders and the Bear ▇▇▇▇▇▇▇ Stockholders shall
have the right to revoke its exercise of the Repurchase Option for all or any
portion of the Consultant Stock elected to be repurchased by it by delivering
notice of such revocation in writing to the holders of the Consultant Stock, the
Company, the Bain Stockholders and the Bear ▇▇▇▇▇▇▇ Stockholders during (i) the
30 day period beginning on the date that the Company, the Bain Stockholders and
the Bear ▇▇▇▇▇▇▇ Stockholders received Consultant's written notice of objection,
and (ii) the 30 day period beginning on the date that the Company, the Bain
Stockholders and/or the Bear ▇▇▇▇▇▇▇ Stockholders are given written notice that
the Fair Market Value of a share of Consultant Stock was finally determined to
be an amount more than 10% greater than the per share repurchase price for
Consultant Stock set forth in the Initial Repurchase Notice or in the
Supplemental Repurchase Notice.
In the event that the Bain Stockholders deliver a notice of revocation, the
Bear ▇▇▇▇▇▇▇ Stockholders shall be entitled to purchase all or any portion of
the Consultant Stock that would otherwise have been purchased by the Bain
Stockholders by providing an additional Supplemental Repurchase Notice to the
holders of the Consultant Stock and the Company within 10 business days after
receipt of the Bain Stockholders' notice of revocation. The Company may exercise
the Repurchase Option for the remaining Consultant Stock by delivering an
additional Company Repurchase Notice to the holder or holders of the applicable
Consultant Stock within 10 business days of the expiration of the 10 business
day period described in the preceding sentence.
In the event that the Bear ▇▇▇▇▇▇▇ Stockholders deliver a notice of
revocation, the Bain Stockholders shall be entitled to purchase all or any
portion of the Consultant Stock that would otherwise have been purchased by the
Bear ▇▇▇▇▇▇▇ Stockholders by providing an additional Supplemental Repurchase
Notice to the holders of the Consultant Stock and the Company within 10 business
days after receipt of the Bear ▇▇▇▇▇▇▇ Stockholders' notice of revocation. The
Company may exercise the Repurchase Option for the remaining Consultant Stock by
delivering an additional Company Repurchase Notice to the holder or holders of
the applicable Consultant Stock within 10 business days of the expiration of the
10 business day period described in the preceding sentence.
In the event that the Company delivers a notice of revocation, the Bain
Stockholders and the Bear ▇▇▇▇▇▇▇ Stockholders shall be entitled to purchase
their pro rata share (determined based on the number of shares of Class A Common
and Class B Common held by each) of all or any portion of the Consultant Stock
that would otherwise have been purchased by the Company by providing an
additional Supplemental Repurchase Notice to the holders of the Consultant Stock
and the other party within 10 business days after receipt of the Company's
notice of revocation. To the extent that the Bain Stockholders or the Bear
▇▇▇▇▇▇▇ Stockholders do not elect to repurchase their full allotment of
Consultant Stock, the other party shall be entitled to purchase the remaining
Consultant Stock by delivering an additional Supplemental Repurchase Notice to
the holder or holders of the applicable Consultant Stock within 10 business days
of the expiration of the 10 business day period described in the preceding
sentence.
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(f) Termination of Repurchase Right. The Repurchase Option granted to the
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Bain Stockholders, Bear ▇▇▇▇▇▇▇ Stockholders and the Company shall terminate (to
the extent not previously exercised) with respect to Consultant Stock at the
earliest of (i) a Bain Exit, (ii) a Qualified Initial Public Offering, or (iii)
the tenth anniversary of the Closing Date.
4. Right to Put Consultant Stock.
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(a) Put Right. If the Company terminates the consulting period under the
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Consulting Agreement executed by and between the Company and Consultant as of
the date hereof for any reason, then holder(s) of Consultant Stock have the
right (the "Put Right") to require the Company, or should the Bear ▇▇▇▇▇▇▇
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Stockholders and Bain Stockholders so elect subject to the terms and conditions
set forth herein, the Bain Stockholders and the Bear ▇▇▇▇▇▇▇ Stockholders, to
purchase all or any portion of the Consultant Stock then held by all (and not
less than all) of such holder(s) (other than any Consultant Stock for which the
Company has exercised its Repurchase Option) pursuant to the terms and
conditions set forth in this Section 4; provided that, notwithstanding the
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foregoing, Consultant shall not be entitled to exercise the Put Right if such
exercise (or the results thereof) would cause the transactions contemplated by
the Merger to fail to qualify for recapitalization accounting. If any shares of
any class of Consultant Stock are held by any transferees of Consultant, the
Bain Stockholders, the Bear ▇▇▇▇▇▇▇ Stockholders and the Company, as the case
may be, will purchase such shares of such class to be purchased from such
holder(s) of Consultant Stock, pro rata according to the number of shares of
such class of Consultant Stock held by such holder(s) at the time of delivery of
such Put Notice (determined as nearly as practicable to the nearest share).
(b) Put Price. Consultant Stock purchased pursuant to the Put Right will
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be purchased at a price per share equal to the Fair Market Value of such
Consultant Stock as of the Valuation Date.
(c) Put Procedures.
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(i) The Put Right is exercisable by the holder(s) of the Consultant
Stock delivering written notice (the "Put Notice") to the Company, the Bain
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Stockholders and the Bear ▇▇▇▇▇▇▇ Stockholders during the period beginning on
the date that Consultant is terminated by the Company (the "Termination Date")
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and ending on the date 65 days after the Termination Date. The Put Notice will
set forth the number of shares of each class of Consultant Stock held by all of
the holder(s) of Consultant Stock.
(ii) The Bain Stockholders and the Bear ▇▇▇▇▇▇▇ Stockholders may
each elect to purchase their pro rata share (determined based upon the number of
shares of Class A Common and Class B Common held by each) of any or all of the
shares of Consultant Stock which the Company is otherwise required to purchase
pursuant to the Put Option by delivering written notice (the "Initial Put
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Purchase Notice") to the holder or holders of each class of Consultant Stock,
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the Company and the other party, within 30 days after receiving the Put Notice.
To the extent that the Bain Stockholders or the Bear ▇▇▇▇▇▇▇ Stockholders do not
elect to purchase their full allotment of Consultant Stock, the other party
shall be entitled to purchase all or any portion of the remaining
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Consultant Stock by providing notice (the "Supplemental Put Purchase Notice") to
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each of the parties receiving the Initial Put Purchase Notice within the later
of (i) 10 business days after receipt of the Initial Put Purchase Notice or (ii)
the expiration of the 30 day period during which the Bain Stockholders and the
Bear ▇▇▇▇▇▇▇ Stockholders were entitled to deliver Initial Put Purchase Notices.
