Exhibit 10.7
FORM OF
STOCKHOLDER'S AGREEMENT
This Stockholder's Agreement (this "Agreement") is entered into as of
______________ by and among ACCURIDE CORPORATION, a Delaware corporation (the
"Company"), __________________ (the "Purchaser") and HUBCAP ACQUISITION L.L.C.
("Acquisition") (being hereinafter collectively referred to as the "Parties").
RECITALS
Pursuant to the terms of the 1998 Stock Purchase and Option Plan for
Employees of Accuride Corporation and Subsidiaries, as the same may be amended
from time to time (the "Equity Plan"), the Company is making shares of its
common stock ("Common Stock") available for purchase by certain employees and is
granting options to purchase Common Stock to certain employees. This Agreement
is one of several agreements ("Other Purchasers' Agreements") which have been,
or which in the future will be, entered into between the Company and other
individuals who are or will be employees of the Company or one of its
Subsidiaries (collectively, the "Other Purchasers"). In addition, the Company
has entered into agreements (the "Investors' Agreements") with certain
institutional investors and other purchasers (collectively, the "Investors")
pursuant to which the Investors purchased or will purchase shares of Common
Stock. For purposes of this Agreement, "Subsidiary," with respect to any
entity, shall mean any corporation (or other entity) in an unbroken chain of
entities beginning with such corporation (or entity) if each of the entities, or
group of commonly controlled entities, other than the last entity in the
unbroken chain, then owns stock (or other equity interest) possessing 50% or
more of the total combined voting power of all classes of equity in one of the
other entities in such chain; "Affiliate" shall mean, with respect to any
Person, a Person directly or indirectly controlling, controlled by, or under
common control with, such Person, and with respect to the Company, also any
entity designated by the Board of Directors of the Company in which the Company
or one of its Affiliates has an interest, and, with respect to Kohlberg Kravis
Xxxxxxx & Co., L.P. ("KKR"), also any Affiliate of any partner of KKR; "Person"
shall mean an individual, partnership, corporation, limited liability company,
business trust, joint stock company, trust, unincorporated association, joint
venture, governmental authority or other entity of whatever nature; and
"control" shall have the meaning given such term under Rule 405 of the
Securities Act of 1933 (the "Securities Act").
Pursuant to the terms of the Equity Plan, the Company has agreed to sell to
the Purchaser, and the Purchaser desires to purchase ________ shares of Common
Stock (the "Purchase Stock") at a price per share of $5,000.00. The purchase of
the Purchase Stock will be made on ______________ (the "Purchase Date") and
following the contemplated stock dividend which will result in Acquisition's
effective cost per share of Common Stock equaling $5,000.00 (the "Stock
Dividend"), unless the Company shall notify the Purchaser that the Purchase Date
has been extended, in which case the Purchase Date shall be the date specified
in such notice. On the
Purchase Date, the Company also will grant to the Purchaser an option or options
(the "Options") to purchase _______ shares of Common Stock at an exercise price
of $5,000.00 per share, pursuant to the terms of the Equity Plan and the "Non-
Qualified Stock Option Agreement" of even date herewith by and between the
Company and the Purchaser. The Options may be granted as Time Options or
Performance Options (each as defined in the Non-Qualified Stock Option
Agreement). The term "Stock" as used in this Agreement shall include all shares
of Purchase Stock of the Company purchased by the Purchaser pursuant to this
Agreement and all shares of Common Stock issued to the Purchaser by the Company
upon exercise of the Options and of any other stock options held by the
Purchaser and any other Common Stock otherwise acquired by the Purchaser at any
time when this Agreement is in effect. The term "Options" as used in this
Agreement shall include all Options granted to the Purchaser pursuant to this
Agreement and any other stock options to purchase Common Stock granted to the
Purchaser by the Company and held by the Purchaser at any time when this
Agreement is in effect.
AGREEMENT
To implement the foregoing and in consideration of the mutual agreements
contained herein, the Parties agree as follows:
1. PURCHASE OF STOCK; ISSUANCE OF OPTIONS.
(a) On the Purchase Date, subject to the Stock Dividend, the Purchaser
hereby subscribes for and shall purchase, and the Company will sell to the
Purchaser, the Purchase Stock at a purchase price of $5,000.00 per share (the
"Initial Price Per Share") subject to the terms and conditions hereinafter set
forth and contained in the Equity Plan. The Company shall have no obligation to
sell any Purchase Stock to any person who (i) is a resident or citizen of a
state or other jurisdiction in which the sale of the Purchase Stock to him would
constitute a violation of the securities or "blue sky" laws of such jurisdiction
(provided that the Company shall take all reasonable ministerial actions under
such laws to avoid any such violation) or (ii) is not an employee of the Company
or one of its Subsidiaries on the Purchase Date.
(b) The Purchaser shall pay to the Company on the Purchase Date
$_________, in cash or a certified bank check or checks payable to the order of
the Company and a note payable to the Company in the principal amount of
$________ in consideration of the Purchase Stock; provided, that with the
consent of the Company, the Purchaser may deliver another form of payment for
the Purchase Stock. On the Purchase Date, in consideration of receipt of the
Initial Price Per Share, the Company will deliver to the Purchaser a
certificate, registered in the Purchaser's name, for the Purchase Stock.
(c) Upon and as of the Purchase Date, the Company shall issue to the
Purchaser Options to purchase ______________ shares of Common Stock subject to
the terms and conditions hereinafter set forth and contained in the Equity Plan
and the Non-Qualified Stock
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Option Agreement, and the Parties shall execute and deliver to each other copies
of the Non-Qualified Stock Option Agreement concurrently with the issuance of
the Options.
2. THE PURCHASER'S REPRESENTATIONS AND WARRANTIES.
(a) The Purchaser hereby represents and warrants that he is acquiring the
Purchase Stock for investment for his own account and not with a view to, or for
resale in connection with, the distribution or other disposition thereof. The
Purchaser agrees and acknowledges that he will not, directly or indirectly,
offer, transfer, sell, assign, pledge, hypothecate or otherwise dispose of any
shares of Stock (any such act sometimes referred to herein as a "Transfer,"
whether voluntary or involuntary) unless such Transfer complies with the terms
and conditions of this Agreement and (i) the Transfer is pursuant to an
effective registration statement under the Securities Act of 1933, as amended,
or the rules and regulations in effect thereunder (the "Securities Act") or (ii)
(A) counsel for the Purchaser (which counsel shall be acceptable to the Company)
shall have furnished the Company with an opinion, satisfactory in form and
substance to the Company, that no such registration is required because of the
availability of an exemption from registration under the Securities Act and (B)
if the Purchaser is a citizen or resident of any country other than the United
States, or the Purchaser desires to effect any Transfer in any such country,
counsel for the Purchaser (which counsel shall be acceptable to the Company)
shall have furnished the Company with an opinion or other advice satisfactory in
form and substance to the Company to the effect that such Transfer will comply
with the securities laws of such jurisdiction. Notwithstanding the foregoing,
the Company acknowledges and agrees that any of the following Transfers are
deemed to be in compliance with this Agreement and no opinion of counsel is
required in connection therewith: (w) a pledge of Purchase Stock to the Company
to secure a loan or guaranty made by the Company in connection with the
Purchaser's acquisition of Purchase Stock, (x) a Transfer made pursuant to
Section 5, 6, 8 or 9 hereof, (y) a Transfer upon the death of the Purchaser to
his executors, administrators, testamentary trustees, legatees or beneficiaries
(the "Purchaser's Estate") or a Transfer to the executors, administrators,
testamentary trustees, legatees or beneficiaries of a person who has become a
holder of Stock in accordance with the terms of this Agreement, provided that it
is expressly understood that any such transferee shall be bound by the
provisions of this Agreement and (z) a Transfer made after the Purchase Date in
compliance with the federal securities laws to a trust or custodianship the
beneficiaries of which may include only the Purchaser, his spouse or his lineal
descendants (which term shall include adoptive as well as biological
descendants) (the "Purchaser's Trust") or a Transfer made after the third
anniversary of the Purchase Date to such a trust by a person who has become a
holder of Stock in accordance with the terms of this Agreement, provided that
such Transfer is made expressly subject to this Agreement and that the
transferee agrees in writing to be bound by the terms and conditions hereof.
