Exhibit 10.5
ALPHA NATURAL RESOURCES, INC.
AMENDED AND RESTATED STOCKHOLDER AGREEMENT
This Amended and Restated Stockholder Agreement (this "Agreement") is made
and entered into effective as of October 26, 2005 (the "Effective Date") by and
among (i) Alpha Natural Resources, Inc., a Delaware corporation (the "Company"),
(ii) ANR Fund IX Holdings, L.P., a Delaware limited partnership, and First
Reserve Fund IX, L.P., a Delaware limited partnership (the "FRC Parties"), (iii)
Vollow Resources LLC, a West Virginia limited liability company, Redbank, Inc.,
a West Virginia corporation, REI, Inc., a West Virginia corporation, Still Run
Coal Company, Inc., a West Virginia corporation, Creekside Energy Development
Company, a West Virginia corporation ("Creekside"), Newhall Pocahontas Energy,
Inc., a West Virginia corporation, SCM, Inc., a West Virginia corporation,
Tanoma Energy, Inc., a Pennsylvania corporation, Madison Mining Company, LLC, a
Pennsylvania limited liability company, Laurel Energy, L.P., a Pennsylvania
limited partnership, Laurel Resources, L.P., a Pennsylvania limited partnership,
I-22 Processing, Inc., a Pennsylvania corporation, Dunamis Resources, Inc., a
Pennsylvania corporation, Beta Resources, LLC, a Colorado limited liability
company, and RRD, Inc., a West Virginia corporation, (collectively, the "AMCI
Parties"), (iv) Madison Capital Funding LLC, a Delaware limited liability
company ("Madison"), (v) the individuals listed on Schedule 1 attached to this
Agreement (the "Xxxxxxxxxx Parties") and (vi) the employees of the Company or
its subsidiaries listed on Schedule 2 attached to this Agreement (the "Employee
Stockholders"). Together, the FRC Parties, the AMCI Parties and Madison are
collectively referred to as the "Investors." The Employee Stockholders, the
Xxxxxxxxxx Parties and the Investors are collectively referred to in this
Agreement as the "Stockholders."
RECITALS
A. The Company, the FRC Parties, the AMCI Parties, Madison and the Employee
Stockholders entered into that certain Stockholder Agreement dated as of
February 11, 2005, as amended by that certain Amendment to Section 3.1 of
Stockholder Agreement dated August 12, 2005 between Xxxx X. Xxxxx in his
capacity as the AMCI Representative and First Reserve Fund IX, L.P. in its
capacity as the FRC Representative (as amended, the "Original Agreement"), in
order to set forth certain understandings with respect to their holdings of the
Company's Common Stock, par value $0.01 per share (the "Common Stock").
B. In connection with the Company's acquisition of White Flame Energy, Inc.
(the "Xxxxxxxxxx Acquisition"), the Company has issued shares of Common Stock to
the Xxxxxxxxxx Parties on the Effective Date, and the Company has agreed to
cause the Original Agreement to be amended and restated as set forth herein.
1
C. The number of shares of the Company's capital stock held by each
Stockholder as of the Effective Date, including shares of Common Stock issued to
the Xxxxxxxxxx Parties at the closing of the Xxxxxxxxxx Acquisition, are set
forth on Exhibit A. A true and correct copy of the Company's Certificate of
Incorporation and Bylaws, each as amended through the Effective Date, are
attached as Exhibits B and C, respectively.
D. The undersigned parties to the Original Agreement include "Stockholders"
(as defined in the Original Agreement) holding not less than a majority of the
outstanding shares of Common Stock held by all "Stockholders" (as defined in the
Original Agreement), including both the FRC Parties and the AMCI Parties, which
parties have the right to amend and restate the Original Agreement pursuant to
Section 3.3(a) to read as set forth herein.
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual
promises hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. ELECTION OF DIRECTORS AND RESTRICTED ACTIONS.
1.1 Election of Directors.
(a) Board Composition. The AMCI Parties, the FRC Parties and the
Company to the fullest extent permitted by law, agree to take all necessary
action, including the voting of shares or the taking of action by written
consent, to implement the following composition of the Board of Directors of the
Company (the "Board"). The Board shall be comprised initially of eight
individuals who shall be natural persons. One such individual shall be the
Company's Chief Executive Officer, who shall initially be Xxxxxxx X. Xxxxxxx.
Subject to Section 1.1(b), the FRC Parties shall be entitled to nominate two
individuals to serve on the Board, who shall initially be Xxxxxxx X. Xxxxxxxx
and Xxxx X. Xxxxxxx. Subject to Section 1.1(b), the AMCI Parties shall be
entitled to nominate two individuals to serve on the Board, who shall initially
be Xxxxx X. Xxxxxxx and Xxxx X. Xxxxx. Three individuals, who shall be
"independent" as such term is defined in Section 303A of the NYSE Listed Company
Manual, and reasonably acceptable to the FRC Parties and the AMCI Parties, shall
be appointed to the Board, who shall initially be E. Xxxx Xxxxxx, Xx., Xxxxx X.
Xxxxxxxxx and Xxxx X. Xxx, Xx. The FRC Parties, on the one hand, and the AMCI
Parties, on the other hand, shall, when acting in this capacity, each be
referred to as a "Board Group." The Board may adjust from time to time by
resolution the number of directors comprising the Board.
(b) Qualifying Board Group. At such time as either the FRC Parties and
their Affiliates (as defined below), on the one hand, or the AMCI Parties and
their Affiliates, on the other hand, no longer own at least 15% of the
outstanding shares of Common Stock, such Board Group shall be entitled to
designate only one individual to serve on the Board, and such Board Group shall
upon the Company's request on behalf of the Board use its best efforts to cause
one of its designated directors to resign or to be removed from the Board. At
such time as either the FRC Parties and their Affiliates (as defined below), on
the one hand, or the AMCI Parties and their Affiliates, on the other hand, no
longer own at least 7.5% of the outstanding shares of Common Stock, such Board
Group shall no longer be entitled to designate any individuals to serve on the
Board, and such Board Group shall upon the Company's request on behalf of the
2
Board use its best efforts to cause its designated director to resign or to be
removed from the Board. For purposes of this Agreement, an "Affiliate" is any
Person that directly or indirectly through one or more intermediaries controls
or is controlled by or is under common control with the specified Person. As
used in this definition of "Affiliate," the term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting
securities, by contract, or otherwise, and as used in this Agreement the term
"Person" means any individual, corporation, association, partnership, limited
liability company, joint venture, trust, estate or other entity or organization.
(c) Reduction of Board. To the extent that either Board Group loses
the right to designate Directors pursuant to the provisions of Section 1.1(b),
the Board will take such action as may be required so as to reduce the size of
the Board.
(d) Expanded Board. From time to time as may be required by applicable
federal and state securities laws, the Board shall be expanded to include such
additional "independent" directors as may be required by the rules of any
exchange on which the shares of the Company's capital stock are traded. Such
independent directors shall be selected by the Board and shall be reasonably
acceptable to both the FRC Parties' Board Group (so long as such Board Group is
entitled to designate any individuals to serve on the Board pursuant to Section
1.1(b) above (a "Qualifying Board Group")) and the AMCI Parties' Board Group (so
long as it is a Qualifying Board Group).
(e) Chairman. A Chairman of the Board (the "Chairman") may, from time
to time, be appointed by the Directors from among themselves. The Chairman of
the initial Board shall be Xxxx X. Xxxxx. The Chairman, if appointed, will
preside over meetings of the Board.
(f) Voting. Each Director, including the Chairman, shall have a single
vote. Any vote, consent or other action of the Board may be undertaken with the
unanimous written consent (in lieu of meeting) of the Directors, in each case
who have been appointed and who are then in office.
(g) Removal and Replacement. Each Board Group shall be entitled at any
time (with or without cause) to cause any or all of the Directors designated by
such Board Group pursuant to Section 1.1(a) to be removed from the Board. Except
as otherwise provided by applicable law, a Director may be removed only by a
Board Group that designated such Director to the Board. In the event that a
vacancy is created at any time by the death, disability, retirement, resignation
or removal (with or without cause) of any Director, or, if prior to his or her
appointment to the Board, any Director-designee of a Board Group indicates that
he or she is unwilling or unable to serve as a Director, then (i) the Board
Group that had appointed such Director (or designee) shall cause the vacancy
created thereby to be filled by an appropriate individual as soon as reasonably
practicable and (ii) the Board shall not take any material action over the
objection of such Board Group with a pending vacancy on the Board without such
Board Group's consent until a replacement Director has been appointed by the
appropriate Board Group pursuant to clause (i) of this sentence and elected to
the Board.
