Exhibit 10.12
MANAGEMENT STOCKHOLDERS AGREEMENT
DATED as of July __,2004.
AMONG:
COMMERCIAL VEHICLE GROUP, INC.,
a Delaware corporation (the "Corporation"),
- and -
ONEX AMERICAN HOLDINGS II LLC,
a Wyoming limited liability company ("Onex"),
- and -
The individuals named on Schedule I to this Agreement and each additional
management employee of the Operating Company (as hereinafter defined) who, at
any time, acquires securities of the Corporation and executes a counterpart of
this Agreement or otherwise agrees to be bound by this Agreement (individually,
a "Managementholder" and collectively, the "Managementholders").
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WHEREAS:
A. As of July __, 2004 the issued and outstanding capital of the
Corporation consists of:
(i) 45,106.007 shares of Class A Common Stock, par value $.01 per
share (the "Class A Common");
(ii) 149,228.315 shares of Class B Common Stock, par value $.01 per
share (the "Class B Common"); and
(iii) 35,892.750 shares of Class C Common Stock, par value $.01 per
share (the "Class C Common");
(iv) 97,964.000 shares of Class D-1 Common Stock, par value $.01
per share (the "Class D-1 Common");
(v) 0.000 shares of Class D-2 Common Stock, par value $.01 per
share (the "Class D-2 Common"); and
(vi) 24,491.000 shares of Class E Common Stock, par value $.01 per
share (the "Class E Common").
B. Each of the Managementholders is an employee of the Corporation
and/or a subsidiary of the Corporation and has acquired or is acquiring certain
shares of Class A Common.
C. In order to provide for the stability of the Corporation and to
restrict the manner and means by which the Class A Common held by the
Managementholders may be transferred, voted and otherwise dealt with the parties
wish to enter into this Agreement.
D. Certain terms used in this Agreement are defined in Article Six of
this Agreement.
THEREFORE, for good and valuable consideration the receipt and
sufficiency of which are acknowledged the parties agree as follows:
ARTICLE ONE
Managementholder's Common Stock Generally
1.1 Managementholder's General Representations and Warranties.
Each Managementholder represents and warrants that:
(a) he has acquired and is holding, or will acquire and hold,
all Managementholder's Stock held by him as sole principal and for investment
only, and not in trust in any manner for or on behalf of any other person or
persons; and
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(b) he is not a party to or bound by any agreement regarding
or affecting his Managementholder's Stock or his rights as a holder of
Managementholder's Stock other than this Agreement, a pledge, if any, of
Managementholder's Stock in accordance with Section 1.5 or an agreement, if any,
to effect a transfer of Managementholder's Stock in accordance with this
Agreement.
1.2 Transfers in Accordance with this Agreement. Each
Managementholder agrees that Managementholder's Stock held by him will not be
transferred in violation of this Agreement, the Securities Act of 1933, as
amended (the "1933 Act"), or any other applicable law.
1.3 Registration of Transfers. The Corporation may refuse to
register any transfer by the registered holder of Managementholder's Stock in
its transfer books if such transfer is not in accordance with this Agreement,
the 1933 Act, or any other applicable law.
1.4 Restrictions on Transfer. Except as expressly provided in
this Agreement, the Managementholder's Stock may not be transferred without the
consent of the Corporation. The Managementholder's Stock may be transferred only
in a sale for cash or cash plus assumption of indebtedness in accordance with
Section 2.1 or in accordance with the other provisions of this Agreement. Any
purported transfer in any manner contrary to the terms of this Agreement shall
be void.
1.5 Sales to be Free of Encumbrances.
(a) In connection with any sale of Managementholder's Stock
pursuant to this Agreement, the Managementholder shall deliver the
Managementholder's Stock being sold free and clear of any claim, mortgage,
charge, pledge, lien, security interest or other encumbrance of any kind.
(b) If the Managementholder fails to comply with subsection
(a), the purchaser may withhold from the purchase price for the
Managementholder's Stock an amount equal to the indebtedness secured by any such
claim, mortgage, charge, pledge, lien, security interest or other encumbrance
or, if the amount of such indebtedness is not known by the purchaser, an amount
equal to the purchaser's good faith estimate thereof, and shall pay such
withheld amount to the person to whom such indebtedness is owed. Any such
payment of such withheld amount shall discharge the purchaser's obligation to
make payment for the purchased shares to the extent of such withheld amount.
1.6 Closings of Sales of Managementholder's Stock.
(a) At the closing of any sale of Managementholder's Stock
pursuant to this Agreement, the Managementholder selling Managementholder's
Stock shall deliver to the purchaser the share certificates and other
instruments representing such Managementholder's Stock, together with stock
powers and other instruments transferring such Common Stock, duly endorsed for
transfer and free and clear of any claim, mortgage, charge, pledge, lien,
security interest or encumbrance of any kind, and the purchaser shall deliver to
the Managementholder the consideration payable upon closing. If subsection
2.3(b) of this Agreement is applicable to the sale and the purchaser is other
than the Corporation or the Investors, the purchaser shall also
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deliver to the Managementholder an undertaking to pay the increased purchase
price for the Managementholder's Stock in accordance with subsection 2.3(b) in
the events therein described, as if such purchaser were a party to this
Agreement.
(b) If the Managementholder is not present at the closing, or
is present but for any reason fails to produce and deliver to the purchaser, in
accordance with subsection (a), the certificates or other instruments
representing any of the Managementholder's Stock being transferred or any other
document required under subsection (a), then the purchaser may deposit the
applicable consideration payable to such Managementholder, as and when payable
under this Agreement. into a special account in trust for the Managementholder
at a branch of the Corporation's bankers. Such deposit shall constitute valid
and effective payment to the Managementholder of the purchase price for such
Common Stock notwithstanding the fact that the Managementholder may have
voluntarily attempted to encumber or dispose of any of the Common Stock contrary
to the terms hereof, or that one or more certificates or other evidences of
ownership of the Common Stock may have been delivered to any other person. From
and after the date of such deposit (even though the share certificates in the
name of the such Managementholder or other instruments representing such Common
Stock have not been delivered to the purchaser), the purchase and transfer of
the Common Stock shall be deemed to have been fully completed and all right,
title, benefit and interest of the Managementholder in and to all such Common
Stock, both at law and in equity, shall be conclusively deemed to have been
transferred and assigned to and become vested in the purchaser.