(b) The certificate (or certificates) representing the Stock shall bear
the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF UNLESS
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SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION COMPLIES WITH THE PROVISIONS OF THE STOCKHOLDER'S
AGREEMENT DATED AS OF ______________ BY AND AMONG ACCURIDE
CORPORATION (THE "COMPANY"), THE PURCHASER NAMED ON THE FACE HEREOF
AND HUBCAP ACQUISITION L.L.C. (A COPY OF WHICH IS ON FILE WITH THE
SECRETARY OF THE COMPANY). EXCEPT AS OTHERWISE PROVIDED IN SUCH
AGREEMENT, NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR
OTHER DISPOSITION OF THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE
MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR (B) IF (I) THE
COMPANY HAS BEEN FURNISHED WITH A SATISFACTORY OPINION OF COUNSEL FOR
THE HOLDER THAT SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION
OR OTHER DISPOSITION IS EXEMPT FROM THE PROVISIONS OF SECTION 5 OF THE
ACT OR THE RULES AND REGULATIONS IN EFFECT THEREUNDER, AND IN
COMPLIANCE WITH APPLICABLE PROVISIONS OF STATE SECURITIES LAWS, AND
(II) IF THE HOLDER IS A CITIZEN OR RESIDENT OF ANY COUNTRY OTHER THAN
THE UNITED STATES, OR THE HOLDER DESIRES TO EFFECT ANY SUCH
TRANSACTION IN ANY SUCH COUNTRY, THE COMPANY HAS BEEN FURNISHED WITH A
SATISFACTORY OPINION OR OTHER ADVICE OF COUNSEL FOR THE HOLDER THAT
SUCH TRANSACTION WILL NOT VIOLATE THE LAWS OF SUCH COUNTRY."
(c) The Purchaser acknowledges that he has been advised that (i) the Stock
has not been registered under the Securities Act, (ii) the Stock must be held
indefinitely and the Purchaser must continue to bear the economic risk of the
investment in the Stock unless it is subsequently registered under the
Securities Act or an exemption from registration is available, (iii) it is not
anticipated that there will be any public market for the Stock, (iv) an
exemption from registration under Rule 144 promulgated under the Securities Act
is not currently available with respect to the sales of any securities of the
Company, and the Company has made no covenant to make such an exemption
available (except as provided in Section 11(b) hereof), (v) when and if shares
of Stock may be disposed of without registration in reliance on Rule 144, such
disposition can be made only in limited amounts in accordance with the terms and
conditions of such Rule, (vi) if the Rule 144 exemption is not available, public
sale without registration will require compliance with some other exemption
under the Securities Act, (vii) a
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restrictive legend in the form heretofore set forth shall be placed on the
certificates representing the Stock, and (viii) a notation shall be made in the
appropriate records of the Company indicating that the Stock is subject to
restrictions on transfer and, if the Company should at some time in the future
engage the services of a stock transfer agent, appropriate stop transfer
restrictions will be issued to such transfer agent with respect to the Stock.
(d) If any shares of Stock are to be disposed of in accordance with Rule
144 under the Securities Act or otherwise, the Purchaser shall promptly notify
the Company of such intended disposition and shall deliver to the Company at or
prior to the time of such disposition such documentation as the Company may
reasonably request in connection with such sale, and, in the case of a
disposition pursuant to Rule 144, shall deliver to the Company an executed copy
of any notice on Form 144 required to be filed with the Securities and Exchange
Commission.
(e) The Purchaser agrees that, if any shares of the Common Stock (or
securities convertible into or exchangeable for Common Stock) of the Company are
offered to the public pursuant to an effective registration statement under the
Securities Act, the Purchaser will not effect any public sale or distribution of
any shares of Stock not covered by such registration statement within 7 days
prior to, or within 180 days after, the effective date of such registration
statement, unless otherwise agreed to in writing by the Company.
(f) The Purchaser represents and warrants that (i) he has received and
reviewed a Private Placement Memorandum, including all amendments and
supplements thereto (the "Private Placement Memorandum") relating to the Stock
and the documents referred to therein, certain of which documents set forth the
rights, preferences and restrictions relating to the Stock and (ii) he has been
given the opportunity to obtain any additional information or documents and to
ask questions and receive answers about such documents, the Company and its
Subsidiaries and the business and prospects of the Company and its Subsidiaries
which he deems necessary to evaluate the merits and risks related to his
investment in the Stock and he has relied solely on such information.
(g) The Purchaser further represents and warrants that (i) his financial
condition is such that he can afford to bear the economic risk of holding the
Stock for an indefinite period of time and has adequate means for providing for
his current needs and personal contingencies, (ii) he can afford to suffer a
complete loss of his investment in the Stock, (iii) all information which he has
provided to the Company concerning himself and his financial position is correct
and complete as of the date of this Agreement, (iv) he understands and has taken
cognizance of all risk factors related to the purchase of the Stock, including
those set forth in the Private Placement Memorandum referred to above, and (v)
his knowledge and experience in financial and business matters are such that he
is capable of evaluating the merits and risks of his purchase of the Stock as
contemplated by this Agreement.
3. RESTRICTION ON TRANSFER.
(a) Except for Transfers permitted by clauses (w), (x), (y), and (z) of
Section 2(a) or pursuant to Section 12, the Purchaser agrees that he will not
transfer, sell, assign, pledge,
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hypothecate or otherwise dispose of any shares of Stock at any time prior to the
fifth anniversary of the Purchase Date. No Transfer of any such shares in
violation hereof shall be made or recorded on the books of the Company and any
such Transfer shall be void and of no effect.
(b) Any attempt to Transfer any shares of Stock not in compliance with
this Agreement shall be null and void and neither the Company nor any transfer
agent shall give any effect in the Company's stock records to such attempted
Transfer.