To the extent that, after giving effect to the reoffer pursuant to the
immediately preceding sentence, any portion of the Consultant Stock is not being
purchased by the Bain Stockholders or the Bear ▇▇▇▇▇▇▇ Stockholders, the Company
must repurchase the remaining Consultant Stock as set forth in Section 4(d)
below. Each Initial Put Purchase Notice and Supplemental Purchase Notice shall
set forth the number of shares of each class of Consultant Stock to be acquired
from such holder(s) and an estimate of the aggregate consideration to be paid
for such holder's shares of each such class of Consultant Stock.
(d) Closing. The closing of the transactions contemplated by this Section
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4 will take place at a time and place mutually agreed upon by the parties
acquiring Consultant Stock which date will not be more than 120 days after the
delivery of the Put Notice, and no earlier than the final determination of Fair
Market Value per share of Consultant Stock as of the Valuation Date and the
expiration of any time periods for which a purchase election may be revoked
pursuant to Section 4(e) (the "Anticipated Closing Date"). The Bain
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Stockholders, the Bear ▇▇▇▇▇▇▇ Stockholders and the Company, as the case may be,
shall pay for any shares of Consultant Stock to be purchased pursuant to the Put
Option by delivery of cash or a cashier's check payable to the holder(s) of such
shares of Consultant Stock in an aggregate amount equal to their pro rata share
of the aggregate repurchase price ("Put Price") for such shares of Consultant
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Stock; provided that any purchase of Consultant Stock that occurs after the
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Anticipated Closing Date by the Company as a result of the Financing
Circumstances shall include simple interest calculated from the Anticipated
Closing Date until the date of such purchase at the rate of 6% per annum on the
Put Price attributable to such shares of Consultant Stock. Notwithstanding
anything to the contrary contained in this Agreement, all repurchases of shares
of Consultant Stock by the Company will be subject to applicable restrictions
and covenants contained in the Pennsylvania Business Corporation Law of 1988 and
in the Company's and its Subsidiaries' debt and equity financing agreements. If
either of the Financing Circumstances exist, the Company will not be required to
make such repurchases until it is permitted to do so under such restrictions and
until its projected cash availability is greater than $15 million (with it being
understood that the Company will make the maximum amount of repurchases
permitted and may defer making the remainder of such repurchases until permitted
to do so and it being further understood that the closing of such repurchase
shall not occur on a date which is later than the second anniversary of the
Anticipated Closing Date). The Bain Stockholders, the Bear ▇▇▇▇▇▇▇ Stockholders
and the Company will receive customary representations and warranties from each
seller regarding the sale of shares of Consultant Stock, solely with respect to
such seller's ownership and title to Consultant Stock and capacity to transfer
Consultant Stock.
(e) Revocation of Purchase Election. Notwithstanding anything contained
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in this Agreement to the contrary, if Consultant objects to the Board's
determination of Fair Market Value as described in the definition of Fair Market
Value or if the Fair Market Value of a share of Consultant Stock is otherwise
determined to be an amount more than 10% greater than the per share repurchase
price for such share of Consultant Stock in the Initial Put Purchase Notice or
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Supplemental Put Purchase Notice, each of the Bain Stockholders and the Bear
▇▇▇▇▇▇▇ Stockholders shall have the right to revoke its exercise of the option
to purchase shares of Consultant Stock pursuant to Section 4(d) by delivering
notice of such revocation in writing to the holders of the Consultant Stock, the
Company, and the other party during (i) the 30 day period beginning on the date
that the Company, the Bain Stockholders and the Bear ▇▇▇▇▇▇▇ Stockholders
received Consultant's written notice of objection, and (ii) the 30 day period
beginning on the date that the Company, the Bain Stockholders and/or the Bear
▇▇▇▇▇▇▇ Stockholders are given written notice that the Fair Market Value of a
share of Consultant Stock was finally determined to be an amount more than 10%
greater than the per share repurchase price for Consultant Stock set forth in
the Initial Put Purchase Notice or in the Supplemental Put Purchase Notice.
Furthermore, if Consultant objects to the Board's determination of Fair
Market Value as described in the definition of Fair Market Value, or if the Fair
Market Value of a share of Consultant Stock is otherwise determined to be more
than 10% less than the per share repurchase price for such share of Consultant
Stock in the Initial Put Purchase Notice or Supplemental Put Purchase Notice,
Consultant shall have the right to revoke his exercise of the Put Right pursuant
to Section 4 by delivering notice of such revocation in writing to the Company,
the Bain Stockholders and the Bear ▇▇▇▇▇▇▇ Stockholders during (i) the 30 day
period beginning on the date that the Company, the Bain Stockholders and the
Bear ▇▇▇▇▇▇▇ Stockholders received Consultant's written notice of objection, or
(ii) the 30 day period beginning on the date that Consultant, the Company, the
Bain Stockholders and/or the Bear ▇▇▇▇▇▇▇ Stockholders are given written notice
that the Fair Market Value of a share of Consultant Stock was finally determined
to be more than 10% less than the per share repurchase price for Consultant
Stock set forth in the Initial Put Purchase Notice or in the Supplemental Put
Purchase Notice.
In the event that the Bain Stockholders deliver a notice of revocation, the
Bear ▇▇▇▇▇▇▇ Stockholders shall be entitled to purchase all or any portion of
the Consultant Stock that would otherwise have been purchased by the Bain
Stockholders by providing an additional Supplemental Put Purchase Notice to the
holders of the Consultant Stock and the Company within 10 business days after
receipt of the Bain Stockholders' notice of revocation. The Company must
purchase the remaining shares of Consultant Stock by delivering an additional
Company Put Purchase Notice to the holder or holders of the applicable
Consultant Stock within 10 business days of the expiration of the 10 business
day period described in the preceding sentence.
In the event that the Bear ▇▇▇▇▇▇▇ Stockholders deliver a notice of
revocation, the ▇▇▇▇ Stockholders shall be entitled to purchase all or any
portion of the Consultant Stock that would otherwise have been purchased by the
Bear ▇▇▇▇▇▇▇ Stockholders by providing an additional Supplemental Put Purchase
Notice to the holders of the Consultant Stock and the Company within 10 business
days after receipt of the Bear ▇▇▇▇▇▇▇ Stockholders' notice of revocation. The
Company must purchase the remaining shares of Consultant Stock by delivering an
additional Company Put Purchase Notice to the holder or holders of the
applicable Consultant Stock within 10 business days of the expiration of the 10
business day period described in the preceding sentence.
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(f) Termination of Put Right. The Put Right granted to the holder(s) of
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the Consultant Stock shall terminate (to the extent not previously exercised)
with respect to Consultant Stock on the first anniversary of the date of this
Agreement.
