Exhibit 2(a)
DISTRIBUTION AGREEMENT
between
SEAFIELD CAPITAL CORPORATION
and
SLH CORPORATION
dated as of
December 20, 1996
TABLE OF CONTENTS
Page
ARTICLE I CERTAIN TRANSACTIONS PRIOR TO THE DISTRIBUTION DATE 1
1.1 ISSUANCE OF STOCK. 1
1.2 TRANSFER OF ASSETS AND ASSUMPTION OF LIABILITIES. 2
1.3 VALUATION OF TRANSFER ASSETS AND LIABILITIES. 2
1.4 CONDUCT OF BUSINESS PENDING THE DISTRIBUTION DATE. 2
1.5 REGISTRATION. 2
ARTICLE II THE DISTRIBUTION 3
2.1 RECORD DATE AND DISTRIBUTION DATE. 3
2.2 THE AGENT. 3
2.3 DELIVERY OF SHARE CERTIFICATES TO THE AGENT. 3
2.4 DISTRIBUTION. 3
2.5 PAYMENT IN LIEU OF FRACTIONAL SHARES. 3
2.6 DELIVERY OF TAX INFORMATION. 4
ARTICLE III SURVIVAL, ASSUMPTION AND INDEMNIFICATION 4
3.1 SURVIVAL OF AGREEMENTS. 4
3.2 TAXES AND EMPLOYEE-RELATED ASSETS AND LIABILITIES. 4
3.3 ASSUMPTION AND INDEMNIFICATION. 4
3.4 PROCEDURE FOR INDEMNIFICATION. 6
3.5 REMEDIES CUMULATIVE. 7
ARTICLE IV CERTAIN ADDITIONAL COVENANTS 7
4.1 FURTHER ASSURANCES. 7
4.2 SLH BOARD. 8
4.3 CONTINUING CONTRACTUAL ARRANGEMENTS. 8
4.4 INTERCOMPANY ACCOUNTS AND SLH NOTE. 8
4.5 OTHER AGREEMENTS. 9
ARTICLE V ACCESS TO INFORMATION 9
5.1 PROVISION OF CORPORATE RECORDS. 9
5.2 ACCESS TO INFORMATION. 9
5.3 PRODUCTION OF WITNESSES. 9
5.4 RETENTION OF RECORDS. 9
5.5 CONFIDENTIALITY. 10
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ARTICLE VI EMPLOYEE BENEFITS 10
6.1 SEAFIELD PENSION PLAN. 10
6.2 SEAFIELD 401K PLAN. 10
6.3 SEAFIELD STOCK PURCHASE PLAN. 10
6.4 SEAFIELD STOCK OPTION PLANS. 10
6.5 SEAFIELD SUPPLEMENTAL RETIREMENT AGREEMENTS. 11
6.6 SEAFIELD SEVERANCE AGREEMENTS, TERMINATION COMPENSATION
AGREEMENTS, AND SEVERANCE PAY. 11
6.7 SEAFIELD CONSULTING AGREEMENT. 12
6.8 SEAFIELD INDEMNIFICATION AGREEMENTS. 12
6.9 WELFARE PLANS. 12
6.10 DIRECTORS' PLANS. 13
6.11 OTHER BALANCE SHEET ADJUSTMENTS. 13
6.12 PRESERVATION OF RIGHTS TO AMEND OR TERMINATE PLANS. 14
6.13 REIMBURSEMENT; INDEMNIFICATION. 14
6.14 FURTHER TRANSFERS. 14
6.15 SLH OFFICERS, EMPLOYEES AND FACILITIES. 14
6.16 COMPLIANCE. 15
ARTICLE VII NO REPRESENTATIONS OR WARRANTIES; EXCEPTIONS 15
7.1 NO REPRESENTATIONS OR WARRANTIES; EXCEPTIONS. 15
ARTICLE VIII INSURANCE 15
8.1 INSURANCE POLICIES AND RIGHTS INCLUDED WITHIN SLH ASSETS. 15
8.2 POST-DISTRIBUTION DATE CLAIMS. 15
8.3 ADMINISTRATION AND RESERVES. 16
8.4 INSURANCE PREMIUMS. 16
8.5 ALLOCATION OF INSURANCE PROCEEDS; COOPERATION. 16
8.6 REIMBURSEMENT OF EXPENSES. 17
8.7 INSURER INSOLVENCY. 17
8.8 NO REDUCTION OF COVERAGE. 17
8.9 ASSISTANCE, WAIVER OF CONFLICT AND SHARED DEFENSE. 17
ARTICLE IX MISCELLANEOUS 18
9.1 CONDITIONS TO OBLIGATIONS. 18
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9.2 COMPLETE AGREEMENT. 19
9.3 EXPENSES. 19
9.4 GOVERNING LAW. 19
9.5 NOTICES. 19
9.6 AMENDMENT AND MODIFICATION. 20
9.7 SUCCESSORS AND ASSIGNS; NO THIRD-PARTY BENEFICIARIES. 20
9.8 COUNTERPARTS. 20
9.9 INTERPRETATION. 20
9.10 LEGAL ENFORCEABILITY. 20
9.11 REFERENCES; CONSTRUCTION. 20
9.12 TERMINATION. 21
ARTICLE X DEFINITIONS 21
10.1 GENERAL. 21
10.2 REFERENCES TO TIME. 30
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Exhibits
Exhibit No. Description
A Facilities Sharing and Interim Services Agreement.
B Form of SLH Employment Agreement.
C Form of Tax Sharing Agreement.
D Assignment and Assumption Agreement.
F SLH Stock Incentive Plan.
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DISTRIBUTION AGREEMENT
This DISTRIBUTION AGREEMENT, dated as of December 20, 1996, by and among
Seafield Capital Corporation, a Missouri corporation ("Seafield") and SLH
Corporation, a newly formed Kansas corporation which is a wholly owned
subsidiary of Seafield ("SLH").
W I T N E S S E T H:
WHEREAS, the Boards of Directors of Seafield and SLH have determined that
it is in the best interests of the shareholders of Seafield: (1) to transfer to
SLH substantially all of Seafield's assets (the "Transfer Assets") other than
its holdings of LabOne, Inc. ("Lab"), and certain other assets (the "Retained
Assets" as more particularly defined below) and certain liabilities (the
"Transfer Liabilities") and (2) to distribute to the holders of the issued and
outstanding shares of common stock, par value $1 per share, of Seafield all of
the issued and outstanding shares of common stock, par value $0.01 per share, of
SLH (the "Shareholders") in accordance with Article II hereof (the
"Distribution");
WHEREAS, the Distribution is intended to constitute a dividend taxable to
the Shareholders to the extent of Seafields current and accumulated earnings and
profits under the Internal Revenue Code of 1986, as amended and applicable state
laws;
WHEREAS, the parties hereto have determined that it is necessary and
desirable to set forth the principal corporate transactions required to effect
such Distribution and to set forth other agreements that will govern certain
other matters prior to and following the Distribution;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained and intending to be legally bound thereby, the parties hereto
agree as follows:
ARTICLE I
CERTAIN TRANSACTIONS PRIOR TO THE DISTRIBUTION DATE
1.1 ISSUANCE OF STOCK. Prior to or as of the Distribution Date, the
parties hereto shall take all steps necessary to reclassify the outstanding
shares of SLH Common Stock so that, except as otherwise contemplated by this
Agreement, immediately prior to or as of the Distribution Date the number of
shares of SLH Common Stock outstanding and held by Seafield shall equal
approximately one fourth the number of shares of Seafield Common Stock
outstanding on the Record Date.
1.2 TRANSFER OF ASSETS AND ASSUMPTION OF LIABILITIES. Prior to the
Distribution Date, the parties hereto shall take all action necessary to
transfer to SLH, and to cause SLH to assume, as the case may be, effective as of
the Distribution Date, (1) all of the Transfer Assets and (2) all of the
Transfer Liabilities.
1.3 VALUATION OF SLH COMMON STOCK. Seafield and SLH shall take such
steps as may be necessary or appropriate subsequent to the Distribution Date to
determine the Fair Market Value of the SLH Common Stock to be distributed in
the Distribution, as of the Distribution Date. Prior to January 31 1998,
Seafield will report the amount of the Distribution received by each Seafield
shareholder to such shareholder and to the IRS on IRS Form 1099-DIV.
1.4 CONDUCT OF BUSINESS PENDING THE DISTRIBUTION DATE. Each of the
parties hereto agrees that from the date hereof until the Distribution Date,
except as otherwise contemplated by this Agreement, it will use its best efforts
to carry on the SLH Business diligently in the ordinary course and substantially
in the same manner as heretofore conducted and to preserve intact the business
organization and goodwill of the SLH Business (including using its best efforts
to cause its Subsidiaries to take such actions).
1.5 REGISTRATION. Prior to the Distribution Date:
(a) Seafield and SLH shall prepare the Information Statement and
the Registration Statement. SLH shall file the Registration Statement with the
SEC. Seafield and SLH shall use reasonable efforts to cause the Registration
Statement to become effective under the Exchange Act as promptly as reasonably
practicable. Seafield and SLH shall prepare the Information Statement; and
after the Registration Statement becomes effective, Seafield shall mail the
Information Statement to the holders of Seafield Common Stock as of the Record
Date.
(b) The parties hereto shall use their best efforts to take all
such action as may be necessary or appropriate under state securities and Blue
Sky laws in connection with the transactions contemplated by this Agreement.
(c) The parties hereto shall cooperate in preparing, filing with
the SEC and causing to become effective any registration statements or
amendments thereto which are necessary or appropriate in order to effect the
transactions contemplated hereby or to reflect the establishment of, or
amendments to, any Plans contemplated hereby.
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ARTICLE II
THE DISTRIBUTION
2.1 RECORD DATE AND DISTRIBUTION DATE. Subject to the satisfaction of
the conditions set forth in Section 9.1, the Board of Directors of Seafield, or
the Executive Committee thereof, if so authorized by the Board of Directors,
shall establish the Record Date and the Distribution Date and any appropriate
procedures in connection with the Distribution.
2.2 THE AGENT. Prior to the Distribution Date, Seafield or such
financial instituion specializing in securities tranfers as Seafield may appoint
(the "Agent") shall make appropriate arrangements for, among other things, the
payment of the Distribution to the holders of Seafield Common Stock in
accordance with this Article II.
2.3 DELIVERY OF SHARE CERTIFICATES TO THE AGENT. Prior to or as of the
Distribution Date, SLH shall deliver to the Agent, a share certificate
representing all of the outstanding shares of SLH Common Stock to be
distributed in connection with the payment of the Distribution. After the
Distribution Date, upon the request of Seafield, as Agent, SLH shall provide
all certificates for shares of SLH Common Stock that the Agent shall require in
order to effect the Distribution.
2.4 DISTRIBUTION. Except as otherwise contemplated by this Agreement,
Seafield, as Agent, shall distribute, as of the Distribution Date, one share of
SLH Common Stock in respect of each four shares of Seafield Common Stock held
by holders of record of Seafield Common Stock on the Record Date. All shares of
SLH Common Stock issued in the Distribution shall be duly authorized, validly
issued, fully paid and nonassessable.
2.5 PAYMENT IN LIEU OF FRACTIONAL SHARES. No certificates or scrip
representing fractional shares of SLH Common Stock will be issued to Seafield
shareholders or to the accounts of participants in the Seafield 401K Plan or the
Seafield Stock Purchase Plan as part of the Distribution. The Agent will
aggregate fractional shares into whole shares and sell them in the open market
at then prevailing prices on behalf of holders who otherwise would be entitled
to receive fractional share interests, and such persons will receive instead a
cash payment in the amount of their pro rata share of the total sale proceeds.
Proceeds from sales of fractional shares will be paid by the Agent based upon
the average gross selling price per share of Common Stock of all such sales.
Seafield will bear the cost of commissions incurred in connection with such
sales. Such sales are expected to be made as soon as practicable after the
Record Date. None of Seafield, SLH or the Distribution Agent will guarantee any
minimum sale price for the shares of SLH Common Stock, and no interest will be
paid on the proceeds.
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2.6 DELIVERY OF TAX INFORMATION. Subsequent to the Distribution Date,
Seafield shall deliver the Tax Information to each holder of Seafield Common
Stock on the Record Date January 31, 1998..
ARTICLE III
SURVIVAL, ASSUMPTION AND INDEMNIFICATION
3.1 SURVIVAL OF AGREEMENTS. All covenants and agreements of the
parties hereto contained in this Agreement shall survive the Distribution Date.
3.2 TAXES AND EMPLOYEE-RELATED ASSETS AND LIABILITIES. This Article
III shall not be applicable to any Plan Assets or any Indemnifiable Losses or
Liabilities related to (1) Taxes, which shall be governed by the Tax Sharing
Agreement or (2) the current or former employment of any Seafield Individual or
SLH Individual, or the compensation or benefits for any Seafield Director or SLH
Director, under any Plan or otherwise, which shall be governed by Article VI
hereof and the Assignment and Assumption Agreement.
3.3 ASSUMPTION AND INDEMNIFICATION.
(a) Subject to Section 3.2, the Assignment and Assumption
Agreement, the Tax Sharing Agreement and Article VI, from and after the
Distribution Date, Seafield shall retain or assume, as the case may be, and
shall indemnify, defend and hold harmless each SLH Individual and each member of
the SLH Group, and each of their Representatives and Affiliates, from and
against:
(1) all liabilities for third party claims relating to, arising
out of or due to, directly or indirectly, the Distribution or to the
service by any SLH Individual as an officer, director or employee of
any member of the Seafield Group prior to the Distribution, except to
the extent covered by insurance and provided such indemnification
would be permitted by law if such officer, director or employee made a
claim for indemnification,
(2) all Seafield Liabilities and Liabilities of any member of
the Seafield Group under this Agreement or any of the Other
Agreements, and
(3) all Indemnifiable Losses of any such SLH Individual, member
of the SLH Group, Representative or Affiliate relating to, arising out
of or due to, directly or indirectly, the Seafield Assets, the
Seafield Liabilities, the Seafield Business, the Seafield Individuals
or the Seafield Group's Representatives, whether relating to or
arising out of occurrences prior to or after the Distribution Date.
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(b) Subject to Section 3.2, the Tax Sharing Agreement, the
Assignment and Assumption Agreement and Article VI, and except as specifically
provided in Section 3.3(a), from and after the Distribution Date, SLH shall
assume, and shall indemnify, defend and hold harmless each Seafield Individual
and each member of the Seafield Group, and each of their Representatives and
Affiliates, from and against,
(1) all SLH Liabilities and all Liabilities of the SLH Group
under this Agreement or any of the Other Agreements, and
(2) all Indemnifiable Losses of any such Seafield Individual,
member of the Seafield Group, Representative or Affiliate relating to,
arising out of or due to, directly or indirectly, the SLH Assets, the
SLH Liabilities, the SLH Business, the SLH Employees or the SLH
Group's Representatives, whether relating to or arising out of
occurrences prior to or after the Distribution Date.
(c) If an Indemnitee realizes a Tax benefit or detriment by reason
of having incurred an Indemnifiable Loss for which such Indemnitee receives an
Indemnity Payment from an Indemnifying Party or by reason of receiving an
Indemnity Payment, then such Indemnitee shall pay to such Indemnifying Party an
amount equal to the Tax benefit, or such Indemnifying Party shall pay to such
Indemnitee an additional amount equal to the Tax detriment (taking into account
any Tax detriment resulting from the receipt of such additional amounts), as the
case may be. If, in the opinion of counsel to an Indemnifying Party reasonably
satisfactory in form and substance to the affected Indemnitee, there is a
substantial likelihood that the Indemnitee will be entitled to a Tax benefit by
reason of an Indemnifiable Loss, the Indemnifying Party promptly shall notify
the Indemnitee and the Indemnitee promptly shall take any steps (including the
filing of such returns, amended returns or claims for refunds consistent with
the claiming of such Tax benefit) that, in the reasonable judgment of the
Indemnifying Party, are necessary and appropriate to obtain any such Tax
benefit. If, in the opinion of counsel to an Indemnitee reasonably satisfactory
in form and substance to the affected Indemnifying Party, there is a substantial
likelihood that the Indemnitee will be subjected to a Tax detriment by reason of
an Indemnification Payment, the Indemnitee promptly shall notify the
Indemnifying Party and the Indemnitee promptly shall take any steps (including
the filing of such returns or amended returns or the payment of Tax
underpayments consistent with the settlement of any Liability for Taxes arising
from such Tax detriment) that, in the reasonable judgment of the Indemnitee, are
necessary and appropriate to settle any Liabilities for Taxes arising from such
Tax detriment. If, following a payment by an Indemnitee or an Indemnifying Party
pursuant to this Section 3.3(c) in respect of a Tax benefit or detriment, there
is an adjustment to the amount of such Tax benefit or detriment, then each of
Seafield and SLH shall make appropriate payments to the other, including the
payment of interest thereon at the federal statutory rate then in effect, to
reflect such adjustments.
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(c) The amount which an Indemnifying Party is required to pay to
any Indemnitee pursuant to this Section 3.3 shall be reduced (including
retroactively) by any Insurance Proceeds and other amounts actually recovered by
such Indemnitee in reduction of the related Indemnifiable Loss, it being
understood and agreed that each of Seafield and SLH shall use its best efforts
to collect any such proceeds or other amounts to which it or any of its
Subsidiaries is entitled, without regard to whether it is the Indemnifying Party
hereunder. If an Indemnitee receives an Indemnity Payment in respect of an
Indemnifiable Loss and subsequently receives Insurance Proceeds or other amounts
in respect of such Indemnifiable Loss, then such Indemnitee shall pay to such
Indemnifying Party an amount equal to the difference between (1) the sum of the
amount of such Indemnity Payment and the amount of such Insurance Proceeds or
other amounts actually received and (2) the amount of such Indemnifiable Loss,
adjusted (at such time as appropriate adjustment can be determined) in each case
to reflect any premium adjustment attributable to such claim. Notwithstanding
anything to the contrary in this Section 3.3, each party's indemnity under this
Section 3.3 shall include the increased cost and expense of purchasing insurance
against future losses, provided and to the extent that such cost and expense is
directly attributable to Indemnifiable Losses.