4. RIGHT OF FIRST REFUSAL.
(a) If, at any time after the fifth anniversary of the Purchase Date and
prior to a Public Offering (as defined below), the Purchaser receives a bona
fide offer to purchase any or all of his shares of Stock (an "Offer") from a
third party (an "Offeror") which the Purchaser wishes to accept, the Purchaser
shall cause such Offer to be reduced to writing and shall notify the Company in
writing of his wish to accept such Offer. The Purchaser's notice shall contain
an irrevocable offer to sell such shares of Stock to the Company, (in the manner
set forth below) at a purchase price equal to the price contained in, and on the
same terms and conditions of, such Offer, and shall be accompanied by a true
copy of such Offer (which shall identify the Offeror thereof). At any time
within 45 days after the date of the receipt by the Company of the Purchaser's
notice described above, the Company shall have the right and option to purchase,
or to arrange for a third party to purchase, all of the shares of Stock covered
by the Offer either (i) at the same price and on the same terms and conditions
as the Offer or (ii) if the Offer includes any consideration other than cash,
then at the sole option of the Company, at the equivalent all cash price,
determined in good faith by the Company's Board of Directors, by delivering a
certified bank check or checks in the appropriate amount to the Purchaser at the
principal office of the Company against delivery of certificates or other
instruments representing the shares of Stock so purchased, appropriately
endorsed by the Purchaser. If at the end of such 45 day period, the Company has
not tendered the purchase price for such shares in the manner set forth above,
the Purchaser may during the succeeding 30 day period sell not less than all of
the shares of Stock covered by the Offer to the Offeror at a price and on terms
no less favorable to the Purchaser than those contained in the Offer. No sale
may be made to any Offeror unless such Offeror agrees in writing with the
Company to be bound by the provisions of this Section 4 in connection with any
resale by the Offeror. Promptly after any such sale to an Offeror, the Purchaser
shall notify the Company of the consummation thereof and shall furnish such
evidence of the completion and time of completion of such sale and of the terms
thereof as may reasonably be requested by the Company. If, at the end of the 30
day period following the expiration of the 45 day period during which the
Company may elect to purchase the Stock, the Purchaser has not completed the
sale of such shares of Stock as aforesaid, all the restrictions on sale,
transfer and assignment contained in this Agreement shall again be in effect
with respect to such shares of Stock.
(b) If, at any time after the fifth anniversary of the Purchase Date and
after the first Public Offering, the Purchaser receives an Offer, the provisions
of subsection (a) above shall continue to apply but "5 day(s)" shall be
substituted for "45 day(s)" and "2 day(s)" shall be substituted for "30 day(s)"
in each instance, respectively, where such term occurs therein.
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5. THE PURCHASER'S RESALE OF STOCK TO THE COMPANY AND SURRENDER OF OPTIONS
UPON THE PURCHASER'S DEATH OR DISABILITY.
(a) Except as otherwise provided herein, if on or prior to the later of
the first Public Offering and the fifth anniversary of the Purchase Date, (i)
(A) the Purchaser is still in the employ of the Company or any Subsidiary of the
Company or (B) the Purchaser has retired from the Company or any Subsidiary of
the Company at age 65 or over (or such other age as may be approved by the Board
of Directors of the Company) after having been employed by the Company or any of
its Subsidiaries for at least three years after the Purchase Date (a "Permitted
Retirement") and (ii) the Purchaser either dies or suffers a "Permanent
Disability" (as defined below) (each, a "Put Event"), then the Purchaser, the
Purchaser's Estate or the Purchaser's Trust, as the case may be, shall have the
right, for six months following the date of death or Permanent Disability, (X)
to sell to the Company, and the Company shall be required to purchase, on one
occasion, all or any portion of the shares of Stock then held by the Purchaser,
the Purchaser's Estate or the Purchaser's Trust, as the case may be, at the
"Section 5 Repurchase Price" (as determined in accordance with Section 7) and
(Y) to require the Company to pay to the Purchaser, the Purchaser's Estate or
the Purchaser's Trust, as the case may be, an amount equal to the "Option Excess
Price" (determined on the basis of the Section 5 Repurchase Price as provided in
Section 10) with respect to the termination of all or any portion of the
outstanding exercisable Options then held by the Purchaser, the Purchaser's
Estate or the Purchaser's Trust, as the case may be. The Purchaser, the
Purchaser's Estate or the Purchaser's Trust, as the case may be, shall send
written notice to the Company of its intention to sell shares of Stock and/or to
terminate Options in exchange for the payment referred to in the preceding
sentence (the "Redemption Notice"). The completion of the purchase shall take
place at the principal office of the Company on the tenth business day after the
giving of the Redemption Notice. The Section 5 Repurchase Price and any payment
with respect to Options as described above shall be paid by delivery to the
Purchaser, the Purchaser's Estate or the Purchaser's Trust, as the case may be,
of a certified bank check or checks in the appropriate amount payable to the
order of the Purchaser, the Purchaser's Estate or the Purchaser's Trust, as the
case may be, against delivery of certificates or other instruments representing
the Stock so purchased and appropriate documents canceling the Options so
terminated, appropriately endorsed or executed by the Purchaser, the Purchaser's
Estate or the Purchaser's Trust, or his or its duly authorized representative.
For purposes of this Agreement, the Purchaser shall be deemed to have suffered a
"Permanent Disability" if the Purchaser is unable to engage in the activities
required by employment by reason of any medically determined physical or mental
impairment which can be expected to result in death or which has lasted or can
be expected to last for a continuous period of not less than 12 months, as
reasonably determined by the Board of Directors of the Company in good faith and
in its discretion.
(b) Notwithstanding anything in Section 5(a) to the contrary and subject
to Section 13, if there exists and is continuing a default or an event of
default on the part of the Company or any Subsidiary of the Company under any
loan, guarantee or other agreement under which the Company or any Subsidiary of
the Company has borrowed money, or such repurchase would result in a default or
an event of default on the part of the Company or any Subsidiary of the
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Company under any such agreement, or if a repurchase would not be permitted
under Section 170 of the General Corporation Law of the State of Delaware or
would otherwise violate the General Corporation Law of the State of Delaware
(each such occurrence being an "Event"), the Company shall not be obligated to
repurchase any of the Stock or to make payment of the Option Excess Price in
exchange for termination of any Options held by the Purchaser, the Purchaser's
Estate or the Purchaser's Trust, as the case may be, until the first business
day which is 15 calendar days after all of the foregoing Events have ceased to
exist (the "Repurchase Eligibility Date"); PROVIDED, HOWEVER, that (i) the
number of shares of Stock subject to repurchase under this Section 5(b) shall be
that number of shares of Stock and (ii) the number of "Exercisable Option
Shares" (as defined in Section 10) shall be that number of Exercisable Option
Shares, held by the Purchaser, the Purchaser's Estate or the Purchaser's Trust,
as the case may be, at the time of delivery of a Redemption Notice in accordance
with Section 5(a) hereof; PROVIDED, FURTHER, that the "Repurchase Calculation
Date" (as defined in Section 7) shall be determined in accordance with Section 7
as of the Repurchase Eligibility Date. All Options exercisable as of the date
of a Redemption Notice shall continue to be exercisable until terminated in
accordance with Section 10.
6. THE COMPANY'S RIGHT TO REPURCHASE STOCK AND CANCEL OPTIONS OF THE
PURCHASER.
(a) (i) If, on or prior to the later of the first Public Offering and
the fifth anniversary of the Purchase Date, (A) the Purchaser's active
employment with the Company (and/or, if applicable, its Subsidiaries) is
voluntarily or involuntarily terminated for any reason whatsoever, (B) the
beneficiaries of the Purchaser's Trust shall include any person or entity
other than the Purchaser, his spouse or his lineal descendants, (C) the
Purchaser shall effect a Transfer of any Stock other than as permitted in
this Agreement, or (D) there shall occur a Transfer of any Stock pursuant
to any bankruptcy proceeding, levy, property settlement or disposition
pursuant to law incident to marital separation or divorce (each, a "Call
Event"), the Company shall have the right to purchase all or any portion of
the shares of Stock then held by the Purchaser, the Purchaser's Estate and
the Purchaser's Trust, as the case may be, at the "Section 6 Repurchase
Price" (determined in accordance with Section 7); PROVIDED, HOWEVER, that
if the Call Event results from the death, Permanent Disability or Permitted
Retirement of the Purchaser, the Company shall have the right to purchase
all or any portion of the shares of Stock held by the Purchaser, the
Purchaser's Estate and the Purchaser's Trust, as the case may be, at the
Section 5 Repurchase Price. The Company shall have until 75 days after the
date of a Call Event in which to give notice in writing to the Purchaser,
the Purchaser's Estate or the Purchaser's Trust, as the case may be, of the
Company's exercise of such right ("Call Notice").