5. Preemptive Rights.
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(a) Except as set forth in subsection (b) below, the Company will not
issue, sell or otherwise transfer to the ▇▇▇▇ Stockholders or the Bear ▇▇▇▇▇▇▇
Stockholders (an "Issuance") at any time prior to a Public Offering, any capital
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stock or debt securities (or securities convertible into or exercisable or
exchangeable for capital stock or debt securities) unless, at least 15 days
prior to such Issuance, the Company notifies each holder of Consultant Stock in
writing of the Issuance (including the price, the purchasers thereof and the
other terms thereof) and grants to each holder of Consultant Stock, the right
(the "Right") to subscribe for and purchase a portion of such additional shares
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or other securities so issued at the same price and on the same terms as issued
in the Issuance equal to the quotient determined by dividing (1) the number of
fully diluted shares of Class A Common and Class B Common held by such holder by
(2) the total number of shares of Class A Common and Class B Common outstanding
on a fully diluted basis. Notwithstanding the foregoing, if all Persons entitled
to purchase or receive such stock or securities are required to also purchase
other securities of the Company, the holders of capital stock exercising their
Right pursuant to this Section shall also be required to purchase the same strip
of securities (on the same terms and conditions) that such other Persons are
required to purchase. The Right may be exercised by such holder at any time by
written notice to the Company received by the Company within 10 days after
receipt by such holder of the notice from the Company referred to above. The
closing of the purchase and sale pursuant to the exercise of the Right shall
occur not less than 10 days after the Company receives notice of the exercise of
the Right and concurrently with the closing of the Issuance.
(b) Notwithstanding the foregoing, the Right shall not apply to (i)
issuances of capital stock or debt securities (or securities convertible into or
exchangeable for, or options to purchase, capital stock or debt securities), pro
rata to all holders of any class of Stock, as a dividend on, subdivision of or
other distribution in respect of, such class of capital stock, (ii) conversions
or exchanges of one class or form of capital stock into another class or form of
capital stock, (iii) issuances of capital stock upon exercise of any debt
security issued by the Company, or (iv) the issuance of capital stock (or
securities convertible into or exchangeable for, or options to purchase, capital
stock) on customary, arm's length terms in connection with the provision by the
▇▇▇▇ Stockholders or the Bear ▇▇▇▇▇▇▇ Stockholders of debt financing to the
Company or its Subsidiaries.
(c) The provisions of this Section 5 will terminate upon the consummation
of a Public Offering or upon a ▇▇▇▇ Exit.
10
6. Restrictions on Transfer of Consultant Stock.
--------------------------------------------
(a) Transfer of Consultant Stock. Consultant will not sell, pledge,
----------------------------
transfer or otherwise dispose of (a "Transfer") any interest in their Consultant
--------
Stock except (i) pursuant to and in accordance with Sections 3, 4, 6(b), 7, 8,
10 or 12 (in connection with a Transfer by the ▇▇▇▇ Stockholders only below),
(ii) pursuant to the terms of the Registration Agreement, dated as of the date
hereof, by and between the Company and certain of its stockholders, (iii)
pursuant to applicable laws of descent and distribution, or (iv) among
Consultant's Family Group; provided, that the restrictions contained in this
--------
Section 6 will continue to be applicable to the shares of Consultant Stock after
any Transfer of the type referred to in clauses (iii) or (iv) above and, as a
condition to any such Transfer, the transferees of such shares of Consultant
Stock must agree in writing to be bound by the provisions of this Agreement.
In the case of a transfer by Consultant to a member of his Family Group, after
such transfer Consultant must continue to own at least 50% of his shares of
Consultant Stock originally owned by him on a fully diluted basis. Any
transferee of Consultant Stock pursuant to a Transfer in accordance with clause
(iii) or (iv) above is herein referred to as a "Permitted Transferee." Upon the
--------------------
proposed Transfer of Consultant Stock pursuant to clause (iii) or (iv) above,
Consultant or a Permitted Transferee Transferring such Consultant Stock will
deliver a written notice (a "Transfer Notice") to the Company, which discloses
---------------
in reasonable detail the identity of the Permitted Transferee(s).
Notwithstanding the foregoing, no party hereto shall avoid the provisions of
this Agreement by making one or more transfers to one or more Permitted
Transferees and then disposing of all or any portion of such party's interest in
any such Permitted Transferee.
(b) Termination of Restrictions. The restrictions set forth in Section
---------------------------
6(a) will terminate upon a Qualified Initial Public Offering.
7. Unaffiliated Sale of the Company.
--------------------------------
(a) If the Board approves an Unaffiliated Sale of the Company (an
"Approved Sale"), then each holder of each class of Consultant Stock will vote
-------------
for, consent to and raise no objections against such Approved Sale. Each holder
of each class of Consultant Stock will, to the maximum extent permitted by
applicable law, waive any dissenters' rights, appraisal rights or similar rights
in connection with such Approved Sale, and if such Approved Sale is a sale of
stock, each holder of such class Consultant Stock will agree to sell (including,
without limitation, by executing and delivering definitive agreements with
respect thereto) up to all of his or her shares of Consultant Stock on the terms
and conditions approved by the Board; provided that the terms and conditions of
--------
such transaction applicable to each holder of a class of Consultant Stock are
the same as those applicable to the ▇▇▇▇ Stockholders holding such class of
capital stock (including, subject to Section 9 below, the price per share and
the type of consideration, but excluding reasonable investment banking and
advisory fees customarily charged by the ▇▇▇▇ Stockholders and the Bear ▇▇▇▇▇▇▇
Stockholders for transactions of such type). Each holder of Consultant Stock
will take all necessary or desirable actions in connection with the consummation
of the Approved Sale as requested by the Board or the Company.
11
(b) If the Company or the holders of the Company's securities enter into
any negotiation or transaction for which Rule 506 (or any similar rule then in
effect) promulgated by the Securities and Exchange Commission may be available
with respect to such negotiation or transaction (including a merger,
consolidation or other reorganization), the holders of Consultant Stock will, at
the request of the Company, appoint a purchaser representative (as such term is
defined in Rule 501) reasonably acceptable to the Company. If any holder of
Consultant Stock appoints a purchaser representative designated by the Company,
the Company will pay the fees of such purchaser representative, but if any
holder of Consultant Stock declines to appoint the purchaser representative
designated by the Company, such holder will appoint another purchaser
representative, and such holder will be responsible for the fees of the
purchaser representative so appointed.