3.4 PROCEDURE FOR INDEMNIFICATION.
(a) If any Indemnitee receives notice of the assertion of any
Third-Party Claim with respect to which an Indemnifying Party is obligated under
this Agreement to provide indemnification, such Indemnitee shall give such
Indemnifying Party notice thereof promptly after becoming aware of such
Third-Party Claim; provided, however, that the failure of any Indemnitee to give
notice as provided in this Section 3.4 shall not relieve any Indemnifying Party
of its obligations under this Article III, except to the extent that such
Indemnifying Party is actually prejudiced by such failure to give notice. Such
notice shall describe such Third-Party Claim in reasonable detail and, if
practicable, shall indicate the estimated amount of the Indemnifiable Loss that
has been or may be sustained by such Indemnitee.
(b) An Indemnifying Party, at such Indemnifying Party's own
expense and through counsel chosen by such Indemnifying Party (which counsel
shall be reasonably satisfactory to the Indemnitee), may elect to defend any
Third-Party Claim; provided, however, that such an election by the Indemnifying
Party shall be deemed an admission of its obligation to indemnify the Indemnitee
with respect to such Third-Party Claim. If an Indemnifying Party elects to
defend a Third-Party Claim, then, within ten Business Days after receiving
notice of such Third-Party Claim (or sooner, if the nature of such Third-Party
Claim so requires), such Indemnifying Party shall notify the Indemnitee of its
intent to do so, and such Indemnitee shall cooperate in the defense of such
Third-Party Claim. Such Indemnifying Party shall pay such Indemnitee's
reasonable out-of-pocket expenses incurred in connection with such cooperation.
After notice from an Indemnifying Party to an Indemnitee of its election to
assume the defense of a
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Third-Party Claim, such Indemnifying Party shall not be liable to such
Indemnitee under this Article III for any legal or other expenses subsequently
incurred by such Indemnitee in connection with the defense thereof; provided,
however, that such Indemnitee shall have the right to employ one law firm as
counsel to represent such Indemnitee (which firm shall be reasonably acceptable
to the Indemnifying Party) if, in such Indemnitee's reasonable judgment, either
a conflict of interest between such Indemnitee and such Indemnifying Party
exists in respect of such claim or there may be defenses available to such
Indemnitee which are different from or in addition to those available to such
Indemnifying Party, and in that event (1) the reasonable fees and expenses of
such separate counsel shall be paid by such Indemnifying Party and (2) each of
such Indemnifying Party and such Indemnitee shall have the right to run its own
defense in respect of such claim. If an Indemnifying Party elects not to defend
against a Third-Party Claim, or fails to notify an Indemnitee of its election as
provided in this Section 3.4 within the period of ten Business Days described
above, such Indemnitee may defend, compromise and settle such Third-Party Claim;
provided, however, that no such Indemnitee may compromise or settle any such
Third-Party Claim without the prior written consent of the Indemnifying Party,
which consent shall not be withheld unreasonably. Notwithstanding the foregoing,
the Indemnifying Party shall not, without the prior written consent of the
Indemnitee, (1) settle or compromise any Third-Party Claim or consent to the
entry of any judgment which does not include as an unconditional term thereof
the delivery by the claimant or plaintiff to the Indemnitee of a written release
from all Liability in respect of such Third-Party Claim or (2) settle or
compromise any Third-Party Claim in any manner that may adversely affect the
Indemnitee.
3.5 REMEDIES CUMULATIVE. The remedies provided in this Article III
shall be cumulative and shall not preclude assertion by any Indemnitee of any
other rights or the seeking of any other remedies against any Indemnifying
Party.
ARTICLE IV
CERTAIN ADDITIONAL COVENANTS
4.1 FURTHER ASSURANCES.
(a) In addition to the actions specifically provided for elsewhere
in this Agreement and the Other Agreements, each of the parties hereto shall use
its best efforts to take, or cause to be taken, all actions, and to do, or cause
to be done, all things reasonably necessary, proper or advisable under
applicable laws, regulations and agreements to consummate and make effective the
transactions contemplated by this Agreement. Without limiting the foregoing,
each party hereto shall cooperate with the other parties, and execute and
deliver, or use its best efforts to cause to be executed and delivered, all
instruments, including instruments of conveyance, assignment and transfer, and
to make all filings with, and to obtain all consents, approvals or
authorizations of, any
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governmental or regulatory authority or any other Person under any permit,
license, agreement, indenture or other instrument, and take all such other
actions as such party may reasonably be requested to take by any other party
hereto from time to time, consistent with the terms of this Agreement, in order
to effectuate the provisions and purposes of this Agreement and the transfers of
Assets and Liabilities and the other transactions contemplated hereby and the
Other Agreements. If any such transfer of Assets or Liabilities is not
consummated prior to or at the Distribution Date, then the party hereto
retaining such Asset or Liability shall thereafter hold such Asset in trust for
the use and benefit of the party entitled thereto (at the expense of the party
entitled thereto), or shall retain such Liability for the account of the party
by whom such Liability is to be assumed pursuant hereto, as the case may be, and
shall take such other action as may be reasonably requested by the party to whom
such Asset is to be transferred, or by whom such Liability is to be assumed, as
the case may be, in order to place such party, insofar as reasonably possible,
in the same position as if such Asset or Liability had been transferred as
contemplated hereby. If and when any such Asset or Liability becomes
transferable, such transfer shall be effected forthwith. The parties hereto
agree that, as of the Distribution Date, each party hereto shall be deemed to
have acquired complete and sole beneficial ownership of all of the Assets,
together with all rights, powers and privileges incident thereto, and shall be
deemed to have assumed in accordance with the terms of this Agreement all of the
Liabilities, and all duties, obligations and responsibilities incident thereto,
that such party is entitled to acquire or required to assume pursuant to the
terms of this Agreement.
(b) Without limiting the generality of Section 4.1(a), Seafield,
as the sole stockholder of SLH, shall ratify any actions which are reasonably
necessary or desirable to be taken by SLH to effectuate the transactions
contemplated by this Agreement in a manner consistent with the terms of this
Agreement, including the preparation and implementation of appropriate Plans for
SLH Employees.
4.2 SLH BOARD. Prior to, or simultaneously with, the Distribution
Date, SLH shall take such actions as are necessary such that its Board of
Directors is comprised of those individuals named as directors in the
Information Statement.
4.3 CONTINUING CONTRACTUAL ARRANGEMENTS. Notwithstanding anything in
this Agreement to the contrary, except as set forth in Sections 4.4 and 4.5, to
the extent that any member of either Group is now providing or selling, or in
the future may provide or sell, to any member of the other Group any services,
benefits or products pursuant to any written or oral agreement or understanding
whatsoever, such agreement or understanding shall not be deemed altered, amended
or terminated as a result of this Agreement or the consummation of the
transactions contemplated hereby.
4.4 INTERCOMPANY ACCOUNTS. Effective as of the
Distribution Date all intercompany receivables, payables, loans or advances
between
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Seafield and SLH shall be treated in the manner provided in the Assignment and
Assumption Agreement.
4.5 OTHER AGREEMENTS. Each of Seafield and SLH shall use reasonable
efforts to enter into, or to cause the appropriate members of its Group to enter
into, the Other Agreements prior to the Distribution Date. If there shall be a
conflict between the provisions of this Agreement and the provisions of the
Other Agreements, the provisions of the Other Agreements shall control.
ARTICLE V
ACCESS TO INFORMATION
5.1 PROVISION OF CORPORATE RECORDS. Prior to or as promptly as
practicable after the Distribution Date, Seafield shall deliver to SLH all
corporate books and records of the SLH Group and copies of all corporate books
and records of the Seafield Group relating to the SLH Assets, the SLH
Liabilities, or the SLH Business, including in each case all active agreements,
active litigation files and government filings. From and after the Distribution
Date, all books, records and copies so delivered shall be the property of SLH.
5.2 ACCESS TO INFORMATION. From and after the Distribution Date, each
of Seafield and SLH shall afford to the other and to the other's Representatives
reasonable access and duplicating rights during normal business hours to all
Information within such party's possession relating to such other party's
businesses, Assets or Liabilities, insofar as such access is reasonably required
by such other party. Without limiting the foregoing, Information may be
requested under this Section 5.2 for audit, accounting, claims, litigation and
Tax purposes, as well as for purposes of fulfilling disclosure and reporting
obligations.
5.3 PRODUCTION OF WITNESSES. After the Distribution Date, each of
Seafield and SLH shall use reasonable efforts to make available to the other,
upon written request, its directors, officers, employees and agents as witnesses
to the extent that any such Person may reasonably be required (giving
consideration to business demands of such Persons) in connection with any legal,
administrative or other proceedings in which the requesting party may from time
to time be involved.
5.4 RETENTION OF RECORDS. Except as otherwise required by law or
agreed in writing, or as otherwise provided in the Tax Sharing Agreement, each
of Seafield and SLH shall retain, for a period of at least ten years following
the Distribution Date, all significant Information in such party's possession or
under its control relating to the business, Assets or Liabilities of the other
party and, after the expiration of such ten-year period, prior to destroying or
disposing of any of such Information, (a) the party
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proposing to dispose of or destroy any such Information shall provide no less
than 30 days' prior written notice to the other party, specifying the
Information proposed to be destroyed or disposed of, and (b) if, prior to the
scheduled date for such destruction or disposal, the other party requests in
writing that any of the Information proposed to be destroyed or disposed of be
delivered to such other party, the party proposing to dispose of or destroy such
Information promptly shall arrange for the delivery of the requested Information
to a location specified by, and at the expense of, the requesting party.
5.5 CONFIDENTIALITY. From and after the Distribution Date, each of
Seafield and SLH shall hold, and shall use its reasonable best efforts to cause
its Affiliates and Representatives to hold, in strict confidence all Information
concerning the other party obtained by it prior to the Distribution Date or
furnished to it by such other party pursuant to this Agreement or the Other
Agreements and shall not release or disclose such Information to any other
Person, except its Representatives, who shall be bound by the provisions of this
Section 5.5; provided, however, that Seafield and SLH may disclose such
Information to the extent that (a) disclosure is compelled by judicial or
administrative process or, in the opinion of such party's counsel, by other
requirements of law, or (b) such party can show that such Information was (1)
available to such party on a nonconfidential basis prior to its disclosure by
the other party, (2) in the public domain through no fault of such party or (3)
lawfully acquired by such party from other sources after the time that it was
furnished to such party pursuant to this Agreement or the Other Agreements.
Notwithstanding the foregoing, each of Seafield and SLH shall be deemed to have
satisfied its obligations under this Section 5.5 with respect to any Information
if it exercises the same care with regard to such Information as it takes to
preserve confidentiality for its own similar Information.
ARTICLE VI
EMPLOYEE BENEFITS
6.1 SEAFIELD PENSION PLAN. As soon as practicable after the
Distribution Date Seafield and SLH will take such steps as the Seafield Board
shall determine to distribute to or for the benefit of SLH Employees their
interests in the Seafield Pension Plan. Any liability relating to such plan
shall be deemed a Retained Liability under the Assignment and Assumption
Agreement.
6.2 SEAFIELD 401K PLAN. As soon as practicable after the Distribution
Date Seafield and SLH will take steps steps as the Seafield Board shall
determine to distribute to or for the benefit of SLH Employees their interests
in the Seafield Pension Plan. Any liability relating to such plan shall be
deemed a Retained Liability under the Assignment and Assumption Agreement.
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6.3 SEAFIELD STOCK PURCHASE PLAN. The Seafield Stock Purchase Plan
shall continue in effect after the Distribution and Obligations thereunder shall
be a Retained Liability under the Assignment and Assumption Agreement.
6.4 SEAFIELD STOCK OPTION PLANS. Obligations under the Seafield Stock
Option Plans shall be deemed a Retained Liability under the Assignment and
Assumption Agreement. However, Seafield and SLH shall cooperate and take all
action necessary to adopt the SLH Option Plan (in the form of Exhibit E hereto).
As of the Distribution Date, employment of an Optionee under any of the Seafield
Stock Option Plans as a director, officer or employee of SLH or any SLH
Subsidiary, shall be deemed to constitute employment by Seafield under the
Seafield Stock Option Plans so that the Optionee's termination of employment
with Seafield shall not accelerate the expiration of the term of the Option;
provided that this provision shall not apply to an Incentive Stock Option
without the express written consent of the Optionee. In addition, employees of
Seafield who are provided to SLH under the Facilities Sharing and Interim
Services Agreements who become optionees under the SLH Option Plan shall be
deemed to be employees of SLH for purposes of that plan.
6.5 SEAFIELD SUPPLEMENTAL RETIREMENT AGREEMENTS. As of the
Distribution Date as to any SLH Employee who is a party to a Seafield
Supplemental Retirement Agreement, Seafield shall retain, or cause one or more
members of the Seafield Group to assume or retain, as the case may be, and
shall be solely responsible for, all liabilities and obligations whatsoever of
either Group whether or not incurred prior to the Distribution Date in
connection with claims under such Seafield Supplemental Retirement Agreement in
respect of any such SLH Employee.
6.6 SEAFIELD SEVERANCE AGREEMENTS, TERMINATION COMPENSATION AGREEMENTS,
AND SEVERANCE PAY.
(a) Pursuant to the Facilities Sharing and Interim Services
Agreement, it is contemplated that for an indefinite period subsequent to the
Distribution Date Seafield will provide to SLH certain management services from
individuals that will remain employees of Seafield and that will be compensated
by Seafield. Under such arrangement SLH shall have no liability with respect to
Seafield's obligations to such Employees before or after the Distribution Date
except to the extent of arrangements entered into as contemplated by this
Agreement and all of such Seafield obligations to such individuals shall be
deemed to be Retained Liabilities under the Assignment and Assumption Agreement.
Accordingly, SLH directors or officers who do not become SLH Employees (for
purposes of this paragraph, a Seafield employee whose services are provided to
SLH under the Facitliy Sharing and Interim Services Agreement shall not be
deemed an SLH Employee) and who are parties to Seafield Severance Agreements or
Termination Compensation Agreements shall continue to be subject to such
agreements and all
11
obligations thereunder shall be Retained Liabilities under the Assignment and
Assumption Agreement.
(b) On or prior to the Distribution Date and effective as of the
Distribution Date SLH and SLH officers shall enter into SLH Employment
Agreements in the form appended hereto as Exhibit B.
(c) Seafield and SLH agree that, with respect to individuals who,
in connection with the Distribution, cease to be employees of the Seafield Group
and become SLH Employees, such cessation shall not be deemed a severance of
employment from either Group for purposes of any Plan or the Seafield Severance
Agreements that provide for the payment of severance, salary continuation or
similar benefits and shall, in connection with the Distribution, if and to the
extent appropriate obtain waivers from individuals against any such assertion.
(d) Except as otherwise provided above and subject to the terms of
the Other Agreements, the Seafield Group shall assume and be solely responsible
for all liabilities and obligations whatsoever in connection with claims made by
or on behalf of Seafield Individuals and the SLH Group shall assume and be
solely responsible for all liabilities and obligations whatsoever in connection
with claims made by or on behalf of SLH Individuals in respect of severance pay,
salary continuation and similar obligations relating to the termination or
alleged termination of any such person's employment either before, to the extent
unpaid, or on or after the Distribution Date.
6.7 SEAFIELD CONSULTING AGREEMENT. The Seafield Consulting Agreement
shall not be affected by the Distribution. shall be Retained Liabilities under
the Assignment and Assumption Agreement.
6.8 SEAFIELD INDEMNIFICATION AGREEMENTS.
(a) The Distribution shall not effect a Termination of any
existing Seafield Indemnification Agreement and Seafield obligations thereunder
shall be deemed to be Retained Liabilities under the Assignment and Assumption
Agreement.
(b) Seafield and SLH agree that activities of SLH Individuals for
SLH from and after the Distribution Date shall be covered under the SLH
Indemnification Provisions of the SLH Articles of Incorporation and Bylaws or
under such other indemnification agreement as SLH may adopt and not under the
Seafield Indemnification Agreements and that such SLH Individuals in such
capacities shall not be deemed to be acting for SLH at the "request of Seafield"
under the Seafield Indemnification Agreements.
6.9 WELFARE PLANS.
12
(a) Subject to the terms of the Assignment and Assumption
Agreement, as of the Distribution Date, SLH shall assume or retain, or cause one
or more members of the SLH Group to assume or retain, as the case may be, and
shall be solely responsible for, or cause its insurance carriers to be
responsible for all liabilities and obligations whatsoever of the Seafield
Group, whether or not incurred prior to the Distribution Date in connection with
claims under any Seafield Welfare Plan (including any Seafield Welfare Plan
providing for post-retirement or retiree medical benefits) in respect of any SLH
Employee and Seafield shall cease to have any liability or obligation with
respect thereto.
(b) Subject to the terms of the Assignment and Assumption
Agreement, as of the Distribution Date, SLH shall take, or cause to be taken,
all actions necessary and appropriate on behalf of itself and the SLH Group (1)
to assume any existing Welfare Plan of the Seafield Group, which Welfare Plan,
as of the Distribution Date, provides benefits solely for SLH Employees or (2)
otherwise to adopt such Welfare Plans as necessary to provide welfare benefits,
effective as of the Distribution Date, and to assume the liabilities and
obligations to SLH Employees which are or shall become the responsibility of SLH
to the extent specified in Section 6.9(a). For this purpose, with respect to any
SLH Employee, Seafield, SLH or a member of the SLH Group shall, to the extent
applicable, credit such Individual with any term of service provided to any
member of either Group, and consider such SLH Individual to have satisfied any
other eligibility criteria (including satisfaction of applicable deductibles or
coinsurance amounts) to the extent so satisfied as of the Distribution Date, as
if such service had been rendered to SLH or the member of the SLH Group and as
if such eligibility criteria had been satisfied while employed by SLH or the
member of the SLH Group. In connection with the foregoing, Seafield agrees to
provide SLH or its designated insurance representative with such information (in
the possession of the Seafield Group and not already in the possession of the
SLH Group) as may be reasonably requested by SLH and necessary for the SLH Group
to assume or establish any such Welfare Plan.
