EXHIBIT 10.7
RESTRICTED STOCK PLAN SPECIAL BONUS AGREEMENT
This RESTRICTED STOCK PLAN SPECIAL BONUS AGREEMENT (this "AGREEMENT") is
made as of this 31st day of March, 2006 (the "AGREEMENT DATE"), between Nebraska
Book Company, Inc., a Kansas corporation (the "COMPANY"), and Xxxx Xxxxxxxx (the
"EXECUTIVE").
WHEREAS, the Executive is an employee of the Company whose participation
is considered by the Company to be important for its growth.
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein set forth, and other good and valuable consideration, receipt of which is
hereby acknowledged, the parties hereto hereby mutually covenant and agree as
follows:
1. DEFINITIONS. For all purposes of this Agreement, the following
definitions shall apply, unless the context otherwise requires:
(a) "BONUS AMOUNT" means the greater of (x) zero ($0), or (y) the amount
equal to (i) (A) the Bonus Percentage, MULTIPLIED BY (B) $1,000,000 MINUS the
Fair Market Value, minus (ii) the amount of any distributions or dividends paid
with respect to the Shares between the Agreement Date and the Reference Date
(excluding any dividends or distributions payable in the form of common stock of
Holdings).
(b) "BONUS PERCENTAGE" means the percentage equal to (i) in the event
the Executive is still employed by the Company on the Reference Date, 100%, (ii)
in the event the Executive's employment by the Company has been terminated by
the Company without Cause following a Change of Control, 100%, and (iii) in the
event the Executive's employment by the Company has been terminated by the
Company without Cause prior to the Reference Date (other than following a Change
of Control) or by reason of the Executive's death or Disability prior to the
Reference Date, the product of 100% MULTIPLIED BY a fraction, the numerator of
which is the number of days elapsed from the Agreement Date through the date of
such termination, and the denominator of which is 1,644.
(c) "CAUSE" means, with respect to the Executive, (i) the Executive's
neglect of his duties, (ii) the Executive is convicted of any felony or gross
misdemeanor (except traffic-related), (iii) the Executive is guilty of gross
misconduct in connection with the performance of his duties, or (iv) the
Executive materially breaches any affirmative or negative covenants or
undertakings under any employment or other agreement with the Holdings or any of
its subsidiaries, in each case as determined by the Board of Directors of the
Company in their reasonable judgment.
(d) "CHANGE OF CONTROL" means the occurrence of any of (i) a sale of all
or substantially all of the assets of the Company, (ii) the acquisition of more
than fifty percent (50%) of the Common Stock of Holdings (with all classes or
series thereof treated as a single class) by any person or group of persons, or
(iii) a merger, consolidation, reorganization, or similar transaction of
Holdings in which there is a fifty percent (50%) or greater change in the
ownership of the Common Stock of Holdings as a result of such transaction.
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(e) "DISABILITY" means an independent medical doctor (selected by the
Company's health or disability insurer) has certified that the Executive has for
90 days consecutive or nonconsecutive, in any 12 month period been disabled in a
manner which seriously interferes with his ability to perform his
responsibilities as an employee of Holdings or its subsidiaries.
(f) "FAIR MARKET VALUE" means the fair market value of the Shares as of
the Reference Date, as determined by the Board of Directors of Holdings in good
faith.
(g) "HOLDINGS" means NBC Holdings Corp., a Delaware corporation.
(h) "REFERENCE DATE" means September 30, 2010.
(i) "SHARES" means 1,400 shares of the Common Stock of Holdings, $.001
par value per share, as adjusted for any reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock split, or other
distribution or similar event with respect to such shares of Common Stock.
2. BONUS PAYMENT.
(a) Within thirty days following the Reference Date, the Company shall
pay to the Executive a bonus (the "BONUS") in an amount equal to the Bonus
Amount; PROVIDED, the Executive shall not be eligible to receive payment of the
Bonus if his employment with Holdings and its subsidiaries has been terminated
prior to the Reference Date for any reason or for no reason (other than
termination by the Company without Cause or by reason of the Executive's death
or Disability), regardless of whether such termination is effected by the
Company (with Cause) or by the Executive (whether voluntarily or involuntarily).
(b) Notwithstanding the foregoing, in the event that payment of the
Bonus is limited or restricted in any way under the terms of any indebtedness
issued by Holdings or any of its subsidiaries (including, but not limited to,
(i) the Amended and Restated Credit Agreement, dated as of February 13, 1998, as
amended and restated as of December 10, 2003, as further amended and restated as
of March 4, 2004 (the "CREDIT AGREEMENT"), among the Company, Holdings, NBC
Acquisition Corp., the lenders party thereto, JPMorgan Chase Bank, N.A., as
administrative agent and collateral agent, Citigroup Global Markets Inc., as
syndication agent, and Bank of America, N.A. and Xxxxx Fargo Bank N.A., as
co-documentation agents, (ii) the 8.625% senior subordinated notes of the
Company due 2012 (the "8.625% Notes"), issued under the Indenture, dated as of
March 4, 2004, between the Company and The Bank of New York, as trustee, and
(iii) the 11.00% senior discount debentures of NBC Acquisition Corp. due 2013
(the "11.00% NOTES"), issued under the Indenture, dated as of March 4, 2004,
between NBC Acquisition Corp. and The Bank of New York, as trustee), the Company
shall not be required to pay the Bonus until such limitations or restrictions
are released, at which time such payment shall be made with interest from the
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date on which the Bonus would have been paid through the date of such payment at
a rate per annum equal to the three (3) month London Interbank Offered Rate as
published in the Eastern Edition of the Wall Street Journal.
