EXHIBIT 10.18
STOCKHOLDERS AGREEMENT
OF
RBS GLOBAL, INC.
This Stockholders Agreement ("AGREEMENT") is entered into as of this 25th day of
November, 2002, by and among RBS Global, Inc. (the "COMPANY"), Carlyle Partners
III, L.P., a Delaware limited partnership ("CPIII"), CPIII Coinvestment, L.P., a
Delaware limited partnership ("COINVESTMENT"), and Carlyle High Yield Partners,
L.P., a Delaware limited partnership ("HIGH YIELD PARTNERS" and collectively
with CPIII and Coinvestment, the "INITIAL CARLYLE STOCKHOLDERS"), and the
Persons listed on the signature pages attached hereto (each individually, a
"MANAGEMENT STOCKHOLDER," and collectively, the "MANAGEMENT STOCKHOLDERS").
These parties are sometimes referred to herein individually by name or as a
"PARTY" and collectively as the "PARTIES". The Initial Carlyle Stockholders,
together with (i) any person or entity (other than a Management Stockholder) to
which the Initial Carlyle Stockholders may hereafter sell, assign, transfer,
convey, pledge or otherwise dispose of (collectively, "TRANSFER") any shares of
common stock, par value $0.01 per share, of the Company ("COMMON STOCK") and
(ii) any Affiliates (as defined below) of the Initial Carlyle Stockholders to
which the Company may hereafter issue shares of Common Stock that executes a
copy of this Agreement are sometimes collectively referred to herein as the
"CARLYLE STOCKHOLDERS". For purposes of this Agreement, "AFFILIATE" shall mean,
with respect to any individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, governmental authority or other entity of whatever nature (each,
a "PERSON"), any other Person directly or indirectly controlling, controlled by,
or under common control with, such Person where "control" shall have the meaning
given such term under Rule 405 of the Securities Act of 1933, as amended (the
"Act"). For purposes of this Agreement, Affiliates of the Initial Carlyle
Stockholders shall include all Persons directly or indirectly controlled by TC
Group, L.L.C., a Delaware limited liability company.
RECITALS:
WHEREAS, each of the Management Stockholders is an employee,
executive officer or director of the Company or one or more subsidiaries of the
Company;
WHEREAS, the Company has issued (or may hereafter issue) to
each Management Stockholder shares of Common Stock as a result of (i) the
purchase of Common Stock by the Management Stockholders; (ii) the exercise by
the Management Stockholder of vested options to purchase Common Stock ("VESTED
OPTIONS"), which options were issued (or may hereafter be issued) to the
Management Stockholder pursuant to the Stock Option Plan of RBS Global, Inc.
(the "STOCK OPTION PLAN"); or (iii) any other employee benefit plan hereafter
adopted by the board of directors of the Company (the "BOARD OF DIRECTORS")
and/or pursuant to any stock purchase plan hereafter adopted by the Board of
Directors (each, a "PURCHASE PLAN"); and
WHEREAS, the Company, the Initial Carlyle Stockholders and the
Management Stockholders desire to enter into this Agreement to provide for
certain matters with respect to the ownership and transfer by the Management
Stockholders of the shares of Common Stock now or hereafter issued or sold to
any Management Stockholders as a result of the (i) the purchase of
Common Stock by the Management Stockholders from the Company or any Carlyle
Stockholder; (ii) the exercise of Vested Options; or (iii) the issuance of
Common Stock to the Management Stockholders pursuant to any Purchase Plan
(collectively, the "RESTRICTED SHARES").
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing and the
mutual agreements set forth herein, and other good and valuable consideration,
the receipt and adequacy of which is hereby acknowledged, the Parties hereto,
intending to be legally bound, hereby agree as follows:
SECTION 1. RESTRICTIONS ON TRANSFERS.
(a) Except as otherwise set forth below, the Management
Stockholders shall not Transfer any Restricted Shares. Any purported Transfer in
violation of the provisions of this Section 1 shall be null and void and shall
have no force or effect.