(c) Seafield shall assume, or retain, all liabilities and
obligations whatsoever of any Group for benefits under any Welfare Plan other
than as set forth in Section 6.9(a).
(d) Notwithstanding any other term or provision hereof, SLH shall
not assume or be liable for any Welfare or other Plan of any member of the
LabResponse Group.
6.10 DIRECTORS' PLANS. SLH shall not assume or be liable for any
compensation or other remuneration of any Seafield Director. SLH shall provide
each SLH Director (other than directors who are Seafield Employees after the
Distribution) with participation in the SLH Option Plan and, until
13
further directed by the SLH Board, a quarterly retainer of $1,000 per quarter
and meeting fees of $500 per meeting. Until further directed by the SLH Board,
salary and other compensation paid to an employee Director shall compensate
such employee for service as a SLH Director.
6.11 OTHER BALANCE SHEET ADJUSTMENTS. To the extent not otherwise
provided in this Agreement, Seafield and SLH shall take such action as is
necessary to effect an adjustment to the books of Seafield and SLH so that, as
of the Distribution Date, the prepaid expense balances and accrued employee
liabilities with respect to any employee liability or obligation assumed or
retained as of the Distribution Date by the Seafield and the SLH Group are
appropriately reflected on the consolidated balance sheets as of the
Distribution Date of Seafield and SLH, respectively.
6.12 PRESERVATION OF RIGHTS TO AMEND OR TERMINATE PLANS. No provisions
of this Agreement or the Assignment and Assumption Agreement, including the
agreement of Seafield or SLH that it, or Seafield or any member of the SLH
Group, will make a contribution or payment to or under any Plan herein referred
to for any period, shall be construed as a limitation on the right of Seafield
or SLH or any member of the SLH Group to amend such Plan or terminate its
participation therein which Seafield or SLH or any member of the SLH Group
would otherwise have under the terms of such Plan or otherwise, and no provision
of this Agreement shall be construed to create a right in any employee or former
employee or beneficiary of such employee or former employee under a Plan which
such employee or former employee or beneficiary would not otherwise have under
the terms of the Plan itself.
6.13 REIMBURSEMENT; INDEMNIFICATION. Each of the parties hereto
acknowledges that the Seafield Group, on the one hand, and the SLH Group, on the
other hand, may incur costs and expenses (including contributions to Plans and
the payment of insurance premiums) arising from or related to any of the Plans
which are, as set forth in this Agreement, the responsibility of the other party
hereto. Accordingly, Seafield and SLH agree to reimburse each other, as soon as
practicable but in any event within 30 days of receipt from the other party of
appropriate verification, for all such costs and expenses reduced by the amount
of any tax reduction or recovery of tax benefit realized by Seafield or SLH, as
the case may be, in respect of the corresponding payment made by it.
6.14 FURTHER TRANSFERS. Seafield and SLH recognize that there may be
SLH Individuals who will, after the Distribution Date, become employed by
Seafield and there may be Seafield individuals who become employed, after the
Distribution Date, by SLH. If Seafield and SLH so agree with respect to any such
individuals, the assets and liabilities with respect to such employees which are
associated with the plans and programs described in this Agreement may be
transferred and assumed in a manner consistent with this Agreement. Any such
transfers or assumptions will be considered to be governed by the terms of this
Agreement and the Facilities Sharing and Interim Services Agreement and shall
not require the agreement of Seafield and SLH if they occur within 3 months of
the Distribution Date.
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6.15 SLH OFFICERS, EMPLOYEES AND FACILITIES.
(a) Effective as of the Distribution Date the employees of SLH and
the SLH Group shall be as specified in the Assignment and Assumption Agreement.
(b) Seafield shall also provide certain services and personnel to
SLH and SLH shall provide certain facilities to Seafield during the Transition
Period pursuant to the Facilities Sharing and Interim Services Agreement.
(c) SLH shall provide each SLH Officer with participation in the
SLH Option Plan.
6.16 COMPLIANCE. Notwithstanding anything to the contrary in this
Article VI, to the extent any actions of the parties contemplated in this
Article are determined prior to Distribution to violate law or result in
unintended tax liability for Seafield Individuals or SLH Individuals, such
action may be modified to avoid such violation of law or unintended tax
liability.
ARTICLE VII
NO REPRESENTATIONS OR WARRANTIES; EXCEPTIONS
7.1 NO REPRESENTATIONS OR WARRANTIES; EXCEPTIONS. SLH understands and
agrees that no member of the Seafield Group is, in this Agreement or in any
other agreement or document, representing or warranting to SLH in any way as to
the SLH Assets, the SLH Liabilities, or the SLH Business or as to any consents
or approvals required in connection with the consummation of the transactions
contemplated by this Agreement, it being agreed and understood that SLH shall
take all of the SLH Assets "as is, where is" and that, except as provided in the
Assignment and Assumption Agreement and Section 4.1, SLH shall bear the economic
and legal risk that conveyances of the SLH Assets shall prove to be insufficient
or that the title of any member of the SLH Group to any SLH Assets shall be
other than good and marketable and free from encumbrances.
ARTICLE VIII
INSURANCE
8.1 INSURANCE POLICIES AND RIGHTS INCLUDED WITHIN SLH ASSETS. Without
limiting the generality of the definition of Transfer Assets set forth in
Section 10.1, the Transfer Assets shall include (a) any and all rights of an
insured party under each of the Seafield Policies, including rights of indemnity
and the right to be defended by or at the expense of the insurer, with respect
to all SLH Claims; provided, however, that nothing in this clause (a) shall be
deemed to constitute (or to reflect) the
15
assignment of any of the Seafield Policies to SLH, and (b) the SLH Policies. SLH
shall be entitled to receive from Seafield any Insurance Proceeds paid to any
member of the Seafield Group with respect to any third-party SLH Claim under any
Seafield Policy.
8.2 POST-DISTRIBUTION DATE CLAIMS. If, subsequent to the Distribution
Date, any Person shall assert a SLH Claim, then Seafield shall at the time such
SLH Claim is asserted be deemed to assign, without need of further
documentation, to SLH all of the Seafield Group's rights, if any, as an insured
party under the applicable Seafield Policy with respect to such SLH Claim,
including rights of indemnity and the right to be defended by or at the expense
of the insurer; provided, however, that nothing in this Section 8.2 shall be
deemed to (1) constitute (or to reflect) the assignment of any of the Seafield
Policies to SLH or (2) affect the Seafield indemnity set forth in Section 3.3 of
this Agreement.
8.3 ADMINISTRATION AND RESERVES. Notwithstanding the provisions of
Article III, from and after the Distribution Date:
(a) Seafield shall be responsible for (1) Insurance Administration
with respect to the Seafield Policies and (2) Claims Administration with respect
to any Liabilities of Seafield; provided, however, that the retention of the
Seafield Policies by Seafield is in no way intended to limit, inhibit or
preclude any right to insurance coverage for any Insured Claim of a named
insured under the Seafield Policies;
(b) SLH shall be responsible for (1) Insurance Administration with
respect to the SLH Policies, and (2) Claims Administration with respect to any
Liabilities of SLH; provided, however, that the retention of the SLH Policies
by SLH is in no way intended to limit, inhibit or preclude any right to
insurance coverage for any Insured Claim of a named insured under the SLH
Policies;
(c) Seafield shall be entitled to reserves established by any
member of any Group, or the benefit of reserves held by any insurance carrier,
with respect to any Seafield Liabilities; and
(d) SLH shall be entitled to reserves established by any member of
any Group, or the benefit of reserves held by any insurance carrier, with
respect to any SLH Liabilities.
8.4 INSURANCE PREMIUMS. SLH shall pay premiums (retrospectively-rated
or otherwise) under the Seafield Policies with respect to SLH Liabilities which
are Insured Claims under the Seafield Policies. Seafield shall have the right
but not the obligation to pay premiums (retrospectively-rated or otherwise)
under the Seafield Policies with respect to SLH Liabilities which are Insured
Claims under the Seafield Policies to the extent that SLH does not pay such
premiums, whereupon SLH
16
shall forthwith reimburse Seafield for any premiums paid by Seafield with
respect to such SLH Liabilities.
8.5 ALLOCATION OF INSURANCE PROCEEDS; COOPERATION. Insurance Proceeds
received with respect to claims, costs and expenses under the Insurance Policies
shall be paid to Seafield with respect to Seafield Liabilities which are Insured
Claims under the Seafield Policies and to SLH with respect to the SLH
Liabilities which are Insured Claims under the Seafield Policies. Payment of
the allocable portions of indemnity costs of Insurance Proceeds resulting from
the Liability Policies will be made to the appropriate party upon receipt from
the insurance carrier. In the event of the exhaustion of coverage under any
Seafield Policy, Seafield and SLH shall allocate Insurance Proceeds equitably
based upon the bona fide claims of the Seafield Group and the SLH Group,
respectively. The parties hereto agree to use their best efforts to cooperate
with respect to insurance matters.
8.6 REIMBURSEMENT OF EXPENSES. SLH shall (a) upon the request of
Seafield, reimburse the relevant insurer or the relevant third-party
administrator, to the extent required under any Insurance Policy or Service
Agreement with respect to any and all SLH Claims which are paid, settled,
adjusted, defended and/or otherwise handled by such insurer or third-party
administrator pursuant to the terms and conditions of such Insurance Policy or
Service Agreement and (b) to the extent the cost incurred exceeds internal
charges made by Seafield to SLH prior to the Distribution Date, pay and/or
reimburse Seafield, or such third party as Seafield may require, for any and all
costs, premiums, expenses, losses paid, attorneys' fees and/or charges incurred
prior to the Distribution Date by either Group or after the Distribution Date by
the Seafield Group arising directly or indirectly in connection with the
payment, settlement, adjustment, defense and/or handling of any such SLH Claim
or under the terms and conditions of any Insurance Policies or Service
Agreements (including any reimbursement paid by Seafield with respect to any
such SLH Claim to any insurer or third-party administrator pursuant to the terms
of any Insurance Policy or Service Agreement). SLH shall make any reimbursement
required by clause (a) of this Section 8.6 at the time required by the relevant
Insurance Policy or Service Agreement. SLH shall make any reimbursement required
by clause (b) of this Section 8.6, on a monthly basis.
8.7 INSURER INSOLVENCY. Seafield shall not be obligated to reimburse
SLH for any SLH Claim under any Insurance Policies where such SLH Claim would
have been paid by the insurer or other third party, but for the insolvency of
such insurer or other third party or the refusal by any insurer or other third
party to pay such SLH Claim.
8.8 NO REDUCTION OF COVERAGE. Seafield shall take no action to
eliminate or materially reduce coverage under any Seafield Policy or Service
Agreement for any SLH Claim.
17
8.9 ASSISTANCE, WAIVER OF CONFLICT AND SHARED DEFENSE. Each of the
parties hereto agrees to provide reasonable assistance to the other parties
hereto as regards any dispute with any third party (including insurers,
third-party administrators and state guaranty funds) as to any matter related to
the Insurance Policies or Service Agreements, but only insofar as such dispute
arises out of the acts or omissions of any third party with respect to a SLH
Claim. In the event that Insured Claims of more than one Group exist relating to
the same occurrence, the parties hereto agree to defend such Insured Claims
jointly and to waive any conflict of interest necessary to the conduct of such
joint defense. Nothing in this Section 8.9 shall be construed to limit or
otherwise alter in any way the indemnity obligations of the parties hereto,
including those created by this Agreement or by operation of law.
ARTICLE IX
MISCELLANEOUS
9.1 CONDITIONS TO OBLIGATIONS.
(a) The obligations of the parties hereto to consummate the
payment of the Distribution are subject to the satisfaction of each of the
following conditions:
(1) The transactions contemplated by Sections 1.1, 1.2, 1.3, and
1.4 shall have been consummated in all material respects;
(2) The Registration Statement shall have been filed with the
SEC and shall have become effective, and no stop order with respect
thereto shall be in effect;
(3) All authorizations, consents, approvals and clearances of
all federal, state, local and foreign governmental agencies required
to permit the valid consummation by the parties hereto of the
transactions contemplated by this Agreement shall have been obtained;
and no such authorization, consent, approval or clearance shall
contain any conditions which would have a material adverse effect on
(A) the Seafield Business, the LabResponse Business or the SLH
Business, (B) the Assets, results of operations or financial condition
of Seafield or the SLH Group or (C) the ability of Seafield or SLH
to perform its obligations under this Agreement; and all statutory
requirements for such valid consummation shall have been fulfilled;
(4) Seafield shall have provided the NASD with the prior written
notice of the Record Date required by Rule 10b-17 of the Exchange Act
and the rules and regulations of the SLH;
18
(5) No preliminary or permanent injunction or other order,
decree or ruling issued by a court of competent jurisdiction or by a
government, regulatory or administrative agency or commission, and no
statute, rule, regulation or executive order promulgated or enacted by
any governmental authority, shall be in effect preventing the payment
of the Distribution;
(6) The Distribution shall be payable in accordance with
applicable law;
(7) All necessary consents, waivers or amendments to each bank
credit agreement, debt security or other financing facility to which
any member of the Seafield Group or the SLH Group is a party or by
which any such member is bound shall have been obtained, or each such
agreement, security or facility shall have been refinanced, in each
case on terms satisfactory to Seafield and SLH and to the extent
necessary to permit the Distribution to be consummated without any
material breach of the terms of such agreement, security or facility;
(b) Any determination made by the Board of Directors of Seafield
in good faith prior to the Distribution Date concerning the satisfaction or
waiver of any or all of the conditions set forth in Section 9.1(a) shall be
conclusive.
9.2 COMPLETE AGREEMENT. This Agreement, the Exhibits hereto and the
agreements and other documents referred to herein shall constitute the entire
agreement between the parties hereto with respect to the subject matter hereof
and shall supersede all previous negotiations, commitments and writings with
respect to such subject matter.
9.3 EXPENSES. Except as otherwise provided in this Agreement and the
Other Agreements, all costs and expenses of any party hereto in connection with
the preparation, execution, delivery and implementation of this Agreement and
with the consummation of the transactions contemplated by this Agreement shall
be paid by the party for whose benefit such costs and expenses are incurred,
with any costs and expenses that cannot be allocated on the foregoing basis to
be divided equally among the parties hereto.
9.4 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Missouri (other than the laws
regarding choice of laws and conflicts of laws) as to all matters (other than
SLH corporate matters which are governed by the KGCC), including matters of
validity, construction, effect, performance and remedies.
9.5 NOTICES. All notices, requests, claims, demands and other
communications hereunder (collectively, "Notices") shall be in writing and shall
be given (and shall be deemed to have been duly given upon receipt) by delivery
in person, by
19
cable, telegram, telex or other standard form of telecommunications, or by
registered or certified mail, postage prepaid, return receipt requested,
addressed as follows:
If to Seafield:
Seafield Capital Corporation
0000 Xxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: President
If to SLH:
SLH Corporation
0000 Xxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: President
or to such other address as any party hereto may have furnished to the other
parties by a notice in writing in accordance with this Section 9.5. Copies of
all notices, requests, claims, demands and other communications hereunder shall
also be given to:
Xxxxxxx & Xxxx X.X.
0000 Xxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxxx Xxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
9.6 AMENDMENT AND MODIFICATION. This Agreement may be amended,
modified or supplemented only by a written agreement signed by all of the
parties hereto.
9.7 SUCCESSORS AND ASSIGNS; NO THIRD-PARTY BENEFICIARIES. This
Agreement and all of the provisions hereof shall be binding upon and inure to
the benefit of the parties hereto and their successors and permitted assigns,
but neither this Agreement nor any of the rights, interests and obligations
hereunder shall be assigned by any party hereto without the prior written
consent of each of the other parties (which consent shall not be unreasonably
withheld). Except for the provisions of Sections 3.3 and 3.4 relating to
Indemnities, which are also for the benefit of the Indemnitees, this Agreement
is solely for the benefit of the parties hereto and their Subsidiaries and
Affiliates and is not intended to confer upon any other Persons any rights or
remedies hereunder.
9.8 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
20
9.9 INTERPRETATION. The Article and Section headings contained in this
Agreement are solely for the purpose of reference, are not part of the agreement
of the parties hereto and shall not in any way affect the meaning or
interpretation of this Agreement.
9.10 LEGAL ENFORCEABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. Each party acknowledges
that money damages would be an inadequate remedy for any breach of the
provisions of this Agreement and agrees that the obligations of the parties
hereunder shall be specifically enforceable.
9.11 REFERENCES; CONSTRUCTION. References to any "Article",
"Exhibit"or "Section", without more, are to Appendices, Articles, Exhibits and
Sections to or of this Agreement. Unless otherwise expressly stated, clauses
beginning with the term "including" set forth examples only and in no way limit
the generality of the matters thus exemplified.
9.12 TERMINATION. Notwithstanding any provision hereof this Agreement
may be terminated and the Distribution abandoned at any time prior to the
Distribution Date by and in the sole discretion of the Board of Directors of
Seafield without the approval of any other party hereto or of Seafield's
shareholders. In the event of such termination, no party hereto shall have any
Liability to any Person by reason of this Agreement.
ARTICLE X
DEFINITIONS
10.1 GENERAL. As used in this Agreement, the following terms shall
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
95 Form 10-K. the Seafield Capital Corporation annual report on Form 10-K
for the year ended December 31, 1995.