3. WITHHOLDING. All payments made pursuant to this Agreement shall be
subject to any withholding required by applicable law. The Company agrees to pay
an additional bonus to the Executive, contemporaneously with the payment of the
Bonus, in an amount such that, after taking into account the payment of all
federal, state and local taxes related to the receipt of the Bonus and all
federal, state and local taxes paid in connection with the receipt of any
distributions or dividends paid with respect to the Shares between the Agreement
Date and the Reference Date (excluding any dividends or distributions payable in
the form of stock), the Executive receives total proceeds under this Agreement
equal to the Bonus Amount.
4. GENERAL PROVISIONS.
(a) This Agreement shall be governed by the internal substantive laws of
the State of Delaware and shall be binding upon the heirs, personal
representatives, executors, administrators, successors and permitted assigns of
the parties.
(b) This Agreement supersedes all prior written and oral agreements and
understandings between the parties and represents the entire agreement between
the parties with respect to the subject matter hereof and may only be modified
or amended in writing signed by both parties.
(c) Any notice, demand, request or other communication hereunder to any
party shall be deemed to be sufficient if contained in a written instrument
delivered in person or duly sent by first class registered, certified or
overnight mail, postage prepaid, or telecopied with a confirmation copy by
regular, certified or overnight mail, addressed or telecopied, as the case may
be, to such party at the address or telecopier number, as the case may be, set
forth below or such other address or telecopier number, as the case may be, as
may hereafter be designated in writing by the addressee to the addressor listing
all parties:
if to the Company, to:
Nebraska Book Company, Inc.
x/x Xxxxxx Xxxxxxxx Xxxxxxx
Xxxx Xxxxxxx Xxxxx, 00xx Xxxxx
000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Telecopier No.: 000-000-0000
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with a copy to:
Johan V. Xxxxxxx
Xxxxxxx XxXxxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Telecopier No.: 000 000-0000
if to the Executive, to:
Xxxx Xxxxxxxx
0000 Xxxxxxxxxx Xxxxx Xxxxx
Xxxxxxx, XX 00000
All such notices, request and other communications shall be deemed to
have been received: (i) in the case of personal delivery, on the date of such
delivery; (ii) in the case of mailing, when received by the addressee; and (iii)
in the case of telecopy transmission, when confirmed by telecopy machine report.
(d) The rights and obligations of each party under this Agreement shall
inure to the benefit of and be binding upon such party's heirs, successors and
permitted assigns. Without limiting the foregoing, this Agreement shall be
binding upon any successor (whether direct or indirect and whether by purchase,
lease, merger, consolidation, liquidation or otherwise) to all or substantially
all of the Company's business and/or assets. For all purposes under this
Agreement, the term "Company" shall include any successor to the Company's
business and/or assets which becomes bound by this Agreement. The rights and
obligations of the Company under this Agreement shall be assignable by the
Company to any one or more persons or entities without the consent of the
Executive. The rights and obligations of the Executive under this Agreement may
only be assigned with the prior written consent of the Company.
(e) Either party's failure to enforce any provision or provisions of
this Agreement shall not in any way be construed as a waiver of any such
provision or provisions, nor prevent the party thereafter from enforcing each
and every other provision of this Agreement. The rights granted both parties
herein are cumulative and shall not constitute a waiver of either party's right
to assert all other legal remedies available to it under the circumstances.
(f) If any provision of this Agreement shall be held illegal, invalid or
unenforceable, such illegality, invalidity or unenforceability shall attach only
to such provision and shall not in any manner affect or render illegal, invalid
or unenforceable any other severable provisions of this Agreement.
(g) Headings are for convenience only and are not deemed to be part of
this Agreement.
(h) Each of the Company and the Executive agrees upon request to execute
any further documents or instruments necessary or desirable to carry out the
purposes or intent of this Agreement.
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(i) This Agreement may be executed in counterparts, all of which
together shall for all purposes constitute one Agreement, binding on each of the
parties hereto notwithstanding that each such party shall not have signed the
same counterpart.
(j) The Company is not by reason of this Agreement obligated to continue
the Executive's employment.
(k) In case of any dispute hereunder, the parties will submit to the
exclusive jurisdiction and venue of any court of competent jurisdiction sitting
in Boston, Massachusetts, and will comply with all requirements necessary to
give such court jurisdiction over the parties and the controversy. EACH PARTY
HEREBY WAIVES ANY RIGHT TO A JURY TRIAL AND TO CLAIM OR RECOVER PUNITIVE
DAMAGES.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement under
seal as of the day and year first set forth above.
NEBRASKA BOOK COMPANY, INC. EXECUTIVE:
By: /S/ XXXX XXXXXX /S/ XXXX XXXXXXXX
---------------------------- -----------------------------
Name: Xxxx Xxxxxx Xxxx Xxxxxxxx
Title: Treasurer
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