(c) Where the purchaser has made a deposit in accordance with
subsection (b), the Managementholder shall be entitled to receive the
consideration for his Managementholder's Stock deposited with the Corporation's
bankers, without interest, upon delivery to the Corporation of (i) the
certificates or other instruments representing the Managementholder's Stock duly
endorsed for transfer in the manner required by subsection (a) and (ii) any
other document required under subsection (a) to be delivered by him at the
closing including, without limitation, the release or discharge of any
encumbrance relating to the Managementholder's Stock being sold.
(d) Each Managementholder irrevocably constitutes and appoints
the Secretary from time to time of the Corporation (the "Secretary") as his
attorney and agent authorized, in his name and on his behalf, to execute and
deliver (i) all such assignments, transfers, deeds and instruments as may be
necessary to effectively transfer the Common Stock being transferred to the
purchaser on the books of the Corporation and (ii) any other document required
under subsection (a) to be delivered by him at closing. Such appointment and
power of attorney, being coupled with an interest, shall not be revoked by the
insolvency, bankruptcy, death or incapacity of the Managementholder, and the
Managementholder hereby agrees to ratify and confirm any act taken by the
Secretary on his behalf hereunder and agrees that the receipt of the Secretary
as attorney shall be a good discharge to the Managementholder.
(e) The Secretary of the Corporation (or another officer
designated by the Board of Directors to act in his stead) shall, at all times,
hold the certificates representing all Managementholder's Stock. The Secretary
or such other officer shall hold such certificates in safekeeping to the order
of the registered holder of the Common Stock represented by the certificates
(but subject to the terms of this Agreement); provided that, upon being
satisfied that a
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lender reasonably requires possession of any certificate for the purposes of an
arrangement permitted by Section 1.5, the Secretary may release the certificate
to the lender upon receipt of an irrevocable direction from the registered
holder to the lender to return the certificates to the Secretary if the
registered holder would otherwise be entitled to the return of the certificates.
(f) Nothing in this Section is intended to limit any other
remedy available to a purchaser of Managementholder's Stock.
1.7 Application of the Agreement. For greater certainty, it is
acknowledged and agreed that this Agreement shall apply in respect of all Common
Stock now or hereafter acquired and held by a Managementholder including, but
not limited to, Common Stock acquired pursuant to Section 3.5, but not including
Common Stock purchased by a Managementholder through the facilities of a
securities exchange on which the Common Stock is then listed or quoted in the
NASDAQ System or the over-the-counter market after the Corporation has become a
Public Company.
ARTICLE TWO
Sale of Managementholder's Stock
2.1 Sales to Another Managementholder or Management Employee.
(a) If a Managementholder desires to transfer
Managementholder's Stock at any time pursuant to a bona fide written offer to
purchase his Managementholder's Stock for cash or for cash and the assumption of
indebtedness referred to in Section 1.5 (an "Offer") from another
Managementholder or a management employee of the Operating Company who in either
case is acceptable to the Board of Directors, in its sole discretion (an
"Offeror"), he shall give the Corporation and the Investors notice thereof (a
"Notice") attaching a copy of such Offer.
(b) If a Notice is given, the Corporation, or at the
Corporation's option, the Investors, shall have the option, exercisable by
notice to the Managementholder within 30 days after the date of receipt of the
Notice by the Corporation and the Investors, to purchase all or any part of the
Managementholder's Stock proposed to be sold pursuant to the Offer for the same
price per share and on the same terms as the Offer.
(c) If the Corporation or the Investors do not exercise the
option referred to in subsection (b) within the 30-day option period provided in
subsection (b), and the Board of Directors of the Corporation has consented to
the proposed sale to the Offeror pursuant to the Offer, the Managementholder
shall have the right, exercisable at any time within 60 days after the
expiration of such 30-day option period, to sell any of the Managementholder's
Stock as to which the option referred to in subsection (b) was not exercised to
the Offeror in accordance with the terms of the Offer. Notwithstanding the
foregoing, the consent of the Board of Directors shall not be required for such
proposed sale if the Offeror is, at the time of the sale, a Managementholder
bound by this Agreement. If the Managementholder's Stock as to which the option
referred to in subsection (b) was not exercised remains unsold at the end of
such 60-day period, such Managementholder's Stock may not thereafter be
transferred unless the Managementholder again complies with this Section 2.1.
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(d) Any Offeror who acquires Common Stock pursuant to an Offer
shall, by its purchase of such Common Stock and acceptance of the certificates
therefor, be deemed to agree to, and shall be bound by, the provisions of this
Agreement and shall at the time of closing of the purchase of any Common Stock
execute such documents as may be, in the reasonable opinion of the Corporation,
required in order to evidence such agreement.
2.2 Sale When the Corporation is a Public Company.
(a) Notwithstanding Section 2.1, at any time when the
Corporation is a Public Company, except during any l80-day period following any
final qualification or registration of securities of the Corporation for a
public offering, a Managementholder shall, after complying in full with the
provisions of this Section 2.2, be entitled during any 90-day period to sell up
to 5% of the Managementholder's Stock then held by him through the facilities of
any securities exchange on which the Common Stock is then listed or quoted in
the NASDAQ System or the over-the-counter market, subject to compliance with
applicable securities laws and with the by-laws and regulations of such exchange
(such a sale is hereinafter referred to as a "Market Sale"). No Managementholder
shall, however, sell in the aggregate pursuant to this Section 2.2 more than a
maximum of one-third of the aggregate number of Managementholder's Stock
acquired to such date by such Managementholder, provided that the Board of
Directors may, on the recommendation of the President of the Corporation, permit
the Managementholder to sell in excess of the foregoing maximum proportion of
his Managementholder's Stock.