(c) Each of the holders of Consultant Stock (if any) will bear their pro-
rata share (based upon the number of shares of Class A Common sold) of the costs
of any sale of Consultant Stock pursuant to an Approved Sale to the extent such
costs are incurred for the benefit of all or substantially all holders of Common
Stock and are not otherwise paid by the Company or the acquiring party. Costs
incurred by each holder of Consultant Stock on its own behalf will not be
considered costs of the transaction hereunder.
(d) The provisions of this Section 7 shall terminate upon a Qualified
Initial Public Offering.
8. ▇▇▇▇ Sale of the Company.
------------------------
(a) If a majority of the members of the Board (which, for purposes of this
Section 8, shall include any director appointed by the Bear ▇▇▇▇▇▇▇ Stockholders
pursuant to the Voting Agreement, dated as of the date hereof, by and among the
Company and certain stockholders of the Company party thereto from time to time
(the "Voting Agreement")) who are not Affiliates or designees of the ▇▇▇▇
----------------
Stockholders (the "Non-▇▇▇▇ Directors") approve a ▇▇▇▇ Sale of the Company (an
------------------
"Approved ▇▇▇▇ Sale"), then each holder of Consultant Stock that is not an
------------------
Affiliate of the ▇▇▇▇ Stockholders will vote for, consent to and raise no
objections against such Approved ▇▇▇▇ Sale. Each such holder of Consultant Stock
will, to the maximum extent permitted by applicable law, waive any dissenters'
rights, appraisal rights or similar rights in connection with such Approved ▇▇▇▇
Sale, and in the event that such Approved ▇▇▇▇ Sale is a sale of stock, each
such holder of Consultant Stock will agree to sell (including, without
limitation, by executing and delivering definitive agreements with respect
thereto) up to all of his or her Consultant Stock on the terms and conditions
approved by the Non-▇▇▇▇ Directors; provided that the terms and conditions of
--------
such transaction applicable to each holder of a class of Consultant Stock that
is not a ▇▇▇▇ Stockholder or an Affiliate thereof are the same as those
applicable to the stockholder holding the largest number of shares of such class
of capital stock that is not a ▇▇▇▇ Stockholder or an Affiliate thereof
(including, subject to Section 9 below, the price per share and the type of
consideration, but excluding reasonable investment banking and advisory fees
customarily charged by the Bear ▇▇▇▇▇▇▇ Stockholders for transactions of such
type). Each holder of Consultant Stock will take all necessary or desirable
actions in connection with the consummation of the Approved ▇▇▇▇ Sale as
requested by the Non-▇▇▇▇ Directors, the ▇▇▇▇ Stockholders or the Company.
12
(b) If, in relation to an Approved ▇▇▇▇ Sale, the Company or the holders
of the Company's securities enter into any negotiation or transaction for which
Rule 506 (or any similar rule then in effect) promulgated by the Securities and
Exchange Commission may be available with respect to such negotiation or
transaction (including a merger, consolidation or other reorganization), the
holders of Consultant Stock will, at the request of the Company or the ▇▇▇▇
Stockholders, appoint a purchaser representative (as such term is defined in
Rule 501) reasonably acceptable to the Company and the ▇▇▇▇ Stockholders. If
any holder of Consultant Stock appoints a purchaser representative designated by
the Company or the ▇▇▇▇ Stockholders, the Company will pay the fees of such
purchaser representative, but if any holder of Consultant Stock declines to
appoint the purchaser representative designated by the Company or the ▇▇▇▇
Stockholders, such holder will appoint another purchaser representative, and
such holder will be responsible for the fees of the purchaser representative so
appointed.
(c) Each of the holders of Consultant Stock (if any) will bear their pro-
rata share (based upon the number of shares of Class A Common sold by
stockholders) of the costs of any sale of Consultant Stock pursuant to an
Approved ▇▇▇▇ Sale to the extent such costs are incurred for the benefit of all
or substantially all holders of Common Stock not affiliated with the ▇▇▇▇
Stockholders and are not otherwise paid by the Company or the acquiring party.
Costs incurred by each holder of Consultant Stock on its own behalf will not be
considered costs of the transaction hereunder.
(d) The provisions of this Section 8 shall terminate upon a Qualified
Initial Public Offering.
9. Distributions upon Sale of the Company, etc. In the event of a sale
--------------------------------------------
or exchange by the holders of Consultant Stock (whether by sale, merger,
recapitalization, reorganization, consolidation, combination or otherwise) in
connection with an Approved Sale or Approved ▇▇▇▇ Sale each holder of Consultant
Stock shall receive in exchange for the Consultant Stock held by such holder
participating in such sale, the same portion of the aggregate consideration from
such sale or exchange that such holder would have received if such aggregate
consideration had been distributed by the Company to the holders of capital
stock of the Company participating in such sale, in complete liquidation
pursuant to the rights and preferences set forth in the Company's Amended and
Restated Articles of Incorporation as in effect immediately prior to such sale
or exchange (and assuming that the only shares of capital stock of the Company
outstanding were the shares of capital stock of the Company participating in
such sale). Each holder of Consultant Stock shall take all necessary or
desirable actions in connection with the distribution of the aggregate
consideration from such sale or exchange as requested by the Company.
10. Initial Public Offering. In the event that the Board approves an
-----------------------
initial public offering and sale of Common Stock (a "Public Offering") pursuant
---------------
to an effective registration statement under the Securities Act of 1933, as
amended, the holders of Common Stock shall take all necessary or desirable
actions in connection with the consummation of the Public Offering. In the event
that such Public Offering is an underwritten offering and the managing
underwriters advise the Company in writing that in their opinion the Common
Stock structure would adversely affect the marketability of the offering, each
holder of Common Stock shall consent to and vote for a
13
recapitalization, reorganization and/or exchange of the Common Stock into
securities that the managing underwriters and the Board find acceptable and
equitable in the circumstances and shall take all necessary or desirable actions
in connection with the consummation of the recapitalization, reorganization
and/or exchange; provided that the resulting securities take into account the
--------
rights and preferences set forth in the Company's Amended and Restated Articles
of Incorporation as in effect immediately prior to such Public Offering.
11. Restrictive Legend; Additional Restriction on Transfer. Each
------------------------------------------------------
certificate evidencing Consultant Stock and each certificate issued in exchange
for or upon the transfer of any Consultant Stock (if such shares remain
Consultant Stock after such transfer) shall be stamped or otherwise imprinted
with a legend in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
TO CERTAIN RESTRICTIONS PURSUANT TO A CONSULTANT STOCK
AGREEMENT, DATED AS OF MAY, 1999 AMONG THE ISSUER OF SUCH
SECURITIES (THE "COMPANY") AND ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, AS AMENDED
AND MODIFIED FROM TIME TO TIME. A COPY OF SUCH CONSULTANT
STOCK AGREEMENT SHALL BE FURNISHED WITHOUT CHARGE BY THE
COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST."