3
(h) Board Committees. The Board of Directors may, by resolution passed
by a majority of the whole Board of Directors, designate one or more committees,
including but not limited to an audit committee, a compensation committee, and a
nominating and governance committee, each such committee to consist of one or
more of the directors of the Company.
1.2 VCOC. In the event that the Company ceases to qualify as an "operating
company" (as defined in the first sentence of 29 C.F.R. Section 2510.3-101(c)),
then the Company will cooperate in good faith to take all reasonable action
necessary to provide that the investment (or at least 51% of the investment
valued at cost) of each Stockholder that qualifies as a "venture capital
operating company" (as defined in 29 C.F.R. Section 2510.3-101(d)) (a "VCOC
Stockholder") shall continue to qualify as a "venture capital investment" (as
defined in 29 C.F.R. Section 2510.3-101(d)).
1.3 Stockholder Action. For as long as either the FRC Parties' Board Group
or the AMCI Parties' Board Group constitutes a Qualifying Board Group, then
except as required by law, the AMCI Parties shall be obligated to vote all of
the Common Stock held by such Persons in favor of any individual designated to
serve as Director pursuant to Section 1.1(a). For so long as the AMCI Parties'
Board Group constitutes a Qualifying Board Group, then except as required by
law, the FRC Parties shall be obligated to vote all of the Common Stock held by
such Person in favor of any individual designated to serve as Director pursuant
to Section 1.1(a).
2. REGISTRATION RIGHTS.
2.1 Definitions. For purposes of this Section 2:
(a) Demand Right Holder. The term "Demand Right Holder" means the FRC
Parties as a group and the AMCI Parties as a group; provided that a Demand Right
Holder shall cease to be a Demand Right Holder at such time as it holds in the
aggregate less than 10% of the Registrable Securities Then Outstanding.
(b) Holder. The term "Holder" means any Stockholder owning of record
Registrable Securities or any permitted assignee of record of such Registrable
Securities to whom rights under this Section 2 have been duly assigned in
accordance with this Agreement.
(c) Initial Public Offering. The term "Initial Public Offering" means
the Company's first underwritten public offering of Common Stock pursuant to the
Company's registration statement under the Securities Act of 1933, as amended,
on Form S-1 (file no. 333-121002).
(d) Majority Holder(s). The term "Majority Holder(s)" means Holders
holding a majority of Registrable Securities held by all Holders requesting
inclusion in a registration.
(e) Registration. The terms "register," "registered," and
"registration" refer to a registration effected by preparing and filing a
registration statement in compliance with the Securities Act of 1933, as amended
(the "Securities Act"), and the declaration or ordering of effectiveness of such
registration statement.
4
(f) Registrable Securities. The term "Registrable Securities" means
all shares of Common Stock now owned or hereinafter acquired by a Stockholder
and any equity of the Company or other entity acquired in exchange for shares of
Common Stock. Notwithstanding the foregoing, "Registrable Securities" shall
exclude any Registrable Securities sold by a Person in a transaction in which
rights under this Section 2 are not assigned in accordance with this Agreement
and any Registrable Securities sold in a public offering, whether sold pursuant
to Rule 144 promulgated under the Securities Act, or in a registered offering,
or otherwise.
(g) Registrable Securities Then Outstanding. The "Registrable
Securities Then Outstanding" shall mean the shares of Common Stock that are
Registrable Securities and (i) are then issued and outstanding or (ii) are then
issuable pursuant to an exercise or conversion of securities exercisable for, or
convertible into, Common Stock.
(h) SEC. The term "SEC" means the U.S. Securities and Exchange
Commission.
2.2 Demand Registration.
(a) Request by Demand Right Holder. If the Company has previously
effected the registration of a class of its equity securities under the
Securities Act and shall receive a written request (a "Demand Notice") from a
Demand Right Holder that the Company file a registration statement under the
Securities Act covering the registration of Registrable Securities pursuant to
this Section 2.2(a), then the Company shall, within ten (10) business days of
the receipt of a Demand Notice, give written notice of such request (the
"Request Notice") to all Holders and, in addition to complying with its
obligations under Section 2.3, shall use its best efforts to effect, as soon as
practicable, the registration under the Securities Act of all Registrable
Securities that the Demand Right Holder requests to be registered in the Demand
Notice, subject only to the limitations of this Section 2.2 and the rights of
other Holders pursuant to Section 2.3; provided that the Company shall not be
obligated to effect any such registration if the Company has, within the six (6)
month period preceding the date of such request, already effected a registration
under the Securities Act pursuant to (i) this Section 2.2(a) or (ii) Section 2.3
in which the Demand Right Holder participated, other than a registration from
which all or a portion of the Registrable Securities of the Demand Right Holder
were excluded pursuant to the provisions of Section 2.3(b).
(b) Underwriting. If a Demand Right Holder intends to distribute the
Registrable Securities covered by its request by means of an underwritten
offering, then it shall so advise the Company as a part of the Demand Notice,
and the Company shall include such information in the Request Notice. In such
event, the right of any Holder to include his, her or its Registrable Securities
in such registration pursuant to the rights set forth in Section 2.3 shall be
conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting as
provided in this Agreement (unless otherwise mutually agreed by such Holder and
the Majority Holder(s)). The Company and all Holders proposing to distribute
their securities through such underwriting shall enter into an underwriting
agreement in customary form with the managing underwriter or underwriters
selected for such underwriting by the Majority Holder(s). All Holders, whether
or not they are participating in such offering, and the Company agree not to
effect any sale, transfer, assignment,
5
pledge or conveyance of (including, without limitation, taking any short
position in) Registrable Securities (or any securities of the Company
exchangeable or convertible into Registrable Securities) during the 180-day
period beginning on the effective date of a registration statement filed by the
Company pursuant to this Section 2.2, except as part of that Registration, (or
for such (i) shorter period as the sole or lead managing underwriter shall
request or (ii) longer period as the sole underwriter or lead managing
underwriter(s) may request in connection with New York Stock Exchange ("NYSE")
or National Association of Securities Dealers, Inc. ("NASD") rules restricting
the timing of the underwriters publishing or distributing research reports on
the Company) (the "Lock-up Period"); provided, however, that, with respect to
offerings other than the Company's Initial Public Offering, Holders who
beneficially own less than 1% of the Registrable Securities Then Outstanding
shall not be subject to the Lock-up Period unless so required by the managing
underwriter and, in such case, the Lock-up Period shall be reduced to a 90-day
period beginning on the effective date of such registration statement (or such
longer period as the sole underwriter or lead managing underwriter(s) may
request in connection with the requirements of applicable NYSE or NASD rules).
Each Holder agrees to enter into customary lock-up agreements with an
underwriter consistent with the terms of the preceding sentence. Notwithstanding
any other provision of this Section 2.2 or Section 2.3, if the managing
underwriter(s) determine in good faith that marketing factors require a
limitation of the number of securities to be underwritten, the Company shall so
advise all Holders of Registrable Securities that would otherwise be registered
and underwritten pursuant hereto, and the managing underwriter(s) may exclude
shares of the Registrable Securities as necessary from the registration and the
underwriting, with the number of shares to be included in the registration and
the underwriting allocated in the following manner: first, to the Investors
requesting inclusion of their Registrable Securities in such registration
statement (whether pursuant to Sections 2.2(a), 2.2(b) or 2.3), on a pro rata
basis, based on the total number of Registrable Securities then held by each
such Investor; second, to the Company; and third, to each of the Employee
Stockholders and Xxxxxxxxxx Parties requesting inclusion of Registrable
Securities in such registration statement pursuant to Section 2.3, on a pro rata
basis, based on the total number of Registrable Securities then held by each
such Employee Stockholder and Xxxxxxxxxx Party. No other Registrable Securities
may be included (other than by the Company or by the Holders pursuant to Section
2.3) without the consent of the Majority Holder(s). If, as a result of any
reduction or limitation at the request of an underwriter, a registration
effected pursuant to this Section 2.2 does not include at least 80% of the
Registrable Securities that the Holders requested to be registered in the Demand
Notice, such registration shall not constitute a demand for purposes of Section
2.2(d). For any Holder that is a partnership, the Holder and the partners and
retired partners of such Holder, or the estates and family members of any such
partners and retired partners and any trusts for the benefit of any of the
foregoing Persons, and for any Holder that is a corporation, the Holder and all
corporations that are Affiliates of such Holder, shall be deemed to be a single
"Holder," and any pro rata reduction with respect to such "Holder" shall be
based upon the aggregate amount of Registrable Securities owned by all entities
and individuals included in such "Holder," as defined in this sentence.