(b) Not less than five and not more than ten business days
before effecting any Market Sale, the Managementholder shall first give notice
to the Investors (a "Market Sale Notice") offering to sell to the Corporation,
or at the Corporation's option, to the Investors all of that number of shares of
Managementholder's Stock which it proposes to sell, at a price per share of
Common Stock equal to the average closing price per share on such securities
exchange on which the Common Stock is then listed or which is quoted or the
NASDAQ System or the over-the-counter market for the ten trading days thereon
immediately preceding the date of the Market Sale Notice (the "Market Price").
(c) If the Corporation or the Investors, wish to accept an
offer made pursuant to a Market Sale Notice they shall do so by notice of
election to purchase (a "Market Exercise Notice"), given to the Managementholder
within three business days after receipt by the Investors of the Market Sale
Notice, which designates the number of shares of Managementholder's Stock to be
purchased, and the Managementholder shall thereupon be bound to sell such
Managementholder's Stock to the Corporation or the Investors, as the case may
be, and the Corporation or the Investors, as the case may be, shall be obligated
to buy such shares of Managementholder's Stock at the Market Price. If the
Corporation or the Investors elect to purchase a part, only, of the number of
the Managementholder's Stock which the Managementholder offered to sell, the
Managementholder may sell the balance of the shares of Managementholder's Stock
which were offered, through the facilities of any securities exchange on which
the Common Stock is then listed or quoted on the NASDAQ System or the
over-the-counter market, on any of the five consecutive business days commencing
on the fifth business day after receipt by the Investors of the Market Sale
Notice.
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2.3 Sale Upon Cessation of Employment.
(a) If a Managementholder ceases to be employed in a full-time
capacity by the Operating Company for any reason (including but not limited to
the Managementholder's voluntary termination, termination by the Operating
Company with or without cause, or the Managementholders' death, permanent
disability or retirement) prior to the time the Corporation becomes a Public
Company, the Corporation (or, if the Corporation so elects, the Investors) shall
purchase, and the Managementholders shall sell, all of the Managementholder's
Stock owned by such Managementholder. The Purchase Price payable per share in
any sale of Common Stock pursuant to this Section 2.3 shall be equal to Book
Value Per Share.
(b) If the Corporation effects a public offering of securities
of the same class as the Managementholder's Stock purchased pursuant to this
Section 2.3 within six months after the closing of such purchase, the purchase
price per share shall be increased by an amount equal to the excess, if any, of
the public offering price per share pursuant to such public offering (after
deduction of any applicable underwriters' commissions or discounts and expenses
of such offering on a per share basis) over the Book Value Per Share used in
calculating the original purchase price.
(c) The purchase price for Managementholder's Stock purchased
pursuant to this Section 2.3 shall be paid 100% in cash at the closing of such
purchase.
2.4 Sale Upon Cessation of Employment When the Corporation is
a Public Company.
Notwithstanding Section 2.3, if a Managementholder ceases to
be employed in a fulltime capacity by the Operating Company for any reason
(including but not limited to the Managementholder's voluntary termination,
termination by the Operating Company, with or without cause, or the
Managementholder's death, permanent disability or retirement) after the time the
Corporation has become a Public Company, the Managementholder shall be entitled
to sell his Managementholder's Stock through the facilities of any securities
exchange on which the Common Stock is then listed or quoted on the NASDAQ system
or over-the-counter market, provided such sales are made in the normal course
and in a manner which complies with applicable securities laws and regulations
and stock exchange rules and provided further that no more than one-half of his
Managementholder's Stock may be sold prior to the first anniversary of such
termination of employment. Notwithstanding the previous sentence, (a) in the
event of the death of the Managementholder, his executors or administrators
shall not be restricted as to the proportion of his Managementholder's Stock
that may be sold during the year following termination of employment, (b) in the
event of the termination of his employment by reason of his permanent
disability, the Managementholder shall not be restricted as to the proportion of
his Managementholder's Stock that may be sold during the year following
termination of employment, and (c) in the event of the retirement of the
Managementholder, up to 75% of his Managementholder's Stock may be sold during
the year following termination of employment.
2.5 Defined Terms and Expressions. As used in this Article:
(a) "permanent disability" means the inability of a
Managementholder to fulfill his duties as an employee of the Operating Company
as a result of illness, accident or
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physical or mental disability either for a period of six consecutive months or
for any 180 days in any 365-day period.
(b) "retirement" means retirement of a Managementholder in
accordance with the retirement policy provided for in the Operating Company's
employment policies in effect from time to time.
(c) "termination by the Operating Company without cause" shall
mean termination by the Operating Company on grounds other than gross or
continued neglect of duty, serious and wilful misconduct, theft, embezzlement,
fraud, breach of fiduciary duty or other like cause.
2.6 "termination by the Operating Company" shall include a
refusal by the Operating Company to renew an employment contract at the end of
its stated term.
2.7 Closing.
(a) The closing of any purchase and sale of Managementholder's
Stock pursuant to exercise by the Corporation or the Investors of a right, or
fulfillment of an obligation, under Section 2.1, 2.2, or 2.3 shall be held at
the registered office of the Corporation at a date and time designated by the
purchaser, but in any event not later than 60 days (or, in the case of a
purchase and sale pursuant to subsection 2.3(e), 120 days) after the date of
receipt of the Notice, receipt of the Market Sale Notice, cessation of
employment or date of acquisition of Common Stock following termination of
employment referred to in subsection 2.3(e), as the case may be.
(b) Any Managementholder's Stock purchased by the Investors or
the Corporation, pursuant to the exercise of a right, or fulfillment of an
obligation, under Section 2.1, 2.2, or 2.3 shall be free and clear of all liens,
charges, encumbrances or restrictions with the exception of any restrictions
imposed by this Agreement where such Managementholder's Stock are purchased by
the Investors.