The Company shall imprint such legend on certificates evidencing Consultant
Stock outstanding as of the date hereof. The legend set forth above shall be
removed from the certificates evidencing any shares which cease to be Consultant
Stock in accordance with the definition of Consultant Stock set forth in Section
14 hereof.
12. Participation Rights.
--------------------
(a) If the ▇▇▇▇ Stockholders or the Bear ▇▇▇▇▇▇▇ Stockholders propose to
enter into any sale to an unaffiliated third party (including Bear ▇▇▇▇▇▇▇ or
its Affiliates in the case of ▇▇▇▇, or ▇▇▇▇ or its Affiliates, in the case of
Bear ▇▇▇▇▇▇▇) pursuant to which such party or parties acquire more than 5% of
any class of capital stock held by the ▇▇▇▇ Stockholders or Bear ▇▇▇▇▇▇▇
Stockholders in any transaction or series of transactions (excluding Public
Sales and transfers and/or distributions to partners of the ▇▇▇▇ Stockholders or
the Bear ▇▇▇▇▇▇▇ Stockholders), then the Consultant will be afforded an
opportunity to participate in such transaction on, subject to Section 9, the
same terms and conditions as applicable to the other holders of such class of
capital stock participating in such transaction. If any stockholder other than
the ▇▇▇▇ Stockholders or the Bear ▇▇▇▇▇▇▇ Stockholders, as the case may be (each
a "Transferring Stockholder") has elected to participate in such sale, the
------------------------
Transferring Stockholder shall be entitled to sell in the contemplated sale a
number of shares of any class of capital stock equal to the product of (i) the
quotient determined by dividing the percentage of such class of capital stock
owned by the Transferring Stockholder by the aggregate percentage of Common
Stock owned by the stockholders participating in such sale (which in the case of
a sale by ▇▇▇▇ Stockholders may include the Bear ▇▇▇▇▇▇▇ Stockholders and which
in the case of a sale by Bear
14
▇▇▇▇▇▇▇ Stockholders may include the ▇▇▇▇ Stockholders) and (ii) the number of
shares of such class of capital stock to be sold in the contemplated sale. Each
holder of Consultant Stock participating in any such transaction will take all
necessary or desirable actions in connection with the consummation of any such
transaction as requested by the ▇▇▇▇ Stockholders including without limitation
executing the applicable purchase agreement.
(b) Notwithstanding the foregoing, in the event that the ▇▇▇▇ Stockholders
intend to transfer shares of more than one class of capital stock, each
Transferring Stockholder will not be entitled to participation rights pursuant
to this Section 12 unless such Transferring Stockholder and sells in the
contemplated sale a pro rata portion of shares of all such classes of capital
stock, which portion shall be determined in the manner set forth in Section
12(a).
(c) The ▇▇▇▇ Stockholders will use reasonable efforts to obtain the
agreement of the prospective transferee(s) to the participation of any
Transferring Stockholders in any contemplated sale, and the ▇▇▇▇ Stockholders
will not transfer any class of capital stock to the prospective transferee(s)
unless (i) the prospective transferee(s) agree to allow the participation of the
Transferring Stockholders or (ii) the ▇▇▇▇ Stockholders agree to purchase on the
same terms and conditions the number of such class of capital stock from any
Transferring Stockholders which such Transferring Stockholders would have been
entitled to sell pursuant to this Section 12.
13. Transfer. Prior to transferring any Consultant Stock (other than a
--------
Public Sale or an Approved Sale or pursuant to Section 12) to any Person,
Consultant shall cause the prospective transferee to be bound by this Agreement
and to execute and deliver to the Company a counterpart of this Agreement.
14. Definition of Consultant Stock. For all purposes of this Agreement,
------------------------------
Consultant Stock will continue to be Consultant Stock in the hands of any holder
other than Consultant (except for the Company, purchasers pursuant to an
offering registered under the Securities Act or purchasers pursuant to a Rule
144 transaction (other than a Rule 144(k) transaction occurring prior to the
time the Company is a Public Company) and subsequent transferees), and each such
other holder of Consultant Stock will succeed to all rights and obligations
attributable to Consultant as a holder of Consultant Stock hereunder.
Consultant Stock will also include shares of the Company's capital stock issued
with respect to shares of Consultant Stock by way of a stock split, stock
dividend or other recapitalization.
15. Holdback Agreement. Before and after, the effective date of any
------------------
underwritten Public Offering, no holder of Consultant Stock will effect any sale
or distribution of Common Stock during the period designated by the underwriters
managing such underwritten Public Offering with respect to such holder of
Consultant Stock, but in no event shall any such period following the effective
date of any such underwritten Public Offering exceed 180 days.
16. Definitions. The following terms are defined as follows:
-----------
15
"Affiliate" means, when used with reference to a specified Person, any
---------
Person that directly or indirectly controls or is controlled by or is under
common control with the specified Person. As used in this definition, "control"
(including, with its correlative meanings, "controlled by" and "under common
control with") shall mean possession, directly or indirectly, of power to direct
or cause the direction of management or policies (whether through ownership of
securities or partnership or other ownership interests, by contract or
otherwise). It is understood and agreed that any portfolio company in which a
▇▇▇▇ Stockholder or any other Affiliates thereof which is a private equity fund
holds in excess of 30% of the outstanding capital stock is an "Affiliate" of
such ▇▇▇▇ Stockholder for purposes of this Agreement and that any portfolio
company in which a Bear ▇▇▇▇▇▇▇ Stockholder or any Affiliate thereof that
invests primarily in equity securities holds in excess of 30% of the outstanding
capital stock is an "Affiliate" of such Bear ▇▇▇▇▇▇▇ Stockholder for purposes of
this Agreement.
"▇▇▇▇ Exit" means (i) a sale of all or substantially all of the
---------
consolidated assets of the Company to any Person other than the ▇▇▇▇
Stockholders or their Affiliates or (ii) the transfer or other disposition of
capital stock to any Person after giving effect to which the ▇▇▇▇ Stockholders
and their Affiliates own less than 5% of the outstanding shares of capital stock
of the Company and any capital stock received in connection with an Organic
Change (as hereinafter defined) (in each case, whether by merger, consolidation,
sale of the Company's capital stock or otherwise).
"▇▇▇▇ Sale of the Company" means (i) a sale of all or substantially all of
------------------------
the consolidated assets of the Company to one or more of the ▇▇▇▇ Stockholders
or their Affiliates or (ii) the transfer or other disposition to the ▇▇▇▇
Stockholders or their Affiliates of outstanding shares of capital stock of the
Company (in each case, whether by merger, consolidation, sale of the Company's
capital stock or otherwise) such that after giving effect to such transfer the
▇▇▇▇ Stockholders and their Affiliates own all or substantially all of the
outstanding shares of the Company's capital stock (in each case, whether by
merger, consolidation, sale of the Company's capital stock or otherwise).