(c) Shelf Registration. If the Company is eligible to register the
resale of Registrable Securities by Holders on Form S-3, then any registration
under Section 2.2(a) shall, if requested in the Demand Notice, be effected on
Form S-3 pursuant to Rule 415 under the Act (or its successor) on a continuous
basis for the period requested (a "Shelf Registration"). In the event of such a
Shelf Registration, the Company shall be entitled to require that a Holder or
6
Holders refrain from effecting any public sales or distributions of Registrable
Securities pursuant to a registration statement, if the Board reasonably
determines that such public sales or distributions would interfere in any
material respect with any transaction involving the Company that the Board
reasonably determines to be material to the Company. The Board shall, as
promptly as practicable, give the Holders written notice of any such
development. In the event of a request by the Board that Holders refrain from
effecting any public sales or distributions of Registrable Securities, the
Company shall be required to lift such restrictions regarding effecting public
sales or distributions of Registrable Securities as soon as reasonably
practicable after the Board shall reasonably determine public sales or
distributions by Holders shall not interfere with such transaction, provided,
that in no event shall any requirement that Holders refrain from effecting
public sales or distributions of Registrable Securities extend for more than 90
days in any twelve month period.
(d) Maximum Number of Demand Registrations. The Company shall be
obligated to effect only two (2) such registrations pursuant to Section 2.2(a)
on behalf of each Demand Right Holder, both of which may be a Shelf
Registration; provided that each of such registrations shall involve the offer
and sale of Registrable Securities in an amount estimated by the Demand Right
Holder in good faith to result in net proceeds to such Demand Right Holder of
not less than $75,000,000. A Registration shall be effected for purposes of this
Section 2.2(d) when and if a registration statement is declared effective by the
SEC and the distribution of securities thereunder has been completed without the
occurrence of any stop order or proceeding relating thereto suspending the
effectiveness of the Registration.
(e) Deferral. Notwithstanding the foregoing, if the Company shall
furnish to the requesting Holders a certificate signed by the President or Chief
Executive Officer of the Company stating that, in the good faith judgment of the
Board, it would be materially detrimental to the Company and its stockholders
for such registration statement to be filed, then the Company shall have the
right to defer such filing for a period of not more than ninety (90) days after
receipt of the request of the Holders pursuant to Section 2.2(a) or 2.2(b), as
the case may be; provided, however, that the Company may not utilize this right
more than once in any twelve (12) month period.
(f) Expenses. All expenses incurred in connection with any
registration pursuant to this Section 2.2, including without limitation all
federal and "blue sky" registration, filing and qualification fees, printer's
and accounting fees, fees and disbursements of counsel for the Company, and fees
and expenses of one counsel for the Holders (selected by the Majority Holder(s))
shall be borne by the Company. Each Holder participating in a registration
pursuant to this Section 2.2 shall bear such Holder's proportionate share (based
on the total number of Registrable Securities sold in such registration other
than for the account of the Company) of all discounts, commissions or other
amounts payable to underwriters or brokers in connection with such offering by
the Holders. Notwithstanding the foregoing, the Company shall not be required to
pay for any expenses of any registration proceeding begun pursuant to this
Section 2.2 if the registration request is subsequently withdrawn at the request
of the Majority Holder(s), unless the Majority Holder(s) agrees that such
registration constitutes the use by it of one (1) demand registration pursuant
to this Section 2.2(a) or Section 2.2(b), respectively; provided, however, that
if at the time of such withdrawal, such Majority Holder(s) has learned of a
material adverse change in the condition, business, or prospects of the Company
not known to such Majority
7
Holder(s) at the time of its request for such registration and has withdrawn its
request for registration with reasonable promptness after learning of such
material adverse change, then the Company shall be required to pay all such
expenses and such registration shall not constitute the use of a demand
registration pursuant to this Section 2.2.
2.3 Piggyback Registrations.
(a) The Company shall promptly notify all Holders in writing (a
"Piggyback Notice") prior to filing any registration statement under the
Securities Act for purposes of effecting an offering of securities of the
Company (including, but not limited to, registration statements relating to the
initial or secondary public offerings of securities of the Company, whether
pursuant to Section 2.2 or otherwise, but excluding registration statements
relating to any employee benefit plan or a corporate reorganization) and subject
to Section 2.3(b), the Company will afford each such Holder an opportunity to
include in such registration statement all or any part of the Registrable
Securities then held by such Holder. Each Holder desiring to include in any such
registration statement all or any part of the Registrable Securities held by
such Holder shall within ten (10) days after receipt of the Piggyback Notice so
notify the Company in writing, and in such notice shall inform the Company of
the number of Registrable Securities such Holder wishes to include in such
registration statement. If a Holder decides not to include all of its
Registrable Securities in any such registration statement, such Holder shall
nevertheless continue to have the right to include any Registrable Securities in
any subsequent registration statement or registration statements as may be filed
by the Company with respect to offerings of its securities, all upon the terms
and conditions set forth in this Agreement.
(b) Underwriting. If a registration statement referred to in the
Piggyback Notice is for an underwritten offering, then the Company shall so
advise the Holders. In such event, the right of any such Holder to include
Registrable Securities in such a Registration shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting as provided in this Agreement. All
Holders proposing to distribute their Registrable Securities through such
underwriting shall enter into an underwriting agreement in customary form with
the managing underwriter or underwriters selected by the Company for such
underwriting. With respect to the Company's Initial Public Offering or any other
offering in which the Company, the AMCI Parties, and/or the FRC Parties are
selling securities pursuant to a registration statement requiring notice to
Holders of Registrable Securities under this Section 2.3, all Holders, whether
or not they are participating in such offering, hereby agree not to effect any
sale, transfer, assignment, pledge or conveyance of (including, without
limitation, taking any short position in) Registrable Securities (or any
securities of the Company exchangeable or convertible into Registrable
Securities) during the Lock-up Period beginning on the effective date of such
registration statement filed by the Company, except as part of that
registration; provided, however, that, with respect to offerings other than the
Company's Initial Public Offering, Holders who beneficially own less than 1% of
the Registrable Securities Then Outstanding shall not be subject to the Lock-up
Period unless so required by the managing underwriter and, in such case, the
Lock-up Period shall be reduced to a 90-day period beginning on the effective
date of such registration statement (or such longer period as the sole
underwriter or lead managing underwriter(s) may request in connection with the
requirements of applicable NYSE or NASD rules). Each Holder agrees to enter into
customary lock-up agreements with an underwriter consistent with the terms of
the preceding
8
sentence. Notwithstanding any other provision of this Agreement, if the managing
underwriter(s) determine(s) in good faith that marketing factors require a
limitation of the number of shares to be underwritten, then the Company shall so
advise all Holders of Registrable Securities that would otherwise be registered
and underwritten pursuant hereto, and the managing underwriter(s) may exclude
shares of the Registrable Securities from the registration and the underwriting,
and the number of shares that will be included in the registration and the
underwriting shall be allocated as set forth in Section 2.2, or, if the
underwriting is not pursuant to Section 2.2, first to the Company, and second,
to each of the Holders requesting inclusion of their Registrable Securities in
such registration statement on a pro rata basis based on the total number of
Registrable Securities then held by each such Holder. If any Holder disapproves
of the terms of any such underwriting, such Holder may elect to withdraw
therefrom by written notice to the Company and the underwriter(s), delivered at
least ten (10) business days prior to the effective date of the registration
statement. Any Registrable Securities excluded or withdrawn from such
underwriting shall be excluded and withdrawn from the registration. The defined
term "Holder" shall be construed for purposes of this Section 2.3(b) in the same
manner as set forth in the last sentence of Section 2.2(b).
(c) Expenses. All expenses incurred in connection with a registration
pursuant to this Section 2.3 (excluding underwriters' and brokers' discounts and
commissions relating to shares sold by the Holders), including, without
limitation all federal and "blue sky" registration, filing and qualification
fees, printers' and accounting fees, fees and disbursements of counsel for
Holders (selected by the Majority Holder(s)), and fees and disbursements of
counsel for the Company, shall be borne by the Company. Each Holder
participating in a registration pursuant to this Section 2.3 shall bear such
Holder's proportionate share (based on the total number of shares sold in such
registration other than for the account of the Company) of all discounts,
commissions or other amounts payable to underwriters or brokers in connection
with such offering by the Holders.
