FORM OF NON-EMPLOYEE DIRECTOR STOCK SUBSCRIPTION AGREEMENT
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NON-EMPLOYEE DIRECTOR STOCK SUBSCRIPTION AGREEMENT, dated as of October __,
1999, between Dynatech Corporation, a Delaware corporation (the "Company"), and
the Purchaser whose name appears on the signature page hereof (the "Purchaser").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company desires to encourage and enable Directors to acquire a
proprietary interest in the Company;
WHEREAS, it is anticipated that providing such persons with a direct stake
in the Company's welfare will assure a closer identification of their interests
with those of the Company and stockholders, thereby stimulating their efforts on
the Company's behalf and strengthening their desire to remain with the Company;
WHEREAS, the Board of Directors of the Company (the "Board") has adopted
the Dynatech Corporation Directors Stock Purchase Plan (the "Plan") and,
pursuant to the Plan, has granted to the Purchaser the right to purchase the
aggregate number of shares of Common Stock ("Common Stock"), of the Company set
forth on the signature page hereof (each a "Share" and, collectively, the
"Shares") at the purchase price provided for herein; and
WHEREAS, the Purchaser desires to subscribe for and purchase from the
Company the Shares, at a purchase price of $3.25 per share, such price being the
fair market value of a share of Common Stock, as determined in good faith by the
Board on May 18, 1999;
WHEREAS, the Company desires to sell the Shares to the Purchaser on the
terms and subject to the conditions set forth herein;
NOW, THEREFORE, to implement the foregoing and in consideration of the
mutual promises, covenants and agreements contained herein, the parties hereto
hereby agree as follows:
1. Purchase and Sale of Common Stock.
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(a) Purchase of Common Stock. Subject to all of the terms and conditions of
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this Agreement, the Purchaser hereby subscribes for and shall purchase, and the
Company shall sell to the Purchaser, the Shares, at a purchase price of $3.25
per Share, at the Closing provided for in Section 2(a) hereof. Notwithstanding
anything to
the contrary, the Company shall have no obligation to sell any Common Stock to
any person who will not be a director of the Company immediately following the
Closing.
(b) Consideration. Subject to all of the terms and conditions of this
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Agreement, the Purchaser shall deliver to the Company at the Closing referred to
in Section 2(a) hereof, immediately available funds in the amount of the
aggregate purchase price set forth on the signature page hereof.
2. Closing.
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(a) Time and Place. Except as otherwise mutually agreed by the Company and
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the Purchaser, the closing (the "Closing") of the transaction contemplated by
this Agreement shall be held at the offices of Dynatech Corporation, 3 New
England Executive Park, Xxxxxxxxxx, Xxxxxxxxxxxxx 00000 on or about
____________, 1999.
(b) Delivery by the Company. At the Closing, the Company shall deliver to
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the Purchaser a stock certificate registered in the Purchaser's name and
representing the Shares, which certificate shall bear the legends set forth in
Section 3(b) hereof.
(c) Delivery by the Purchaser. At the Closing, the Purchaser shall deliver
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to the Company the consideration referred to in Section 1(b) hereof.
3. Purchaser's Representations, Warranties and Covenants.
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(a) Investment Intention. The Purchaser represents and warrants that the
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Purchaser is acquiring the Shares solely for the Purchaser's own account for
investment and not with a view to or for sale in connection with any
distribution thereof. The Purchaser agrees that the Purchaser will not, directly
or indirectly, offer, transfer, sell, pledge, hypothecate or otherwise dispose
of any of the Shares (or solicit any offers to buy, purchase or otherwise
acquire or take a pledge of any Shares), except in compliance with the
Securities Act of 1933, as amended (the "Securities Act"), and the rules and
regulations of the Securities and Exchange Commission thereunder, and in
compliance with applicable state securities or "blue sky" laws. The Purchaser
further understands, acknowledges and agrees that none of the Shares may be
transferred, sold, pledged, hypothecated or otherwise disposed of (i) unless the
provisions of Section 4 shall have been complied with or have expired, (ii)
unless (A) such disposition is pursuant to an effective registration statement
under the Securities Act, (B) the Purchaser shall have delivered to the Company
an opinion of counsel, which opinion and counsel shall be reasonably
satisfactory to the Company, to the effect that such disposition is exempt from
the provisions of Section 5 of the Securities Act or (C) a no-action letter from
the Securities and Exchange Commission, reasonably satisfactory to the Company,
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shall have been obtained with respect to such disposition and (iii) unless such
disposition is pursuant to registration under any applicable state securities
laws or an exemption therefrom.