(ii) If, on or prior to the later of the first Public Offering and
the fifth anniversary of the Purchase Date, a Call Event occurs, the
Company shall have the right (in accordance with the requirements of the
Call Notice) to cancel all or any portion of the then exercisable
outstanding Options held by any of the Purchaser, the Purchaser's Estate
and the Purchaser's Trust, as the case may be, in exchange for payment to
the Purchaser, the Purchaser's Estate or the Purchaser's Trust, as the case
may be, with respect to each Exercisable Option Share so canceled, of an
amount equal to the Option
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Excess Price determined on the basis of the Section 6 Repurchase Price, or,
if the Call Event results from the death, Permanent Disability or Permitted
Retirement of the Purchaser, the Section 5 Repurchase Price.
(iii) The completion of each purchase and payment of the Option
Excess Price pursuant to the foregoing shall take place at the principal
office of the Company on the tenth business day after the later of the
giving of notice of the Company's exercise of its rights pursuant to
subsection (i) or (ii) above or the date of the Call Event. The Section 5
Repurchase Price or the Section 6 Repurchase Price, as the case may be, and
any payment with respect to Options as described above shall be paid by
delivery to the Purchaser, the Purchaser's Estate or the Purchaser's Trust,
as the case may be, of a certified bank check or checks in the appropriate
amount payable to the order of the Purchaser, the Purchaser's Estate or the
Purchaser's Trust, as the case may be, against delivery of certificates or
other instruments representing the Stock so purchased and appropriate
documents canceling the Options so terminated, appropriately endorsed or
executed by the Purchaser, the Purchaser's Estate or the Purchaser's Trust
or his or its duly authorized representative.
(b) Notwithstanding any other provision of this Section 6 to the contrary
and subject to Section 13, if there exists and is continuing any Event, the
Company shall delay the repurchase of the Stock and the payment with respect to
any Options (pursuant to a Call Notice timely given in accordance with Section
6(a) hereof) held by the Purchaser, the Purchaser's Estate or the Purchaser's
Trust, as the case may be, until the Repurchase Eligibility Date; PROVIDED,
HOWEVER, that the determination of (i) the number of shares of Stock subject to
repurchase under this Section 6(b) and (ii) the number of Exercisable Option
Shares subject to cancellation in exchange for payment under this Section 6(b)
shall be made at the time of delivery of a Call Notice in accordance with
Section 6(a) hereof; PROVIDED, FURTHER, that the Repurchase Calculation Date
shall be determined in accordance with Section 7 based on the Repurchase
Eligibility Date. All Options exercisable as of the date of a Call Notice shall
continue to be exercisable until terminated in accordance with Section 10.
7. DETERMINATION OF REPURCHASE PRICE.
(a) The Section 5 Repurchase Price and the Section 6 Repurchase Price are
each hereinafter referred to as the "Repurchase Price," as applicable the
Repurchase Price shall be calculated on the basis of the unaudited financial
statements of the Company or the Market Price Per Share (as defined in Section
7(f)) as of the "Repurchase Calculation Date" which shall be the last day of the
month preceding the later of (i) the month in which the event giving rise to the
repurchase occurs and (ii) the month in which the Repurchase Eligibility Date
occurs. The event giving rise to the repurchase shall be the Transfer, death,
Permanent Disability, Permitted Retirement or other termination of employment or
other event, as the case may be, not the giving of any notice pursuant to
Section 5 or 6.
(b) Prior to a Public Offering the Section 5 Repurchase Price shall be a
per share Repurchase Price equal to the greater of (i) the Initial Price Per
Share and (ii) the Adjusted Book Value Per Share (as defined in Section 7(d)) as
of the Repurchase Calculation Date. After a
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Public Offering, the Section 5 Repurchase Price shall be a per share Repurchase
Price equal to the greater of (x) the Initial Price Per Share and (y) the Market
Price Per Share (as defined in Section 7(f)) as of the Repurchase Calculation
Date.
(c) Prior to a Public Offering, the Section 6 Repurchase Price shall be a
per share Repurchase Price equal to the lesser of (i) the Adjusted Book Value
Per Share and (ii) the sum of (A) the Initial Price Per Share and (B) the
product of (1) the "Percentage" (as defined below) and (2) the amount, if any,
by which the Adjusted Book Value Per Share as of the Repurchase Calculation Date
exceeds the Initial Price Per Share. After a Public Offering, the Section 6
Repurchase Price shall be a per share Repurchase Price equal to the lesser of
(x) Market Value Per Share as of the Repurchase Calculation Date or (y) the sum
of (A) the Initial Price Per Share and (B) the product of (1) the Percentage and
(2) the amount, if any, by which the Market Value Per Share as of the Repurchase
Calculation Date exceeds the Initial Price Per Share.
The "Percentage" shall be determined as follows:
Repurchase Calculation Date Percentage
Prior to the first anniversary of the Purchase Date - 0 -
On and after the first anniversary of the Purchase
Date and prior to the second anniversary of the Purchase Date 20%
On and after the second anniversary of the Purchase Date and
prior to the third anniversary of the Purchase Date 40%
On and after the third anniversary of the Purchase Date and
prior to the fourth anniversary of the Purchase Date 60%
On and after the fourth anniversary of the Purchase Date and
prior to the fifth anniversary of the Purchase Date 80%
On and after the fifth anniversary of the Purchase Date 100%
(d) For purposes of this Agreement, Adjusted Book Value Per Share as of
any date of determination shall equal the sum of (i) the Initial Price Per Share
and (ii) the Book Value Per Share as of the date of determination minus the Book
Value Per Share as of the Purchase Date. "Book Value Per Share" as of any date
of determination shall equal the result of (x) the sum of (A) the stockholders'
equity of the Company, excluding amounts attributable to shares of the Company's
capital stock other than its Common Stock; the amount of any asset reversion
resulting from the termination of any pension plan of the Company or any of its
Subsidiaries; and excluding the effect of any decrease after the Purchase Date
in the valuation allowance recognized at the Purchase Date related to deferred
tax assets arising as a result of the "Recapitalization" (as defined below), all
as determined in accordance with generally accepted accounting principles
applied on a basis consistent with any prior periods, and (B) the aggregate
exercise prices of all outstanding stock options and other rights to acquire
common stock of the
10
Company and the aggregate conversion prices of all securities convertible into
shares of Common Stock, divided by (y) the sum of the number of shares of Common
Stock then outstanding and the number of shares of Common Stock issuable upon
the exercise of all outstanding stock options and other rights to acquire Common
Stock and the conversion of all securities convertible into shares of Common
Stock. For purposes of this Agreement, Book Value Per Share as of the Purchase
Date will be based on the stockholders' equity of the Company immediately after
giving effect to purchase of Common Stock by Acquisition as of January 21, 1998,
the redemption of Common Stock held by Xxxxxx Dodge Corporation, the incurrence
of related transaction fees and expenses, and the recognition of net deferred
tax assets or liabilities related thereto (the "Recapitalization").
(e) As used herein the term "Public Offering" shall mean the sale of
shares of Common Stock to the public pursuant to a registration statement under
the Securities Act which has been declared effective by the Securities and
Exchange Commission (other than a registration statement on Form S-8 or any
other similar form) which results in an active trading market in the Common
Stock. A "Qualified Public Offering" shall mean a Public Offering pursuant to
an effective registration statement relating to shares of Common Stock held by
any or all of Acquisition, KKR and any of their respective Affiliates.