Affiliate: with respect to any specified Person, a Person that directly,
or indirectly through one or more intermediaries, controls, is controlled by, or
is under common control with, such specified Person.
21
Agent: Seafield or such financial institution, trust company or other
institutional stock transfer agent as Seafield may appoint, which shall act as
distribution agent to distribute the shares of SLH Common Stock pursuant to the
Distribution.
Asset: any and all assets and properties, tangible or intangible, including
the following: (1) cash, notes and accounts receivable (whether current or
non-current); (2) certificates of deposit, banker's acceptances, stock,
debentures, evidences of indebtedness, certificates of interest or participation
in profit-sharing agreements, collateral-trust certificates, preorganization
certificates or subscriptions, transferable shares, investment contracts,
voting-trust certificates, fractional undivided interests in oil, gas or other
mineral rights, puts, calls, straddles, options and other securities of any
kind; (3) trade secrets, confidential information, registered and unregistered
trademarks, service marks, service names, trade styles and trade names, product
bar codes and associated goodwill; statutory, common law and registered
copyrights; applications for any of the foregoing, rights to use the foregoing
and other rights in, to and under the foregoing; (4) rights under leases,
contracts, licenses, permits, distribution arrangements, sales and purchase
agreements, other agreements and business arrangements; (5) real estate and
buildings and other improvements thereon; (6) leasehold improvements, fixtures,
trade fixtures, machinery, equipment (including transportation and office
equipment), tools, dies and furniture; (7) office supplies, production supplies,
spare parts, other miscellaneous supplies and other tangible property of any
kind; (8) raw materials, work-in-process, finished goods, consigned goods and
other inventories; (9) prepayments or prepaid expenses; (10) claims, causes of
action, choses in action, rights of recovery and rights of set-off of any kind;
(11) the right to receive mail, payments on accounts receivable and other
communications; (12) lists of advertisers, records pertaining to advertisers and
accounts, personnel records, lists and records pertaining to suppliers and
agents, and books, ledgers, files and business records of every kind; (13)
advertising materials and other printed or written materials; (14) goodwill as a
going concern and other intangible properties; (15) employee contracts,
including any rights thereunder to restrict an employee from competing in
certain respects; and (16) licenses and authorizations issued by any
governmental authority.
Assignment and Assumption Agreement: Assignment and Assumption Agreement
between Seafield and SLH providing for the transfer by Seafield to SLH of the
Transfer Assets and SLH's assumption of the Transfer Liabilities, to be entered
into between Seafield and SLH substantially in the form attached hereto as
Exhibit D, with such changes as may be mutually satisfactory to Seafield and
SLH.
Business Day: any day other than a Saturday, a Sunday or a day on which
banking institutions located in the States of Kansas or Missouri are authorized
or obligated by law or executive order to close.
22
Claims Administration: the processing of claims made under the Insurance
Policies, including the reporting of claims to the insurance carrier, management
and defense of claims and providing for appropriate releases upon settlement of
claims.
Code: the Internal Revenue Code of 1986, as amended, or any successor
legislation and the regulations promulgated thereunder.
Collective Bargaining Agreement: any collective bargaining or other labor
agreement to which any member of either Group is a party.
Current Plan Year: the plan year or fiscal year, to the extent applicable
with respect to any Plan, during which the Distribution Date occurs.
Cut-Off Date: the last day of the calendar month immediately preceding the
Distribution Date or, if such day is less than 14 days before the Distribution
Date, the last day of the next preceding calendar month.
Disclosure Document: the Registration Statement on Form 10 and the related
Information Statement.
Distribution: the distribution to holders of shares of Seafield Common
Stock to be effected pursuant to Article II on the basis of one share of SLH
Common Stock for each four shares of Seafield Common Stock held of record as
of the Record Date.
Distribution Date: the date, to be determined by the Board of Directors of
Seafield, or the Executive Committee thereof, as of which the Distribution shall
be effected and as of which the Transfer Assets are transferred to SLH and the
Transfer Liabilities are assumed by SLH pursuant to the Assignment and
Assumption Agreement.
ERISA: the Employee Retirement Income Security Act of 1974, as amended, or
any successor legislation, and any regulations promulgated thereunder.
Exchange Act: the Securities Exchange Act of 1934, as amended, together
with the rules and regulations promulgated thereunder.
Facilities Sharing and Interim Services Agreement: A Facilities Sharing and
Interim Services Agreement between SLH and Seafield in the form attached as
Exhibit A providing for Seafield making available certain personnel and
services to SLH and SLH making available certain facilities to Seafield during
the Transition Period and for a period of time following the Distribution Date.
Group: the Seafield Group, LabResponse Group or SLH Group.
23
Incentive Option: a Seafield Option that qualifies as an Incentive Stock
Option under Section 422A of the Code.
Indemnifiable Losses: all losses, Liabilities, damages, claims, demands,
judgments or settlements of any nature or kind, known or unknown, fixed,
accrued, absolute or contingent, liquidated or unliquidated, including all
reasonable costs and expenses (legal, accounting or otherwise as such costs are
incurred) relating thereto, suffered by an Indemnitee.
Indemnifying Party: a Person who or which is obligated under this
Agreement to provide indemnification.
Indemnitee: a Person who may seek indemnification under this Agreement.
Indemnity Payment: an amount that an Indemnifying Party is required to pay
to an Indemnitee pursuant to Article III.
Information: all records, books, contracts, instruments, computer data and
other data and information.
Information Statement: the Information Statement to be sent to the holders
of shares of Seafield Common Stock in connection with the Distribution.
Insurance Administration: with respect to each Insurance Policy, (1) the
accounting for premiums (including retrospectively-rated premiums), defense
costs, indemnity payments, deductibles and retentions as appropriate under the
terms and conditions of each of the Insurance Policies, (2) the reporting to
excess insurance carriers of any losses or claims which may cause the
per-occurrence or aggregate limits of any Insurance Policy to be exceeded and
(3) the distribution of Insurance Proceeds as contemplated by this Agreement.
Insurance Policy: insurance policies and insurance contracts of any kind
that are owned or maintained by any member of either the Seafield or SLH Group
as the insured interest, including primary and excess policies, comprehensive
general liability policies, automobile, aircraft and workers' compensation
insurance policies, and self-insurance and captive insurance company
arrangements, together with the rights, benefits and privileges thereunder.
Insurance Proceeds: those monies received by an insured from an insurance
carrier or paid by an insurance carrier on behalf of the insured, in either case
net of any applicable premium adjustment, retrospectively-rated premium,
deductible, retention, cost or reserve paid or held by or for the benefit of
such insured.
24
Insured Claims: those Liabilities that, individually or in the aggregate,
are covered within the terms and conditions of any of the Insurance Policies,
whether or not subject to deductibles, coinsurance, uncollectability or
retrospectively-rated premium adjustments, but only to the extent that such
Liabilities are within applicable Insurance Policy limits, including aggregates.
IRS: the Internal Revenue Service.
Lab: LabOne, Inc. and any Subsidiary thereof.
LabResponse Assets: All assets held by members of the LabResponse Group.
LabResponse Business: All of the businesses conducted immediately prior to
the Distribution Date by any member of any Group, and reported by Seafield in
the "Healthcare and Insurance" segments in Note 6 to the Seafield consolidated
financial statements (or which would have been so reported had it been conducted
as of September 30, 1996) in the Annual Report on Form 10-K for the year ended
December 31, 1995.
LabResponse Employee: any individual who is, has been or will be an
officer or employee of a member of the LabResponse Group.
LabResponse Group: Lab, Response, Pyramid and any subsidiary of Lab,
Response or Pyramid.
LabResponse Individual: any individual who (1) is a LabResponse Employee,
(2) at any time prior to the Distribution Date is or was an officer or employee
of any LabResponse Business or (3) is a beneficiary of any individual specified
in clause (1) or (2).
LabResponse Plan: any Plan maintained primarily for the benefit of
directors, officers, employees and agents of the LabResponse Group.
KGCC: the Kansas General Corporation Code.
Liabilities: all debts, liabilities and obligations, whether absolute or
contingent, matured or unmatured, liquidated or unliquidated, accrued or
unaccrued, known or unknown, whenever arising, and whether or not the same would
properly be reflected on a balance sheet, including all costs and expenses
relating thereto.
NASDAQ: The Nasdaq National Market Automated Quotation System of the
National Association of Securities Dealers, Inc.
25
Other Agreements: The Assignment and Assumption Agreement, Facilities
Sharing and Interim Services Agreement, and Tax Sharing Agreement in the Form of
Tax Sharing Agreement appended hereto as Exhibit C.
Person: an individual, a partnership, a joint venture, a corporation, a
trust, an unincorporated organization or a government or any department or
agency thereof.
Plan: any plan, policy or arrangement or contract or agreement providing
benefits (including bonuses, deferred compensation, incentive compensation,
savings, stock purchases, pensions, profit sharing or retirement or other
retiree benefits, including retiree medical benefits) for any group of employees
or former employees or individual employee or former employee, or the
beneficiary or beneficiaries of any such employee or former employee, whether
formal or informal or written or unwritten and whether or not legally binding,
and including any means, whether or not legally required, pursuant to which any
benefit is provided by an employer to any employee or former employee or the
beneficiary or beneficiaries of any such employee or former employee.
Pyramid: Pyramid Diagnostic Services, Inc., a Seafield Subsidiary.
Qualified Plan: a Plan which is an employee pension benefit plan (within
the meaning of Section 3(2) of ERISA) and which constitutes or is intended in
good faith to constitute a qualified plan under Section 401(a) of the Code.
Prior Plan Year: to the extent applicable with respect to any Plan, any
plan year or fiscal year that ended on or prior to the Cut-Off Date.
Record Date: the date to be determined by the Board of Directors of
Seafield, or the Executive Committee thereof, as the record date for determining
shareholders of Seafield entitled to receive the Distribution.
Registration Statement: a registration statement on Form 10 to effect the
registration of the SLH Common Stock pursuant to the Exchange Act.
Relocation Date. The date on which Seafield and SLH no longer share
personnel, facilities and services under the Facilities Sharing Agreement.
Representative: with respect to any Person, any of such Person's
directors, officers, employees, agents, consultants, advisors, accountants,
attorneys and representatives.
Response: Response Oncology, Inc. and any Subsidiary thereof.
26
Response Plan: any Plan maintained primarily for the benefit of directors,
officers, employees and agents of Response.
Retained Assets: Assets to be retained by Seafield under the Assignment and
Assumption Agreement.
Seafield: as defined in the recitals to this Agreement.
Seafield 401-K Plan: The Seafield Capital Corporation 401-K Plan and
Trust.
Seafield Assets: subject to the provisions of the Other Agreements, all of
the Assets, other than the SLH Assets, held immediately prior to the
Distribution Date by any member of any Group.
Seafield Business: All of the businesses other than the SLH Business
conducted by any member of the Seafield Group and LabResponse Group.
Seafield Common Stock: the common stock, par value $1 per share, of
Seafield.
Seafield Consulting Agreement: Consulting agreement referred to in
exhibits 10.16 and 10.17 of the 95 Form 10-K.
Seafield Director: any individual who is a director of Seafield following
the Distribution.
Seafield Employee: any individual who is or has been an officer or
employee of a member of the Seafield Group.
Seafield Group: Seafield and subsidiaries other than any subsidiary that is
a member of the SLH Group.
Seafield Indemnification Agreements: Seafield Capital Corporation
Indemnification Agreements between Seafield and corporate/executive officers
referred to in exhibits 10.22 of the 95 Form 10-K.
Seafield Individual: any individual who (1) is a Seafield Employee, (2) at
any time prior to the Distribution Date is or was an officer or employee of any
Seafield Business or (3) is a beneficiary of any individual specified in clause
(1) or (2).
Seafield Liabilities: subject to the provisions of the Other Agreements,
all of the Liabilities, other than the SLH Liabilities, of any member of any
Group.
27
Seafield Option: an option to purchase shares of Seafield Common Stock
granted pursuant to the Seafield Stock Option Plans, together with any stock
appreciation right or limited stock appreciation right issued in connection
therewith.
Seafield Plans: The Seafield 401-K Plan, Pension Plan, Stock Purchase
Plan, Supplemental Retirement Agreements, Consulting Agreements, Termination
Compensation Agreements, Indemnification Agreements, Severance Agreements, Stock
Option Plans, Welfare Plans; and any other plan maintained for the benefit of
Seafield Employees.
Seafield Policies: all Insurance Policies, current and past, which relate
to the Seafield, LabResponse and SLH Businesses.
Seafield Pension Plan: The Seafield Capital Corporation Money Purchase
Pension Plan.
Seafield Restricted Stock: shares of Seafield Common Stock issued to an
individual pursuant to any Seafield Plan which are subject to forfeiture in the
event that certain terms and conditions are not satisfied.
Seafield Severance Agreements: Seafield Capital Corporation Severance
Agreements between Seafield and corporate/executive officers referred to in
exhibits 10.23 and 10.24 of the 95 Form 10-K.
Seafield Stock Purchase Plan: The Seafield Capital Corporation Stock
Purchase Plan, as amended.
Seafield Stock Option Plans. Seafield Capital Corporation 1984 and 1989
Stock Option Incentive Plans, as amended and Seafield Capital Corporation 1991
Non-Employee directors' Stock Option Plan, as amended.
Seafield Supplemental Retirement Agreements: Supplemental retirement
agreements referred to in exhibits 10.15 and 10.17 of the 95 Form 10-K.
Seafield Termination Compensation Agreements: Seafield Capital Corporation
Termination Compensation or "change-in-control" agreements between Seafield and
corporate/executive officers referred to in exhibits 10.19, 10.20 and 10.21 of
the 95 Form 10-K.
Seafield Welfare Plan: any Plan which is not a Qualified Plan and which
provides medical, health, disability, accident, life insurance, death, dental or
other welfare benefits, including any post-employment benefits or retiree
medical benefits.
28
SEC: the Securities and Exchange Commission.
Securities Act: the Securities Act of 1933, as amended, together with the
rules and regulations promulgated thereunder.
Service Agreement: any third-party administrator or claims handling
agreement of any kind or nature to which any member of either Group is directly
or indirectly a party, in effect as of the date hereof, related to the handling
of SLH Claims.
SLH: as defined in the recitals to this Agreement.
SLH Assets: Subject to the provisions of the Other Agreements, (1) all of
the Transfer Assets and (2) all other assets held by the SLH Group as of the
date of any determination.
SLH Business: All business conducted prior to the Distribution Date by any
SLH Subsidiary and by Seafield with respect to its investments in the following
assets and entities (a) interests in First Century II, First Century III and
New Enterprises Associates II, LP, three venture capital funds, (b) interests
in Oclassen Pharmaceuticals, Inc. and Norian Corporation, (c) leasehold
interests relating to the Xxxxxxxxx property and offices at 0000 Xxxxx
Xxxxxxxxx, Xxxxx 000, Xxxxxx Xxxx, Xxxxxxxx and (d) interests in the suit
against Xxxxxxxx, Xxxxxx & Xxxxxxx, et. al. and any Seafield's claims or rights
against the IRS or any state or local taxing authority arising out of Seafield's
Tax years beginning after 1985 and ending with the 1995 tax year.
SLH Common Stock: the common stock, par value $0.01 per share, of SLH.
SLH Claim: any claim against any SLH Employee, SLH Individual or member of
the SLH Group with respect to any injury, loss, Liability, damage or expense
that (1) is or was incurred or asserted to have been incurred prior to the
Distribution Date in, or in connection with, the conduct of the Assets or
business of any member of any Group and (2) arose or may have arisen out of one
or more occurrences or events that are or may be insured or insurable under one
or more of the Seafield Policies.
SLH Director: any individual who is a director of SLH.
SLH Employee: any individual who is an employee of the SLH Group at the
Distribution Date or becomes an employee of SLH Group immediately following the
Distribution Date as contemplated by the Assignment and Assumption Agreement or
who provides services to SLH under the Facilities Sharing and Iterim Serivces
Agreement.
29
SLH Employment Agreement: an employment agreement to be entered into
between SLH and each SLH Officer in accordance with the form of Employment
Agreement appended hereto as Exhibit B.
SLH Group: SLH and the SLH Subsidiaries.
SLH Individual: any individual who (1) is a SLH Employee, (2) an officer
or director of SLH or (3) is a beneficiary of any individual who is a SLH
Employee.
SLH Liabilities: subject to the provisions of the Other Agreements, all of
the Liabilities of any member of any Group (1) which relate directly to the SLH
Assets or the SLH Business as conducted immediately prior to the Distribution
Date, whether incurred or arising prior to, or after, the Distribution Date and
(2) which are specifically assumed by SLH under an express provision of this
Agreement or as a Transfer Liability under the Assignment and Assumption
Agreement.
SLH Option Plan: a new Plan to be adopted by SLH in connection with the
Distribution, pursuant to which, among other things, options to purchase, and
restricted, shares of SLH Common Stock may be granted to SLH Employees and SLH
Directors.
SLH Plan: Any plan created on or after the Distribution Date by SLH for the
Benefit of SLH directors, officers, employees or agents of SLH.
SLH Policies: all Insurance Policies, current and past, which relate to
the SLH Business and do not relate to the LabResponse Business.
SLH Subsidiaries: BMA Resources, Inc., Scout Development Corporation,
Scout Development Corporation of New Mexico, Carousel Apartment Homes, Inc.,
andTenenbaum, Inc.
SLH Support Agreements: any obligation or agreement of the Seafield Group
under any guarantee, letter of credit, letter of comfort or working capital
maintenance agreement obtained prior to the Distribution Date for the benefit of
the SLH Business or any member of the SLH Group.
SLH Shares: SLH Common Stock to be issued to Seafield in the Distribution.