(b) Legends. The Purchaser acknowledges that the certificate or
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certificates representing the Shares shall bear the following legends or other
appropriate legends:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
PROVISIONS OF A NON-EMPLOYEE DIRECTOR STOCK SUBSCRIPTION AGREEMENT,
DATED AS OF OCTOBER __, 1999, AS THE SAME MAY BE AMENDED FROM TIME TO
TIME, AND NEITHER THIS CERTIFICATE NOR THE SHARES REPRESENTED BY IT
ARE ASSIGNABLE OR OTHERWISE TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
PROVISIONS OF SUCH NON-EMPLOYEE DIRECTOR STOCK SUBSCRIPTION
AGREEMENT, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
COMPANY. THE SHARES REPRESENTED BY THIS CERTIFICATE ARE ENTITLED TO
THE BENEFITS OF AND ARE BOUND BY THE OBLIGATIONS SET FORTH IN A
REGISTRATION RIGHTS, DATED AS OF MAY 21, 1998, AMONG THE COMPANY AND
CERTAIN STOCKHOLDERS OF THE COMPANY, A COPY OF WHICH IS ON FILE WITH
THE SECRETARY OF THE COMPANY AS THE SAME MAY BE AMENDED FROM TIME TO
TIME."
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER ANY STATE SECURITIES LAWS
AND MAY NOT BE TRANSFERRED, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF UNLESS (i) (A) SUCH DISPOSITION IS PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, (B) THE HOLDER HEREOF SHALL HAVE DELIVERED TO THE COMPANY AN
OPINION OF COUNSEL, WHICH OPINION AND COUNSEL SHALL BE REASONABLY
SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT SUCH DISPOSITION IS
EXEMPT FROM THE PROVISIONS OF SECTION 5 OF SUCH ACT OR (C) A NO-ACTION
LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION, REASONABLY
SATISFACTORY TO COUNSEL FOR THE
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COMPANY, SHALL HAVE BEEN OBTAINED WITH RESPECT TO SUCH DISPOSITION AND
(ii) SUCH DISPOSITION IS PURSUANT TO REGISTRATION UNDER ANY APPLICABLE
STATE SECURITIES LAWS OR AN EXEMPTION THEREFROM."
(c) Securities Law Matters. The Purchaser acknowledges receipt of advice
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from the Company that (i) the Shares have not been registered under the
Securities Act or qualified under any state securities or "blue sky" laws, (ii)
the Shares must be held indefinitely and the Purchaser must continue to bear the
economic risk of the investment in the Shares unless the Shares are subsequently
registered under the Securities Act and such state laws or an exemption from
registration is available, (iii) when and if the Shares may be disposed of
without registration in reliance upon Rule 144 promulgated under the Securities
Act ("Rule 144"), such disposition can be made only in limited amounts in
accordance with the terms and conditions of such Rule, (iv) a restrictive legend
in the form heretofore set forth shall be placed on the certificates
representing the Shares and (v) a notation shall be made in the appropriate
records of the Company indicating that the Shares are subject to restrictions on
transfer set forth in this Agreement and appropriate stop-transfer restrictions
will be issued to the Company's stock transfer agent with respect to the Shares.
(d) Compliance with Rule 144. If any of the Shares are to be disposed of
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in accordance with Rule 144, the Purchaser shall transmit to the Company an
executed copy of Form 144 (if required by Rule 144) no later than the time such
form is required to be transmitted to the Securities and Exchange Commission for
filing and such other documentation as the Company may reasonably require to
assure compliance with Rule 144 in connection with such disposition.
(e) Ability to Bear Risk. The Purchaser represents and warrants that (i)
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the financial situation of the Purchaser is such that the Purchaser can afford
to bear the economic risk of holding the Shares for an indefinite period and
(ii) the Purchaser can afford to suffer the complete loss of the Purchaser's
investment in the Shares.
(f) Questionnaire. The Purchaser agrees to furnish such documents and
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comply with such reasonable requests of the Company as may be necessary to
substantiate the Purchaser's status as a qualifying investor in connection with
the private offering of shares of Common Stock to the Purchaser. The Purchaser
represents and warrants that all information contained in such documents and any
other written materials concerning the status of the Purchaser furnished by the
Purchaser to the Company in connection with such requests will be true, complete
and correct in all material respects.