(b) Nothing in Section 1(a) shall prevent the Transfer of any
Restricted Shares by any Management Stockholder to (i) the Company, the Initial
Carlyle Stockholders, or any Affiliate of each; (ii) any member of a Management
Stockholder's immediate family or trusts for their benefit provided the
Management Stockholder retains the sole and exclusive right to vote and dispose
of any Restricted Shares transferred to the family member or trust; and (iii)
upon a Management Stockholder's death, the Management Stockholder's executors,
administrators, testamentary trustees, legatees and beneficiaries.
(c) Each Management Stockholder agrees that, as a condition
precedent to any transfer described in Section 1(b), each transferee described
in Section 1(b) (other than the Company, the Initial Carlyle Stockholders or any
Affiliate of each) shall deliver to the Company a copy of this Agreement signed
by such transferee.
SECTION 2. RIGHTS TO REPURCHASE SHARES.
(a) For a period of six (6) months following the later of
(i) the Termination of Employment (as defined below) or the Termination of
Directorship (as defined below) of any Management Stockholder; and (ii) the
exercise or expiration, in accordance with the terms of the Stock Option Plan or
any stock option agreement issued thereunder, of all Vested Options held by any
Management Stockholder as of the time of the Management Stockholder's
Termination of Employment or Termination of Directorship, the Company may elect
to repurchase Restricted Shares held by the Management Stockholder or his or her
successor in interest thereunder ("CALL Right"). The Call Right may be exercised
more than once, but must be exercised with respect to all (but not less than
all) of the Restricted Shares outstanding on the date of any Call Notice (as
defined below). The repurchase price payable by the Company upon exercise of the
Call Right ("REPURCHASE PRICE") shall be the Fair Market Value (as defined
below) of the Restricted Shares subject to the Call Right on the date of the
Call Notice. The Call Right shall be exercised by written notice ("CALL NOTICE")
to the Management Stockholder given in accordance with Section 8(f) of this
Agreement on or prior to the last date on which the Call Right may be exercised
by the Company.
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(b) For purposes of this Agreement, "TERMINATION OF
EMPLOYMENT" shall mean the time when the employee-employer relationship between
a Management Stockholder and the Company or one of its subsidiaries is
terminated for any reason, with or without cause, including, but not by way of
limitation, a termination by resignation, discharge, death or retirement, but
excluding a termination where there is a simultaneous reemployment by the
Company or one of its subsidiaries. For purposes of this Agreement, "TERMINATION
OF DIRECTORSHIP" shall mean the time when a Management Stockholder ceases to be
a member of the Board of Directors of the Company or one of its subsidiaries
("Director") for any reason, including, but not by way of limitation, a
termination by resignation, failure to be elected, death or retirement. The
committee appointed to administer the Stock Option Plan (the "COMPENSATION
COMMITTEE") or the Board of Directors shall determine the effect of all matters
and questions relating to Termination of Employment or Termination of
Directorship.
(c) Subject to Section 5 below, the repurchase of Restricted
Shares pursuant to the exercise of a Call Right shall take place on the later of
(i) the date specified by the Company which shall in no event be later than
sixty (60) days following the date of the Call Notice and (ii) within ten (10)
days following the receipt by the Company of all necessary governmental
approvals. On such date, the Management Stockholder shall transfer the
Restricted Shares subject to the Call Notice to the Company, free and clear of
all liens and encumbrances, by delivering to the Company the certificates
representing the Restricted Shares to be purchased, duly endorsed for transfer
to the Company or accompanied by a stock power duly executed in blank, and the
Company shall pay to the Management Stockholder the Repurchase Price. The
Company and the Management Stockholder each shall use his, her or its reasonable
efforts to expedite all proceedings contemplated hereunder to obtain a
determination of the Repurchase Price of the Restricted Shares at the earliest
practicable date.
(d) (i) In the case of any transfer of title or beneficial
ownership of Restricted Shares upon default, foreclosure, forfeit, divorce,
court order or otherwise, other than by a voluntary decision on the part of a
Management Stockholder (each, an "INVOLUNTARY TRANSFER"), the Management
Stockholder shall promptly (but in no event later than two days after the
Involuntary Transfer) furnish written notice (the "INVOLUNTARY TRANSFER NOTICE")
to the Company indicating that the Involuntary Transfer has occurred, specifying
the name of the person to whom the shares were transferred (the "INVOLUNTARY
TRANSFEREE"), giving a detailed description of the circumstances giving rise to,
and stating the legal basis for, the Involuntary Transfer.