(f) As used herein the term "Market Price Per Share" shall mean the price
per share equal to the average of the last sale price of the Common Stock on the
Repurchase Calculation Date on each exchange on which the Common Stock may at
that time be listed and on which the Common Stock traded on such date or, if
there shall have been no sales on any of such exchanges on the Repurchase
Calculation Date, the average of the closing bid and asked prices on each such
exchange at the end of the Repurchase Calculation Date or if there is no such
bid and asked price on the Repurchase Calculation Date on the next preceding
date when such bid and asked price occurred or, if the Common Stock shall not be
so listed, the average of the closing sales prices as reported by NASDAQ at the
end of the Repurchase Calculation Date in the over-the-counter market. If the
Common Stock is not so listed or reported by NASDAQ, then the Market Price Per
Share shall be the Adjusted Book Value Per Share.
(g) In determining the Repurchase Price, appropriate adjustments shall be
made for any future issuances of rights to acquire, and securities convertible
into, Common Stock and any stock dividends, splits, combinations,
recapitalizations, and any other adjustment in the number of outstanding shares
of Common Stock.
8. "TAG-ALONG" RIGHT.
(a) In the event that at any time prior to the fifth anniversary of the
first Public Offering, Acquisition (or one of its Affiliates or a KKR Affiliate
to whom Acquisition has previously transferred any of its shares of Common Stock
owned immediately following January 21, 1998, a "Transfer Affiliate") proposes
to sell for cash or any other consideration any shares of Common Stock owned by
it to any person (a "Proposed Purchaser"), in any transaction having such
substance (including a merger) other than (i) a Public Offering or (ii) a sale
to an Acquisition Affiliate or KKR Affiliate, Acquisition (or such Transfer
Affiliate) will notify the
11
Purchaser, the Purchaser's Estate or the Purchaser's Trust, as the case may be,
in writing (a "Sale Notice") of such proposed sale (a "Proposed Sale") and the
material terms of the Proposed Sale as of the date of the Sale Notice (the
"Material Terms") promptly, and in any event not less than 15 days prior to the
consummation of the Proposed Sale and not more than 5 days after the execution
of the definitive agreement relating to the Proposed Sale, if any (the "Sale
Agreement"). If within 10 days of the receipt of the Sale Notice, Acquisition
(or such Transfer Affiliate) receives a written request (a "Sale Request") to
include Stock held by the Purchaser, the Purchaser's Estate or the Purchaser's
Trust in the Proposed Sale, the Stock so held by the Purchaser, the Purchaser's
Estate or the Purchaser's Trust shall be so included as provided herein;
PROVIDED, HOWEVER, that only one such Sale Request may be delivered by the
Purchaser, the Purchaser's Estate or the Purchaser's Trust, as the case may be,
with respect to any Proposed Sale for all Stock held by the Purchaser, the
Purchaser's Estate or the Purchaser's Trust; and PROVIDED, FURTHER, that any
Sale Request shall be irrevocable unless (x) there shall be a material adverse
change in the Material Terms or (y) otherwise mutually agreed to in writing by
the Purchaser, the Purchaser's Estate or the Purchaser's Trust, as the case may
be, and Acquisition (or such Transfer Affiliate). Promptly after the receipt of
the Sale Request, Acquisition (or such Transfer Affiliate) will furnish the
Purchaser, the Purchaser's Estate or the Purchaser's Trust, as the case may be,
with a copy of the Sale Agreement, if any.
(b) The number of shares of Stock that the Purchaser, the Purchaser's
Estate or the Purchaser's Trust, as the case may be, will be permitted to
include in a Proposed Sale pursuant to a Sale Request will be the product of (i)
the number of shares of Stock then held by, and the number of Exercisable Option
Shares that may then be acquired by, the Purchaser, the Purchaser's Estate or
the Purchaser's Trust and (ii) the ratio of (A) the number of shares of Common
Stock which Acquisition (or the Transfer Affiliate) proposes to sell in the
Proposed Sale, to (B) the number of shares of Common Stock then held by
Acquisition (and any Transfer Affiliates). Notwithstanding the above, if one of
more holders of shares of Common Stock who have been granted the same rights
granted hereunder elect not to include in the Proposed Sale the maximum number
of shares of Common Stock which such holder would have been permitted to include
in a Proposed Sale (the "Eligible Shares"), Acquisition, KKR and any of their
respective Affiliates, or any of them, may sell in the Proposed Sale that number
of additional shares of Common Stock owned by any of them not in excess of the
number of Eligible Shares not included in the Proposed Sale.
(c) Except as may otherwise be provided herein, shares of Stock subject to
a Sale Request will be included in a Proposed Sale pursuant hereto and to any
agreements with the Proposed Purchaser relating thereto, on the same terms and
subject to the same conditions applicable to the shares of Common Stock which
Acquisition (or the Transfer Affiliate) proposes to sell in the Proposed Sale.
Such terms and conditions shall include, without limitation, the sale price; the
payment of fees, commissions and expenses; the provision of, and representation
and warranty as to, information requested of Acquisition (or the Transfer
Affiliate); and the provision of requisite indemnifications; PROVIDED, HOWEVER,
that any indemnification provided by the Purchaser, the Purchaser's Estate or
the Purchaser's Trust shall be determined pro rata in
12
proportion with the aggregate number of shares of Common Stock to be sold in the
Proposed Sale.
(d) Upon delivering a Sale Request, the Purchaser, the Purchaser's Estate
or the Purchaser's Trust, as the case may be, will, if requested by Acquisition
(or the Transfer Affiliate), execute and deliver a custody agreement and power
of attorney in form and substance satisfactory to Acquisition (or the Transfer
Affiliate) (a "Custody Agreement and Power of Attorney") with respect to the
shares of Stock which are to be included in the Proposed Sale pursuant hereto.
The Custody Agreement and Power of Attorney will provide, among other things,
that the Purchaser, the Purchaser's Estate or the Purchaser's Trust, as the case
may be, will deliver to and deposit in custody with the custodian and
attorney-in-fact named therein a certificate or certificates representing such
shares of Stock (duly endorsed in blank by the registered owner or owners
thereof or accompanied by duly executed stock powers in blank) and irrevocably
appoint said custodian and attorney-in-fact as the Purchaser's, the Purchaser's
Estate's or the Purchaser's Trust's, as the case may be, agent and
attorney-in-fact with full power and authority to act under the Custody
Agreement and Power of Attorney on behalf of the Purchaser, the Purchaser's
Estate or the Purchaser's Trust, as the case may be, with respect to the matters
specified therein.
(e) The Purchaser agrees that he will execute such other agreements as
Acquisition (or the Transfer Affiliate) may reasonably request in connection
with the consummation of a Proposed Sale and Sale Request and the transactions
contemplated thereby.
(f) Acquisition agrees that it shall not conduct any registered,
underwritten public offering of any of its equity securities.
9. "BRING-ALONG" RIGHT.