(g) Access to Information. The Purchaser represents and warrants that (i)
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the Purchaser has carefully reviewed the Amended and Restated Offering
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Memorandum, dated October 1999, and the other materials furnished to the
Purchaser in connection with the transaction contemplated hereby, (ii) the
Purchaser has been granted the opportunity to ask questions of, and receive
answers from, representatives of the Company concerning the terms and conditions
of the purchase of the Shares and to obtain any additional information that the
Purchaser deems necessary to verify the accuracy of the information contained in
such materials and (iii) the Purchaser's knowledge and experience in financial
and business matters is such that the Purchaser is capable of evaluating the
risks of the investment in the Shares.
(h) Registration; Restrictions on Sale upon Public Offering. The Purchaser
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shall be entitled to the rights and subject to the obligations created under the
Registration Rights Agreement, dated as of May 21, 1999, among the Company,
Xxxxxxx, Dubilier & Rice Fund V Limited Partnership (the "Fund") and certain
stockholders of the Company (the "Registration Rights Agreement"), to the extent
set forth therein, and the Shares shall be considered Registrable Securities
thereunder. The Purchaser agrees that, in the event that the Company files a
registration statement under the Securities Act with respect to an underwritten
public offering of any shares of its capital stock, the Purchaser will not
effect any public sale or distribution of any shares of the Common Stock (other
than as part of such underwritten public offering), including but not limited
to, pursuant to Rule 144 or Rule 144A ("Rule 144A") under the Securities Act,
during the 20 days prior to and the 180 days after the effective date of such
registration statement.
4. Restrictions on Disposition of Shares. For 18 months from the date of
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this Agreement, neither the Purchaser nor any of the Purchaser's heirs or
representatives shall sell, assign, transfer, pledge or otherwise directly or
indirectly dispose of or encumber any of the Shares to or with any other person,
firm, trust, association, corporation or entity (including, without limitation,
transfers to any other holder of the Company's capital stock, dispositions by
gift, by will, by a corporation as a distribution in liquidation and by
operation of law other than a transfer of Shares by operation of law to the
estate of the Purchaser upon the death of the Purchaser, provided that such
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estate shall be bound by all of the provisions of this Agreement), provided that
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such restrictions shall not apply to any such disposition of the Shares pursuant
to Section 6 of this Agreement. The restrictions contained in this Section 4
shall terminate in the event that an underwritten public offering of the Common
Stock led by one or more underwriters at least one of which is an underwriter of
nationally recognized standing (a "Public Offering") has been consummated and
shall not apply to a sale to the underwriters as part of a Public Offering. Any
transfer or attempted transfer of the Shares in violation of this Section 4
shall be null and void ab initio, and the Company shall not register, recognize
or give effect to any such transfer or attempted transfer, nor shall the
intended transferee acquire any rights in such Shares. The Purchaser
acknowledges and agrees that the restrictions on transfer of the Shares
contained in this Section 4 relate to special, unique and
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extraordinary matters and that a violation of any of the terms of such
restrictions will cause the Company irreparable injury for which adequate
remedies are not available at law. Accordingly, the Purchaser agrees that the
Company shall be entitled to an injunction, restraining order or such other
equitable relief (without the requirement to post bond) as a court of competent
jurisdiction may deem necessary or appropriate to restrain the Purchaser from
committing any violation of the terms of such restrictions. These injunctive
remedies are cumulative and in addition to any other rights and remedies the
Company may have.
5. Representations and Warranties of the Company. The Company represents
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and warrants to the Purchaser that (a) the Company has been duly incorporated
and is an existing corporation in good standing under the laws of the
jurisdiction of its incorporation, (b) this Agreement has been duly authorized,
executed and delivered by the Company and constitutes a valid and legally
binding obligation of the Company enforceable against the Company in accordance
with its terms, (c) the Shares, when issued, delivered and paid for in
accordance with the terms hereof, will be duly and validly issued, fully paid
and nonassessable, and free and clear of any liens or encumbrances other than
those created pursuant to this Agreement, or otherwise in connection with the
transactions contemplated hereby and upon his acquisition of the Shares, the
Purchaser will become entitled to the rights and subject to the obligations of a
holder of "Registrable Securities" as set forth in the Registration Rights
Agreement.