(d) Not Demand Registration. Registration pursuant to this Section 2.3
shall not be deemed to be a demand registration as described in Section 2.2,
unless the participating Holders holding a majority of Registrable Securities
being registered specifically elect otherwise in writing. Except as otherwise
provided in this Agreement, there shall be no limit on the number of times the
Holders may request registration of Registrable Securities under this Section
2.3.
(e) Withdrawal Right. Notwithstanding any provision contained in this
Section 2.3 to the contrary, the Company shall have the right to terminate or
withdraw any registration statement initiated by it (other than in response to a
Demand Notice under Section 2.2) prior to the effectiveness of such registration
statement whether or not any Holder has elected to include his, her or its
Registrable Securities in such registration statement.
(f) Shelf Registrations. In the event the registration pursuant to
this Section 2.3 is a Shelf Registration, the Holders requesting inclusion in
such registration pursuant to Section 2.3(a) shall comply with the provisions of
Section 2.2(c).
9
2.4 Obligations of the Company. Whenever required to effect the
registration of any Registrable Securities under this Agreement the Company
shall, as expeditiously as reasonably possible:
(a) Registration Statement. Subject to the requirements of Section
2.2(e), prepare and file with the SEC a registration statement with respect to
such Registrable Securities and use its best efforts to cause such registration
statement to become effective and to keep any such registration statement
effective for so long as required by the Securities Act to complete the
distribution.
(b) Amendments and Supplements. Prepare and file with the SEC such
amendments and supplements to such registration statement and the prospectus
used in connection with such registration statement as may be necessary to
comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by such registration statement.
(c) Prospectuses. Furnish to the Holders such number of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by them that are included in such registration.
(d) Blue Sky. Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Majority Holder(s); provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states or
jurisdictions.
(e) Underwriting. In the event of any underwritten public offering,
enter into and perform its obligations under an underwriting agreement in usual
and customary form (including indemnification provisions), with the managing
underwriter(s) of such offering. Each Holder participating in such underwriting
shall also enter into and perform its obligations under such an agreement.
(f) Notification. Notify each Holder of Registrable Securities covered
by such registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated in such registration statement or
necessary to make the statements in such registration statement not misleading
in the light of the circumstances then existing. In addition, the Company shall
promptly notify each Holder and each underwriter, broker, dealer and placement
agent participating in any offering or sale or other distribution of securities
covered by such registration statement of the issuance or threatened issuance of
any order suspending the registration or qualification of any Registrable
Securities covered by such registration statement for disposition in any
jurisdiction; use its commercially reasonable efforts to prevent the issuance of
any such threatened order and, if any such order is issued, use its commercially
reasonable efforts to obtain the lifting or withdrawal of
10
such order at the earliest possible moment and promptly notify each Holder and
each such underwriter, broker, dealer and placement agent of any lifting or
withdrawal.
(g) Opinion and Comfort Letter. Furnish, at the request of any Holder
requesting registration of Registrable Securities or of any underwriter in
connection herewith, on the date or dates requested by such Holder, (i) an
opinion, dated as of such date, of the counsel representing the Company for the
purposes of such registration, in form and substance as is customarily given to
underwriters in an underwritten public offering and reasonably satisfactory to
the Majority Holder(s), addressed to the underwriters, if any, and to the
Holders requesting registration of Registrable Securities and (ii) a "comfort"
letter dated as of such date, from the independent certified public accountants
of the Company, in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public offering
and reasonably satisfactory to the Majority Holder(s), addressed to the
underwriters, if any, and to the Holders requesting registration of Registrable
Securities.
(h) Road Shows. To the extent reasonably requested by the Majority
Holder(s), cause the appropriate members of the management and employees of the
Company to participate in meetings, diligence sessions, and road shows.
(i) Maintenance of Listed Status. Following its Initial Public
Offering, the Company shall use its best efforts to (i) cause all Registrable
Securities to be listed on the securities exchange or automated quotation system
on which the Company's Common Stock is initially listed; and (ii) to maintain
its status as a listed company on such exchange or quotation system. In the
event the Company should be de-listed from such exchange or quotation system,
the Company shall use its best efforts to regain its status as a listed company
on such exchange or quotation system as promptly as is reasonably possible.
(j) Additional Actions. Take all other actions which are reasonably
necessary or which may be reasonably requested by the Holders, or any
underwriter, broker, dealer or placement agent participating in any offering or
sale or other distribution of securities covered by such registration statement
to effect the registration and qualification of the Registrable Securities
covered by such registration statement and to facilitate the disposition thereof
in accordance with the respective plans of distribution of the selling Holders.
2.5 Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to Sections 2.2 or 2.3
that the participating Holders shall furnish to the Company such information
regarding themselves, the Registrable Securities held by them, and the intended
method of disposition of such securities as shall be reasonably requested by the
Company or otherwise required to timely effect the registration of their
Registrable Securities.
2.6 Indemnification. In the event any Registrable Securities are included
in a registration statement under Sections 2.2 or 2.3:
(a) By the Company. To the extent permitted by law, the Company will
indemnify and hold harmless each participating Holder, the partners, officers
and directors of each Holder, any underwriter (as determined in the Securities
Act) for such Holder and each
11
Person, if any, who controls such Holder or underwriter within the meaning of
the Securities Act or the Securities Exchange Act of 1934, as amended, (the
"Exchange Act"), against any losses, claims, damages, or liabilities (joint or
several) to which they may become subject under the Securities Act, the Exchange
Act or other federal or state law, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or are based upon any
of the following statements, omissions or violations (collectively a
"Violation"):
(i) any untrue statement or alleged untrue statement of a
material fact contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto;
(ii) the omission or alleged omission to state in the
registration statement a material fact required to be stated in the
registration statement, or necessary to make the statements in the
registration statement not misleading, or
(iii) any violation or alleged violation by the Company of the
Securities Act, the 1934 Act, any federal or state securities law or
any rule or regulation promulgated under the Securities Act, the 1934
Act or any federal or state securities law in connection with the
offering covered by such registration statement;
and the Company will reimburse each such Holder, partner, officer or director,
underwriter or controlling Person for any legal or other expenses reasonably
incurred by them, as incurred, in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
indemnity agreement contained in this subsection 2.6(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Company, which consent
shall not be unreasonably withheld, nor shall the Company be liable in any such
case for any such loss, claim, damage, liability or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by such Holder, partner, officer, director, underwriter
or controlling Person of any such Person.
(b) By Selling Holders. To the extent permitted by law, each selling
Holder will indemnify and hold harmless the Company, each of its directors, each
of its officers who have signed the registration statement, each Person, if any,
who controls the Company within the meaning of the Securities Act, any
underwriter and any other Holder selling securities under such registration
statement or any of such other Holder's partners, directors or officers or any
Person who controls such Holder within the meaning of the Securities Act or the
Exchange Act, against any losses, claims, damages or liabilities (joint or
several) to which the Company or any such director, officer, controlling Person,
underwriter or other such Holder, partner or director, officer or controlling
Person of such other Holder may become subject under the Securities Act, the
Exchange Act or other federal or state law, insofar as such losses, claims,
damages or liabilities (or actions in respect thereto) arise out of or are based
upon any Violation, in each case to the extent (and only to the extent) that
such Violation occurs in reliance upon and in conformity with written
information furnished by such Holder concerning such Holder expressly for use in
connection with such registration; and each such Holder will reimburse any legal
or
12
other expenses reasonably incurred by the Company or any such director, officer,
controlling Person, underwriter or other Holder, partner, officer, director or
controlling Person of such other Holder in connection with investigating or
defending any such loss, claim, damage, liability or action: provided, however,
that the indemnity agreement contained in this subsection 2.6(b) shall not apply
to amounts paid in settlement of any such loss, claim, damage, liability or
action if such settlement is effected without the consent of the Holder, which
consent shall not be unreasonably withheld; and provided, further, that the
total amounts payable in indemnity by a Holder under this Section 2.6(b) in
respect of any Violation shall not exceed the net proceeds received by such
Holder in the registered offering out of which such Violation arises.
(c) Notice. Promptly after receipt by an indemnified party under this
Section 2.6 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 2.6, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential conflict of interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall relieve such indemnifying party of
liability to the indemnified party under this Section 2.6 to the extent the
indemnifying party is prejudiced as a result thereof, but the omission so to
deliver written notice to the indemnified party will not relieve it of any
liability that it may have to any indemnified party otherwise than under this
Section 2.6.