"▇▇▇▇ Stockholders" means the Persons listed on the signature pages hereto
-----------------
as ▇▇▇▇ Stockholders.
"Bear ▇▇▇▇▇▇▇ Stockholders" means the Persons listed on the signature pages
-------------------------
hereto as Bear ▇▇▇▇▇▇▇ Stockholders.
"Board" means the Company's Board of Directors.
-----
"Cause" means (i) the commission of a felony, (ii) the commission of fraud
-----
having an adverse effect on the Company or any of its Subsidiaries or any of
their directors or shareholders, (iii) any material act or omission involving
dishonesty having an adverse effect on the Company or any of its Subsidiaries or
any of their directors or shareholders, (iv) gross negligence or willful
misconduct with respect to the Company or any of its Subsidiaries or substantial
failure to otherwise perform duties as reasonably directed, in any such case
described in this clause (iv), for thirty days after written notice from the
Board and an opportunity to cure.
16
"Class A Common" means the Company's Class A Common, par value $.01 per
--------------
share.
"Class B Common" means the Company's Class B Common Stock, par value $.01
--------------
per share.
"Class L Common" means the Company's Class L Common Stock, par value $.01
--------------
per share.
"Common Stock" means, collectively, Class A Common, Class B Common Stock,
------------
Class L Common and any other common stock authorized by the Company.
"Consultant Stock" means (i) all shares of Post-Recapitalization Stock and
----------------
(ii) all shares of Common Stock issued with respect to the shares referred to in
clause (i) above by way of stock dividend or stock split in connection with any
conversion, merger, consolidation or recapitalization or other reorganization
affecting the Common Stock.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
------------
time to time.
"Fair Market Value" of each share of Consultant Stock means the average of
-----------------
the closing prices of the sales of the appropriate class of Common Stock on all
securities exchanges on which such class of Common Stock may at the time be
listed, or, if there have been no sales on any such exchange on any day, the
average of the highest bid and lowest asked prices on all such exchanges at the
end of such day, or, if on any day such Common Stock is not so listed, the
average of the representative bid and asked prices quoted in the NASDAQ System
as of 4:00 P.M., New York time, or, if on any day such Common Stock is not
quoted in the NASDAQ System, of the average of the highest bid and lowest asked
prices on such day in the domestic over-the-counter market as reported by the
National Quotation Bureau Incorporated, or any similar successor organization,
in each such case averaged over a period of 21 days consisting of the day as of
which the Fair Market Value is being determined and the 20 consecutive business
days prior to such day. If at any time such class of Common Stock is not listed
on any securities exchange or quoted in the NASDAQ System or the over-the-
counter market, the Fair Market Value will be the fair value of such class of
Common Stock determined in good faith by the Board based on such factors as the
members thereof, in the exercise of their business judgment, consider relevant
without taking into account a discount for a minority position or illiquidity
but taking into account whether the Company is a privately held company or a
public company (with it being understood that as of the day immediately
following the date hereof, the Fair Market Value for each share of Class A
Common shall be $0.22 and for each share of Class L Common shall be $18 per
share notwithstanding that the Company is a private company). If the Consultant
in good faith disagrees with such determination, the Board and the Consultant
will negotiate in good faith to agree on such Fair Market Value. If such
agreement is not reached within 30 days after the delivery of the Company
Repurchase Notice, the Initial Repurchase Notice or the Supplemental Repurchase
Notice, Fair Market Value shall be determined by an independent and unaffiliated
appraiser (which shall be one of Valuation Research, BT ▇▇▇▇ ▇▇▇▇▇, Broadview
Associates or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇) selected by the Board, which appraiser shall be
instructed to submit to the Board and the Consultant a report within 30 days of
its engagement setting forth such determination. The first $7,000 of the
expenses of such appraiser shall be borne by the Consultant (and the remainder
shall be borne by the Company) unless the appraiser's valuation is at least 25%
17
greater than the amount determined by the Board, in which case, the costs of the
appraiser shall be borne by the Company. In the absence of manifest error, the
determination of such appraiser shall be final and binding upon all parties.
Notwithstanding the foregoing, to the extent that the Company has determined
Fair Market Value through an independent and unaffiliated appraiser at any time
within the six month period prior to Consultant's Termination Date, the Fair
Market Value set forth in such appraisal shall conclusively be deemed to be
"Fair Market Value" hereunder and shall be binding upon all parties hereto,
unless the Board, in its good faith discretion determines that acquisitions,
divestitures or other material events consummated during such six-month period
affect the valuation set forth in such appraisal.
"Family Group" means a Participant's spouse and descendants of Participant
------------
or his or her parents (whether natural or adopted) and any trust solely for the
benefit of such Participant and/or such Participant's spouse and/or descendants
(natural or adopted) of Participant or his or her parents and any corporation,
limited liability company, partnership or other entity the equity holders of
which solely include such Participant, his or her spouse or descendants (natural
or adopted) or any trust for the benefit of such Participant, his or her spouse
or descendants (natural or adopted).
"Independent Third Party" means any Person who, immediately prior to the
-----------------------
contemplated transaction, does not own in excess of 5% of the Common Stock on a
fully diluted basis, who is not controlling, controlled by or under common
control with any such 5% owner of the Common Stock and who is not the spouse or
descendant (by birth or adoption) of any such 5% owner of the Common Stock.
"Organic Change" means any recapitalization, reorganization,
--------------
reclassification, consolidation, merger, sale of all or substantially all of the
Company's assets or other transaction which is effected in such a way that
holders of Common Stock are entitled to receive (either directly or upon
subsequent liquidation) stock, securities or assets with respect to or in
exchange for Common Stock.
"Person" means an individual, a partnership, a corporation, a limited
------
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, a governmental entity or any
department, agency or political subdivision thereof or any other entity or
organization.
"Public Company" means a company any of whose securities are registered
--------------
pursuant to Section 12(b) or 12(g) of the Securities Exchange Act.
"Public Sale" means any sale of Common Stock to the public pursuant to an
-----------
offering registered under the Securities Act or to the public through a broker,
dealer or market maker pursuant to the provisions of Rule 144 (other than Rule
144(k) prior to the time the Company is a Public Company) adopted under the
Securities Act.
"Qualified Initial Public Offering" means the initial sale by the Company
---------------------------------
of any class or classes of the Common Stock in an offering registered under the
Securities Act of 1933, as amended from time to time, other than an offering
made solely in connection with a business acquisition or
18
combination or an employee benefit plan, but only if the aggregate gross
proceeds received by the Company and/or its stockholders in such initial sale or
series of such sales in the aggregate are in excess of $50 million.