(ii) Upon the receipt of the Involuntary Transfer
Notice, and for 60 days thereafter, the Company shall have the right to
elect to repurchase, and the Involuntary Transferee shall have the
obligation to sell, all (but not less than all) of the Restricted
Shares acquired by the Involuntary Transferee for a repurchase price
equal to the Fair Market Value of such shares of Common Stock as of the
date of the Involuntary Transfer (the "INVOLUNTARY TRANSFER REPURCHASE
PRICE" and such right, the "INVOLUNTARY TRANSFER REPURCHASE RIGHT").
The Involuntary Transfer Repurchase Right shall be exercised by written
notice (the "INVOLUNTARY TRANSFER REPURCHASE NOTICE") to the
Involuntary Transferee given in accordance with Section 8(f) of this
Agreement on or prior to the last date on which the Involuntary
Transfer Repurchase Right may be exercised by the Company.
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(iii) Subject to Section 5 below, the repurchase of
Restricted Shares pursuant to the exercise of the Involuntary Transfer
Repurchase Right shall take place on the later of (i) the date
specified by the Company which shall in no event be later than sixty
(60) days following the date of the Involuntary Transfer Repurchase
Notice and (ii) within ten (10) days following the receipt by the
Company of all necessary governmental approvals. On such date, the
Involuntary Transferee shall transfer the Restricted Shares subject to
the Involuntary Transfer Repurchase Notice to the Company, free and
clear of all liens and encumbrances, by delivering to the Company the
certificates representing the Restricted Shares to be purchased, duly
endorsed for transfer to the Company or accompanied by a stock power
duly executed in blank, and the Company shall pay to the Involuntary
Transferee the Involuntary Transfer Repurchase Price. The Company and
the Involuntary Transferee each shall use his, her or its reasonable
efforts to expedite all proceedings contemplated hereunder to obtain a
determination of the Involuntary Transfer Repurchase Price of the
Restricted Shares at the earliest practicable date.
(e) The Fair Market Value of Restricted Shares shall be
determined by the Board of Directors as follows:
(i) if the Common Stock is listed on one or more
National Securities Exchanges (within the meaning of the Securities
Exchange Act of 1934, as amended), each share of Common Stock to be
repurchased shall be valued at the average closing price of a share of
such class of Common Stock on the principal exchange on which the
shares are then trading, on the 20 trading days immediately preceding
such date;
(ii) if the Common Stock is not traded on a National
Securities Exchange but is quoted on the NASDAQ Stock Market or a
successor quotation system and the Common Stock is listed as a National
Market Issue under the NASD National Market System, each share of
Common Stock to be repurchased shall be valued at the average of the
last sales price on each of the 20 trading days immediately preceding
such date as reported by the NASDAQ Stock Market or such successor
quotation system; or
(iii) if the class of Common Stock is not publicly
traded on a National Securities Exchange and is not quoted on the
NASDAQ Stock Market or a successor quotation system, the Fair Market
Value of the Common Stock to be repurchased shall be determined in good
faith by the Compensation Committee or the Board of Directors. In the
event the Management Stockholder disagrees with the valuation
determined by the Compensation Committee or the Board of Directors, the
Management Stockholder may choose an independent appraiser to conduct a
valuation of the Common Stock. The selection of the independent
appraiser shall be subject to the Company's approval, which approval
shall not be unreasonably withheld. The fees and expenses of the
independent appraiser shall be borne equally by the Management
Stockholder and the Company.
SECTION 3. BRING-ALONG RIGHTS.