(a) In the event that at any time prior to the fifth anniversary of the
first Public Offering, Acquisition (or a Transfer Affiliate) proposes to sell
any of its holdings of Common Stock (the "Acquisition Shares") in a Proposed
Sale (a "Bring-Along Sale"), Acquisition (or such Transfer Affiliate) may
provide the Purchaser, the Purchaser's Trust, or the Purchaser's Estate, as the
case may be, written notice (a "Bring-Along Notice") of such Proposed Sale and
the Material Terms thereof not less than 10 business days prior to the proposed
date of the Bring-Along Sale (the "Bring-Along Sale Date") and the Purchaser
hereby agrees to sell to such Proposed Purchaser that number of shares of Stock
equal to the product of (i) the number of shares of Stock then held by, and the
number of Exercisable Option Shares that may then be acquired by, the Purchaser,
the Purchaser's Estate and the Purchaser's Trust and (ii) the ratio of (A) the
number of shares of Common Stock which Acquisition (or the Transfer Affiliate)
proposes to sell in the Proposed Sale to (B) the number of shares of Common
Stock then held by Acquisition (and all Transfer Affiliates) at the same price
and upon the same terms and conditions as such transfer of Acquisition Shares.
The Purchaser shall not exercise any dissenter's rights with respect to the
consummation of any such Proposed Sale.
13
(b) On the Bring-Along Sale Date, the Purchaser (or the Purchaser's Trust
or the Purchaser's Estate, as the case may be) shall deliver a certificate or
certificates for his or its Stock, duly endorsed for transfer with signatures
guaranteed, to such Proposed Purchaser in the manner and at the address
indicated in the Bring-Along Notice against delivery of the purchase price for
such Stock. The provisions of this Section 9 shall apply regardless of the form
of consideration in the Bring-Along Sale.
10. TERMINATION OF OPTIONS.
All outstanding Options granted to the Purchaser under the Equity Plan or
otherwise, whether or not then exercisable, shall be automatically terminated
upon the payment by the Company to the Purchaser, pursuant to the provisions of
Section 5 or Section 6 of this Agreement, of an amount equal to the Option
Excess Price. If the Option Excess Price is zero or a negative number, all
outstanding Options granted to the Purchaser under the Equity Plan or otherwise,
whether or not then exercisable, shall be automatically terminated upon the
tenth business day after the later of (i) the date of the giving of the Call
Notice or Put Notice, as the case may be, and (ii) the date of the Call Event or
Put Event, as the case may be. The "Option Excess Price" with respect to each
share of Stock that may be acquired by exercise of an Option shall mean the
excess, if any, of (i) the Section 5 Repurchase Price or the Section 6
Repurchase Price, depending on which Repurchase Price would be used to
repurchase Stock pursuant to Section 5 or 6, as the case may be (regardless of
whether or not any Stock is actually subject to repurchase pursuant to such
Sections), over (ii) the exercise price applicable to such Option. For purposes
hereof, "Exercisable Option Shares" as of any date of determination shall mean
shares of Common Stock which, at such time, could be purchased upon exercise of
all outstanding Options granted to the Purchaser.
11. THE COMPANY'S REPRESENTATIONS AND WARRANTIES.
(a) The Company represents and warrants to the Purchaser that (i) this
Agreement has been duly authorized, executed and delivered by the Company and
(ii) the Stock, when issued and delivered in accordance with the terms hereof
and the Non-Qualified Stock Option Agreement, will be duly and validly issued,
fully paid and nonassessable.
(b) If the Company shall have filed a registration statement pursuant to
the requirements of Section 12 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or engaged in a Public Offering, (i) the Company
shall use reasonable efforts to register the Options and the Stock to be
acquired on exercise thereof on a Form S-8 Registration Statement or any
successor to Form S-8 to the extent that such registration is then available
with respect to such Options and Stock and (ii) the Company will file the
reports required to be filed by it under the Securities Act and the Exchange Act
and the rules and regulations adopted by the Securities and Exchange Commission
("SEC") thereunder, to the extent required from time to time to enable the
Purchaser to sell shares of Stock without registration under the Securities Act
within the limitations of the exemptions provided under any applicable rule or
regulation of the SEC. Notwithstanding anything contained in this Section
11(b), the Company may deregister under Section 12 of the Exchange Act if it is
then permitted to do so pursuant to the Exchange
14
Act and the rules and regulations thereunder. Nothing in this Section 11(b)
shall be deemed to limit in any manner the restrictions on Transfer of Stock
contained in this Agreement.
12. "PIGGYBACK" REGISTRATION RIGHTS.
(a) Until the later of first occurrence of a Qualified Public Offering and
the fifth anniversary of the Purchase Date, the Purchaser hereby agrees to be
bound by all of the terms, conditions and obligations of the Registration Rights
Agreement of even date herewith, among the Company and certain of the Investors
(the "Registration Rights Agreement") and, in the case of the first Qualified
Public Offering and subject to the limitations set forth in this Section 12,
shall have all of the rights and privileges of the Registration Rights
Agreement, in each case as if the Purchaser were a "Holder" (as defined in the
Registration Rights Agreement) other than the Company; PROVIDED, HOWEVER, that
the Purchaser shall not have any rights to request registration under Section 3
of the Registration Rights Agreement. Notwithstanding anything to the contrary
contained in the Registration Rights Agreement, the Purchaser's rights and
obligations under the Registration Rights Agreement shall be subject to the
limitations and additional obligations set forth in this Section 12. All shares
of Stock purchased by the Purchaser pursuant to this Agreement and held by the
Purchaser, the Purchaser's Estate or the Purchaser's Trust, including shares
purchased upon the exercise of Options, shall be deemed to be "Registrable
Securities" as defined in the Registration Rights Agreement.
(b) The Company will promptly notify the Purchaser in writing (a "Notice")
of any proposed registration (a "Proposed Registration") in connection with a
contemplated Qualified Public Offering. If within 15 days of the receipt by the
Purchaser of such Notice, the Company receives from the Purchaser, the
Purchaser's Estate or the Purchaser's Trust a written request (a "Request") to
register shares of Stock held by the Purchaser, the Purchaser's Estate or the
Purchaser's Trust, as the case may be (which Request will be irrevocable unless
otherwise mutually agreed to in writing by the Purchaser and the Company), such
shares of Stock will be so registered as provided in this Section 12; PROVIDED,
HOWEVER, that for each such registration statement only one Request, which shall
be executed by each of the Purchaser, the Purchaser's Estate or the Purchaser's
Trust, as the case may be, may be submitted for all Registrable Securities held
by the Purchaser, the Purchaser's Estate or the Purchaser's Trust.
(c) The maximum number of shares of Stock which will be registered
pursuant to a Request will be the lowest of (i) the number of shares of Stock
then held by the Purchaser (which for purposes of this subsection (c) shall
include shares held by the Purchaser's Estate and the Purchaser's Trust),
including all shares of Stock which may be acquired under unexercised Options to
the extent then exercisable, (ii) the maximum number of shares of Common Stock
which the Company can register in the Proposed Registration without adverse
effect on the offering in the view of the managing underwriters (reduced pro
rata with all Other Purchasers), and (iii) the maximum number of shares which
the Purchaser (pro rata based upon the aggregate number of shares of Common
Stock the Purchaser and all Other Purchasers have requested be registered) and
all Other Purchasers are permitted to register under the Registration Rights
Agreement.
15
(d) Upon delivering a Request the Purchaser will, if requested by the
Company, execute and deliver a Custody Agreement and Power of Attorney in form
and substance satisfactory to the Company and as described pursuant to Section
8(d) with respect to the shares of Stock to be registered pursuant to this
Section 12.
(e) The Purchaser agrees that he will execute such other agreements as the
Company may reasonably request to further evidence the provisions of this
Section 12.