6. Tag-Along Rights. So long as there has not been an underwritten public
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offering of the Common Stock led by at least one underwriter of nationally
recognized standing (a "Public Offering"), the Fund hereby agrees not to make
any sale or transfer of Common Stock owned by the Fund which would constitute a
Qualifying Sale, except pursuant to the following provisions of this Section 6:
(a) At least 30 days prior to making any sale or transfer of Common Stock
which would constitute a Qualifying Sale, the Fund will deliver a written notice
(the "Sale Notice") to the Company and the Purchaser. The Sale Notice will fully
disclose the identity of the prospective transferee and the terms and conditions
of the proposed Qualifying Sale. The Fund agrees not to consummate any such
proposed Qualifying Sale until at least 30 days after the Sale Notice has been
delivered to the Purchaser, unless the Fund has received notice from the
Purchaser indicating whether or not the Purchaser has elected to participate in
such Qualifying Sale and the number of shares to be sold by the Purchaser has
been finally determined pursuant hereto prior to the expiration of such 30-day
period. The Purchaser may elect to participate in the proposed Qualifying Sale
by delivering written notice to the Fund and the Company within 30 days after
receipt of the Sale Notice. If the Purchaser elects to participate in such
proposed Qualifying Sale, the Purchaser will be entitled to sell in such
Qualifying Sale, at the same price and on the same terms as the Fund, a number
of Shares equal to
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the product of (i) the quotient determined by dividing (A) the percentage of the
then outstanding Common Stock represented by the shares of Common Stock then
held by the Purchaser by (B) the aggregate percentage of the then outstanding
Common Stock represented by the Common Stock then held by the Fund and the
aggregate Common Stock held by those directors and employees of the Company or a
subsidiary (including the Purchaser) who elect to participate in such proposed
Qualifying Sale pursuant to the terms of their respective agreements and (ii)
the number of shares of Common Stock such transferee has agreed to purchase in
the proposed Qualifying Sale (or, in the case of a Qualifying Sale within the
meaning of clause (ii) of Section 6(b), the Excess Number of shares which such
transferee has agreed to purchase).
(b) The term "Qualifying Sale" shall mean (i) any sale or transfer of
Common Stock proposed to be made by the Fund at any time after the Fund has sold
or transferred in the aggregate at least the Qualifying Number of shares of
Common Stock or (ii) in the event that prior to the sale or transfer by the Fund
of an aggregate of the Qualifying Number of shares of Common Stock, the Fund
proposes to sell or transfer a number of shares of Common Stock which when
combined with any prior sales or transfers of such shares by the Fund exceeds
the Qualifying Number, the sale or transfer of a number of shares (the "Excess
Number") equal to the excess of (A) the sum of any shares previously sold or
transferred by the Fund and the aggregate number of shares proposed to be sold
or transferred in such contemplated sale, over (B) the Qualifying Number of
shares. In determining whether there is a Qualifying Sale, equitable adjustments
shall be made to reflect any stock split, stock dividend, stock combination,
recapitalization or similar transaction. The term "Qualifying Number" shall mean
5,539,539 shares of Common Stock (excluding any sales or transfers by the Fund
to any director or employee of the Company or a subsidiary of the Company).
(c) The obligation of the Fund and the rights of the Purchaser pursuant to
this Section 6 will not apply to any sale or transfer by the Fund pursuant to a
distribution to the public (whether pursuant to a Public Offering or pursuant to
Rule 144 or otherwise (but not pursuant to Rule 144A or any successor
provision). Any shares referred to, or covered by any sale, transfer or
distribution referred to, in the preceding sentence shall not be included in the
computation of Qualifying Sale.
(d) The Fund acknowledges that the Purchaser would be irreparably damaged
in the event of a breach or a threatened breach by the Fund of any of its
obligations under this Section 6 and the Fund agrees that, in the event of a
breach or a threatened breach by the Fund of any such obligation, the Purchaser
shall, in addition to any other rights and remedies available to him or her in
respect of such breach, be entitled to an injunction from a court of competent
jurisdiction (without any requirement to post bond) granting it specific
performance by the Fund of its obligations under this Section 6. In the event
that the Purchaser shall file suit to enforce the covenants
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contained in this Section 6 (or obtain any other remedy in respect of any breach
thereof) and prevails in such suit the Purchaser shall be entitled to recover
from the Company the costs incurred by the Purchaser in conducting the suit,
including reasonable attorney's fees and expenses.
7. Miscellaneous.
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(a) Notices. All notices and other communications required or permitted to
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be given under this Agreement shall be in writing and shall be deemed to have
been given if delivered personally or sent by certified or express mail, return
receipt requested, postage prepaid, or by any recognized international
equivalent of such mail delivery, to the Company, the Fund or the Purchaser, as
the case may be, at the following addresses or to such other address as the
Company, the Fund or the Purchaser, as the case may be, shall specify by notice
to the others:
(i) if to the Company, to it at:
Dynatech Corporation
3 New England Executive Park
Xxxxxxxxxx, XX 00000
Attention: General Counsel
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(ii) if to the Purchaser, to the Purchaser at the address set forth on the
signature page hereof.