2.8 Investor Purchasers. Any opportunity for the Investors to
purchase Common Stock pursuant to this Agreement shall be offered to each
Investor pro rata based on the aggregate number of shares of Common Stock each
such Investor owns or has the right to acquire (either through exercise,
conversion, exchange or otherwise) at the time of such offer. If an Investor
fails to elect to purchase its pro rata share, any remaining shares of Common
Stock shall be referred to the subscribing Investors on the same pro rata basis
until all such shares are allocated or no Investor desires to elect to purchase
any more of such shares. For purposes hereof, all shares of Common Stock owned
by any general partner of any Investor who is a partnership shall be deemed to
be owned by such Investor.
2.9 Non-Disclosure of Confidential Information. Each
Managementholder acknowledges that, in the course of performing and fulfilling
his duties and as an employee of the Operating Company (which in this section
includes its affiliates), he may have access to and may be entrusted with
confidential information concerning its activities, business operations and its
customers and clients, which information is not generally known in the industry
in which the Operating Company does business ("Confidential Information"). The
disclosure of any Confidential Information to competitors of the Operating
Company or to other persons would be
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highly detrimental to the interests of the Operating Company. Each
Managementholder further acknowledges and agrees that the right to maintain
confidential such Confidential Information is a proprietary right which the
Operating Company is entitled to protect. Accordingly, each Managementholder
covenants and agrees with the Operating Company that (a) he will not during the
continuance of his employment by the Operating Company disclose any such
Confidential Information to any person, nor shall he use the same, except as
required in the normal course of his employment by the Operating Company, and
(b) after the termination or expiration of his employment by the Operating
Company, he will not disclose or make any use of same without the consent of the
Operating Company, provided, however, that he shall not be prohibited by this
paragraph from using the personal skills and knowledge developed by him prior to
and during his employment by the Operating Company. Each Managementholder
acknowledges that the above covenants are reasonable and agrees that, in
addition to any other remedies at law it may have (which other remedies such
Managementholder acknowledges to be inadequate to protect its legitimate
interests), the Operating Company shall be entitled to injunctive relief in the
event of a breach thereof.
ARTICLE THREE
Sale of Common Stock by Onex and the Corporation
3.1 Piggy-Back Right.
(a) Except as provided in Section 3.4, if at any time the
Board of Directors approves a Sale of the Company (an "Approved Sale"), the
Corporation shall, at least 20 days prior to the Approved Sale, give notice (a
"Sale Notice") to the Management Representatives (as hereinafter defined) on
behalf of the Managementholders describing the terms of the Approved Sale in
reasonable detail, including the identity of the proposed purchaser, and stating
that each Managementholder has (and each Managementholder shall then have) the
option to sell to the proposed purchaser his Managementholder's Stock,
simultaneously with and conditional upon the closing of the Approved Sale, at
the price per share and on the other terms consistent with the rights and
preferences of the Common Stock set forth in the Corporation's Certificate of
Incorporation as is reasonably determined by the Board of Directors.
(b) The option pursuant to subsection (a) shall be exercised
by notice to the Corporation given not later than the date specified therefor in
the Sale Notice, which shall be not less than 10 business days after such Sale
Notice is given. If a Managementholder gives notice of his election to sell he
shall be obligated to sell the shares of Managementholders' Stock specified in
his notice upon the terms specified in subsection (a) to the proposed purchaser,
conditional upon the closing of the Approved Sale.
(c) If the proposed purchaser pursuant to the Approved Sale
has specified a limited number of shares of Common Stock which it is willing to
purchase in the aggregate, each Managementholder shall have the right to sell to
the proposed purchaser up to that number of shares of Common Stock which is in
the same proportion to all shares of Common Stock being purchased by the
proposed purchaser as the number of shares of Common Stock then owned by such
Managementholder is of the total number of shares of Common Stock then
outstanding (in
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each case, assuming the conversion or exchange of all securities convertible
into or exchangeable for Common Stock).
3.2 Drag-Along Right. If at any time the Board of Directors
proposes an Approved Sale, the Corporation may, by so notifying the Management
Representatives on behalf of the Managementholders in the Sale Notice, require
each Managementholder to sell his Managementholder's Stock, simultaneously with
and conditional upon the closing of such Approved Sale, at the price (whether in
cash or other consideration) per share and other terms consistent with the
rights and preferences of the Common Stock set forth in the Corporation's
Certificate of Incorporation as is reasonably determined by the Board of
Directors, and each Managementholder shall thereupon be obligated to sell such
Managementholder's Stock. If the form of consideration to be received on such
Approved Sale is, in the reasonable opinion of the Board of Directors after
consultation with the Management Representatives, inappropriate as a form of
consideration for Managementholders, the Corporation shall use its best efforts
to have such consideration converted to cash or more appropriate consideration
at a fair value.
3.3 Representations and Warranties on a Disposition. In
connection with any Approved Sale, in which Managementholder's Stock is to be
sold by a Managementholder, the Corporation may require the Managementholder to
enter into agreements with the purchaser representing and warranting that,
except as specifically disclosed to the purchaser in writing, such
Managementholder, at the time of the closing of the Approved Sale, does not have
actual knowledge that any representation or warranty made by the Corporation or
any other shareholder in connection with the Approved Sale was untrue in any
material respect when made or is untrue in any material respect as of such
closing; the liability of the selling Managementholder under such representation
and warranty shall be limited to the amount which he receives from the sale of
his Managementholder's Stock in connection with the Approved Sale and shall be
pro rata in accordance with the number of shares of Common Stock sold by the
Managementholder in relation to the shares of Common Stock being sold by all
shareholders as part of the Approved Sale.
3.4 Exceptions to the Piggy-Back Right. Section 3.1 shall not
apply to any sale as part of a public offering of Common Stock.