Subsidiary: with respect to any specified Person, any corporation or other
legal entity of which such Person or any of its Subsidiaries controls or owns,
directly or indirectly, more than 50% of the stock or other equity interest
entitled to vote on the election of members to the board of directors or similar
governing body.
30
Tax: as defined in the Tax Sharing Agreement.
Tax Information: Information to be furnished to Seafield Shareholders and
the IRS on IRS Form 1099-Div in connection with the Distribution.
Tax Sharing Agreement: a tax sharing agreement to be entered into between
Seafield and SLH substantially in the form attached hereto as Exhibit C, with
such changes as may be mutually satisfactory to Seafield and SLH.
Third-Party Claim: any claim, suit, arbitration, inquiry, proceeding or
investigation by or before any court, any governmental or other regulatory or
administrative agency or commission or any arbitration tribunal asserted by a
Person who is not a party hereto.
Transfer Assets: The assets to be transferred by Seafield to SLH under the
Assignment and Assumption Agreement.
Transfer Liabilities: The liabilities to be assumed by SLH under the
Assignment and Assumption Agreement.
Transition Period. The period of time from the Distribution Date to the
Relocation Date.
10.2 REFERENCES TO TIME. All references in this Agreement to times of
the day shall be to Kansas City, Missouri time.
31
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
SEAFIELD CAPITAL CORPORATION
S/Xxxxx X. Sweard
By: _______________________________
Xxxxx X. Xxxxxx, CFA
Executive Vice President and
Chief Financial Officer
SLH CORPORATION
S/Xxxxxx X. Xxxxxxxxx
By: _______________________________
Vice President and Chief
Financial and Accounting
Officer
32
Exhibit A
FACILITIES SHARING AND INTERIM SERVICES AGREEMENT
This FACILITIES SHARING AND INTERIM SERVICES AGREEMENT is made as of the
_____ day of ____________________, 1996, between Seafield Capital Corporation, a
Missouri corporation ("Seafield") and SLH CORPORATION., a newly formed Kansas
corporation which is a wholly owned subsidiary of Seafield ("SLH").
RECITALS
A. The Boards of Directors of Seafield and SLH have determined that it
is in the best interests of the shareholders of Seafield: (1) to transfer to
SLH substantially all of Seafield's assets (the "Transfer Assets") other than
its holdings of LabOne, Inc. ("Lab") and its holdings of Response Oncology,
Inc. ("Response") and certain other assets (the "Retained Assets" as more
particularly defined below) and certain liabilities (the "Transfer Liabilities")
and (2) to distribute to the holders of the issued and outstanding shares of
common stock, par value $1 per share, of Seafield all of the issued and
outstanding shares of common stock, par value $0.01 per share, of SLH (the
"Distribution") in accordance with Article II of a DISTRIBUTION AGREEMENT to
which this agreement is appended as Exhibit A ("Distribution Agreement").
B. Pursuant to Section 6.15 of the Distribution Agreement Seafield has
agreed to provide SLH with certain services and SLH has agreed to provide
Seafield with certain facilities in accordance with the terms of this agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained and intending to be legally bound thereby, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
1. Definitions and Terms. Except as otherwise provided herein, the
capitalized terms in this agreement shall have the same meaning as those terms
are defined to have in the Distribution Agreement.
ARTICLE II
FACILITIES AND SERVICES
2.01 AGREEMENT TO PROVIDE FACILITIES AND SERVICES. Subject to the terms
and conditions hereof Seafield agrees to provide to SLH and SLH agrees to
accept during the term specified in Section 2.03 (the "Term") all services
required by SLH for the operation of the offices of SLH's Chairman, Chief
Executive Officer, Chief Accounting Officer and Chief Financial Officer,
together with clerical and administrative services, but not including services
provided exclusively by Scout Development Corporation and its subsidiaries.
Services to be provided hereunder shall be provided on a reasonably timely
basis. The Services provided hereunder shall be provided in exchange for the
facilities to be provided by SLH to Seafield as set forth in Section 2.02
hereof.
2.02 AGREEMENT TO PROVIDE FACILITIES AND SERVICES. Subject to the terms
and conditions hereof SLH agrees to provide Seafield and Seafield agrees to
accept during the term specified in Section 2.02 (the "Term") the use of SLH
facilities at 0000 Xxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxx Xxxx, Xxxxxxxx (the
"Offices") for up to 16 Seafield officers and employees, including the Seafield
employees performing services for SLH under Section 2.01. The facilities shall
include appropriate office space, furniture, equipment and supplies to support
the day to day activities of such personnel during the term of this agreement.
The facilities provided hereunder shall be provided in exchange for the services
to be provided by SLH to Seafield as set forth in Section 2.02 hereof; provided,
however, following the Distribution, Seafield and the Company will review the
amount of personnel and facilities used under the arrangement and each will
reimburse the other to the extent that the exchange of facilities for services
is not reasonably equivalent.
2.03 TERM. This Agreement shall be effective on the date first written
above and shall continue until terminated by either party by giving written
notice to the other party of termination to become effective as of the end of
the month following the month in which notice of termination is given.
ARTICLE III
MISCELLANEOUS
3.01 SEAFIELD INDEMNIFICATION. SLH further agrees to indemnify and
hold harmless Seafield, its officers, agents, employees, directors,
representatives and successors from any claims, liabilities, damages, losses,
costs, attorneys fees, damages and/or liability, worker's compensation and
discrimination actions and/or any other type of civil, administrative or
criminal action(s) whether such action(s) be brought by Seafield's personnel
and/or any other third party(ies), that they, or any one of them, may suffer or
sustain as a result of any claims, demands or causes of action arising out of,
or in any way related to the action or inaction of SLH relating to SLH's use of
Services provided to SLH by Seafield hereunder.
3.02 SLH INDEMNIFICATION. Seafield further agrees to indemnify and
hold harmless SLH, its officers, agents, employees, directors, representatives
and successors from any claims, liabilities, damages, losses, costs, attorneys
fees, damages and/or liability, worker's compensation and discrimination actions
and/or any other type of civil,
2
administrative or criminal action(s) whether such action(s) be brought by SLH's
personnel and/or any other third party(ies), that they, or any one of them, may
suffer or sustain as a result of any claims, demands or causes of action arising
out of, or in any way related to the action or inaction of Seafield relating to
Seafield's use of facilities provided to Seafield by SLH hereunder.
3.03 MUTUAL COVENANT. Except to the extent otherwise provided herein,
SLH and Seafield covenant and warrant that in the event that it appears that the
exchange of services for facilities as herein provided is not a fair exchange,
then a fair charge for the services or facilities provided hereunder shall be
determined in a fair and equitable manner and thereafter paid to the party
providing such service or facility..
3.04 FORCE MAJEURE. If either party is unable to perform any of its
duties or fulfill any of its covenants or obligations under this Agreement as a
result of causes beyond its control and without its fault or negligence,
including but not limited to acts of God or government, fire, flood, war,
governmental controls, and labor strife, then such party shall not be deemed to
be in default of this Agreement during the continuance of such events which
rendered it unable to perform; such party shall have such additional time
thereafter as is reasonably necessary to enable it to resume performance of its
duties and obligations under this Agreement; and the party entitled to such
performance shall not be required to pay the other party for such performance to
the extent that such other party is unable to perform. Notwithstanding the
foregoing, if the suspension of a party's obligation to perform under this
Agreement is of such a nature or duration as to substantially frustrate the
purpose of this Agreement, then SLH or Seafield, as the case may be, shall have
the right to terminate this Agreement by giving to the other 30 days' prior
written notice of termination, in which case termination shall be effective upon
the expiration of such 30-day period unless performance is resumed prior to such
expiration.
3.05 SEVERABILITY. The invalidity of any provision of this Agreement
as determined by a court of competent jurisdiction in no way shall affect the
validity of any other provision hereof. If a provision is determined to be
invalid, the parties shall negotiate in good faith in an effort to agree upon a
suitable and equitable alternative provision to effect the original intent of
the parties.
3.06 TIME OF THE ESSENCE. The parties hereto agree that with respect
to the performance of all terms, conditions and covenants of this Agreement,
time is of the essence.
3.07 CAPTIONS. Section captions are not a part hereof and are merely
for the convenience of the parties.
3.08 BINDING EFFECT; CHOICE OF LAW. Subject to any provisions hereof,
this Agreement shall bind the parties, their successors and assigns. This
Agreement
3
shall be governed by the laws of the State of Missouri without reference to the
conflict or choice of law provisions thereof.
3.09 ASSIGNMENT. Neither party shall assign or sublease this Agreement
or any Services to be provided hereunder without the prior written consent of
the other, which consent shall not be withheld unreasonably. Notwithstanding
the foregoing, consent shall not be required for an assignment or sublease of
this Agreement or any Service provided hereunder by either party to a corporate
affiliate of such party or to any third party vendor or third party record
keeper who had been providing all or a material portion of the Services to or on
behalf of SLH or Seafield, as the case may be, prior to the date first written
above.
3.09 AMENDMENT. This Agreement may not be amended without the express
written agreement of all parties hereto.
3.10 NOTICES. All notices under this Agreement must be in writing and
delivered personally or sent by United States mail, postage prepaid, addressed
as follows, except that any party by written notice given as aforesaid, may
change its address for subsequent notices to be given hereunder.
If to Seafield:
Seafield Capital Corporation
0000 Xxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: President
If to SLH:
SLH CORPORATION.
0000 Xxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: President
Notice sent by U.S. mail will be deemed given when deposited with the U.S.
postal service.
3.11 LIABILITY FOR NONPERFORMANCE. None of the parties hereto nor any
subsidiaries of such parties shall have any liability to each other for failure
to perform its obligations hereunder unless such failure arises out of, directly
or indirectly, the misconduct or gross negligence on the part of the
nonperforming party. Seafield shall not be required to perform any Service (or
any part of any Service) to the extent that performance of such Service (or such
part of such Service) would violate any law, rule or regulation.
4
3.12 INDEPENDENT ENTITIES. In carrying out the provisions of this
Agreement, Seafield and SLH are and shall be deemed to be for all purposes,
separate and independent entities. Seafield and SLH shall select their employees
and agents, and such employees and agents shall be under the exclusive and
complete supervision and control of Seafield or SLH, as the case may be.
Seafield and SLH hereby acknowledge responsibility for full payment of wages and
other compensation to all employees and agents engaged by either in the
performance of their respective Services under this Agreement. It is the express
intent of this Agreement that the relationship of Seafield to SLH and SLH to
Seafield shall be solely that of separate and independent companies and not that
of a joint venture, partnership or any other joint relationship.
3.13 NONFIDUCIARY STATUS. In carrying out the provisions of this
Agreement, neither party shall be a fiduciary (as defined in Section 3(21) of
ERISA) with respect to any employee benefit plan, program or arrangement
maintained by or on behalf of the other party. Each party will provide Services
pursuant to the terms and conditions of this Agreement in accordance with the
directions, guidelines and/or procedures established by SLH or Seafield, as the
case may be, or the plan administrator (as defined in Section 3(16) of ERISA) of
each party's employee benefit plans or arrangements.
3.14 THIRD PARTY BENEFICIARIES. The provisions of this Agreement are
solely for the benefit of the parties and are not intended to confer upon any
person except the parties any rights or remedies hereunder. There are no third
party beneficiaries of this Agreement, and this Agreement shall not provide any
third person with any remedy, claim, liability, reimbursement, action or other
right in excess of those existing without reference to this Agreement.
3.14 CONSTRUCTION. For purposes of this Agreement, references to
Seafield, with respect to events or periods prior to the date first written
above, shall mean and include, where appropriate, SLH's operation of the
Transferred Businesses as they existed prior to such date.
IN WITNESS WHEREOF, this Agreement has been executed in multiple
counterparts on the date set forth above, each of which shall, for all purposes,
be deemed an original and all of which shall evidence but one agreement between
the parties hereto.
SLH CORPORATION, SEAFIELD CAPITAL CORPORATION,
a Kansas corporation a Missouri corporation
By: ______________________________ By: ______________________________
Name: ____________________________ Name: ____________________________
Title: ___________________________ Title: ___________________________
5
Exhibit B
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made effective as of________________, 1997, by and
between SLH CORPORATION, a Kansas corporation (the "Company"), and____________
(the "Executive").
WHEREAS, by the effective date of this Agreement, the Company will be a
publicly traded company which owns various venture capital and other investments
and is engaged in real estate and energy businesses; and
WHEREAS, the Company desires to employ the Executive as __________________
of the Company; and
WHEREAS, the Executive desires to be employed on the terms and subject to
the conditions hereinafter stated.
NOW, THEREFORE, in consideration of the mutual covenants contained in this
Employment Agreement, the parties hereby agree as follows:
SECTION 1
POSITION AND RESPONSIBILITIES
During the Term of this Employment Agreement, the Executive shall perform
such duties for such compensation and subject to such terms and conditions as
are hereinafter set forth.
SECTION 2
TERM AND DUTIES
2.1 Term; Extension. The term of this Employment Agreement (the "Term
of this Employment Agreement") will commence on such date, following the date on
which shares of the Company's stock are distributed by Seafield Capital
Corporation ("Seafield") to its shareholders (the "Distribution Date"), as that
certain Facilities Sharing and Interim Services Agreement between the Company
and Seafield is terminated by either party thereto, and shall continue until the
third anniversary of the Distribution Date; provided that the Term of this
Employment Agreement shall be automatically extended for successive one year
periods unless notice of non-extension is given by either party to the other not
less than twelve months prior to the end of the then current Term. If such
notice is given, the Term of this Employment Agreement shall end on the earliest
anniversary of the Distribution Date which is at least twelve months after the
date of such notice. Termination of the Executive's employment pursuant to this
Employment Agreement, other than upon expiration of the Term of this Employment
Agreement, shall be governed by Sections 4 and 5.
2.2 Duties. The Executive shall devote appropriate time, attention and
efforts during normal business hours to the Company's affairs, but the Company
and Executive agree that Executive's position and responsibilities with the
Company will not require Executive's full time and attention and Executive is
entitled to pursue other employment opportunities simultanously with his duties
hereunder. The Executive shall have such duties and responsibilities as are
assigned to him from time to time by the Board of Directors. As of the
effective date of this Employment Agreement, the Executive shall have senior
management authority and responsibility with respect to the long term management
of the Company, consistent with directions from the Board of Directors.
2.3 Location. The duties of the Executive shall be performed at such
locations and places as may be directed by the Board of Directors.
SECTION 3
COMPENSATION AND BENEFITS
3.1 Base Compensation. The Company shall pay the Executive a base
salary ("Base Salary") of $75,000 per annum, subject to applicable withholdings.
Base Salary shall be payable according to the customary payroll practices of the
Company but in no event less frequently than once each month. The Base Salary
shall be reviewed annually and shall be subject to increase or decrease
according to the policies and practices adopted by the Board of Directors from
time to time; provided, however, that in no event shall the Base Salary for any
year be decreased by more than five percent (5%) from the immediately preceding
year's Base Salary as a result of any such annual review.
3.2 Additional Benefits. The Executive will be entitled to participate
in all employee benefit plans or programs and receive all benefits and
perquisites to which any salaried employees are eligible under any existing or
future plans or programs established by the Company for salaried employees.
These are expected to consist of group health insurance, simplified employee
pension plans, car allowance, and a stock option plan. The Executive will
participate to the extent permissible under the terms and provisions of such
plans or programs in accordance with program provisions. Nothing in this
Agreement will preclude the Company from amending or terminating any of the
plans or programs applicable to salaried employees or senior executives. The
Executive will be entitled to an annual paid vacation as established by the
Board of Directors.
3.3 Business Expenses. The Company will reimburse the Executive for
all reasonable travel and other expenses incurred by the Executive in connection
with the performance of his duties and obligations under this Employment
Agreement.
2
3.4 Withholding. The Company may directly or indirectly withhold from
any payments under this Employment Agreement all federal, state, city or other
taxes that shall be required pursuant to any law or governmental regulation.
SECTION 4
DEATH BENEFIT; DISABILITY COMPENSATION; KEY MAN INSURANCE
4.1 Payment in Event of Death. In the event of the death of the
Executive during the Term of this Employment Agreement, the Company's obligation
to make payments under this Employment Agreement shall cease as of the date of
death, except for earned but unpaid Base Salary.
4.2 Disability Compensation. Notwithstanding the disability of the
Executive, the Company will continue to pay the Executive during the Term of
this Employment Agreement, according to the compensation provisions of this
Employment Agreement. In the event the disability continues for a period of
three (3) months, the Company may thereafter terminate this Employment Agreement
and the Executive's employment as of the end of said period. Following such
termination, the Company will pay the Executive amounts equal to his regular
installments of Base Salary, as of the time of termination, for a period of six
(6) months.
4.3 Responsibilities in the Event of Disability. During the period the
Executive is receiving payments following his disability and as long as he is
physically and mentally able to do so, the Executive will furnish information
and assistance to the Company and from time to time will make himself available
to the Company to undertake assignments consistent with his position or prior
position with the Company and his physical and mental health. If the Company
fails to make a payment or provide a benefit required as part of this Employment
Agreement, the Executive's obligation to provide information and assistance will
end.
4.4 Definition of Disability. The term "disability" will have such
meaning as is determined in the reasonable discretion of the Board of Directors.
4.5 Key-Man Life Insurance. Upon request by the Company, the Executive
agrees to cooperate with the Company in obtaining "key man" life insurance on
the life of the Executive, with death benefits payable to the Company. Such
cooperation shall include the submission by the Executive to a medical
examination and his response to inquiries regarding his medical history.
3
SECTION 5
TERMINATION OF EMPLOYMENT
Notwithstanding anything herein to the contrary, this Employment Agreement
and the Executive's employment with the Company may be terminated under the
circumstances and subject to the terms and provisions of this Section 5.