(a) If any Carlyle Stockholder at any time, or from time to
time, in one transaction or a series of related transactions, proposes to
Transfer shares of Common Stock to one or more Persons that is not an Affiliate
of the Initial Carlyle Stockholders (a "THIRD PARTY
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PURCHASER"), then the Carlyle Stockholder(s) shall have the right (a
"BRING-ALONG RIGHT"), but not the obligation, to require each Management
Stockholder to tender for purchase to the Third Party Purchaser, on the same
terms and conditions as apply to the selling Carlyle Stockholder(s), a number of
Restricted Shares and Vested Options (including any options that vest as a
result of the consummation of the Transfer to the Third Party Purchaser) that,
in the aggregate, equal the lesser of (A) the number derived by multiplying
(1) the total number of Restricted Shares owned by the Management Stockholder
(including Restricted Shares issuable in respect of all Vested Options held by
the Management Stockholder whether or not exercised and including any options
that vest as a result of the consummation of the Transfer to the Third Party
Purchaser); by (2) a fraction, the numerator of which is the total number of
shares of Common Stock to be sold by the Carlyle Stockholder(s) in connection
with the transaction or series of related transactions and the denominator of
which is the total number of the then outstanding shares of Common Stock held by
all Carlyle Stockholders(s); or (B) the number of shares as the Carlyle
Stockholder(s) shall designate in the Bring-Along Notice (as defined below).
(b) If any Carlyle Stockholder elects to exercise its
Bring-Along Right under this Section 3 with respect to the Restricted Shares
held by the Management Stockholders, the Carlyle Stockholder shall notify each
Management Stockholder in writing (collectively, the "BRING-ALONG NOTICES").
Each Bring-Along Notice shall set forth: (i) the name of the Third Party
Purchaser(s) and the number of shares of Common Stock proposed to be sold by the
Carlyle Stockholder to the Third Party Purchaser(s); (ii) the proposed amount
and form of consideration and terms and conditions of payment offered by the
Third Party Purchaser(s) and a summary of any other material terms pertaining to
the Transfer ("THIRD PARTY TERMS"); and (iii) the number of Restricted Shares
and Vested Options that the Carlyle Stockholder elects each Management
Stockholder to sell in the Transfer. The Bring-Along Notices shall be given at
least five (5) days before the closing of the proposed Transfer.
(c) Upon the giving of a Bring-Along Notice, each Management
Stockholder shall be obligated to sell the number of Restricted Shares and
Vested Options set forth in each Management Stockholder's Bring-Along Notice on
the Third Party Terms.
(d) At the closing of the Transfer to any Third Party
Purchaser(s) pursuant to this Section 3, the Third Party Purchaser(s) shall
remit to the Management Stockholder the consideration for the total sales
price of the Common Stock and Vested Options held by the Management
Stockholder sold pursuant hereto MINUS any consideration to be escrowed or
otherwise held back in accordance with the Third Party Terms, and MINUS the
aggregate exercise price of any Vested Options being Transferred by the
Management Stockholder to the Third Party Purchaser(s), against delivery by
the Management Stockholder of certificates for Common Stock, duly endorsed
for Transfer or with duly executed stock powers and an instrument evidencing
the transfer or the cancellation of the Vested Options subject to the
Bring-Along Right reasonably acceptable to the Company, and the compliance by
the Management Stockholder with any other conditions to closing generally
applicable to the Carlyle Stockholder(s) and all other holders of Common
Stock selling shares in the transaction.
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SECTION 4. TAG ALONG RIGHTS.
(a) In the event that, at any time prior to the date on which
the Company consummates a sale of shares of Common Stock in an initial public
offering of shares of Common Stock registered pursuant to the Securities Act of
1933, as amended, the Carlyle Stockholders propose to Transfer shares of Common
Stock to a Third Party Purchaser, in a single Transfer or a series of related
Transfers constituting a Company Sale (as defined in Section 4(d) below), then
each Management Stockholder shall have the right (the "TAG-ALONG RIGHT") to
require that the proposed Third Party Purchaser purchase from such Management
Stockholder up to the number of whole Restricted Shares equal to the number
derived by multiplying (x) the total number of shares of Common Stock that the
proposed Third Party Purchaser has agreed or committed to purchase, BY (y) a
fraction, the numerator of which is the total number of Restricted Shares (other
than shares issued or issuable upon the exercise of options) owned by the
Management Stockholder, and the denominator of which is the aggregate number of
shares of Common Stock (other than shares issued or issuable upon the exercise
of options) owned by all Carlyle Stockholders, the Management Stockholder and
all other holders of Common Stock who have exercised a Tag-Along Right similar
to the rights granted to the Management Stockholder in this Section 4. (The
intent of this computation is to accord to the Management Stockholder the right
to sell the same percentage of its holdings of Common Stock as the Carlyle
Stockholders are entitled to sell in such a transaction). Any Restricted Shares
purchased from the Management Stockholder pursuant to this Section 4(a) shall be
purchased upon the same terms and conditions as such proposed Transfer by the
selling Carlyle Stockholder(s).