(iii) if to the Fund, to:
Xxxxxxx, Dubilier & Rice
Fund V Limited Partnership
0000 Xxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxx
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All such notices and communications shall be deemed to have been received on the
date of delivery if delivered personally or on the third business day after the
mailing thereof. Copies of any notice or other communication given under this
Agreement shall also be given to:
Xxxxxxx, Dubilier & Rice, Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxx, III
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and
Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
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The Fund also shall be given a copy of any notice or other communication between
the Purchaser and the Company under this Agreement at its address as set forth
above.
(b) Binding Effect; Benefits. This Agreement shall be binding upon the
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parties to this Agreement and their respective successors and assigns and shall
inure to the benefit of the parties to the Agreement, the Fund and their
respective successors and assigns. Except as provided in Section 6, nothing in
this Agreement, express or implied, is intended or shall be construed to give
any person other than the parties to this Agreement, the Fund or their
respective successors or assigns any legal or equitable right, remedy or claim
under or in respect of any agreement or any provision contained herein.
(c) Waiver; Amendment.
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(i) Waiver. Any party hereto or beneficiary hereof may by written notice
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to the other parties (A) extend the time for the performance of any of the
obligations or other actions of the other parties under this Agreement, (B)
waive compliance with any of the conditions or covenants of the other parties
contained in this Agreement and (C) waive or modify performance of any of the
obligations of the other parties under this Agreement, provided that any waiver
of the provision of Section 6 must be consented to in writing by the Fund.
Except as provided in the preceding sentence, no action taken pursuant to this
Agreement, including, without limitation, any investigation by or on behalf of
any party or beneficiary shall be deemed to constitute a waiver by the party or
beneficiary taking such action of compliance with any representations,
warranties, covenants or agreements contained herein. The waiver by any party
hereto or beneficiary hereof of a breach of any provision of this Agreement
shall not operate or be construed as a waiver of any preceding or succeeding
breach and no failure by a party to exercise any right or privilege hereunder
shall be deemed a waiver of such party's or beneficiary's rights or privileges
hereunder or shall be deemed a waiver of such party's or beneficiary's rights to
exercise the same at any subsequent time or times hereunder.
(ii) Amendment. This Agreement may not be amended, modified or supplemented
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orally, but only by a written instrument executed by the Purchaser and the
Company, and (in the case of any amendment, modification or supple-
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ment to or affecting Section 6 hereof, or that adversely affects the rights of
the Fund hereunder) consented to by the Fund in writing.
(d) Entire Agreement. This Agreement is the entire agreement of the
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parties with respect to the subject matter hereof and supersedes all other prior
agreements, understandings, documents, statements, representations and
warranties, oral or written, express or implied, between the parties hereto and
their respective affiliates, representatives and agents in respect of the
subject matter hereof.
(e) Assignability. Neither this Agreement nor any right, remedy, obligation
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or liability arising hereunder or by reason hereof shall be assignable by the
Company or the Purchaser without the prior written consent of the other parties
and the Fund. The Fund may assign from time to time all or any portion of its
rights under Section 6 hereof to one or more persons or other entities
designated by it.
(f) Applicable Law. This Agreement shall be construed in accordance with
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and governed by the laws of the State of New York, without giving effect to the
conflicts of laws rules thereof to the extent such rules would require or permit
the application of the laws of another jurisdiction, except to the extent that
the corporate law of the jurisdiction of incorporation of the Company
specifically and mandatorily applies.
(g) Section and Other Headings, etc. The section and other headings
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contained in this Agreement are for reference purposes only and shall not affect
the meaning or interpretation of this Agreement.
(h) Counterparts. This Agreement may be executed in any number of
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counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same instrument.
(i) Delegation by the Board. All of the powers, duties and
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responsibilities of the Board specified in this Agreement may, to the full
extent permitted by applicable law, be exercised and performed by any duly
constituted committee thereof to the extent authorized by the Board to exercise
and perform such powers, duties and responsibilities.
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IN WITNESS WHEREOF, the Company and the Purchaser have executed this
Agreement as of the date first above written.
DYNATECH CORPORATION
By:
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Name:
Title:
THE PURCHASER
By:
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Name:
Address of the Purchaser:
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Total Number of Shares
of Common Stock to be
Purchased:
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Cash Purchase Price:
$
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