5.1 Termination Without Cause. If the Executive suffers a Termination
Without Cause (hereinafter defined), the Company will continue to pay the
Executive amounts equal to his Base Salary, as in effect at the time of the
Termination Without Cause, for the remaining Term of this Employment Agreement.
For the remaining Term of this Employment Agreement, the Company shall reimburse
the Executive for the cost of the Executive's health insurance as in effect at
the date of termination. The exercisability of stock options granted to the
Executive shall be governed by any applicable stock option agreements and the
terms of the respective stock option plans.
5.2 Termination With Cause; Voluntary Termination. If the Executive
suffers a Termination with Cause or the Executive terminates his employment with
the Company (a "Voluntary Termination"), then, the Company will not be obligated
to pay the Executive any amounts of compensation or benefits following the date
of termination. However, earned but unpaid Base Salary through the date of
termination will be paid in a lump sum at such time.
5.3 Definitions. For purposes of this Employment Agreement, the
following terms have the following meanings:
(a) "Termination With Cause" means termination of the Executive's
employment by the Company, acting in good faith, by written notice to the
Executive specifying the event relied upon for such termination, either (i) due
to the Executive's serious, willful misconduct with respect to his duties under
this Employment Agreement or (ii) due to the Executive's conviction for a
felony, the Executive's perpetration of a fraud, embezzlement or other act of
dishonesty or the Executive's breach of a trust or fiduciary duty which
materially adversely affects the Company or its shareholders or (iii) the
Executive's other employment or business activities constituting a conflict with
all or a material part of the Company's business.
(b) "Termination Without Cause" means termination of the
Executive's employment by the Company other than due to the Executive's death or
disability or Termination With Cause.
4
SECTION 6
OTHER DUTIES OF THE EXECUTIVE DURING
AND AFTER THE TERM OF THIS EMPLOYMENT AGREEMENT
6.1 Additional Information. The Executive will, upon reasonable
notice, during or after the Term of this Employment Agreement, furnish
information as may be in his possession and cooperate with the Company as may
reasonably be requested in connection with any claims or legal actions in which
the Company is or may become a party. The Executive shall receive reasonable
compensation for the time expended by him pursuant to this Section 6.1.
6.2 Confidentiality. The Executive recognizes and acknowledges that
all information pertaining to the affairs, business, clients, customers or other
relationships of the Company, as hereinafter defined, is confidential and is a
unique and valuable asset of the Company. Access to and knowledge of this
information are essential to the performance of the Executive's duties under
this Employment Agreement. The Executive will not during the Term of this
Employment Agreement or thereafter, except to the extent reasonably necessary in
the performance of his duties under this Agreement, give to any person, firm,
association, corporation or governmental agency any information concerning the
affairs, business, clients, customers or other relationships of the Company
except as required by law. The Executive will not make use of this type of
information for his own purposes or for the benefit of any person or
organization other than the Company. The Executive will also use his best
efforts to prevent the disclosure of this information by others. All records,
memoranda, etc. relating to the business of the Company whether made by the
Executive or otherwise coming into his possession are confidential and will
remain the property of the Company.
6.3 Noncompetition.
(a) During the Term of Employment. The Executive will not Compete
with the Company at any time while he is employed by the Company or receiving
payments from the Company.
(b) Voluntary Termination; Termination With Cause. In the event
of a Voluntary Termination or a Termination With Cause, the Executive will not
Compete (hereinafter defined) with the Company for a period consisting of the
remaining Term of this Employment Agreement plus one (1) year.
(c) Termination Without Cause; Non-Extension of the Term. In the
event of a Termination Without Cause or in the event the Company gives notice
under Section 2.1 that the Term of this Employment Agreement will not be
automatically extended, the Executive will not Compete with the Company for the
then remaining Term of this Employment Agreement.
5
(d) Definition of "Compete" with the Company. For the purposes of
this Section 6, the term "Compete with the Company" means action by the
Executive, direct or indirect, for his own account or for the account of others,
either as an officer, director, stockholder, owner, partner, member, promoter,
employee, consultant, advisor, agent, manager, creditor or in any other
capacity, resulting in the Executive having any pecuniary interest, legal or
equitable ownership, or other financial or non-financial interest in, or
employment, association or affiliation with, any corporation, business trust,
partnership, limited liability company, proprietorship or other business or
professional enterprise that engages in an energy related business substantially
similar to or in competition with any energy business engaged in by the Company
or in which the Company has an equity interest exceeding 5%.
(e) Reasonableness of Scope and Duration; Remedies. The Executive
acknowledges that the covenants contained herein are reasonable as to geographic
and temporal scope. The Executive acknowledges that his breach or threatened or
attempted breach of any provision of Section 6 would cause irreparable harm to
the Company not compensable in monetary damages and that the Company shall be
entitled, in addition to all other applicable remedies, to a temporary and
permanent injunction and a decree for specific performance of the terms of
Section 6 without being required to prove damages or furnish any bond or other
security.
SECTION 7
CONSOLIDATION, MERGER OR SALE OF ASSETS
Nothing in this Employment Agreement shall preclude the Company from
consolidating or merging into or with, or transferring all or substantially all
of its assets to, another corporation or organization which assumes this
Employment Agreement and all obligations and undertakings of the Company
hereunder. Upon such a consolidation, merger or sale of assets, the term "the
Company" as used herein will mean or include the other corporation or
organization and, unless terminated as herein provided, this Employment
Agreement shall continue in full force and effect. This Section 7 is not
intended to modify or limit the rights of the Executive hereunder.
SECTION 8
MISCELLANEOUS
8.1 Entire Agreement. This Employment Agreement contains the entire
understanding between the Company and the Executive with respect to the subject
matter and supersedes any prior employment or severance agreements between the
Company and its affiliates, and the Executive.
6
8.2 Amendment; Waiver. This Employment Agreement may not be modified
or amended except in writing signed by the parties. No term or condition of
this Employment Agreement will be deemed to have been waived except in writing
by the party charged with waiver. A waiver shall operate only as to the
specific term or condition waived and will not constitute a waiver for the
future or act on anything other than that which is specifically waived.
8.3 Severability; Modification of Covenant. Should any part of this
Employment Agreement be declared invalid for any reason, such invalidity shall
not affect the validity of any remaining portion hereof and such remaining
portion shall continue in full force and effect as if this Employment Agreement
had been originally executed without including the invalid part. Should any
covenant of this Employment Agreement be unenforceable because of its geographic
scope or term, its geographic scope or term shall be modified to such extent as
may be necessary to render such covenant enforceable.
8.4 Effect of Captions. Titles and captions in no way define, limit,
extend or describe the scope of this Employment Agreement nor the intent of any
provision thereof.
8.5 Counterpart Execution. This Employment Agreement may be executed
in any number of counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
8.6 Governing Law; Arbitration. This Employment Agreement has been
executed and delivered in the State of Kansas and its validity, interpretation,
performance and enforcement shall be governed by the laws of that state. Any
dispute among the parties hereto shall be settled by arbitration in the Kansas
City area, in accordance with the rules then obtaining of the American
Arbitration Association and judgment upon the award rendered may be entered in
any court having jurisdiction thereof. All provisions hereof are for the
protection and are intended to be for the benefit of the parties hereto and
enforceable directly by and binding upon each party. Each party hereto agrees
that the remedy at law of the other for any actual or threatened breach of this
Employment Agreement would be inadequate and that the other party shall be
entitled to specific performance hereof or injunctive relief or both, by
temporary or permanent injunction or such other appropriate judicial remedy,
writ or orders as may be decided by a court of competent jurisdiction in
addition to any damages which the complaining party may be legally entitled to
recover together with reasonable expenses of litigation, including attorney's
fees incurred in connection therewith, as may be approved by such court.
8.7 Notices. All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been made when
delivered or mailed first-class postage prepaid by registered mail, return
receipt requested, or when delivered if by hand, overnight delivery service or
confirmed facsimile transmission, to the following:
7
(1) If to the Company, at _________________, _________________,
Attention: Chairman of the Nominating and Compensation Committee, or
at such other address as may have been furnished to the Executive by
the Company in writing; or
(2) If to the Executive, at _________________, _______________,
or such other address as may have been furnished to the Company by the
Executive in writing.
8.8 Binding Agreements. This Employment Agreement shall be binding on
the parties' successors, heirs and assigns.
8
IN WITNESS WHEREOF, the undersigned have executed this Employment Agreement
as of the date first above written.
SLH CORPORATION
By: _____________________________
Chairman of the Nominating and
Compensation Committee
EXECUTIVE:
__________________________________
9
Exhibit C
TAX SHARING AGREEMENT
Between
SEAFIELD CAPITAL CORPORATION
and
SLH CORPORATION
TABLE OF CONTENTS
ARTICLE I. PREPARATION AND FILING OF TAX RETURNS . . . . . . . . . . . . . . 2
1.1 General Rules . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Pre-Distribution Period Tax Returns . . . . . . . . . . . . 2
1.3 Post-Distribution Period Tax Returns . . . . . . . . . . . 4
ARTICLE II. DEFICIENCIES AND REFUNDS OF TAXES . . . . . . . . . . . . . . . . 4
2.1 Definition of Final Determination . . . . . . . . . . . . . 4
2.1 Payment of Deficiencies by SLH . . . . . . . . . . . . . . 5
2.3 Payment of Refunds to SLH . . . . . . . . . . . . . . . . . 7
ARTICLE III. TAX AUDITS, TRANSACTIONS AND OTHER MATTERS . . . . . . . . . . . 8
3.1 Tax Audits and Controversies . . . . . . . . . . . . . . . 8
3.2 Retention of Books and Records . . . . . . . . . . . . . . 9
3.3 Cooperation Regarding Tax Matters . . . . . . . . . . . . .10
3.4 Survival of Agreement . . . . . . . . . . . . . . . . . . .11
ARTICLE IV. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.1 Severability . . . . . . . . . . . . . . . . . . . . . . 9
4.2 Modification of Agreement . . . . . . . . . . . . . . . . 9
4.3 Conflict with the Distribution Agreement . . . . . . . . 9
4.4 Notices . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.5 Application to Present and Future Subsidiaries . . . . .10
4.6 Term . . . . . . . . . . . . . . . . . . . . . . . . . .10
4.7 Titles and Headings . . . . . . . . . . . . . . . . . . .10
4.8 Singular and Plural . . . . . . . . . . . . . . . . . . .10
4.9 Governing Law . . . . . . . . . . . . . . . . . . . . . .10
4.10 Counterparts . . . . . . . . . . . . . . . . . . . . . .10
TAX SHARING AGREEMENT
THIS TAX SHARING AGREEMENT (the "Agreement") is made as of _______, 1997 by
Seafield Capital Corporation, a Missouri corporation ("Seafield"), and SLH
Corporation, a Kansas corporation ("SLH").
WHEREAS, SLH is a newly-formed corporation to which Seafield has on the
date hereof transferred certain assets, subject to certain liabilities, in
exchange for 100 percent of the issued and outstanding common stock of SLH
(which common stock is the only issued and outstanding capital stock of SLH);
and
WHEREAS, the assets transferred by Seafield to SLH on the date hereof
include 100 percent of the outstanding capital stock of BMA Resources, Inc., a
Missouri corporation, and 100 percent of the outstanding capital stock of Scout
Development Corporation, a Missouri corporation which itself owns 100 percent of
the capital stock of Scout Development Corporation of New Mexico, a Missouri
corporation and 100 percent of the capital stock of Carousel Apartment Homes,
Inc. ("Carousel") (SLH, BMA Resources, Inc., Scout Development Corporation,
Scout Development Corporation of New Mexico and Carousel are hereinafter
collectively the "SLH Group"); and
WHEREAS, Seafield and SLH have contemporaneously herewith entered into a
Distribution Agreement (the "Distribution Agreement") pursuant to which all of
the issued and outstanding common stock of SLH is to be distributed effective as
of the close of business on the date hereof (the "Distribution Date") by
Seafield to the holders of its common stock on a pro rata basis (the
"Distribution"); and
WHEREAS, the parties hereto desire to provide for the payment of tax lia-
bilities and entitlement to tax refunds for the taxable periods ending before,
on, and after the Distribution Date, to allocate responsibility for and provide
for cooperation in the preparation and filing of tax returns with respect to
such taxable periods, and to provide for certain other related matters;
NOW, THEREFORE, Seafield, on behalf of itself and its present, former, and
future subsidiaries, other than members of the SLH Group as hereinafter defined
(the "Seafield Group"), and SLH, on behalf of itself and the SLH Group, in
consideration of the premises and the mutual covenants contained herein,
acknowledge and agree as follows:
ARTICLE I.
PREPARATION AND FILING OF TAX RETURNS
Section 1.1. General Rules.
(a) Certain Definitions. For purposes of this Agreement:
the term "Taxes" shall mean all forms of taxation and shall include without
limitation income, alternative minimum, superfund, sales, use, ad valorem, gross
receipts, franchise, transfer, recording, withholding, employment, excise, and
occupation taxes, together with any related interest, penalties, and additions
to tax, or additional amounts, imposed by any governmental authority upon the
Seafield Group, the SLH Group, or any of their respective members or any
combination thereof; the term "Tax" shall mean any of the Taxes; and the term
"Tax Return" shall mean any return, filing, questionnaire, or other document
required by law to be filed, including any amendment and refund claim that
constitutes an amendment to any of the foregoing that is required or permitted
to be filed, for any period with any governmental authority or other person in
connection with any Taxes (whether or not a payment is required to be made with
respect to such filing).
(b) Preservation of Accounting Methods and Tax Elections.
All Tax Returns filed by any member of the Seafield Group or by any member of
the SLH Group after the Distribution Date shall be prepared on a basis which
does not have an adverse effect on the elections, accounting methods,
conventions, closing agreements, and principles of taxation used in any Tax
Return filed by any such person for any taxable period ending on or before the
Distribution Date, and shall be filed on a timely basis by the party responsible
for such filing under this Agreement.
(c) Decisions Regarding Tax Returns. Subject to the
provisions of this Agreement, all decisions relating to the preparation and
filing of Tax Returns and relating to the handling of any audit or other review
of such Tax Returns by any governmental authority shall be made in the sole
discretion of the party responsible under this Agreement for such filing.
Section 1.2. Pre-Distribution Period Tax Returns.
(a) Continued Effectiveness of Prior Seafield Tax Sharing
Agreement. The parties acknowledge that Seafield, its subsidiaries, and members
of the SLH Group are parties to a Tax Sharing Agreement dated as of August 1,
1990 (the "Prior Tax Agreement"). Notwithstanding the change in the federal
income tax consolidated group of which Seafield is the common parent corporation
that results from the Distribution (and similar changes that may result under
state or local law), the Prior Tax Agreement shall continue in full force and
effect after the Distribution Date with respect to all Tax Returns otherwise
subject to the provisions of such Prior Tax Agreement that relate to fiscal
periods beginning before the Distribution Date. The Prior Tax Agreement, as
modified, amplified, and supplemented by this Agreement, shall be interpreted in
accordance with
2
the past practices under such agreement of the parties thereto. The parties
acknowledge that, in accordance with the preceding provisions of this Section
1.2(a), Seafield shall be responsible for and shall pay all Federal income Taxes
arising as a result of the Distribution.
(b) Performance of Parties Under Prior Tax Agreement. SLH
shall cause each member of the SLH Group to perform on a timely basis all of
such member's obligations, if any, under the Prior Tax Agreement and, in
addition, shall promptly provide to Seafield upon request all information that
Seafield may reasonably request from time to time (including tax computations,
reconciliations of book and taxable incomes, and other similar information that
SLH or a member of the SLH Group must affirmatively prepare) that may be needed
by Seafield to file Tax Returns or otherwise perform under the Prior Tax
Agreement or to monitor the performance of any other party under such contract.
Seafield shall itself and shall cause each other member of the Seafield Group to
perform on a timely basis all of its or such member's obligations, respectively,
under the Prior Tax Agreement and shall promptly provide to SLH upon request all
information that SLH may reasonably request from time to time relating to the
Tax liability of any member of the Seafield Group or the SLH Group with respect
to a Tax Return that is subject to the provisions of the Prior Tax Agreement or
to the performance under such contract of any of the parties thereto.
(c) Tax Returns Not Governed by Prior Tax Agreement. For
purposes of the preceding Sections 1.2(a) and (b) (i.e., for purposes of filing
Tax Returns and paying Taxes pursuant to the Prior Tax Agreement for fiscal
periods beginning prior to the Distribution Date), paragraph 7 of the Prior Tax
Agreement is hereby modified to refer to and include all municipal and state
Taxes with respect to which combined, consolidated, or unitary reporting is
permissible, rather than merely referring to and including state income Taxes.
All Tax Returns other than the Tax Returns described in Section 1.2(a) and the
preceding sentence which include or are filed with respect to a member of the
Seafield Group or the SLH Group for periods beginning before the Distribution
Date shall be filed by the member of the Seafield Group or the SLH Group, as the
case may be, that is required to file such return by law.
(d) Carryback of Tax Attributes. For purposes of this
Agreement: the term "Tax Attribute" shall mean any net operating loss, capital
loss, or tax credit allowed by the Internal Revenue Code of 1986 or any
successor thereto and the regulations promulgated thereunder (the "Code") or
equivalent state statute or local ordinance; and the term "Tax Benefit" shall
mean the amount of the decrease in Taxes resulting from any increase or decrease
in any item including, but not limited to, any item of income or deduction, gain
or loss, or tax credit. If any member of the SLH Group shall have a Tax
Attribute that can only be utilized on a consolidated, combined, or unitary Tax
Return filed by Seafield for a fiscal year beginning before the Distribution
Date, then Seafield shall promptly upon SLH's request (and upon SLH furnishing
to Seafield all information relevant to such Tax Attribute) file an amended Tax
Return for such fiscal year reporting
3
such Tax Attribute and shall pay to such member of the SLH Group the Tax Benefit
attributable to such Tax Attribute, all in accordance with the provisions of the
Prior Tax Agreement; provided, Seafield may withhold from such payment and
retain for itself a reasonable fee to compensate it for the effort and expense
incurred by it in filing such amended Tax Return. If any member of the SLH
Group shall have a Tax Attribute that can be utilized either on a consolidated,
combined, or unitary Tax Return filed by Seafield for a fiscal year beginning
before the Distribution Date or on a Tax Return for a fiscal year beginning on
or after the Distribution Date, then such Tax Attribute may be carried back to
the earlier fiscal period's Tax Return (in accordance with the procedures de-
scribed in the preceding sentence) if Seafield and SLH mutually so agree, and if
not then the SLH Group member may utilize the Tax Attribute only on the later
fiscal period's Tax Return.