(b) The Carlyle Stockholder(s) shall notify each Management
Stockholder in writing in the event such Carlyle Stockholder(s) propose to make
a Transfer or series of Transfers giving rise to the Tag-Along Right at least
seven (7) business days prior to the date on which such Carlyle Stockholder(s)
expect to consummate such Transfer (the "SALE NOTICE") which notice shall
specify the number of shares of Common Stock which the Third Party Purchaser
intends to purchase in such Transfer. The Tag-Along Right may be exercised by
any Management Stockholder by delivery of a written notice to Carlyle proposing
to sell Restricted Shares (the "TAG-ALONG Notice") within five (5) business days
following receipt of the Sale Notice from such Carlyle Stockholder(s). The
Tag-Along Notice shall state the number of Restricted Shares that the Management
Stockholder proposes to include in such Transfer to the proposed Third Party
Purchaser (not to exceed the number as determined above). In the event that the
proposed Third Party Purchaser does not purchase the specified number of
Restricted Shares from the Management Stockholder on the same terms and
conditions as specified in the Sale Notice, then the Carlyle Stockholder(s)
shall not be permitted to sell any shares of Common Stock to the proposed Third
Party Purchaser unless the Carlyle Stockholder(s) purchase from the Management
Stockholder such specified number of Restricted Shares on the same terms and
conditions as specified in such Sale Notice.
(c) At the closing of the Transfer to any Third Party
Purchaser pursuant to this Section 4, the Third Party Purchaser shall remit to
each Management Stockholder who exercised his Tag-Along Right the consideration
for the total sales price of the Common Stock held by such Management
Stockholder sold pursuant hereto MINUS any such consideration to be escrowed or
otherwise held back in accordance with the Third Party Terms, against delivery
by such Management Stockholder of certificates for such Common Stock, duly
endorsed for
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Transfer or with duly executed stock powers subject to the Tag-Along Right
reasonably acceptable to the Company, and the compliance by such Management
Stockholder with any other conditions to closing generally applicable to the
Carlyle Stockholder(s) and all other holders of Common Stock selling shares in
such transaction.
(d) For the purpose hereof, "COMPANY SALE" shall mean the
consummation of any transaction or series of transactions pursuant to which one
or more persons or entities or group of persons or entities (other than the
Initial Carlyle Stockholders, its affiliates or any transfer as a result of any
liquidation or dissolution of any Carlyle Stockholder) acquires (i) capital
stock of the Company possessing the voting power sufficient to elect a majority
of the members of the Board of Directors of the Company or its successor(s)
(whether such transaction is effected by merger, consolidation,
recapitalization, sale or transfer of the Company's capital stock or otherwise)
or (ii) all or substantially all of the assets of the Company and its
subsidiaries.
SECTION 5. REPURCHASE DISABILITY
(a) Notwithstanding anything to the contrary herein,
(i) the Company shall not be required or permitted to
purchase any Restricted Shares held by any Management Stockholder or
Involuntary Transferee upon exercise of the Call Right, Involuntary
Transfer or a Put Right if the Board of Directors determines that:
(A) the purchase of Restricted Shares would impair
the Company's or its subsidiaries' ability to meet their
obligations in the ordinary course of business taking
into account any pending or proposed transactions,
capital expenditures or other budgeted cash outlays by
the Company, including, without limitation, any proposed
acquisition of any other entity by the Company or any of
its subsidiaries;
(B) the Company is prohibited from purchasing the
Restricted Shares by applicable law restricting the
purchase by a corporation of its own shares; or
(C) the purchase of Restricted Shares would
constitute a breach of, default, or event of default
under, or is otherwise prohibited by, the terms of any
loan agreement or other agreement or instrument to which
the Company or any of its subsidiaries is a party (the
"FINANCING DOCUMENTS") or the Company is not able to
obtain the consent of its senior lender to the purchase of
the Restricted Shares.