(d) Defect Eliminated in Final Prospectus. The foregoing indemnity
agreements of the Company and Holders are subject to the condition that, insofar
as they relate to any Violation made in a preliminary prospectus but eliminated
or remedied in the amended prospectus on file with the SEC at the time the
registration statement in question becomes effective or the amended prospectus
filed with the SEC pursuant to SEC Rule 424(b) (the "Final Prospectus"), such
indemnity agreement shall not inure to the benefit of any Person if a copy of
the Final Prospectus was timely furnished to the indemnified party, was not
furnished to the Person asserting the loss, liability, claim or damage at or
prior to the time such action is required by the Securities Act, and the
furnishing of such Final Prospectus as so required would have eliminated
liabilities under the Securities Act or the Exchange Act.
(e) Contribution. In order to provide for just and equitable
contribution to joint liability under the Securities Act in any case in which
either (i) any Holder exercising rights under this Agreement, or any controlling
Person of any such Holder, makes a claim for indemnification pursuant to this
Section 2.6 but it is judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to appeal
or the denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section 2.6 provides
for indemnification in such case, or (ii) contribution under the Securities Act
may be required on the part of any such selling Holder
13
or any such controlling Person in circumstances for which indemnification is
provided under this Section 2.6; then, and in each such case, the Company and
such Holder will contribute to the aggregate losses, claims, damages or
liabilities to which they may be subject (after contribution from others) in
such proportion so that such Holder is responsible for the portion represented
by the percentage that the public offering price of its Registrable Securities
offered by and sold under the registration statement bears to the public
offering price of all securities offered by and sold under such registration
statement, and the Company and other selling Holders are responsible for the
remaining portion; provided, however, that, in any such case: (A) no such Holder
will be required to contribute any amount in excess of the public offering price
of all such Registrable Securities offered and sold by such Holder pursuant to
such registration statement; (B) no Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
will be entitled to contribution from any Person or entity who was not guilty of
such fraudulent misrepresentation, and (C) in determining relative fault, due
consideration shall be given to the source of any written information furnished
by a Holder concerning such Holder expressly for use in connection with such
registration
(f) Survival. The obligations of the Company and Holders under this
Section 2.6 shall survive until the earlier of (i) the one year anniversary of
the expiration of all applicable statutes of limitation or extensions of such
statutes or (ii) the termination of First Reserve Fund IX, L.P.
2.7 Rule 144 Reporting; S-3 Eligibility. With a view to making available
the benefits of certain rules and regulations of the SEC which may at any time
permit the sale of "restricted securities" (used in this Agreement as defined in
Rule 144 under the Securities Act) to the public without registration, and to be
eligible to use Form S-3, the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, at all times during
which the Company is subject to the reporting requirements of the Exchange Act;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act
(at all times during which the Company is subject to such reporting
requirements); and
(c) so long as any Holder owns any Restricted Securities, to furnish
to such Holder forthwith upon request a written statement by the Company as to
its compliance with the reporting requirements of said Rule 144 and with regard
to the Securities Act and the Exchange Act (at all times during which the
Company is subject to such reporting requirements), a copy of the most recent
annual or quarterly report of the Company, and such other reports and documents
of the Company and other information in the possession of or reasonably
obtainable by the Company as such Holder may reasonably request in availing
itself of any rule or regulation of the SEC allowing such Holder to sell any
such securities without registration.
2.8 Impact of Merger. In the event the Company merges with or into another
entity, the terms of this Section 2 shall apply to any equity received by the
Holders in connection with the merger in exchange for the Common Stock or other
Registrable Securities held by such Holders immediately prior to the
consummation of the merger.
14
2.9 Termination of the Company's Obligations. The Company shall have no
obligations pursuant to Sections 2.2 or 2.3 with respect to any Registrable
Securities proposed to be sold by a Holder in a registration pursuant to Section
2.2 or 2.3 if, in the reasonable opinion of counsel to the Company, addressed to
such Holder, all such Registrable Securities held by such Holder could be sold
under Rule 144 promulgated under the Act in a single transaction.
3. TRANSFERS, ASSIGNMENT, AMENDMENT AND TERMINATION.
3.1 Limitation on Transfers. Each Stockholder's right to directly or
indirectly, sell, transfer, pledge or otherwise dispose of any economic, voting
or other rights in or to any equity interest in shares of the capital stock of
the Company now held or hereafter acquired (each, a "Transfer") shall be limited
as provided in this Section 3.1. Each Employee Stockholder, severally and not
jointly, agrees with the Company that such Employee Stockholder's right to
Transfer Restricted Employee Shares (as defined in Section 4) shall be limited
as provided in Section 4 (in addition to limitations set forth in this Section
3.1). Except for (a) Transfers in connection with any effective registration
statement, (b) Transfers in accordance with the requirements of Rule 144 or Rule
701 or their successors under the Securities Act, (c) Transfers by an individual
for bona fide estate planning purposes with the consent of the Board of
Directors of the Company, which shall not be unreasonably withheld, (d)
Transfers by Employee Stockholders to the Company in accordance with Section 4
and (e) Transfers to the owners of a Stockholder's equity interests, who are not
Affiliates of such Stockholder, receiving capital stock of the Company in
connection with the liquidation of, or a distribution with respect to an equity
interest in, such Stockholder, no Transfer shall be effective unless (i) the
Transferee agrees to be bound by the terms and conditions of this Agreement, and
any related agreements previously approved by the Board or the Stockholders in
accordance with this Agreement, (ii) it complies in all respects with the
applicable provisions of this Agreement, (iii) it complies in all respects with
applicable federal and state securities laws, including the Securities Act, and
(iv) it is made in compliance with all applicable Company policies and
restrictions (including any trading "window periods" or other policies
regulating xxxxxxx xxxxxxx).
3.2 Assignment. Notwithstanding anything in this Agreement to the contrary:
(a) Registration Rights. The registration rights of any Demand Right
Holder under Section 2.2 of this Agreement may be assigned in connection with
any Transfers of not less than 10% of the Registrable Securities Then
Outstanding made by such Demand Right Holder; provided, however, that no Person
may be assigned any of the foregoing rights unless (i) the Company is given
written notice by the assigning party at the time of such assignment stating the
name and address of the assignee and identifying the securities of the Company
as to which the rights in question are being assigned and (ii) any such assignee
shall have agreed to be subject to all the terms and conditions of this
Agreement, including without limitation the provisions of this Section 4.
(b) Voting Rights. Except for assignments by any of the FRC Parties to
another FRC Affiliate or by any of the AMCI Parties to an AMCI Affiliate, the
rights under Section 1 are not assignable without the consent of each Board
Group.
3.3 Amendment of Rights; Termination.
15
(a) Amendment. Except as otherwise provided, any provision of this
Agreement may be amended and the observance thereof may be waived (either
generally or in a particular instance and either retroactively or prospectively)
with the written consent of Stockholders holding not less than a majority of the
outstanding shares of Common Stock held by Stockholders. Notwithstanding the
foregoing, except as provided in Section 3.3(c) and Section 4.6, (i) no
provision of this Agreement may be amended or waived if a particular Stockholder
(or discrete group of Stockholders) would be materially and disproportionately
(vis a vis other Stockholders) prejudiced thereby, unless such stockholder (or a
majority of shares of such group of Stockholders) consents in writing to such
amendment or waiver and (ii) no amendment shall be made to Sections 1.1(a),
1.1(b), 1.1(f), 1.1(g), 1.1(h), 1.2, 1.3, 3.3(a) and 3.3(b), unless both the FRC
Parties and the AMCI Parties consent to the amendment. The consent of the FRC
Parties or the AMCI Parties, as the case may be, required by clause (ii) of the
preceding sentence shall not be required as to either of such Parties if the FRC
Parties and their Affiliates, on the one hand, or the AMCI Parties and their
Affiliates, on the other hand, no longer owns at least 5% of the outstanding
shares of Common Stock or the if FRC Parties and their Affiliates and the AMCI
Parties and their Affiliates no longer hold 30% of the outstanding shares of
Common Stock in the aggregate. Any amendment or waiver effected in accordance
with this Section 3.3 shall be binding upon the Stockholders, each Holder, each
permitted successor or assignee of such Stockholder or Holder and the Company;
provided that the rights under Section 2 shall terminate only as set forth in
Section 2.
(b) Termination. Except as provided in Section 3.3(c) and Section 4.6,
this Agreement may be terminated with the written consent of Stockholders
holding not less than a majority of the outstanding shares of Common Stock held
by Stockholders; provided that if such termination is in connection with any
transaction which would have resulted in a Stockholder having rights under
Sections 2.3 of the Agreement, such Stockholder, notwithstanding the
termination, shall be entitled to exercise any rights provided to him, her or it
under such Section(s).