3.5 Piggy-Back Right on a Public Offering.
(a) If the Corporation proposes to effect a public offering of
shares of Common Stock in which shares of the Corporation's Common Stock held by
the Investors are to be included, the Corporation shall, prior to the proposed
initial filing or registration, give notice thereof and of the manner of
offering contemplated thereby ("Public Offering Notice") to each of the
Managementholders unless a determination has been made by the managing
underwriter(s) pursuant to sub-section (g) of this Section 3.5 to the effect
that there is reasonable cause to believe that the inclusion of the
Managementholders' Stock might adversely affect the offering.
(b) The Corporation shall not be required to give a Public
Offering Notice in accordance with subsection (a) or to register
Managementholder's Stock in accordance with subsection (c) if the distribution
of shares of Common Stock being proposed cannot, under applicable law and
regulations, be combined (pursuant to the form of prospectus or registration
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Statement proposed to be used) with a distribution of shares of
Managementholder's Stock or if and to the extent that such distribution of
Managementholder's Stock would contravene an agreement with a security holder
that prohibits or restricts the inclusion of securities to be sold by others.
(c) If a Public Offering Notice is given, then, on written
notice to the Corporation (a "Holder's Request") from a Managementholder within
10 days after the receipt of the Public Offering Notice (which Holder's Request
shall specify the number of shares of Management holder's Stock which the
Managementholder wishes to sell and distribute, which number shall not represent
a greater proportion of such Managementholder's Stock than the proportion of all
shares of Common Stock held by the Investors which is proposed to be sold and
distributed pursuant to such public offering) the Corporation will use its best
efforts to register the shares of Managementholder's Stock stated in the
Holder's Request (or, if less, the Pro Rata Number of such Managementholder's
Stock) for distribution pursuant to the proposed public offering in addition to
the shares of Common Stock being offered by the Investors. If the number of
shares of Common Stock which the Investors, the Managementholders and other
holders of Common Stock wish to sell and distribute exceeds the number thereof
which, in the opinion of the managing underwriter(s), is the maximum number
thereof that might be included with the offering without adversely affecting the
offering, then the excess above such maximum number shall not be included with
the offering, and the number of shares of Common Stock of the Investors and each
Managementholder wishing to sell, to be sold with the offering, shall be
proportionate to their respective holdings of Common Stock. If any of the
Managementholders is thereby entitled to sell more shares of Common Stock than
he wishes to sell, the Investors and each remaining Managementholder shall be
entitled to make up the difference pro-rata from its or his respective holdings,
provided that any such Managementholder shall have confirmed his desire to make
up his pro-rata proportion of the difference out of his holdings within 5 days
after notice of his entitlement to do so is given to him.
(d) As used in this Section 3.5, the term "Pro Rata Number"
shall mean the product of (i) the total number of shares of Common Stock held by
the Managementholder and (ii) a fraction, the numerator of which is the
aggregate number of shares of Common Stock which are to be so registered and the
denominator of which is the aggregate number of shares of Common Stock
outstanding.
(e) On a sale pursuant to this Section 3.5, Managementholders
shall sell their shares of Common Stock through the underwriters on the same
terms as the Investors or the Corporation generally are selling their or its
shares of Common Stock.
(f) The Corporation shall be responsible for the preparation
of the preliminary prospectus, the prospectus or registration statement and
related papers and filings (including any Blue Sky filings) in connection with
the proposed public offering.
(g) Notwithstanding the provisions of this Section 3.5, the
Corporation (i) may at any time delay, abandon or withdraw such prospectus or
registration statement relating to a proposed offering, and (ii) shall not be
required to register Managementholder's Stock pursuant to subsection (c) in
connection with any proposed offering if, in the opinion of the managing
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underwriter(s), there is reasonable cause to believe that the inclusion of such
Managementholder's Stock might adversely affect the offering.
(h) Each participating Managementholder shall supply the
Corporation with such information as the Corporation may reasonably request in
order to prepare any preliminary prospectus, prospectus and registration
statement required in connection with the proposed public offering, to prepare
any related papers and filings, to effect the qualifications required by this
Section 3.5 and to comply with applicable securities laws.
(i) Each Managementholder's registration rights are limited
solely to the rights set forth in this Section 3.5.
3.6 Costs of Public Offering. Each Managementholder who
participates in a public offering of Common Stock of the Corporation pursuant to
any provision of this Article 3 shall bear a portion of all costs incurred in
connection with such offering including, without limitation, the fees of
investment bankers, lawyers and accountants in the same proportion as the number
of shares of Common Stock sold by such Managementholder is of all the Common
Stock sold pursuant to such public offering unless such costs are to be borne by
the Corporation. Each Managementholder shall, in any event, pay the underwriting
discounts or commissions applicable to the sale of his Common Stock in such
public offering and, where required, execute the applicable underwriting
agreement and all related documents.
ARTICLE FOUR
Legending and Voting
4.1 Legending of Stock Certificates. All certificates
representing shares of Common Stock held by Managementholders shall bear the
following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFER AND CERTAIN RESTRICTIONS ON
THE VOTING OF SUCH SECURITIES CONTAINED IN THE MANAGEMENT
STOCKHOLDERS AGREEMENT, DATED AS OF _________ __, 2004 AMONG
THE ISSUER OF SUCH SECURITIES (THE "COMPANY") AND CERTAIN OF
THE COMPANY'S STOCKHOLDERS, A COPY OF SUCH MANAGEMENT
STOCKHOLDERS AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE
COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST."
4.2 Voting of Managementholder's Stock. Each Managementholder
shall at all times vote his Managementholder's Stock (to the extent they are
entitled to vote) in the same manner as the Common Stock held by Onex is voted,
on the election of directors and on all other matters which are submitted to a
vote (or consent in lieu of voting) of the Corporation's stockholders, and for
this purpose, shall execute and deliver to Onex (or its designees) proxies to
vote such Managementholder's Stock in the same manner as the Common Stock held
by Onex is
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voted. To the extent permitted by law, each Managementholder, by his execution
of this Agreement, irrevocably constitutes and appoints the person who is at any
time the president of Onex, his proxy to vote all of his Managementholder's
Stock at any meeting of stockholders of the Corporation, or to give consent in
lieu of voting, on any matter which is submitted for a vote or consent to the
stockholders, provided that such Managementholder's Stock is voted or consent is
given with respect to them in the same manner as the Common Stock held by Onex.