The events described in (A) through (C) above each
constitute a "REPURCHASE Disability."
(ii) In the event of a Repurchase Disability, the
Company shall notify in writing the Management Stockholder or
Involuntary Transferee with respect to whom the Call Right, Involuntary
Transfer or Put Right has been exercised (a "DISABILITY
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NOTICE"). The Disability Notice shall specify the nature of the
Repurchase Disability. The Company shall thereafter repurchase the
Restricted Shares described in the Call Notice, Involuntary Transfer
Repurchase Notice or Put Notice as soon as reasonably practicable after
all Repurchase Disabilities cease to exist (or the Company may elect,
but shall have no obligation, to cause its nominee to repurchase the
Restricted Shares while any Repurchase Disabilities continue to exist).
In the event the Company suspends its obligations to repurchase the
Restricted Shares pursuant to a Repurchase Disability, (A) the Company
shall provide written notice to each applicable Management Stockholder
or Involuntary Transferee as soon as practicable after all Repurchase
Disabilities cease to exist (the "REINSTATEMENT NOTICE"); (B) the Fair
Market Value of the Restricted Shares subject to the Call Notice,
Involuntary Transfer Repurchase Notice or Put Notice shall be
determined as of the date the Reinstatement Notice is delivered to the
Management Stockholder or Involuntary Transferee, which Fair Market
Value shall be used to determine the Repurchase Price or Involuntary
Transfer Repurchase Price in the manner described above; and (C) the
repurchase shall occur on a date specified by the Company within ten
(10) days following the determination of the Fair Market Value of the
Restricted Shares to be repurchased as provided in subsection (B)
above.
SECTION 6. COOPERATION.
(a) In the event that any Carlyle Stockholder exercises its
rights pursuant to Section 3 or in connection with any Company Sale, each
Management Stockholder shall consent to and raise no objections against the
transaction, and if the transaction is structured as a sale of stock, each
Management Stockholder shall take all actions that the Board of Directors and
the Carlyle Stockholders reasonably deem necessary or desirable in connection
with the consummation of the transaction. Without limiting the generality of the
foregoing, each Management Stockholder agrees to (i) consent to and raise no
objections against the transaction; (ii) execute any Common Stock purchase
agreement, merger agreement or other agreement entered into with the Third Party
Purchaser with respect to the transaction setting forth the Third Party Terms
and any ancillary agreement with respect thereto; (iii) vote the Common Stock
held by the Management Stockholder in favor of the transaction; and (iv) refrain
from the exercise of dissenters' appraisal rights with respect to the
transaction.
(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 under the Act, may be available with respect to
the negotiation or transaction (including a merger, consolidation, or other
reorganization), each Management Stockholder shall, if requested by the Company,
appoint a purchaser representative (as defined in Rule 501 of the Act)
reasonably acceptable to the Company. If the purchaser representative is
designated by the Company, the Company shall pay the fees of the purchaser
representative, but if any Management Stockholder appoints another purchaser
representative, the Management Stockholder shall be responsible for the fees of
the purchaser representative so appointed.
(c) Each Management Stockholder shall bear its pro-rata share
of the costs of any transaction in which it sells Restricted Shares or Vested
Options (based upon the number of Restricted Shares and Vested Options held by
the Management Stockholder that are sold in such
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transaction) to the extent such costs are incurred for the benefit of all
holders of Common Stock and Vested Options and are not otherwise paid by the
Company or the acquiring party.
SECTION 7. TERMINATION. This Agreement shall terminate on the first to
occur of:
(a) The date the Company consummates an underwritten public
offering of at least $50 million of Common Stock by the Company pursuant to an
effective registration statement filed by the Company with the United States
Securities and Exchange Commission (other than on Forms S-4 or S-8 or successors
to such forms) under the Act; or
(b) The complete liquidation of the Company or the sale, lease
or other disposition by the Company of all or substantially all of the Company's
assets; or
(c) The execution of a resolution of the Board of Directors
terminating the Agreement. Notwithstanding the foregoing, a Stockholder's
Tag-Along Right shall survive a termination of this Agreement pursuant to this
Section 7(c).