"Repurchase Date" means the date that Consultant directly or indirectly,
---------------
either for himself or for any other person, partnership, corporation or company,
(i) owns, manages, controls, participates in, consults with, renders services
for, permits his name to be used or in any other manner engages in any business
or enterprise which manufactures, designs, produces or sells products which
compete with products that the Company or any of its Subsidiaries currently
produces or is in the process of developing anywhere in the world where the
Company or any of its Subsidiaries currently conducts its business, (ii) induces
or attempts to induce any employee of the Company or any Subsidiary to leave the
employ of the Company or such Subsidiary (other than by mass advertising to the
general public, including by newspaper or internet, but not including any
solicitation by phone), (iii) hires or employs any person who was an employee of
the Company or any Subsidiary at any time during the Consulting Period to
perform services described in (i) above, or (iv) calls on, solicits, or services
any customer, supplier, licensee, licensor or other business relation or
prospective client of the Company or any of its Subsidiaries with respect to
products and/or services that have been provided by the Company or any of its
Subsidiaries, are currently being provided by the Company or any of its
Subsidiaries or which the Company or any of its Subsidiaries is currently in the
process of developing, (v) induces or attempts to induce any customer, supplier,
licensee, licensor or other business relation of the Company or any of its
Subsidiaries to cease doing business with the Company or such Subsidiary. For
purposes of this Agreement, the term "participate" includes any direct or
indirect interest in any enterprise, whether as an officer, director, employee,
partner, sole proprietor, agent, representative, independent contractor,
consultant, franchisor, franchisee, creditor, owner or otherwise; provided that
--------
the activities referred to in this paragraph shall not include passive ownership
of less than 2% of the stock of a publicly-held corporation whose stock is
traded on a national securities exchange or automated quotation system or in the
over-the-counter market, serving on the Board of Directors of any organization
that does not compete with the Company or its subsidiaries or providing services
to U.S. Publications, Inc. so long as it does not compete with the Company or
its Subsidiaries.
"Sale of the Company" means (i) a Bain Sale of the Company, or (ii) an
-------------------
Unaffiliated Sale of the Company.
"Securities Act" means the Securities Act of 1933, as amended from time to
--------------
time.
"Subsidiary" means, with respect to any Person, any corporation,
----------
partnership, limited liability company, association or other business entity of
which (i) if a corporation, a majority of the total voting power of shares of
stock entitled (without regard to the occurrence of any contingency) to vote in
the election of directors thereof is at the time owned or controlled, directly
or indirectly, by that Person or one or more of the other Subsidiaries of that
Person or a combination thereof, or (ii) if a partnership, limited liability
company, association or other business entity, a majority of the partnership or
other similar ownership interest thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more Subsidiaries of that
Person or a combination thereof. For
19
purposes hereof, a Person or Persons shall be deemed to have a majority
ownership interest in a partnership, limited liability company, association or
other business entity if such Person or Persons shall be allocated a majority of
partnership, limited liability company, association or other business entity
gains or losses or shall be or control the managing director, managing member,
manager or a general partner of such partnership, limited liability company,
association or other business entity.
"Unaffiliated Sale of the Company" means (i) a sale of all or substantially
--------------------------------
all of the consolidated assets of the Company to any Person other than the Bain
Stockholders or their Affiliates, or (ii) the transfer or other disposition to
any Person other than the Bain Stockholders or their Affiliates of more than 50%
of the outstanding shares of capital stock of the Company (in each case, whether
by merger, consolidation, sale of the Company's capital stock or otherwise).
"Valuation Date" shall mean (i) with respect to any Repurchase Option, the
--------------
date, if any, that the Company delivers a Repurchase Notice to a holder of
Consultant Stock or (ii) with respect to any Put Right, the date, if any, that
the holder(s) of Consultant Stock deliver a Put Notice to the Company.
17. Notices. Any notice provided for in this Agreement must be in writing
-------
and must be personally delivered, received by certified mail, return receipt
requested, or sent by guaranteed overnight delivery service, to the Investors at
the addresses indicated in the Company's records and to the other recipients at
the address indicated below:
20
To the Company:
Integrated Circuit Systems, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: President
With copies to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
3000 Two ▇▇▇▇▇ Square
▇▇/▇▇/ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
and
▇▇▇▇ Capital, Inc.
Two ▇▇▇▇▇▇ Place
Boston, Massachusetts 02116
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Yoo ▇▇▇ ▇▇▇
and
ICST Acquisition Corp.
c/o Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
and
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, P.C.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
and
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
21
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
To Consultant:
at Consultant's last address
on the records of the Company
or such other address or to the attention of such other person as the recipient
party will have specified by prior written notice to the sending party. Any
notice under this Agreement will be deemed to have been given when so delivered
or mailed.
18. Severability. Whenever possible, each provision of this Agreement
------------
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or the effectiveness or validity of any provision in any
other jurisdiction, and this Agreement will be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.
19. Complete Agreement. This Agreement embodies the complete agreement
------------------
and understanding among the parties and supersedes and preempts any prior
understandings, agreements or representations by or among the parties, written
or oral, which may have related to the subject matter hereof in any way.
Without limiting the foregoing, all executive stock and stock option agreements
between the Company and Consultant which existed immediately prior to the Merger
are hereby canceled and terminated.
20. Counterparts. This Agreement may be executed in separate
------------
counterparts, each of which will be deemed to be an original and all of which
taken together will constitute one and the same agreement.
21. Successors and Assigns; Transfer. This Agreement is intended to bind
--------------------------------
and inure to the benefit of and be enforceable by Consultant and the Company and
their respective successors, heirs and assigns, provided that Consultant may not
assign any of his rights or obligations, except as expressly provided by the
terms of this Agreement. Prior to transferring any shares of Consultant Stock
(other than in a Public Sale or any Approved Sale) to any person or entity,
Consultant will cause the prospective transferee to execute and deliver to the
Company an agreement containing the rights and restrictions set forth herein
with respect to such shares of Consultant Stock.
22
22. Governing Law. The corporate law of the Commonwealth of Pennsylvania
-------------
will govern all questions concerning the relative rights of the Company and its
stockholders. All other issues concerning the enforceability, validity and
binding effect of this Agreement will be governed by and construed in accordance
with the laws of the Commonwealth of Pennsylvania, without giving effect to any
choice of law or conflict of law provision or rule that would cause the
application of the law of any jurisdiction other than the Commonwealth of
Pennsylvania.
23. Remedies. The parties hereto acknowledge and agree that money damages
--------
may not be an adequate remedy for any breach of the provisions of this Agreement
and that any party hereto will have the right to injunctive relief, in addition
to all of its other rights and remedies at law or in equity, to enforce the
provisions of this Agreement.