Notwithstanding anything contained in this Section 4.2, Managementholder's Stock
shall not, except with the express consent of the Managementholder, be voted in
favor of any resolution the effect of which will be to change the
Managementholder's Stock or Onex Stock, or convert or exchange the
Managementholder's Stock or Onex Stock into or for different securities, unless
in every such case the Managementholder's Stock and the Onex Stock are thereby
changed identically or converted into or exchanged for the same type of
securities in proportion to their respective holdings of Common Stock, in each
case on terms consistent with the rights and preferences set forth in the
Corporation's Certificate of Incorporation as is reasonably determined by Onex.
4.3 Management Representatives. Each of the Managementholders
hereby irrevocably constitutes and appoints the Management Representatives (as
defined in this Section 4.3) as his representatives to take all actions on his
behalf in connection with this Agreement, in their sole and absolute discretion,
including but not limited to executing any consents or waivers in connection
with, or any amendments to, this Agreement (with the exception of any decision
to sell his Managementholder's Stock pursuant to Section 2.1, 2.2, 3.1, or 3.5).
In the event of a disagreement among the Management Representatives, a majority
of them shall have all authority granted to the Management Representatives by
the Managementholder under this Agreement. The term "Management Representatives"
shall mean the Chief Executive Officer of the Corporation and any two
Vice-Presidents of any Operating Company designated from time to time by the
Chief Executive Officer.
ARTICLE FIVE
Covenants of the Corporation
5.1 Mergers, Consolidations, Etc. The Corporation shall not
merge, consolidate or reorganize with another corporation, or sell all or
substantially all of its assets to another person, if pursuant thereto any
Investor shall receive equity securities as full or partial consideration for
its Common Stock, unless all Managementholders shall have the right to receive
the same securities in proportion to their respective holdings of Common Stock,
in each case on terms consistent with the rights and preferences set forth in
the Corporation's Certificate of Incorporation as is reasonably determined by
the Board of Directors.
5.2 Financial Statements. The Corporation shall deliver to
each Managementholder so long as he owns Managementholder's Stock:
(a) within 120 days after the end of each fiscal year of the
Corporation, a consolidated balance sheet of the Corporation and its
subsidiaries as at the end of such fiscal year, and consolidated statements of
income and of cash flows of the Corporation and its
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subsidiaries for such fiscal year, accompanied by a report thereon of
independent certified public accountants; and
(b) within 45 days after the end of each fiscal quarter of the
Corporation, a consolidated balance sheet of the Corporation and its
subsidiaries as at the end of such quarter, and consolidated statements of
income and of cash flows of the Corporation and its subsidiaries for such
quarter, and a certificate of an officer of the Corporation certifying that, in
his opinion, the statements fairly present the financial position and results of
operation of the Corporation and its subsidiaries and have been prepared in
accordance with generally accepted accounting principles (except that such
statements need not include complete notes).
(c) Except as otherwise required by any applicable law or
judicial order or decree or by any governmental agency or authority, each
Managementholder entitled to receive information regarding the Corporation and
its subsidiaries under this Section 5.2 shall maintain the confidentiality of
all nonpublic information obtained by such Managementholder hereunder which the
Corporation has reasonably designated as proprietary or confidential in nature;
provided that each such Managementholder may, to the extent required by law,
disclose such information in connection with the sale or transfer of Common
Stock if such Managementholder's transferee agrees in writing to be bound by the
provisions hereof.
ARTICLE SIX
Interpretation
6.1 Definitions. When used in this Agreement the following
terms shall have the respective meanings shown:
(a) "affiliate" means, with respect to any person, any of (i)
a director or executive officer of such person, (ii) a spouse, parent, sibling
or descendant of such person (or spouse, parent, sibling or descendant of any
director or executive office of such person), and (iii) any other person that,
directly or indirectly, controls, or is controlled by or is under common control
with such person (for purposes of this definition, "control" (including with
correlative meanings, the terms "controlling," "controlled by" and "under common
control with"), as used with respect to any person, means the possession,
directly or indirectly of the power to direct or cause the direction of the
management and policies of such person, whether through the ownership of voting
securities or by contract or agency or otherwise);
(b) "Board of Directors" means the board of directors of the
Corporation;
(c) "business day" means any day which is neither a Saturday
or Sunday nor a legal holiday on which the banks are authorized or required to
be closed in New York City;
(d) "Book Value Per Share" as of any date means the quotient
obtained by dividing (i) consolidated common stockholders' equity of the
Corporation and its subsidiaries as of the end of the fiscal quarter immediately
subsequent to the date of the event that required the purchase and sale pursuant
to Section 2.3 determined in accordance with generally accepted accounting
principles in effect in the United States on the date of this Agreement by (ii)
the number of shares of Common Stock outstanding on such date. In making
calculations for
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purposes of clauses (i) and (ii) it shall be assumed that all options and rights
to purchase shares of Common Stock and securities convertible or exchangeable
into Common Stock outstanding on the date as of which the calculation is being
made had been exercised or converted to the extent that the exercise price or
conversion price (expressed in terms of principal amount of debt or liquidation
preference in the case of shares) does not exceed Book Value Per Share
(determined without regard to this sentence) and any purchase price for shares
of Common Stock payable upon such exercise had been paid. The determination of
Book Value Per Share shall be based upon the audited (in the case of the end of
a fiscal year) or unaudited (in the case of the end of any of the first three
quarters of a fiscal year) balance sheet of the Corporation as at the end of the
fiscal quarter in question. Notwithstanding the foregoing, Book Value Per Share