SECTION 8. MISCELLANEOUS.
(a) LEGENDS. Each certificate representing the Restricted
Shares shall bear the following legends:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT AND SAID LAWS OR AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS THEREOF."
"THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO ADDITIONAL
RESTRICTIONS ON TRANSFER AND CERTAIN OTHER AGREEMENTS SET
FORTH IN A STOCKHOLDERS AGREEMENT BETWEEN THE ISSUER AND THE
INITIAL HOLDER HEREOF DATED AS OF [DATE]. A COPY OF SUCH
AGREEMENT SHALL BE FURNISHED WITHOUT CHARGE BY THE ISSUER TO
THE HOLDER HEREOF UPON WRITTEN REQUEST."
(b) SUCCESSORS, ASSIGNS AND TRANSFEREES. This Agreement shall
be binding upon and inure to the benefit of the Parties hereto and their
respective legal representatives, heirs, legatees, successors, and assigns and
any other transferee of the Restricted Shares and shall also apply to any
Restricted Shares acquired by any Management Stockholder after the date hereof.
(c) SPECIFIC PERFORMANCE, ETC. Each Party, in addition to
being entitled to exercise all rights provided herein or granted by law,
including recovery of damages, shall be entitled to specific performance of the
Party's rights under this Agreement. Each Party agrees that monetary damages
would not be adequate compensation for any loss incurred by reason of a
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breach by the Party of the provisions of this Agreement and each Party hereby
agrees to waive the defense in any action for specific performance that a remedy
at law would be adequate.
(d) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the state of Delaware.
(e) INTERPRETATION. The headings of the Sections contained in
this Agreement are solely for the purpose of reference, are not part of the
agreement of the Parties and shall not affect the meaning or interpretation of
this Agreement.
(f) NOTICES. All notices and other communications provided for
or permitted hereunder shall be in writing and shall be deemed to have been duly
given and received when delivered by overnight courier or hand delivery, when
sent by telecopy, or five (5) days after mailing if sent by registered or
certified mail (return receipt requested) postage prepaid, to the Parties at the
following addresses (or at such other address for any Party as shall be
specified by like notices, provided that notices of a change of address shall be
effective only upon receipt thereof).
(i) If to the Company at:
Rexnord Corporation
--------------------------
--------------------------
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Attention:
with copies to the Carlyle Stockholders at the
address listed below and:
Xxxxxx & Xxxxxxx
000 Xxxxxxxx Xxxxxx, X.X.
Xxxxx Xxxxx
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile: 000-000-0000
(ii) If to the Carlyle Stockholders at:
TC Group, LLC
0000 Xxxxxxxxxxxx Xxxxxx, XX
Xxxxx 000 Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile: 000-000-0000
with a copy to Xxxxxx & Xxxxxxx, at the address
given above.
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(iii) If to a Management Stockholder, to the address set
forth on the Management Stockholder's signature page hereto.
(g) RECAPITALIZATION, EXCHANGE, ETC. AFFECTING THE COMPANY'S
STOCK. The provisions of this Agreement shall apply, to the full extent set
forth herein, with respect to any and all shares of Common Stock and all of the
shares of capital stock of the Company or any successor or assign of the Company
(whether by merger, consolidation, sale of assets, or otherwise) that may be
issued in respect of, in exchange for, or in substitution of such Common Stock
and shall be appropriately adjusted for any stock dividends, splits, reverse
splits, combinations, recapitalizations, and the like occurring after the date
hereof.
(h) COUNTERPARTS. This Agreement may be executed in two (2) or
more counterparts, each of which shall be deemed to be an original and all of
which together shall be deemed to constitute one and the same agreement.
(i) ATTORNEY'S FEES. In any action or proceeding brought to
enforce any provision of this Agreement, each party shall pay its own attorney's
fees and expenses regardless of whether in the opinion of the court or
arbitrator deciding the action or proceeding there is a prevailing party.
(j) SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal, or unenforceable in any respect for any reason, the
validity, legality, and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be in any way
impaired thereby.