(c) Nature of Agreement concerning Employee Stockholders. The
provisions of Section 3.1 shall be deemed to be separate agreements between the
Company, on one hand, and each Employee Stockholder, on the other hand. Other
than the affected Employee Stockholder, no Stockholder or other Person shall
have any rights or obligations under Section 3.1 with respect to any Transfers
by the affected Employee Stockholder, and shall not be deemed to be parties to
any agreements under Section 3.1 between the Company and the affected Employee
Stockholder. Section 3.1 may be amended, modified or terminated with respect to
any Employee Stockholder by a written agreement between the Company and the
affected Employee Stockholder, and no such agreement shall apply to any other
Employee Stockholder without the written consent of the Company and such other
Employee Stockholder.
4. RESTRICTED EMPLOYEE SHARES.
4.1 General. Each Employee Stockholder (severally and not jointly) and
the Company agree that (a) none of his Restricted Employee Shares may be sold,
transferred, pledged, hypothecated or otherwise encumbered or disposed of until
they have vested in accordance with this Section 4 and (b) any Restricted
Employee Shares that are not vested in accordance with this Section 4 as of the
time of termination of the Employee Stockholder's
16
employment with the Company and all of its subsidiaries and Affiliates shall be
forfeited to the Company immediately upon such termination.
4.2 Vesting. (a) Restricted Employee Shares shall vest in accordance with
the following vesting schedule (and therefore not be subject to forfeiture as
specified in Section 4.1) if the Employee Stockholder continues to be employed
by the Company (or a subsidiary or affiliate thereof) on the vesting date set
forth below:
PERCENTAGE OF RESTRICTED EMPLOYEE
VESTING DATE SHARES VESTED
----------------- ---------------------------------
December 31, 2005 50%
December 31, 2006 100%
Any percentage of vested shares shall be applied to the number of Restricted
Employee Shares initially held by an Employee Stockholder (as such number is
equitably adjusted for any stock splits, stock dividends or similar
transactions) and shall be applied by rounding up to the nearest whole share.
(b) Notwithstanding the foregoing vesting schedule, (1) the percentage
of Restricted Employee Shares that shall be deemed to be vested for an Employee
Stockholder whose employment is either (i) terminated by the Company for a
reason other than "Cause," (ii) terminated by the Employee Stockholder as result
of his "Retirement," "Permanent Disability" or death, or (iii) terminated as a
result of the voluntary resignation of such Employee Stockholder within one year
of the date an Employment Agreement with such Employee Stockholder expires shall
be equal to such Employee Stockholder's "Vesting Percentage" and (2) if a Change
of Control occurs, then the percentage of Restricted Employee Shares vested
shall be equal to 100%.
4.3 Definitions. For purposes of this Section 4, the following definitions
apply:
(a) The term "Cause" shall mean "employer cause" as set forth in any
Employment Agreement between the Employee Stockholder and the Company and/or its
subsidiaries and Affiliates (an "Employment Agreement"), or in the absence of
such an agreement, cause as defined by the Company's employment policies in
effect at the time of termination. Termination of employment as a result of
death shall not constitute Cause.
(b) The term "Change of Control" shall mean (i) any merger,
consolidation or business combination in which the stockholders of the Company
immediately prior to the merger, consolidation or business combination do not
own at least a majority of the outstanding equity interests of the surviving
parent entity, (ii) the sale of all or substantially all of the Company's
assets, (iii) the acquisition of beneficial ownership or control of (including,
without limitation, power to vote) a majority of the outstanding shares of
Common Stock by any person or entity (including a "group" as defined by or under
Section 13(d)(3) of the Exchange Act) (other than a group consisting of one or
more of the Stockholders), (iv) the dissolution or liquidation of the Company,
(v) a contested election of directors, as a result of which or in
17
connection with which the persons who were directors of the Company before such
election or their nominees cease to constitute a majority of the Board, or (vi)
any other event specified by the Board or a committee designated by the Board.
Notwithstanding the forgoing, no transaction shall be considered to have
effected a Change of Control if (i) a majority of the equity interests of the
surviving parent entity is owned directly or indirectly by the AMCI Parties
and/or by one or more private equity funds controlled by First Reserve
Corporation or its Affiliates or (ii) entities controlled by the AMCI Parties
and/or by one or more private equity funds controlled by First Reserve
Corporation or its Affiliates have the right to appoint a majority of the board
of directors of the surviving parent entity.
(c) The term "Permanent Disability" shall mean shall mean Employee's
physical or mental incapacity to perform his or her usual duties with such
condition likely to remain continuously and permanently as determined by the
Company.
(d) The term "Retirement" shall mean either (a) the Employee
Stockholder's retirement at or after normal retirement age (either voluntarily
or pursuant to the Company's retirement policy) or (b) the voluntary termination
of Employee Stockholder's employment by the Employee Stockholder in accordance
with the Company's early retirement policy.
(e) The term "Restricted Employee Shares" shall mean those shares of
Common Stock issued by the Company to the Employee Stockholders that are
denominated as such on Exhibit A to this Agreement.
(f) The term "Vesting Percentage" shall mean a number expressed as
percentage (not greater than 100%) determined by dividing (i) the number of
months (rounded to the nearest whole number) from December 31, 2004 until the
date of the Employee Stockholder's termination of employment with the Company
and its subsidiaries and Affiliates, by (ii) 24. For example, if the date of
termination occurs between March 16, 2006 and April 14, 2006, then the Vesting
Percentage will be approximately 63% (15 full months from December 31, 2004
until the termination date, divided by 24).
4.4 Section 83(b) Election. Each Employee Stockholder has, within 30 days
after the date of the Original Agreement, made an effective election with
respect to his Restricted Employee Shares with the Internal Revenue Service
under Section 83(b) of the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder, substantially in the form attached to this
Agreement as Exhibit D.
4.5 Rights as Stockholder. No Employee Stockholder shall have rights as a
stockholder with respect to any Restricted Employee Shares until a stock
certificate for the shares is issued in Employee Stockholder's name, except that
any cash dividends paid on Restricted Employee Shares shall be paid to the
Employee Stockholder and shall not be subject to forfeiture. The Company shall
hold all stock certificates evidencing, in whole or in part, any Restricted
Employee Shares that have not vested and, upon any forfeiture of Restricted
Employee Shares pursuant to this Section 4, the Company may take appropriate
action to cancel such stock certificate (and, if appropriate, reissue a stock
certificate to Employee Stockholder evidencing only the vested shares). Once any
such stock certificate is issued in Employee
18
Stockholder's name, the Employee Stockholder shall be entitled to all rights
associated with ownership of the Restricted Employee Shares, except that the
Restricted Employee Shares will remain subject to the restrictions set forth in
this Agreement and if any additional shares of Common Stock become issuable on
the basis of such Restricted Employee Shares (e.g., a stock split or dividend),
any such additional shares shall be subject to the same restrictions as the
shares of Restricted Employee Shares to which they relate.
4.6 Nature of Agreement on Restricted Employee Shares. The provisions of
Section 4 shall be deemed to be separate agreements between the Company, on one
hand, and each Employee Stockholder, on the other hand. Other than the affected
Employee Stockholder, no other Stockholder or other Person shall have any rights
or obligations under Section 4 with respect to any Restricted Employee Shares
held by the affected Employee Stockholder, and shall not be deemed to be parties
to any agreements under Section 4 between the Company and the affected Employee
Stockholder. This Section 4 may be amended, modified or terminated with respect
to any Employee Stockholder by a written agreement between the Company and the
affected Employee Stockholder, and no such agreement shall apply to any other
Employee Stockholder without the written consent of the Company and such other
Employee Stockholder.
5. LEGEND.
Each certificate representing shares of capital stock of the Company
now or hereafter owned by a Stockholder shall be endorsed with the following
legend:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES
LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT
TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY
MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN
OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE
EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT
AND ANY APPLICABLE STATE SECURITIES LAWS.
Each certificate representing shares of capital stock of the Company now or
hereafter owned by a Stockholder, other than certificates representing any
unvested Restricted Employee Shares, shall also be endorsed with the following
legend:
THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF CERTAIN OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS OF A
CERTAIN STOCKHOLDER AGREEMENT BY AND AMONG, THE STOCKHOLDER, THE
19
CORPORATION AND CERTAIN HOLDERS OF SHARES OF STOCK OF THE CORPORATION.
COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE
SECRETARY OF THE CORPORATION.