shall be equitably adjusted by the Board of Directors if a stock dividend,
recapitalization or other material event occurs outside of the ordinary course
of business after the end of such fiscal quarter and before the closing of the
sale in respect of which the determination is being made;
(e) "Common Stock" means (i) any Class A Common, Class B
Common, Class C Common, Class D-1 Common, Class D-2 Common, or Class E Common
and any other common stock of the Corporation outstanding from time to time and
(ii) any equity securities issued or issuable, directly or indirectly, with
respect to the securities referred to in clause (i) above by any of stock
divided or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization;
(f) "Independent Third Party" means any person who,
immediately prior to the contemplated transaction, does not own in excess of 5%
of the Corporation's common stock on a fully-diluted basis (a "5% Owner") and
who is not an affiliate of a 5% Owner;
(g) "Investors" means each of Onex, the persons listed on
Schedule III attached hereto and their respective affiliated permitted
transferees of Common Stock;
(h) "Management Representatives" shall have the meaning given
to it in Section 4.3;
(i) "Managementholder's Stock" means the Common Stock owned at
any particular time by any Managementholder other than Common Stock purchased by
a Managementholder through the facilities of a securities exchange on which the
Common Stock is then listed or quoted in the NASDAQ System or the
over-the-counter market after the Corporation has become a Public Company;
(j) "Onex" means Onex American Holdings II LLC or any
affiliate of Onex American Holdings II LLC;
(k) "Onex Stock" means the Common Stock owned at any
particular time by Onex other than Common Stock purchased by Onex through the
facilities of a securities exchange on which the Common Stock is then listed or
quoted in the NASDAQ System or the over-the-counter market after the Corporation
has become a Public Company;
(l) "Operating Company" means anyone or more of the
Corporation and its subsidiaries;
15
(m) "person" includes an individual, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization and a government
or any department or agency thereof;
(n) "Public Company" means a corporation which has effected a
public offering;
(o) "public offering" means public offering and sale of Common
Stock pursuant to an effective registration under the 1933 Act;
(p) "Sale of the Company" means the sale of the Corporation to
an Independent Third Party or a group of Independent Third Parties pursuant to
which such party or parties acquire (i) capital stock of the Corporation
possessing the voting power to elect a majority of the Corporation's board of
directors (whether by merger, consolidation, recapitalization, reorganization or
sale of a majority of the Corporation's outstanding Common Stock and Common
Stock equivalents) or (ii) all or substantially all of the Corporation's
consolidated assets;
(q) "subsidiary" means, with respect to any person, any
corporation of which the shares of stock having fifty percent (50%) or more of
the general voting power in electing the board of directors are, at the time of
which the determination is being made, owned by such person either directly or
indirectly through subsidiaries; and
(r) "transfer" includes any sale, exchange, assignment, gift,
bequest, pledge, creation of a lien or security interest, disposition,
encumbrance, or other arrangement by which possession, legal title or beneficial
ownership passes from one person to another, or to the same person in a
different capacity, whether or not voluntary and whether or not for value.
6.2 Extended Meanings. In this Agreement, words importing the
singular number include the plural and vice versa and words importing gender
include all genders.
6.3 Governing Law. This Agreement and all amendments hereof
and waivers and consents hereunder shall be governed by the internal law, and
not the law of conflicts, of the State of Delaware.
6.4 Captions. The captions in this Agreement are for
convenience of reference only and shall not be given any effect in the
interpretation of this Agreement.
6.5 Severability. The provisions of this Agreement are
intended to be and shall be deemed to be severable. The invalidity or
unenforceability of any particular provision of this Agreement shall not affect
the other provisions hereof, and this Agreement shall be construed in all
respects as if such invalid or unenforceable provision were omitted.
6.6 Time. Time shall be of the essence in this Agreement.
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ARTICLE SEVEN
Miscellaneous
7.1 Termination. This Agreement shall terminate if the
Investors in the aggregate cease to hold at least one-third of the outstanding
shares of Common Stock of the Corporation and this Agreement shall terminate as
to any person when that person no longer owns any shares of Managementholder's
Stock, or rights to acquire shares of Common Stock to which this Agreement shall
apply under Section 1.8.
7.2 Notices. All notices, consents and other communications
required or permitted to be given under or by reason of this Agreement shall be
in writing and shall be delivered personally or by telex or telecopy as
described below, and shall be deemed given on the date on which delivery is
made. If delivered by telex or telecopy, such notices or communications shall be
confirmed by a registered or certified letter (return receipt requested),
postage prepaid. Any such delivery shall be addressed to the intended recipient
at the following addresses (or at such other address for a party as shall be
specified by such party by like notice to the other parties):
(a) if to the Corporation:
Commercial Vehicle Group, Inc.
0000 Xxxxxx Xxx
Xxx Xxxxxx, Xxxx 00000
Attention: President
with a copy to:
Hidden Creek Industries
0000 XXX Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx X. Xxxxxx
Telecopy: (000) 000-0000
and
Xxxxxxxx & Xxxxx LLP
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxxx
Telecopy: (000) 000-0000
(b) if to Investors:
Onex American Holdings II LLC
000 Xxx Xxxxxx
(P.O. Xxx 000)
00xx Xxxxx
Xxxxxxx, Xxxxxx X0X 0X0
Attention: President
Telecopy: (000) 000-0000
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with a copy to:
Xxxxxxxx & Xxxxx LLP
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxxx
Telecopy: (000) 000-0000
(c) if to any Managementholder, to him at his address as
appears on Schedule I attached hereto or as otherwise shown on the records of
the Corporation.
7.3 No Waiver. The failure of a party to insist upon strict
adherence to any term of this Agreement on any occasion shall not be considered
a waiver or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement. No purported waiver
shall be effective unless in writing. The waiver by any party of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent or other breach.