(k) AMENDMENT. This Agreement may be amended by resolution of
the Board of Directors provided the amendment has been approved by the Initial
Carlyle Stockholders. At any time hereafter, additional Management Stockholders
may be made parties hereto by executing a signature page in the form attached as
Exhibit A hereto, which signature page shall be countersigned by the Company and
shall be attached to this Agreement and become a part hereof without any further
action of any other Party hereto.
(l) TAX WITHHOLDING. The Company shall be entitled to require
payment in cash or deduction from other compensation payable to any Management
Stockholder of any sums required by federal, state, or local tax law to be
withheld with respect to the issuance, vesting, exercise, repurchase, or
cancellation of any Restricted Share or any option to purchase Restricted
Shares.
(m) NO ADDITIONAL RIGHTS. Nothing contained in this Agreement
(i) obligates the Company or any Affiliate of the Company to employ any
Management Stockholder in any capacity whatsoever; (ii) confers upon any
Management Stockholder the right to continue to serve as a Director,
(iii) prohibits or restricts the Company or any Affiliate of the Company from
terminating the employment, if any, of any Management Stockholder at any time or
for any reason whatsoever, with or without cause; or (iv) restricts in any way
the rights of the stockholders of the Company or any of its subsidiaries, to
remove any Management Stockholder as a Director at any time for any reason
whatsoever. Each Management Stockholder hereby
11
acknowledges and agrees that neither the Company nor any other person has made
any representations or promises whatsoever concerning his or her employment or
directorship, or continued employment by the Company or any Affiliate of the
Company.
(n) OFFSETS. The Company shall be permitted to offset and
reduce from any amounts payable to a Management Stockholder the amount of any
indebtedness or other obligation or payment owing to the Company by the
Management Stockholder .
(o) ENTIRE AGREEMENT. This writing constitutes the entire
agreement of the Parties with respect to the subject matter hereof.
[signature pages follow]
12
IN WITNESS WHEREOF, the undersigned have executed this
Agreement on the date first written above.
RBS GLOBAL, INC.
By: /s/ XXXXXXX X. XXXXXXXXX
---------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice President
CARLYLE PARTNERS III, L.P.
By: TC Group III, L.P., its General Partner
By: TC Group III, L.L.C., its General Partner
By: TC Group, L.L.C., its Managing Member
By: TCG Holdings, L.L.C., its Managing Member
By: /s/ XXXXXXX X. XXXXXXXXX
---------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Managing Director
CP III COINVESTMENT, L.P.
By: TC Group III, L.P., its General Partner
By: TC Group III, L.L.C., its General Partner
By: TC Group, L.L.C., its Managing Member
By: TCG Holdings, L.L.C., its Managing Member
By: /s/ XXXXXXX X. XXXXXXXXX
---------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Managing Director
CARLYLE HIGH YIELD PARTNERS, L.P.
By: TCG High Yield, L.L.C., its General Partner
By: TCG High Yield Holdings, L.L.C.,
its Managing Member
By: TC Group, L.L.C., its sole Member
By: TCG Holdings, L.L.C., its Managing Member
By: /s/ XXXXXXX X. XXXXXXXXX
---------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Managing Director
Each Management Stockholder has agreed to be bound by the
terms of this Agreement by execution and deliver of the signature page set
forth as Exhibit A hereto.
EXHIBIT A
SIGNATURE PAGE
TO
STOCKHOLDERS AGREEMENT OF
RBS GLOBAL, INC.
By execution of this signature page, Xxxxxxx Xxxxxxxxxxxx
hereby agrees to become a party (as a Management Stockholder) to, be bound by
the obligations of, and receive the benefits of, that certain Stockholders
Agreement of RBS Global, Inc. dated as of November 25, 2002 by and among
Xxxxxxx Xxxxxxxxxxxx, Carlyle Partners III, L.P., CPIII Coinvestment, L.P.,
Carlyle High Yield Partners, L.P. and certain other parties named therin, as
amended from time to time thereafter.
/s/ XXXXXXX XXXXXXXXXXXX
------------------------------------
Xxxxxxx Xxxxxxxxxxxx
[Address]
0000 Xxxxxxxxx Xxxxx
------------------------------------
Xxxxxxxxx, XX 00000
------------------------------------
Accepted:
RBS Global, Inc.
By: /s/ XXXXXXX X. XXXXXXXXX
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