(e) Apportionment of Tax Attributes. If all or a portion of
any Tax Attribute arising in any taxable period beginning before the
Distribution Date is apportioned to a tax year of any member of the SLH Group
beginning on or after the Distribution Date pursuant to any provisions of the
Code (or equivalent state or local law or regulation), then SLH shall retain the
Tax Benefit related to the Tax Attribute so apportioned.
Section 1.3. Post-Distribution Period Tax Returns. All Tax Returns and
Taxes for periods beginning on or after the Distribution Date shall be the
responsibility of the Seafield Group if such Tax Returns or Taxes are legally
due from the Seafield Group and shall be the responsibility of the SLH Group if
such Tax Returns or Taxes are legally due from the SLH Group.
ARTICLE II
DEFICIENCIES AND REFUNDS OF TAXES
Section 2.1. Definition of Final Determination. For purposes of this
Agreement the term "Final Determination" shall mean the final resolution of
liability for any Tax for a taxable period: (i) by Internal Revenue Service
("IRS") Form 870-AD (or any successor forms thereto) on the date of acceptance
by or on behalf of the IRS, or by a comparable form under the laws of other
jurisdictions; (ii) by a decision, judgment, decree, or other order by a court
of competent jurisdiction which has become final and unappealable; (iii) by
closing agreement or accepted offer in compromise under Section 7121 or 7122 of
the Code, or comparable agreement under the laws of other jurisdictions; (iv) by
any allowance of a refund or credit in respect of an overpayment of Tax, but
only after the expiration of all periods during which such refund may be
recovered (including by way of offset) by the Tax-imposing jurisdiction; or (v)
by any other final disposition, including by reason of the expiration of the
applicable statute of limitations or by mutual agreement of the parties.
4
Section 2.2. Payment of Deficiencies by SLH. The provisions of this
Section 2.2 are intended to amplify the provisions of paragraph 6 of the Prior
Tax Agreement. If a Final Determination is made that results in any adjustments
to any Tax Return of Seafield in which any member of the SLH Group is included
for taxable periods beginning before the Distribution Date, then to the extent
that such adjustments result in a greater Tax for such SLH Group member or any
Seafield Group member (in either case without regard to any offsetting
adjustments to other members of the Seafield Group), such member of the SLH
Group shall be liable for such increase in Taxes. If any member of the SLH
Group shall have any liability as a result of this Section 2.2, SLH shall pay to
Seafield, hold Seafield harmless, and indemnify Seafield for any such Tax
liability, costs, and attorneys fees, and the amount thereof shall be paid by
SLH to Seafield within 15 days of the receipt by SLH of written notice of such
liability, together with a computation of the amount due and supporting
documentation in such detail as SLH may reasonably request to verify the
computation of the amount due. Any such required payment not made within such
15-day period shall thereafter bear interest until paid at the then most
recently published rate of interest charged by the IRS on income tax
deficiencies pursuant to Code section 6621(a)(2).
Section 2.3. Payment of Refunds to SLH. The provisions of this Section
2.3 are intended to amplify further the provisions of paragraph 6 of the Prior
Tax Agreement. If a Final Determination is made that results in any adjustments
to any Tax Return of Seafield in which any member of the SLH Group is included
for taxable periods beginning before the Distribution Date, then to the extent
that such adjustments decrease the Tax liability attributable to any member of
the SLH Group and result in a Tax Benefit to Seafield or any member of the
Seafield Group (without regard to any offsetting adjustments to other members of
the Seafield Group), then Seafield shall remit to SLH any refunds of Taxes
received by or credited to it as a result of the adjustments attributable to a
member of the SLH Group. Seafield shall pay any amounts due from it to SLH as a
result of this Section 2.3 within 15 days of its receipt of the relevant refund
or credit from the IRS or any state or other governmental unit, as the case may
be. Any such required payment not made within such 15-day period shall
thereafter bear interest until paid at the then most recently published rate at
which the IRS pays interest on tax refunds pursuant to Code section 6621(a)(1).
Such payments shall be accompanied by a computation of the amount due and
supporting documentation in such detail as SLH may reasonably request to verify
the computation of the amount due. Anything herein to the contrary
notwithstanding, except as provided in this Section 2.3, no member of the SLH
Group shall be entitled to any payment or benefit as a result of the receipt of
any Tax refund received by any member of the Seafield Group except to the extent
such refund is attributable to the overpayment of estimated Taxes by the SLH
Group or any member thereof.
5
ARTICLE III
TAX AUDITS, TRANSACTIONS AND OTHER MATTERS
Section 3.1. Tax Audits and Controversies.
(a) Federal, State, or Local Income or Franchise Taxes.
Except as otherwise provided in this Section 3.1, Seafield shall have the
exclusive authority and obligation to represent each member of the SLH Group
before the IRS or any other governmental agency or authority or before any court
with respect to any matter affecting the federal, state, or local income or
franchise Tax liability of any member of either the Seafield Group or the SLH
Group for any Tax period beginning before the Distribution Date, in each such
case: (i) allowing representatives of the SLH Group, including without
limitation outside counsel and consultants, to participate in good faith in all
respects in all such Tax proceedings affecting any member of the SLH Group; and
(ii) acting in the best interests of both the Seafield Group and the SLH Group.
Such representation shall include but shall not be limited to
exclusive control over: (i) any response to any examination of federal, state,
or local income or franchise Tax Returns; and (ii) any contest or litigation
through a Final Determination of any issue included in any Tax Return that
includes a member of the Seafield Group, including but not limited to: (A)
whether and in what forum to conduct such contest; and (B) whether and on what
basis to settle such contest, except that Seafield shall not without SLH's
consent settle any claim, suit, action, or proceeding in respect of which any
member of the SLH Group may incur any then known (by Seafield) future Tax
liability, or in respect of which indemnity for federal, state, or local income
or franchise Taxes may be sought hereunder against SLH or any member of the SLH
Group, which consent shall not be unreasonably withheld. Seafield shall give
timely notice to SLH of any inquiry, the assertion of any claim, or the
commencement of any suit, action, or proceeding in respect of which any member
of the SLH Group may incur any then known (by Seafield) future Tax liability or
in respect of which indemnity for federal, state, or local income or franchise
Taxes may be sought under this Agreement against SLH or any member of the SLH
Group and shall give SLH such information with respect thereto as SLH may
reasonably request.
Anything in this Section 3.1 or elsewhere in this Agreement to the
contrary notwithstanding, if SLH contests or litigates any federal, state, or
local income or franchise tax issue in any forum, SLH shall pay and shall
indemnify and hold harmless each member of the Seafield Group from any and all
costs, expenses, and/or liabilities of any type or nature including without
limitation, any federal income tax liability (including interest and penalties
thereon), that are incurred by or imposed upon Seafield or any member of the
Seafield Group which Seafield or such Seafield Group member would not otherwise
have incurred.
6
(b) Other Taxes. Except as otherwise provided in this
Section 3.1, the party responsible for filing any Tax Return (other than
federal, state, or local income or franchise Tax Returns) pursuant to Section
1.2(c) hereof shall, at its own expense, have the exclusive authority to
represent each member of the Seafield Group and the SLH Group before any
governmental agency or authority or before any court with respect to any matter
affecting the Tax liability of any member of either the Seafield Group or the
SLH Group for any Tax period beginning before the Distribution Date in each
case: (i) allowing representatives of the other group to participate in good
faith in all respects in all such Tax proceedings affecting any member of the
other group; and (ii) acting in the best interests of both the Seafield Group
and the SLH Group.
Such representation shall include but shall not be limited to
exclusive control over: (i) any response to any examination by the governmental
authority of such Tax Returns; and (ii) any contest through a Final
Determination of any issue included in any Tax Return that includes a member of
the SLH Group or the Seafield Group, including but not limited to: (A) whether
and in what forum to conduct such contest; and (B) whether and on what basis to
settle such contest, except that Seafield or any member of the Seafield Group
shall not settle any claim, suit, action, or proceeding in respect of which
indemnity for such Taxes may be sought hereunder against SLH or any member of
the SLH Group without SLH's consent, which consent shall not be unreasonably
withheld, and except that SLH or any member of the SLH Group shall not settle
any claim, suit, action, or proceeding in respect of which indemnity for such
Taxes may be sought hereunder against Seafield or any member of the Seafield
Group without Seafield's consent, which consent shall not be unreasonably
withheld.
Section 3.2. Retention of Books and Records. SLH and Seafield each agrees
to retain and preserve in accessible and reproducible form all Tax Returns,
related schedules, and workpapers, and all accounting and computer records (in
whatever media) and other documents relating thereto (collectively, the "Tax
Documents"), existing on the date hereof or created through or with respect to
taxable periods ending on or before the Distribution Date until the later of:
(a) the expiration of the statute of limitations (including extensions) of the
taxable years to which such Tax Returns and Tax Documents relate; or (b)
December 31, 2006. No Tax Documents shall be destroyed or otherwise disposed of
by either Seafield or SLH (or any member of their respective groups) until the
party intending to make such disposition has given the other party at least 30
days advance notice thereof, whereupon the party receiving such notice shall
have the right, at its own expense, to take possession of such Tax Documents.
Section 3.3. Cooperation Regarding Tax Matters.
(a) SLH's Obligations. In addition to any obligations
imposed pursuant to the Distribution Agreement, SLH and each other member of the
SLH Group shall fully cooperate with Seafield and its representatives, in a
prompt and timely manner, in connection with the preparation and filing of, and
any inquiry, audit, examination,
7
investigation, dispute, or litigation involving, any Tax Return filed or
required to be filed by or for any member of the Seafield Group for any taxable
period beginning before the Distribution Date. Such cooperation shall include
but not be limited to making available to Seafield during normal business hours,
and within 30 days of any request therefor, all Tax Documents, books, records,
and information, and the assistance of all officers and employees, necessary or
useful in connection with any Tax inquiry, audit, examination, investigation,
dispute, litigation, or other matter.
SLH agrees on behalf of itself and each other member of the SLH Group
to execute and deliver to Seafield, when so requested by Seafield, any power of
attorney that may be necessary or appropriate to allow Seafield and its counsel
to represent SLH or such SLH Group member in any controversy which Seafield
shall have the right to control pursuant to the terms of Section 3.1 of this
Agreement.
(b) Seafield's Obligation. Except as otherwise provided in
this Article III, Seafield shall fully cooperate with SLH and its
representatives, in a prompt and timely manner, in connection with the
preparation and filing of, and any inquiry, audit, examination, investigation,
dispute, or litigation involving, any Tax Return filed or required to be filed
pursuant to Section 1.2(c) by or for any member of the SLH Group. Such
cooperation shall include but not be limited to making available to SLH during
normal business hours, and within 30 days of any request therefor, all books,
records, and information, and the assistance of all officers and employees,
necessary or useful in connection with any tax inquiry, audit, examination,
investigation, dispute, litigation, or other matter.
Seafield agrees on behalf of itself and each other member of the
Seafield Group to execute and deliver to SLH, when so requested by SLH, any
power of attorney that may be necessary or appropriate to allow SLH and its
counsel to represent Seafield or such other Seafield Group member in any
controversy which SLH shall have the right to control pursuant to the terms of
Section 3.1(b) of this Agreement.
(c) Remedy for Failure to Comply. If Seafield reasonably
determines that SLH is not for any reason fulfilling its obligations under
Section 3.3(a), or if SLH reasonably determines that Seafield is not for any
reason fulfilling its obligations under Section 3.3(b), then Seafield or SLH, as
the case may be, shall have the right to appoint, at the expense of the other,
an independent entity such as a nationally recognized public accounting firm to
assist the other in meeting its obligations under this Section 3.3. Such entity
shall have complete access to all books, records, and information, and the
complete cooperation of all officers and employees, of SLH or Seafield, as the
case may be.
Section 3.4. Survival of Agreement. This Agreement and all covenants
contained herein shall survive the expiration of all statutes of limitations
prescribed by the Code and other tax laws and any extensions thereof that apply
to any Tax Returns and any Taxes and any Final Determination relating to any
Taxes.
8
ARTICLE IV
MISCELLANEOUS
Section 4.1. Severability. In case any one or more of the provisions con-
tained in this Agreement should be invalid, illegal, or unenforceable, the
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby.
Section 4.2. Modification of Agreement. No modification, amendment, or
waiver of any provision of this Agreement shall be effective unless the same
shall be in writing and signed by each of the parties hereto and then such
modification, amendment, or waiver shall be effective only in the specific
instance and for the purpose for which given.
Section 4.3. Conflict with Other Agreements. Anything in this Agreement
or the Distribution Agreement to the contrary notwithstanding, in the event and
to the extent that there shall be a conflict between the provisions of this
Agreement and the Distribution Agreement, the provisions of this Agreement shall
control. In the event and to the extent that there shall be a conflict between
the provisions of this Agreement and the Prior Tax Agreement as modified,
amplified, and supplemented by this Agreement, the provisions of this Agreement
shall control. Notwithstanding any other provision of this Agreement, however,
this Agreement shall not amend, modify, or affect in any way the provisions of
the Distribution Agreement and the Blanket Assignment, Xxxx of Sale, Deed and
Assumption Agreement between Seafield and SLH dated the date hereof (the
"Assignment") that relate to the rights or obligations of either party with
respect to certain federal income tax or other tax-related claims and certain
federal income tax or other tax-related liabilities that are described
therein; the parties expressly intend for all matters relating to the such
claims or liabilities to be governed by the Distribution Agreement and the
Assignment.
Section 4.4. Notices. All notices or other communications required or
permitted under this Agreement shall be delivered by hand, mailed by certified
or registered mail, postage prepaid and return receipt requested, or sent by
cable, telegram, telex, or telecopy (confirmed by regular, first-class mail), to
the parties at the following addresses (or at such other addresses for a party
as shall be specified by like notice) and shall be deemed given on the date on
which such notice is received:
(a) In the case of Seafield, to
Seafield Capital Corporation
0000 Xxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: President
(b) In the case of SLH, to
9
SLH Corporation
0000 Xxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: President
Section 4.5. Application to Present and Future Subsidiaries. This Agree-
ment is being entered into by Seafield and SLH on behalf of themselves and each
member of the Seafield Group and the SLH Group, respectively. This Agreement
shall constitute a direct obligation of each such member and shall be deemed to
have been readopted and affirmed on behalf of any corporation which becomes a
member of the Seafield Group or the SLH Group in the future. Seafield and SLH
hereby guarantee the performance of all actions, agreements, and obligations
provided for under this Agreement of each member of the Seafield Group and the
SLH Group, respectively. Seafield and SLH shall, upon the written request of
the other, cause any of their respective group members formally to execute this
Agreement. This Agreement shall be binding upon, and shall inure to the benefit
of, the successors, assigns, and persons controlling any of the corporations
bound hereby.
Section 4.6. Term. This Agreement shall commence on the date of execution
indicated above and shall continue in effect until otherwise agreed to in
writing by Seafield and SLH, or their successors.
Section 4.7. Titles and Headings. Titles and headings to sections herein
are inserted for the convenience of reference only and are not intended to be a
part or to affect the meaning or interpretation of this Agreement.
Section 4.8. Singular and Plural. As used herein, the singular shall
include the plural and vice versa.
Section 4.9. Governing Law. This Agreement shall be governed by the laws
of the State of Missouri.
Section 4.10. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become a binding agreement when one or more counterparts have been signed
by each party and delivered to the other parties.
10
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers, all on the day and year first
above written.
SEAFIELD CAPITAL CORPORATION,
a Missouri corporation
By: ________________________
Title: _____________________
SLH CORPORATION,
a Kansas corporation
By: ________________________
Title: _____________________
11
Exhibit D
BLANKET ASSIGNMENT, XXXX OF SALE, DEED AND
ASSUMPTION AGREEMENT
This BLANKET ASSIGNMENT, XXXX OF SALE, DEED AND ASSUMPTION AGREEMENT, dated
as of February __, 1997, ("Assignment and Assumption Agreement") by and among
Seafield Capital Corporation, a Missouri corporation ("Seafield") and SLH
Corporation, a newly formed Kansas corporation which is a wholly owned
subsidiary of Seafield ("SLH").
RECITALS
A. The Boards of Directors of Seafield and SLH have determined that it
is in the best interests of the shareholders of Seafield: (1) to transfer to
SLH substantially all of Seafield's assets (the "Transfer Assets") other than
its holdings (including any capital stock and debt) of LabOne, Inc. ("Lab") and
Response Oncology, Inc. ("Response") and certain other assets (the "Retained
Assets" as more particularly defined below) and certain liabilities (the
"Transfer Liabilities") and (2) to distribute to the holders of the issued and
outstanding shares of common stock, par value $1 per share, of Seafield all of
the issued and outstanding shares of common stock, par value $0.01 per share, of
SLH (the "Distribution") in accordance with Article II of a DISTRIBUTION
AGREEMENT dated as of December 1, 1996 ("Distribution Agreement").