24. Effect of Transfers in Violation of Agreement. The Company will not
----------------------------------------------
be required (a) to transfer on its books any shares of Consultant Stock which
have been sold or transferred in violation of any of the provisions set forth in
this Agreement or (b) to treat as owner of such shares of Consultant Stock, to
accord the right to vote as such owner or to pay dividends to any transferee to
whom such shares of Consultant Stock have been transferred in violation of this
Agreement.
25. Amendments and Waivers. Any provision of this Agreement may be
----------------------
amended or waived only with the prior written consent of the Company (with
approval of the Board) and Consultant; provided that Sections 1, 2, 3, 4, 8, 12,
-------- ----
27 and 31 are for the express benefit of the Bain Stockholders and/or the Bear
▇▇▇▇▇▇▇ Stockholders and there shall be no amendment to (or other amendment
which has the effect of amending) any of Sections 1, 2, 3, 4, 8, 12, 27 or 31 or
this Section 25 in a manner adverse to the Bain Stockholders without first
obtaining the written consent of the Bain Stockholders or in a manner adverse to
the Bear ▇▇▇▇▇▇▇ Stockholders without first obtaining the written consent of the
Bear ▇▇▇▇▇▇▇ Stockholders, as applicable.
26. Expenses. The Company agrees to pay, and hold Consultant harmless
--------
against liability for the payment of his reasonable fees and expenses arising in
connection with the preparation and execution of this Agreement and the other
agreements, documents and instruments contemplated hereby and thereby, and the
consummation of the transactions contemplated hereby and thereby.
27. Rights Granted to the Bain Stockholders, the Bear ▇▇▇▇▇▇▇ Stockholders
----------------------------------------------------------------------
and their Affiliates. Any rights granted to the Bain Stockholders, the Bear
--------------------
▇▇▇▇▇▇▇ Stockholders and their Affiliates hereunder may also be exercised (in
whole or in part) by their designees (which may be Affiliates).
28. Offset. Whenever the Company or any of its Subsidiaries is to pay any
------
sum to Consultant or any Affiliate or related person thereof, any amounts that
such Consultant or such Affiliate or related person owes to the Company or any
of its Subsidiaries may be deducted from that sum before payment.
23
29. Further Assurances. Consultant shall execute and deliver all
------------------
documents, provide all information, and take or refrain from taking such actions
as may be necessary or appropriate to achieve the proposes of this Agreement.
In addition, in connection with any Sale of the Company structured to achieve
pooling of interest accounting treatment, Consultant will take such actions
reasonably requested by the Board as are necessary to achieve and maintain
pooling of interest accounting treatment.
30. Deemed Transfer of Consultant Stock. If the Bain Stockholders, the
-----------------------------------
Bear ▇▇▇▇▇▇▇ Stockholders and/or the Company shall make available, at the time
and place and in the amount and form provided in this Agreement, the
consideration for the Consultant Stock to be repurchased in accordance with the
provisions of this Agreement, then from and after such time, the person from
whom such shares are to be repurchased shall no longer have any rights as a
holder of such shares (other than the right to receive payment of such
consideration in accordance with this Agreement), and such shares shall be
deemed purchased in accordance with the applicable provisions hereof and the
Bain Stockholders, the Bear ▇▇▇▇▇▇▇ Stockholders and the Company, as the case
may be, shall be deemed the owner and holder of such shares, whether or not the
certificates therefor have been delivered as required by this Agreement.
31. Certain Transactions with Bain. Following the date of the consummation
------------------------------
of the Merger, (i) the Company will not effect a Sale of the Company to a
portfolio company of the Bain Stockholders, and (ii) the Company will not, and
the Company will not permit any Subsidiary to, agree to consummate (or
consummate) any non-material transaction other than on an arms-length basis or
otherwise enter into or consummate any material transaction whether or not on an
arms-length basis, with the Bain Stockholders or their Affiliates other than
pursuant to agreements entered on or prior to the date hereof or agreed upon by
the Non-Bain Directors, in each case unless such transaction has been approved
by the Non-Bain Directors (which for purposes of this Section 31 shall include
the approval of any director appointed by the Bear ▇▇▇▇▇▇▇ Stockholders pursuant
to the Voting Agreement).
32. Construction. References herein to this Agreement or any other
------------
agreement shall be a reference to such agreement, as amended, modified,
supplemented or waived from time to time.
* * * * *
24
IN WITNESS WHEREOF, the parties hereto have executed this Consultant Stock
Agreement on the day and year first above written.
INTEGRATED CIRCUIT SYSTEMS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇
Its: President
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
[Signature Page to Consultant Stock Agreement]
with respect to paragraphs 1, 2, 3, 4, 8, 12,
---------------------------------------------
25, 27 and 31 only:
-------------------
BAIN STOCKHOLDERS:
-----------------
▇▇▇▇ CAPITAL FUND VI, L.P.
By: ▇▇▇▇ Capital Partners VI, L.P.
Its: General Partner
By: ▇▇▇▇ Capital Investors VI, Inc.
Its: General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Its: Managing Director
BCIP TRUST ASSOCIATES II
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
[Signature Page to Consultant Stock Agreement]
with respect to paragraphs 1, 2, 3, 4, 8, 12,
---------------------------------------------
25, 27 and 31 only:
-------------------
BAIN STOCKHOLDERS:
-----------------
BCIP TRUST ASSOCIATES II-B
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
BCIP ASSOCIATES II
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
BCIP ASSOCIATES II-B
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
[Signature Page to Consultant Stock Agreement]
with respect to paragraphs 1, 2, 3, 4, 8, 12,
---------------------------------------------
25, 27 and 31 only:
-------------------
BAIN STOCKHOLDERS:
-----------------
BCIP ASSOCIATES II-C
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
PEP INVESTMENTS PTY LTD.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
[Signature Page to Consultant Stock Agreement]
with respect to paragraphs 1, 2, 3, 4, 8, 12,
---------------------------------------------
25, 27 and 31 only:
-------------------
BAIN STOCKHOLDERS:
-----------------
▇▇▇▇▇▇▇▇ STREET PARTNERS II
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
Its: ______________________________
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇.▇.▇.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
Its: ______________________________
[Signature Page to Consultant Stock Agreement]
with respect to paragraphs 1, 2, 3, 4, 8, 12,
---------------------------------------------
25, 27 and 31 only:
-------------------
BEAR ▇▇▇▇▇▇▇ STOCKHOLDERS:
-------------------------
ICST ACQUISITION CORP.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------
Its: ______________________________
[Signature Page to Consultant Stock Agreement]