13. PRO RATA REPURCHASES.
Notwithstanding anything to the contrary contained in Sections 5, 6 and 7,
if at any time consummation of all purchases and payments to be made by the
Company pursuant to this Agreement and the Other Purchasers' Agreements would
result in an Event, then the Company shall make purchases from, and payments to,
the Purchaser and Other Purchasers pro rata (on the basis of the proportion of
the aggregate number of shares of Common Stock each such Purchaser and all Other
Purchasers have elected or are required to sell to the Company, including the
number of shares of Common Stock that could be acquired by each upon exercise of
then exercisable outstanding options to purchase Common Stock) for the maximum
number of shares of Common Stock permitted without resulting in an Event (the
"Maximum Repurchase Amount"). The provisions of Sections 5(b) and 6(b) shall
apply in their entirety to payments and repurchases with respect to options and
shares of Common Stock which may not be made due to the limits imposed by the
Maximum Repurchase Amount under this Section 13. Until all of such Common Stock
and options are purchased and paid for by the Company, the Purchaser and the
Other Purchasers whose Common Stock and options are not purchased in accordance
with this Section 13 shall have priority, on a pro rata basis, over other
purchases of Common Stock and payment for options by the Company pursuant to
this Agreement and the Other Purchasers' Agreements.
14. RIGHTS TO NEGOTIATE REPURCHASE PRICE.
Nothing in this Agreement shall be deemed to restrict or prohibit the
Company from purchasing shares of Stock or Options from the Purchaser, at any
time, upon such terms and conditions, and for such price, as may be mutually
agreed upon between the Parties, whether or not at the time of such purchase
circumstances exist which specifically grant the Company the right to purchase,
or the Purchaser the right to sell, shares of Stock or which specifically grant
the Company the right to cancel options or the Purchaser the right to receive
any Option Excess Price under the terms of this Agreement.
15. COVENANT REGARDING 83(B) ELECTION.
Except as the Company may otherwise agree in writing, the Purchaser hereby
covenants and agrees that he will make an election provided pursuant to Treasury
Regulation 1.83-2 with respect to the Stock, including without limitation, the
Stock to be acquired pursuant to Section 1 and the Stock to be acquired upon
each exercise of the Purchaser's Options, and the Purchaser further covenants
and agrees that he will furnish the Company with copies of the forms of
16
election the Purchaser files within 30 days after the date hereof, and within 30
days after each exercise of the Purchaser's Non-Qualified Options and with
evidence that each such election has been filed in a timely manner.
16. NOTICE OF CHANGE OF BENEFICIARY.
Immediately prior to any transfer of Stock to the Purchaser's Trust, the
Purchaser shall provide the Company with a copy of the instruments creating the
Purchaser's Trust and with the identity of the beneficiaries of the Purchaser's
Trust. The Purchaser shall notify the Company immediately prior to any change
in the identity of any beneficiary of the Purchaser's Trust.
17. EXPIRATION OF CERTAIN PROVISIONS.
The provisions contained in Sections 4, 5 and 6 of this Agreement and the
portion of any other provision of this Agreement which incorporates the
provisions of Section 4, 5 or 6, shall terminate and be of no further force or
effect with respect to any shares of Stock sold by the Purchaser pursuant to an
effective registration statement filed by the Company pursuant to Section 12
hereof.
18. RECAPITALIZATIONS, ETC.
The provisions of this Agreement shall apply, to the full extent set forth
herein with respect to the Stock and the Options, to any and all shares of
capital stock of the Company or any capital stock, partnership units or any
other security evidencing ownership interests in any successor or assign of the
Company (whether by merger, consolidation, sale of assets or otherwise) which
may be issued in respect of, in exchange for, or in substitution of the Stock or
the Options, by reason of any stock dividend, split, reverse split, combination,
recapitalization, liquidation, reclassification, merger, consolidation or
otherwise.
19. THE PURCHASER'S EMPLOYMENT BY THE COMPANY.
Nothing contained in this Agreement or in any other agreement entered into
by the Company and the Purchaser contemporaneously with the execution of this
Agreement (i) obligates the Company or any Subsidiary of the Company to employ
the Purchaser in any capacity whatsoever or (ii) prohibits or restricts the
Company (or any of its Subsidiaries) from terminating the employment, if any, of
the Purchaser at any time or for any reason whatsoever, with or without Cause,
and the Purchaser hereby acknowledges and agrees that neither the Company nor
any other person has made any representations or promises whatsoever to the
Purchaser concerning the Purchaser's employment or continued employment by the
Company.
20. STATE SECURITIES LAWS.
The Company hereby agrees to use its best efforts to comply with all state
securities or "blue sky" laws which might be applicable to the sale of the Stock
and the issuance of the Options to the Xxxxxxxxx.
00
00. BINDING EFFECT.
The provisions of this Agreement shall be binding upon and accrue to the
benefit of the Parties hereto and their respective heirs, legal representatives,
successors and assigns. In the case of a transferee permitted under Section
2(a) hereof, such transferee shall be deemed the Purchaser hereunder; provided,
however, that no transferee (including without limitation, transferees referred
to in Section 2(a) hereof) shall derive any rights under this Agreement unless
and until such transferee has delivered to the Company a valid undertaking to
become bound by the terms of this Agreement.
22. AMENDMENT.
This Agreement may be amended only by a written instrument signed by the
Parties hereto.
23. CLOSING.
Except as otherwise provided herein, the closing of each purchase and sale
of shares of Stock and the payment of the Option Excess Price, if any, pursuant
to this Agreement shall take place at the principal office of the Company on the
tenth business day following delivery of the notice by either Party to the other
of its exercise of the right to purchase or sell such Stock hereunder or to
cause the payment of the Option Excess Price, as the case may be.
24. APPLICABLE LAW.
The laws of the state of Delaware shall govern the interpretation, validity
and performance of the terms of this Agreement, regardless of the law that might
be applied under principles of conflicts of law. Any suit, action or proceeding
against the Purchaser, with respect to this Agreement, or any judgment entered
by any court in respect of any thereof, may be brought in any court of competent
jurisdiction in the State of Delaware, and the Purchaser hereby submits to the
non-exclusive jurisdiction of such courts for the purpose of any such suit,
action, proceeding or judgment. By the execution and delivery of this
Agreement, the Purchaser appoints the Secretary of the Company, at its principal
office, as his agent upon which process may be served in any such suit, action
or proceeding. Service of process upon such agent, together with notice of such
service given to the Purchaser in the manner provided in Section 28 hereof,
shall be deemed in every respect effective service of process upon him in any
suit, action or proceeding. Nothing herein shall in any way be deemed to limit
the ability of the Company to serve any such writs, process or summonses in any
other manner permitted by applicable law or to obtain jurisdiction over the
Purchaser, in such other jurisdictions and in such manner, as may be permitted
by applicable law. The Purchaser hereby irrevocably waives any objections which
he may now or hereafter have to the laying of the venue of any suit, action or
proceeding arising out of or relating to this Agreement brought in any court of
competent jurisdiction in the State of Delaware, and hereby further irrevocably
waives any claim that any such suit, action or proceeding brought in any such
court has been brought in any inconvenient forum. No suit, action or proceeding
against the Company or Acquisition with respect to this Agreement may be
18
brought in any court, domestic or foreign, or before any similar domestic or
foreign authority other than in a court of competent jurisdiction in the State
of Delaware, and the Purchaser hereby irrevocably waives any right which he may
otherwise have had to bring such an action in any other court, domestic or
foreign, or before any similar domestic or foreign authority. The Company and
Acquisition hereby submit to the jurisdiction of such courts for the purpose of
any such suit, action or proceeding.
25. ASSIGNABILITY OF CERTAIN RIGHTS BY THE COMPANY.
The Company shall have the right to assign any or all of its rights or
obligations to purchase shares of Stock pursuant to Sections 4, 5 and 6 hereof.