Each certificate representing shares of capital stock of the Company that are in
whole or in part unvested Restricted Employee Shares shall also be endorsed with
the following legend:
THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF CERTAIN OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS OF A
CERTAIN STOCKHOLDER AGREEMENT BY AND AMONG, THE STOCKHOLDER, THE
CORPORATION AND CERTAIN HOLDERS OF SHARES OF STOCK OF THE CORPORATION.
CERTAIN OF SUCH SECURITIES MAY ALSO BE SUBJECT TO FORFEITURE UNDER THE
TERMS OF SUCH AGREEMENT. COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON
WRITTEN REQUEST TO THE SECRETARY OF THE CORPORATION.
6. GENERAL PROVISIONS.
6.1. Notices. Except as may be otherwise provided in this Agreement, all
notices, requests, waivers and other communications made pursuant to this
Agreement shall be in writing and shall be conclusively deemed to have been duly
given (a) when hand delivered to the other party; (b) when received when sent by
facsimile at the address and number set forth below; (c) three business days
after deposit in the U.S. mail with first class or certified mail receipt
requested postage prepaid and addressed to the other parties as set forth below;
or (d) the next business day after deposit with a national overnight delivery
service, postage prepaid, addressed to the parties as set forth below with
next-business-day delivery guaranteed, provided that the sending party receives
a confirmation of delivery from the delivery service provider.
If to the AMCI Parties:
American Metals & Coal International, Inc.
000 Xxxxxxxxx Xxxx, 0xx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxx, President
Facsimile No.: (000) 000-0000
With a copy to:
American Metals & Coal International, Inc.
Xxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Executive Vice President
Facsimile No.: (000) 000-0000
and to:
00
XxXxxxx Xxxxx XXX
Xxx Xxxxx Xxxxxx
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Facsimile No.: (000) 000-0000
If to the FRC Parties:
First Reserve Corporation
Xxx Xxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx
Facsimile No.: (000) 000-0000
With copies to:
First Reserve Corporation
Xxx Xxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
Facsimile No.: (000) 000-0000
If to the Company:
Alpha Natural Resources, Inc.
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: President
Facsimile No.: (000) 000-0000
With a copy to:
Bartlit Xxxx Xxxxxx Xxxxxxxxx & Xxxxx LLP
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
If to Madison:
Madison Capital Funding LLC
000 X. Xxxxxxx Xx. Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxx, Managing Director
21
Facsimile No.: (000) 000-0000
To any of the Xxxxxxxxxx Parties:
To their address set forth on Schedule 1 attached to this Agreement
To any of the Employee Stockholders:
To their address of record on the books of the Company
Each Person making a communication hereunder by facsimile shall promptly
confirm by telephone to the Person to whom such communication was addressed each
communication made by it by facsimile pursuant hereto but the absence of such
confirmation shall not affect the validity of any such communication. A party
may change or supplement the addresses given above, or designate additional
addresses, for purposes of this Section 6.1 by giving the other parties written
notice of the new address in the manner set forth above.
6.2 Entire Agreement; Interpretation; Termination of Prior Agreements. This
Agreement, together with all the Exhibits hereto, and that certain Letter
Agreement dated as of October 25, 2005 among the FRC Parties and the AMCI
Parties constitute and contain the entire agreement and understanding of the
parties with respect to the subject matter of this Agreement (other than any
additional restrictions on transfer and repurchase rights contained in
subscription agreements, employment agreements or stock option agreements
between the Company and the Employee Stockholders) and supersede any and all
prior negotiations, correspondence, agreements, understandings, duties or
obligations between the parties respecting the subject matter of this Agreement.
This Agreement will amend and restate the Original Agreement to read in its
entirety as set forth herein, when it has been duly executed by parties having
the right to so amend and restate the Original Agreement. Neither this Agreement
nor the acquisition of Restricted Employee Shares creates any employment rights
for any Stockholder and the Company shall have no liability for terminating any
Stockholder's employment.
6.3 Governing Law. This Agreement shall be governed by and construed
exclusively in accordance with the internal laws of the State of Delaware,
excluding that body of law relating to conflict of laws and choice of law.
6.4 Severability. If one or more provisions of this Agreement are held to
be unenforceable under applicable law, then such provision(s) shall be excluded
from this Agreement and the balance of this Agreement shall be interpreted as if
such provision(s) were so excluded and shall be enforceable in accordance with
its terms.
6.5 Third Parties. Nothing in this Agreement, express or implied, is
intended to confer upon any Person, other than the parties hereto and their
permitted successors and assigns, any rights or remedies under or by reason of
this Agreement.
6.6 Successors and Assigns. Subject to the provisions of Section 3.1, the
provisions of this Agreement shall inure to the benefit of, and shall be binding
upon, the successors and permitted assigns of the parties hereto.
22
6.7 Captions. The captions to sections of this Agreement have been inserted
for identification and reference purposes only and shall not be used to construe
or interpret this Agreement.
6.8 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. Facsimile signatures to this Agreement shall be
valid for all purposes.
6.9 [Reserved].
6.10 Arbitration. Any controversy, dispute, or claim arising out of, in
connection with, or in relation to, the interpretation, performance or breach of
this Agreement, including, without limitation, the validity, scope, and
enforceability of this section, shall be solely and finally settled by
arbitration conducted in New York, New York, by and in accordance with the then
existing rules for commercial arbitration of the American Arbitration
Association, or any successor organization. Judgment upon any award rendered by
the arbitrator(s) may be entered by the State or Federal Court having
jurisdiction thereof. Any of the parties may demand arbitration by written
notice to the other and to the American Arbitration Association ("Demand for
Arbitration"). The parties intend that this agreement to arbitrate be the
exclusive means to resolve disputes under this Agreement and that it be valid,
enforceable and irrevocable.
6.11 Jurisdiction. In the absence of an arbitration election pursuant to
Section 6.10, the parties hereby irrevocably submit and consent to the
nonexclusive jurisdiction of the State and Federal Courts located in the State
of New York with respect to any action or proceeding arising out of this
Agreement or any matter arising therefrom or relating thereto. In any such
action or proceeding, each Employee Stockholder waives personal service of the
summons and complaint or other process and papers therein and agrees that the
service thereof may be made by mail directed to such Employee Stockholder at the
address for such Employee Stockholder provided in this Agreement, service to be
deemed complete seven (7) days after mailing, or as permitted under the rules of
either of said Courts.
6.12 Appointment of AMCI Representative. By the execution and delivery of
this Agreement, (i) each of the AMCI Parties hereby irrevocably constitutes and
appoints Xxxx X. Xxxxx (the "AMCI Representative") as its true and lawful agent
and attorney-in-fact with full power of substitution to act in the name, place
and stead of the AMCI Parties to act on behalf of the AMCI Parties in any
litigation or arbitration involving this Agreement, do or refrain from doing all
such further acts and things, and execute all such documents as the AMCI
Representative shall deem necessary or appropriate in connection with the
transactions contemplated by this Agreement including, without limitation, the
power:
(a) to execute and deliver all notices under, waivers under, and
amendments to this Agreement, ancillary agreements, certificates and documents
that the AMCI Representative deems necessary or appropriate in connection with
the performance of this Agreement and consummation of the transactions
contemplated by this Agreement;
23
(b) to receive funds, make payments of funds, and give receipts for
funds;
(c) to receive funds for the payment of expenses of the AMCI Parties
and apply such funds in payment for such expenses;
(d) to do or refrain from doing any further act or deed on behalf of
the AMCI Parties that the AMCI Representative deems necessary or appropriate in
its sole discretion relating to the subject matter of this Agreement as fully
and completely as the AMCI Parties could do if personally present;
(e) to execute for and on behalf of the AMCI Parties Statements on
Schedule 13D in accordance with Section 13 of the Exchange Act and Forms 3, 4,
and 5 in accordance with Section 16(a) of the Exchange Act;
(f) do and perform any and all acts for and on behalf of the
undersigned which may be necessary or desirable to complete and execute any such
Schedule 13D or Form 3, 4, or 5, complete and execute any amendment or
amendments thereto, and timely file such form with the SEC and any stock
exchange or similar authority; and
(g) to receive service of process in connection with any claims under
this Agreement.
The FRC Parties, the Xxxxxxxxxx Parties and any other Person may
conclusively and absolutely rely, without inquiry, upon any action of the AMCI
Representative in all matters referred to in this Agreement. All notices
required to be made or delivered by the Company, the FRC Parties or the
Xxxxxxxxxx Parties to the AMCI Parties shall be made to the AMCI Representative
for the benefit of the AMCI Parties and shall discharge in full all notice
requirements of the Company, the FRC Parties or the Xxxxxxxxxx Parties to the
AMCI Parties with respect to any such matter.