7.4 Exclusive Agreement and Amendment. This Agreement
supersedes all prior agreements among the parties with respect to its subject
matter, is intended as a complete and exclusive statement of the terms of the
Agreement among the parties with respect thereto and cannot be changed or
terminated orally. This Agreement may only be amended or altered by the mutual
agreement of the parties hereto, such amendments or alterations to become
effective when reduced to writing and signed by the Investors holding a majority
of the voting Common Stock, the Corporation, and a majority of the Management
Representatives or by the Corporation and the holders of at least 75% of the
shares of Managementholders' Stock.
7.5 Further Assurances. Each party agrees to take all such
actions and to execute all such documents as may be necessary or advisable to
implement the provisions of this Agreement fully and effectively.
7.6 Assignment.
(a) Any Investor may assign this Agreement and all of its
rights hereunder to any other Investor to whom such assigning Investor
simultaneously transfers all of the Common Stock owned by such assigning
Investor, provided that the transferee shall, at that same time, execute and
deliver to the Corporation an agreement in writing whereby such transferee
assumes all of the obligations of such assigning Investor under this Agreement
to all other parties hereto.
(b) Notwithstanding any provision of this Agreement, a
Managementholder may transfer all or any of his Managementholder's Stock to a
Managementholder Corporation (as hereinafter defined), which is then controlled
by the transferor, provided that simultaneously with or prior to such transfer
such Managementholder Corporation shall have agreed in writing with the other
parties to this Agreement to assume all of the obligations of the transferor
hereunder with respect to such shares of Managementholder's Stock and provided
that the
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transferor agrees to guarantee the performance of such obligations to the other
parties hereto, in each case by a written instrument reasonably satisfactory to
the Board of Directors, in which case references herein to Managementholders
shall thenceforth include any such Managementholder Corporation so long as it
shall continue to hold any Managementholder's Stock. In this Section,
"Managementholder Corporation" means (i) a corporation, all of the shares of
which are legally and beneficially owned by one or more of the transferor, his
spouse, either of their children, and/or any spouse of any of the children, or
(ii) any trust exclusively in favor of any of the foregoing persons. A
Managementholder Corporation may, at any time, and shall forthwith in the event
that such Managementholder Corporation ceases to be controlled by the transferor
or ceases to qualify as a Managementholder Corporation under the foregoing
definition, transfer back to the transferor all of the Managementholder's Stock,
held by it. For purposes of Sections 2.3 and 2.4, Managementholder's Stock owned
by a Managementholder Corporation shall be deemed to be owned by the transferor.
(c) Subject to the foregoing, no party may assign any of its
rights or delegate any of its duties under this Agreement.
7.7 Counterparts.
(a) This Agreement may be executed in counterparts, each of
which shall be considered an original, but all of which together shall
constitute one and the same instrument.
(b) Any Managementholder may also execute this Agreement by
executing and delivering to the Corporation a Counterpart and Acknowledgment in
the form set out as Schedule II to this Agreement, whereupon such
Managementholder shall become bound by, and entitled to the benefits of, this
Agreement as fully and effectively as though such Managementholder had executed
a Counterpart of this Agreement together with the other parties to this
Agreement.
7.8 Binding Effect. This Agreement shall be binding upon, and
shall inure to the benefit of the parties to this Agreement and their respective
heirs, executors, administrators, personal representatives, successors and
permitted assigns.
7.9 Decisions of Board of Directors. All decisions and
determinations permitted or required to be made by the Corporation hereunder
shall be made by the Board of Directors in its sole unfettered discretion and
all such decisions and determinations shall be conclusive and binding on the
parties hereto.
* * * * *
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IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto, all as of the date first above written.
COMMERCIAL VEHICLE GROUP, INC.
By:
------------------------------------
Its:
-----------------------------------
ONEX AMERICAN HOLDINGS II LLC
By:
------------------------------------
Its:
-----------------------------------
MANAGEMENTHOLDERS:
---------------------------------------
Xxxxx Xxxxxxxxx
---------------------------------------
Xxxxx Xxxxx
---------------------------------------
Xxxxxx Xxxxxxx
20
---------------------------------------
Xxxxx X. Xxxxx
---------------------------------------
Xxxxxx Xxxx
---------------------------------------
Xxx Xxxxxxx
---------------------------------------
Xxxxx Xxxxx
---------------------------------------
Don Lorraine
---------------------------------------
Xxx Xxxxx
---------------------------------------
Xxxxx Xxxxxxxx
---------------------------------------
Xxx Xxxxxxxx
---------------------------------------
Xxxx Xxxxx
---------------------------------------
Xxxxx Xxxxxx
---------------------------------------
Xxxxxxx Xxxxxxxxxxx
---------------------------------------
Xxx Xxxxxxx
---------------------------------------
Xxxxxxx Xxxxxx
---------------------------------------
Xxxx Xxxxx
---------------------------------------
Xxxx Xxxxx
---------------------------------------
Xxxxx Xxxxxxxx
21
SCHEDULE I
Names and Address of Managementholders
22
SCHEDULE II
MANAGEMENT STOCKHOLDERS AGREEMENT
COUNTERPART AND ACKNOWLEDGMENT
TO: COMMERCIAL VEHICLE GROUP, INC.
THE INVESTORS
THE MANAGEMENTHOLDERS
RE: The Management Stockholders Agreement (the "Agreement") dated as of
_________________, 1997 between Commercial Vehicle Group, Inc. the
"Investors" and the Managementholders" (each, as defined in the
Agreement)
The undersigned hereby agrees to be bound by the terms of the Agreement
as a party to the Agreement, and shall be entitled to all benefits of a
Managementholder pursuant to the Agreement, as fully and effectively as though
the undersigned had executed a counterpart of the Agreement together with the
other parties to the Agreement. The undersigned hereby acknowledges having
received and reviewed a copy of the Agreement.
DATED this ______ day of ________________, 200_.
---------------------------------------
Signature of Managementholder
---------------------------------------
Name of Managementholder
(Please Print)
23
SCHEDULE III
Schedule of Investors
24