26. LIMITED LIABILITY OF MEMBERS OF ACQUISITION.
Notwithstanding any other provision of this Agreement, no recourse under
this Agreement or any documents or instruments delivered in connection with this
Agreement or any of the transactions contemplated hereby shall be had against
any current or future director, officer, employee, general or limited partner or
member, of Acquisition or KKR, or any of the foregoing, whether by the
enforcement of any assessment or by any legal or equitable proceeding, or by
virtue of any statute, regulation or other applicable law, it being expressly
agreed and acknowledged that no personal liability whatsoever shall attach to,
be imposed on or otherwise be incurred by any current or future officer, agent
or employee of, or any current or future member of Acquisition or any current or
future director, officer, employee, general or limited partner, member, assignee
or affiliate of any of the foregoing, as such for any obligation of Acquisition
under this Agreement or any documents or instruments delivered in connection
with this Agreement or any of the transactions contemplated hereby or for any
claim based on, in respect of or by reason of such obligations or their
creation.
27. MISCELLANEOUS.
In this Agreement (i) all references to "dollars" or "$" are to United
States dollars and (ii) the word "or" is not exclusive. If any provision of
this Agreement shall be declared illegal, void or unenforceable by any court of
competent jurisdiction, the other provisions shall not be affected, but shall
remain in full force and effect.
28. NOTICES.
All notices and other communications provided for herein shall be in
writing and shall be deemed to have been duly given if delivered by hand
(whether by overnight courier or otherwise) or sent by registered or certified
mail, return receipt requested, postage prepaid, to the Party to whom it is
directed:
(a) If to the Company, to it at the following address:
Accuride Corporation
0000 Xxxxx Xxxx
00
Xxxxxxxxx, Xxxxxxxx 00000
Attn: General Counsel
with a copy to:
Xxxxxx & Xxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxx X. Xxxxxxxx, Esq.
If to Acquisition, to it at the following address:
x/x Xxxxxxxx Xxxxxx Xxxxxxx & Co., L.P.
0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx, Xx.
with a copy to:
Xxxxxx & Xxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxx X. Xxxxxxxx, Esq.
(c) If to the Purchaser, to him at his most recent address as reflected in
the Company's records,
or at such other address as the Party shall have specified by notice in writing
to the other Parties in accordance with this Section 28.
29. COVENANT NOT TO COMPETE; CONFIDENTIAL INFORMATION.
(a) In consideration of the Company entering into this Agreement with the
Purchaser, the Purchaser hereby agrees effective as of the Purchase Date, for so
long as the Purchaser is employed by the Company or one of its Subsidiaries or
Affiliates (but not entities which are Affiliates solely by reason of their
relationship with KKR Partners II, L.P. ("Partners II")) and for a period of one
year thereafter (the "Noncompete Period"), the Purchaser shall not, directly or
indirectly, engage in the production, sale or distribution of rims or wheels for
vehicles or of any other product or service produced, sold or distributed by the
Company or its Subsidiaries or Affiliates (but not entities which are Affiliates
solely by reason of their relationship with Partners II) on the date hereof or
during the Noncompete Period anywhere in the world in which the Company or its
Subsidiaries or Affiliates (but not entities which are Affiliates solely by
reason of their relationship with Partners II) is doing business other than
through the Purchaser's employment with the Company or any of its Subsidiaries
or Affiliates. At the Company's option, the Noncompete Period may be extended
for an additional one year period if (i) within nine months following the
termination of the Purchaser's employment, the Company gives the
20
Purchaser notice of such extension and (ii) beginning with the first anniversary
of such date of termination, the Company pays the Purchaser, in installments
consistent with the Company's then current salary payment policies, an amount
equal to the Purchaser's base salary on the date of the termination of his
employment. For purposes of this Agreement, the phrase "directly or indirectly
engage in" shall include any direct or indirect ownership or profit
participation interest in an enterprise, whether as an owner, stockholder,
partner, member, joint venturer of otherwise, and shall include any direct or
indirect participation in an enterprise as a consultant, licensor of technology
or otherwise. Nothing herein will prevent the Purchaser from, at any time,
owning in the aggregate not more than 1% of the outstanding stock of any
publicly traded class of stock of a corporation.
(b) The Purchaser will not disclose or use at any time for so long as the
Purchaser is employed by the Company or one of its Subsidiaries or Affiliates
and for a period of five years thereafter, any Confidential Information (as
defined below) of which the Purchaser is or becomes aware, whether or not such
information is developed by him, except to the extent that such disclosure or
use is directly related to and required by the Purchaser's performance of
duties, if any, assigned to the Purchaser by the Company. As used in this
Agreement, the term "Confidential Information" means information that is not
generally known or available to the public and that is used, developed or
obtained by the Company or its Subsidiaries or Affiliates in connection with its
businesses, including but not limited to, (i) products or services; (ii) fees,
costs and pricing structures; (iii) designs; (iv) computer software, including
operating systems, applications and program listings; (v) flow charts, manuals
and documentation; (vi) data bases; (vii) accounting and business methods;
(viii) inventions, devices, new developments, methods and processes, whether
patentable or unpatentable and whether or not reduced to practice;
(ix) customers or customer requirements, order levels or projections and
customer or client lists; (x) other copyrightable works; (xi) all technology and
trade secrets; and (xii) all similar and related information in whatever form.
Confidential Information will not include any information that has been
published in a form generally available to the public prior to the date the
Purchaser proposes to disclose or use such information. The Purchaser
acknowledges and agrees that all copyrights, works, inventions, innovations,
improvements, developments, patents, trademarks and all similar or related
information which relate to the actual or anticipated business of the Company
and its Subsidiaries and Affiliates (including its predecessors) and conceived,
developed or made by the Purchaser while employed by the Company or its
Subsidiaries or Affiliates belong to the Company. The foregoing sentence does
not apply to any copyrights, works, inventions, innovations, improvements,
developments, patents, trademarks or other information: (i) for which no
equipment, supplies, facility or Confidential Information of the Company were
used; (ii) which were developed entirely on the Executive's own time; (iii)
which do not relate at the time of conception or reduction to practice to the
Company's current business or its anticipated research or development; and (iv)
which do not result from any work performed by Executive for the Company. The
Purchaser will perform all actions reasonably requested by the Company (whether
during or after the Noncompete Period) to establish and confirm such ownership
at the Company's expense (including without limitation assignments, consents,
powers of attorney and other instruments).
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(c) Notwithstanding subsections (a) and (b) above, if at any time a court
holds that any of the restrictions stated in such subsections (a) and (b) are
unreasonable or otherwise unenforceable under circumstances then existing, the
Parties hereto agree that the maximum period, scope or geographic area
determined to be reasonable under such circumstances by such court will be
substituted for the stated period, scope or geographic area, and will be
effective, binding and enforceable against the Purchaser. Because the
Purchaser's services are unique and because the Purchaser has had access to
Confidential Information, the Parties hereto agree that money damages will be an
inadequate remedy for any breach of this Agreement. In the event a breach or
threatened breach of this Agreement, the Company or its successors or assigns
may, in addition to other rights and remedies existing in their favor, apply to
any court of competent jurisdiction for specific performance and/or injunctive
relief in order to enforce, or prevent any violations of, the provisions hereof
(without the posting of a bond or other security).
[signature page follows]
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IN WITNESS WHEREOF, the Parties have executed this Stockholder's Agreement
as of the date first above written.
ACCURIDE CORPORATION
By
---------------------------------
HUBCAP ACQUISITION L.L.C.
By
---------------------------------
THE PURCHASER
---------------------------------
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