6.13 Appointment of the FRC Representative. By the execution and delivery
of this Agreement, (i) each of the FRC Parties hereby irrevocably constitutes
and appoints First Reserve Fund IX, (the "FRC Representative") as its true and
lawful agent and attorney-in-fact with full power of substitution to act in the
name, place and stead of the FRC Parties to act on behalf of the FRC Parties in
any litigation or arbitration involving this Agreement, do or refrain from doing
all such further acts and things, and execute all such documents as the FRC
Representative shall deem necessary or appropriate in connection with the
transactions contemplated by this Agreement including, without limitation, the
power:
(a) to execute and deliver all notices under, waivers under, and
amendments to this Agreement, ancillary agreements, certificates and documents
that the FRC Representative deems necessary or appropriate in connection with
the performance of this Agreement and consummation of the transactions
contemplated by this Agreement;
(b) to receive funds, make payments of funds, and give receipts for
funds;
24
(c) to receive funds for the payment of expenses of the FRC Parties
and apply such funds in payment for such expenses;
(d) to do or refrain from doing any further act or deed on behalf of
the FRC Parties that the FRC Representative deems necessary or appropriate in
its sole discretion relating to the subject matter of this Agreement as fully
and completely as the FRC Parties could do if personally present;
(e) to execute for and on behalf of the FRC Parties Statements on
Schedule 13D in accordance with Section 13 of the Exchange Act and Forms 3, 4,
and 5 in accordance with Section 16(a) of the Exchange Act;
(f) do and perform any and all acts for and on behalf of the
undersigned which may be necessary or desirable to complete and execute any such
Schedule 13D or Form 3, 4, or 5, complete and execute any amendment or
amendments thereto, and timely file such form with the SEC and any stock
exchange or similar authority; and
(g) to receive service of process in connection with any claims under
this Agreement.
The AMCI Parties, the Xxxxxxxxxx Parties and any other Person may
conclusively and absolutely rely, without inquiry, upon any action of the FRC
Representative in all matters referred to in this Agreement. All notices
required to be made or delivered by the Company, the AMCI Parties or the
Xxxxxxxxxx Parties to the FRC Parties shall be made to the FRC Representative
for the benefit of the FRC Parties and shall discharge in full all notice
requirements of the Company, the AMCI Parties or the Xxxxxxxxxx Parties to the
FRC Parties with respect to any such matter.
6.14 Appointment of Xxxxxxxxxx Representative. By the execution and
delivery of this Agreement, (i) each of the Xxxxxxxxxx Parties hereby
irrevocably constitutes and appoints Xxx Xxxxxxxxxx (the "Xxxxxxxxxx
Representative") as its true and lawful agent and attorney-in-fact with full
power of substitution to act in the name, place and stead of the Xxxxxxxxxx
Parties to act on behalf of the Xxxxxxxxxx Parties in any litigation or
arbitration involving this Agreement, do or refrain from doing all such further
acts and things, and execute all such documents as the Xxxxxxxxxx Representative
shall deem necessary or appropriate in connection with the transactions
contemplated by this Agreement including, without limitation, the power:
(a) to execute and deliver all notices under, waivers under, and
amendments to this Agreement, ancillary agreements, certificates and documents
that the Xxxxxxxxxx Representative deems necessary or appropriate in connection
with the performance of this Agreement and consummation of the transactions
contemplated by this Agreement;
(b) to receive funds, make payments of funds, and give receipts for
funds;
(c) to receive funds for the payment of expenses of the Xxxxxxxxxx
Parties and apply such funds in payment for such expenses;
25
(d) to do or refrain from doing any further act or deed on behalf of
the Xxxxxxxxxx Parties that the Xxxxxxxxxx Representative deems necessary or
appropriate in its sole discretion relating to the subject matter of this
Agreement as fully and completely as the AMCI Parties could do if personally
present;
(e) to execute for and on behalf of the Xxxxxxxxxx Parties Statements
on Schedule 13D in accordance with Section 13 of the Exchange Act and Forms 3,
4, and 5 in accordance with Section 16(a) of the Exchange Act;
(f) do and perform any and all acts for and on behalf of the
undersigned which may be necessary or desirable to complete and execute any such
Schedule 13D or Form 3, 4, or 5, complete and execute any amendment or
amendments thereto, and timely file such form with the SEC and any stock
exchange or similar authority; and
(g) to receive service of process in connection with any claims under
this Agreement.
The FRC Parties, the AMCI Parties and any other Person may conclusively and
absolutely rely, without inquiry, upon any action of the Xxxxxxxxxx
Representative in all matters referred to in this Agreement. All notices
required to be made or delivered by the Company, or the FRC Parties or the AMCI
Parties to the Xxxxxxxxxx Parties shall be made to the Xxxxxxxxxx Representative
for the benefit of the Xxxxxxxxxx Parties and shall discharge in full all notice
requirements of the Company, the FRC Parties or the AMCI Parties to the
Xxxxxxxxxx Parties with respect to any such matter.
6.15 Additional Securities Subject to Agreement. Each Stockholder agrees
that any other shares of Common Stock or other shares of the Company's capital
stock that it acquires after the Effective Date by means of a stock split, stock
dividend, distribution, exercise of stock options or warrants shall be subject
to the terms of this Agreement.
6.16 Confidentiality.
(a) Each Stockholder recognizes and acknowledges that the Company's
trade secrets, proprietary information, and Confidential Information (as defined
in Section 6.15(c) below), as they may exist from time to time, are valuable,
special and unique assets of the Company's business. Except as otherwise
required by law, each Stockholder agrees to hold as the Company's property, all
memoranda, books, papers, letters, and other data, and all copies thereof and
therefrom, in any way relating to the Company's business and affairs, whether
made by such Stockholder or otherwise coming into such Stockholder's possession,
and at the time such Stockholder ceases to be a Stockholder for any reason, to
deliver the same to the Company.
(b) Each Stockholder hereby agrees that such Stockholder will not at
any time during the period such Stockholder is a Stockholder or thereafter
disclose to any third party (other than in the ordinary course of business of
the Company) or use for the benefit of such Stockholder or any third party any
Confidential Information (as such term is defined in Section
26
6.16(c) below), except (i) as otherwise required by law, or (ii) as previously
authorized by the Board in writing.
(c) As used in this Agreement, "Confidential Information" shall mean
information which is not generally known to the public in the form available to
Stockholders and which was or is used, developed or obtained by the Company
relating to the business of the Company, or research and development, including,
but not limited to, all investor, client, portfolio company or customer lists,
marketing strategies and techniques, trade secrets, engineering or other
know-how or other information pertaining to the financial condition, business,
research and development or prospects of the Company.
[SIGNATURE PAGES FOLLOW]
27
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
ALPHA NATURAL RESOURCES, INC.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
THE AMCI PARTIES
By: /s/ Xxxx X. Xxxxx
------------------------------------
Xxxx X. Xxxxx, the AMCI
Representative, pursuant to Section
6.12 of the Original Agreement
THE FRC PARTIES
By: First Reserve Fund IX, L.P., the FRC
Representative, pursuant to Section
6.13 of the Original Agreement
By: First Reserve GP IX, L.P., its
General Partner
By: First Reserve GP IX, Inc., its
General Partner
By: /s/ Xxxx X. Xxxxxxx
------------------------------------
Xxxx X. Xxxxxxx, Managing Director
THE XXXXXXXXXX PARTIES
/s/ Xxxxxxx Xxxxxx "Don" Xxxxxxxxxx
----------------------------------------
Xxxxxxx Xxxxxx "Don" Xxxxxxxxxx
/s/ Xxxx Xxxxx Xxxxxxxxxx
----------------------------------------
Xxxx Xxxxx Xxxxxxxxxx
/s/ Xxxxxxx X. Xxxxxxxxxx
----------------------------------------
Xxxxxxx X. Xxxxxxxxxx
/s/ Xxx Xxxxxxxxxx Xxxxxxx
----------------------------------------
Xxx Xxxxxxxxxx Xxxxxxx
28
/s/ Xxxxx Xxxxxx
----------------------------------------
Xxxxx Xxxxxx
29
SCHEDULE 2
EMPLOYEE STOCKHOLDERS
Xxxxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxxxxxx
D. Xxxxx Xxxx
Xxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxx, Xx.
Xxxxxxx X. Xxxxx
Xxxxx X. Xxxxx
Xxxxxx X. Xxxxxx
Xxx Xxxxx Xxxxxxxxx, Xx.
Xxxxxx Xxxxxxx Xxxxxx