B. Pursuant to Section 1.02 of the Distribution Agreement Seafield and
SLH are required to take all action necessary to transfer to SLH, and to cause
SLH to assume, as the case may be, effective as of the Distribution Date, (1)
all of the Transfer Assets and (2) all of the Transfer Liabilities. This
agreement is intended to effect such transfers and assumptions, subject to the
terms of the Distribution Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained and intending to be legally bound thereby, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
1. Definitions and Terms. Except as otherwise provided herein, the
capitalized terms in this agreement shall have the same meaning as those terms
are defined to have in the Distribution Agreement.
ARTICLE II
TRANSFER OF TRANSFER ASSETS
2.1 Contribution and Transfer. KNOW ALL MEN BY THESE PRESENTS: for
good and valuable consideration, the receipt of which is hereby acknowledged,
Seafield, subject to the terms hereof, has contributed, granted, conveyed,
transferred, assigned, and set over, and does by these presents grant, convey,
transfer, assign and set over to SLH all of its right, title and interest in
those assets held by Seafield in the name of or for the exclusive benefit of the
SLH Business (the "SLH Assets") other than the assets listed in Section 2.2
hereof (the "Retained Assets," with the SLH Assets other than the Retained
Assets being hereinafter referred to as the "Transfer Assets"), TO HAVE AND TO
HOLD the same unto SLH, its successors and assigns, forever. Without limiting
the foregoing, the Transfer Assets expressly include all Transfer Assets
reflected on Seafield's books and records as being allocated for the exclusive
use or consumption by the SLH Business, including, without limitation, the
Transfer Assets reflected on the September 30, 1996, unaudited pro forma
combined Balance Sheet included in the SLH Form 10 under the Securities and
Excahange Act dated December 21, 1996, as amended (the "Balance Sheet" and the
"Form 10") as well as those acquired by the SLH Business since September 30,
1996, less those disposed of since September 30, 1996. Without limiting the
foregoing, the Transfer Assets include the following:
2.11 SLH Subsidiaries. All of the issued and outstanding shares of
the capital stock of the following Seafield subsidiaries, which together with
the indirectly owned subsidiaries of such Seafield subsidiaries constitute the
SLH Subsidiaries as defined in the Distribution Agreement:
a. BMA Resources, Inc. ("Resources"), which owns, among other
things (i) 5,950,000 shares of the issued and outstanding shares of common
stock of Syntroleum Corporation and (ii) interests in the following oil and gas
general partnerships: Bundy, Bentel, Westgate and Xxxxxxxx.
b. Scout Development Corporation ("Scout"), which owns, among
other things (i) Scout Development Corporation of New Mexico ("Scout NM"), and
(ii) Carousel Apartment Homes, Inc. ("Carousel"); and
x. Xxxxxxxxx Associates, Inc. ("Xxxxxxxxx"),together with any
accounts receivable and other assets that may have been retained by Seafield in
connection with the sale of Xxxxxxxxx'x business and assets.
2.12 SLH Investments. The following Securities held by Seafield
which are hereinafter referred to as the SLH Investments:
2
a. Securities issued by Norian Corporation, a California
corporation consisting of 181,250 shares of convertible preferred stock, no par
value;
b. Securities issued by: (i) First Century Partnership III, a
limited partnership consisting of a 3.7% capital interest; (ii) First Century
Partnership II, a limited partnership; (iii) New Enterprise Associates II,
L.P. a limited partnership;
c. Securities issued by Oclassen Pharmaceuticals, Inc. a
Delaware corporation consisting of 500,000 shares of common stock;
d. Cash and short term investments in the face amount of
$6,850,000.
e. Contract rights formerly relating to or arising out of
Xxxxxxxxx Associates, Inc. and its stockholders, including all rights of
Seafield in and to payments and other consideation required to be made by
Ernst & Young U.S. LLP ("E&Y") pursuant to that certain Asset Purchase
Agreement dated May 31, 1995 (the "E&Y Agreement) and any rights arising out
of that certain Agreement of Purchase and Sale of Assets dated as of July 10,
1995 between Seafield and Xxxxx X. xxxxxxxxx (the "WAT Agreement") and all
accounts and notes receivable by Seafield with respect to the sale of
Xxxxxxxxxx Associates, Inc. assets and the liquidation of Xxxxxxxxxx; and
f. Treasury notes or similar instruments pledged by Seafield in
the approximate amount of $3.0 million to secure payment of a certain Gillet
letter of credit.
2.13 Information and Records. All books, records and information
recorded on any form of media, including paper, magnetic disks, computer drives,
microfiche or other form of information storage equipment or materials owned by
Seafield and used exclusively by the SLH Business.
2.14 Accounts and Notes Receivable. All payments of currency
receivable by Seafield upon accounts generated with respect to the SLH Business
and upon notes, leases, refunds and other evidences of indebtedness or
reimbursements arising out of transactions between the SLH Business and persons
or entities other than Seafield (hereinafter "Third Parties"), including any
receivables reflected on the Balance Sheet and now owned by Seafield.
3
2.15 Contracts and Agreements. All of Seafield's right, title and
interest in all contracts and agreements between Seafield and any Third Party
made by or for the exclusive benefit of the SLH Business, other than such rights
and interests in contracts and agreements included among the Retained Assets
(the "Contract Rights," and "Contracts," respectively with the excluded rights
and interests hereinafter referred to as the "Retained Contract Rights" and
"Retained Contracts," respectively) including, without limitation the following:
2.151 Real estate leases consisting of (i) the lease for the
space occupied by Seafield at 0000 Xxxxx Xxxxxxxxx , Xxxxx 000, Xxxxxx Xxxx,
Xxxxxxxx (the "Seafield Offices") and (ii) the Xxxxxxxxx leases.
2.152 Equipment leases with respect to any items of equipment
located at the Seafield Offices on the Distribution Date;
2.153 Insurance and indemnity contracts and policies to the
extent set forth under Article VIII of the Distribution Agreement;
2.154 SLH Business orders for the purchase of goods and or
services from Third Parties;
2.155 Employee benefit plans and arrangements for the benefit
of employees who on the Distribution Date are employed by and are on the payroll
of the SLH or any SLH Subsidiary (the "SLH Employees"); and
2.156 Any SLH Support Agreement as defined in the Distribution
Agreement including the pledge by Seafield of the Gillete cash and short term
securities.
2.157 The E&Y Agreement and the WAT Agreement.
2.16 Claims, Suits and Choses in Action. All asserted and unasserted
claims, suits, and choses in action now owned by Seafield and arising out of the
business and operations of the SLH Business or relating to any of the Transfer
Assets (the "Claims") including without limitation, the following:
a. Any Seafield claim for tax refunds or off sets arising out
of losses recognized or recognizable by Seafield with respect to the disposition
prior to the Distribution Date of any assets of the SLH Business, or which is
usable by Seafield as an off
4
set agaisnt or a reduction of any tax liability which is included in the
Transfer Liabilities; and
b. The action described in the second paragraph of Item 3 of
the Seafield report on Form 10-K for the fiscal year ended December 31, 1995
(the "Seafield 10-K") (BMA x. Xxxxxxxx, Xxxxxx & Xxxxxxx);
2.17 Permits and Licenses. All permits and licenses held by Seafield
for the exclusive benefit of the SLH Business to the extent that such permits
and licenses may be legally transferrable (The "Permits").
2.2 Retained Assets. Notwithstanding the foregoing, the following Retained
Assets shall not be deemed to be within the Transfer Assets and shall not be
contributed or otherwise transferred to SLH hereunder:
2.21 Retained Information and Records. All books, records and
information recorded on any form of media, including paper, magnetic disks,
computer drives, microfiche or other form of information storage equipment or
materials owned by Seafield and including information or data relating to or for
the benefit of the SLH Business as well as businesses other than the SLH
Business (the "Joint Records"). SLH shall be permitted access to the Joint
Records at Seafield's discretion and on an otherwise mutually agreeable basis.
2.22 Retained Accounts and Notes Receivable. All of the following
Retained Accounts Receivable: All intracompany accounts receivable by the SLH
Business from Seafield other than the following accounts: X' Xxxxx Note
receivable.
2.23 Retained Contracts and Contract Rights. All of the following
Retained Contracts and Retained Contract Rights:
2.231 All contract rights to be retained by Seafield or any
member of the Seafield Group under Article VI and VIII of the Distribution
Agreement.
2.24 Assets Subject to Restrictions on Transfer. The Retained Assets
shall include, subject to the terms hereof, any asset otherwise included in the
above description of the Transfer Assets which is subject to a restriction on
transfer or otherwise requires the consent of a third party prior to transfer
and with respect to which the restriction has not been removed or a consent has
not been obtained as of the Distribution Date. Subsequent to the Distribution
Date Seafield and SLH shall use reasonable efforts to remove any such
restriction or to obtain such consent and upon the removal of such restriction
or the receipt of such consent such asset shall become a Contributed Asset,
deemed by the parties to have been contributed at and as of the Distribution
Date. Upon such occurrence Seafield and SLH
5
shall execute such further instruments of transfer necessary to complete the
legal transfer of such Contributed Asset, dated as of the Distribution Date if
permissible. Pending removal of such restriction and receipt of any such
required consent, Seafield shall arrange for SLH to enjoy the benefits of such
Asset to the extent legally permissible and SLH shall provide Seafield with the
resources necessary for Seafield to continue to satisfy SLH's obligations with
respect to such asset.
2.25 Other Retained Assets. All of the following other assets held
by Seafield in the name of or for the exclusive benefit of the SLH Business:
None other than an Accura Legend automobile used by X.X. Xxxxx XX, a whale
sculupture in the Seafield Board Room and a fish tank in the offices of X.X.
Xxxxx XX.
ARTICLE III
ASSUMPTION OF TRANSFER LIABILITIES
3.1 Liabilities Assumed by SLH. SLH hereby unconditionally assumes and
agrees to discharge and perform in accordance with their terms all of the
obligations, liabilities and duties of Seafield arising out of its operation of
the SLH Business and its ownership, use or operation of the Transfer Assets
other than such Retained liabilities and obligations that are enumerated in
Section 3.2 (the "Transfer Liabilities," with such Retained liabilities and
obligations hereinafter referred to as the "Retained Liabilities"), including
without limitation the following Transfer Liabilities:
3.11 Balance Sheet Liabilities. All of Seafield's liabilities
relating to the SLH Business which are referred to or which are reflected on the
Balance Sheet as well as such liabilities which have been incurred by the SLH
Business since September 30, 1996, other than such liabilities included in the
Retained Liabilities (the "Balance Sheet Liabilities" with the such Retained
balance sheet liabilities hereinafter referred to as the "Retained Balance Sheet
Liabilities").
3.12 Liabilities to SLH Employees. All of Seafield's liabilities to
SLH Employees, including, without limitation, all Seafield's obligations under
and pursuant to any SLH collective bargaining, union benefit, salary, bonus,
employee welfare, pension, retirement, vacation pay, disability, accident and
health insurance, life insurance, profit sharing, severance pay or other benefit
plan other than such liabilities and obligations included in the Retained
Liabilities (the "Employee Liabilities" with the such other employee liabilities
hereinafter referred to as the "Retained Employee Liabilities").
3.121 Employment of SLH Employees. At the Distribution Date,
(a) all of the following individuals who were prior to the Distribution Date
employees of Seafield shall become the employees of SLH, with their employment
continuing on the same terms and conditions as in effect immediately prior to
the Distribution Date, subject to the rights of each such employee to decline
such employment with SLH: All persons full time
6
employed by an SLH Subsidiary, but not including P. Xxxxxxx Xxxxxx, Xxxxx X.
Xxxxxx, Xxxxxx X. Xxxxxxxxx, Xxxxx XxXxx, D. Xxxx Xxxxxxxx, Xxxx Xxxx, Xxxxx
Xxxxx, Xxxxx Xxxxx, Xxx Xxxxxxxx, Xxxxx Xxxxxxxx, Xxxxx Xxxxxxx, Xxxxx Xxxxxxxx
or Xxxxx Xxxxxxx; and (b) all SLH Employees who were immediately prior to the
Distribution Date employees of SLH or of any SLH Subsidiary shall continue as
employees of SLH or such subsidiary of SLH, as the case may be, with their
employment continuing on the same terms and conditions as in effect immediately
prior to the Distribution Date. In no event shall there be deemed to be any
separation from service or termination of employment with respect to any of the
SLH Employees for any purpose on account of the transfer of assets and
liabilities relating to the SLH Business contemplated hereby.
3.13 Contract Liabilities. All of Seafield's liabilities and
obligations under the contracts and agreements included in the Transfer Assets,
including those specified in Section 2.15.
3.14 Liabilities Relating to Certain Tax Claims. Without limiting
the foregoing, the Transfer Liabilities shall include any and all liability of
Seafield to the IRS or any state or local taxing authority with respect to any
matter relating to or arising out of any proposed adjustments by the IRS as
described under "Legal Matters" in the Information Statement that is a part of
the the Form 10 (the "Information Statement") as well as any other matters to be
assumed by SLH as set forth in the Tax Sharing Agreement.
3.15 Transfer and Distribution Tax Liabilities. Without limiting the
foregoing, the Transfer Liabilities shall include Tax liabilities only to the
extent provided in Section 3.14 and as provided in the Tax Sharing Agreement.
3.16 Other Liabilities. All other liabilities and obligations of
Seafield arising out of or relating to any of the Transfer Assets other than
such liabilities and obligations included in the Retained Liabilities (the
"Other Liabilities" with the such other Retained liabilities hereinafter
referred to as the "Other Retained Liabilities").
3.2 Retained Liabilities. Notwithstanding the foregoing, the following
Retained Liabilities shall not be deemed to be within the Transfer Liabilities
and shall not be assumed by SLH hereunder:
3.21 Retained Employee Liabilities. Retained Employee Liabilities
consisting of all of Seafield's obligations (a) with respect to the following
Seafield employees:P. Xxxxxxx Xxxxxx, Xxxxx X. Xxxxxx, Xxxxxx X. Xxxxxxxxx,
Xxxxx XxXxx, D. Xxxx Xxxxxxxx, Xxxx Xxxx, Xxxxx Xxxxx, Xxxxx Xxxxx, Xxx
Xxxxxxxx, Xxxxx Xxxxxxxx, Xxxxx Xxxxxxx, Xxxxx Xxxxxxxx or Xxxxx Xxxxxxx; (b)
under Retained Liabilities identified in Article VI of the Distribution
Agreement, and (c ) arising under employee benefit plans that are not for the
exclusive benefit of the SLH Employees but that cover the employees of Seafield
and/or of its subsidiaries in addition to the SLH Employees such as stock option
or award plans relating to securities issued or issuable by Seafield, umbrella
employee benefit or
7
welfare plans such as the 401-K Plan, to the extent such obligations relate to
employees other than the SLH Employees and to the extent that such obligations
are excluded from the Transfer Liabilities under the Distribution Agreement.
3.22 Transfer and Distribution Tax Costs and Expenses. Without
limiting the foregoing, the Transfer Liabilities shall not include any expense
or liability (other than Tax Liabilities under Section 3.14) incurred by
Seafield with respect to (a) the transfer of the Transfer Assets and the
assumption of the Transfer Liabilities hereunder and (b) the distribution of the
SLH Common Stock to the Seafield shareholders under the Distribution Agreement.
3.24 Retained Other Liabilities. All of the following Retained Other
Liabilities: None.
3.3 No Other Liabilities Assumed. Anything in this Agreement to the
contrary notwithstanding, SLH shall not assume, or shall be deemed to have
assumed, any debt, claim, obligation or other liability of Seafield or any of
Seafield's subsidiaries or other affiliates whatsoever other than as
specifically set forth in this Article III.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES, INDEMNIFICATION AND
ACCESS TO INFORMATION
4.1 Representations and Warranties. Except as otherwise provided
herein, Seafield makes no representations or warranties with respect to the
Transfer Assets, the Transfer Liabilities or the accuracy or completeness of the
Balance Sheet and SLH understands that it is accepting the Transfer Assets "AS
IS AND WITH ALL FAULTS" and assuming the Transfer Liabilities without any
limitation.
4.2 Indemnification. Obligations of the parties with respect to
indemnification are provided for under Article III of the Distribution
Agreement.
4.3 Access to Information. Obligations of the parties with respect to
access to Information are provided for under Article V of the Distribution
Agreement.
4.4 Restriction On Payment of Dividends and Redemption of Stock. As
further assurance for its obligations hereunder, SLH agrees that until the
second anniversary of this agreement SLH shall not distribute property to its
stockholders with respect to its outstanding stock as a dividend or redeem any
of its capital stock without the prior written consent of the Seafield Board.
8
ARTICLE V
MISCELLANEOUS AND
CERTAIN ADDITIONAL COVENANTS OF SEAFIELD AND SLH
5.1 Taxes. Subject to the specific terms of the Tax Sharing Agreement,
Seafield shall pay all sales, use, stamp, transfer, service, recording, real
estate and like taxes or fees, if any, imposed by the United States or any state
or political subdivision thereof on Seafield and or SLH, required to be paid in
connection with the transfer and assignment of the Transfer Assets, if any and
in connection with the Distribution; provided, however, neither SLH nor Seafield
shall be responsible for or obligated with respect to any taxes required to be
recognized by any Seafield shareholder or SLH stockholder arising out of or in
connection with the distribution of the SLH Common Stock in the Distribution.
5.2 Amendment. This Agreement may be amended, modified or supplemented
in a writing signed by Seafield and SLH.
5.3 Counterparts. This Agreement may be executed simultaneously in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
5.4 Applicable Law. This Agreement shall be governed by and construed
and enforced in accordance with the internal laws of the State of Missouri.
5.5 Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
5.6 No Third Party Beneficiaries. Except as otherwise indicated
herein, this Agreement is solely for the benefit of the parties hereto and no
provision of this Agreement shall be deemed to confer upon third parties any
remedy, claim, liability, reimbursement, claim of action or other right in
excess of the specific rights granted hereunder.
5.7 Conveyances and Further Assurances. The transfer of the Transfer
Assets hereunder shall be further evidenced by the delivery by Seafield to SLH
of stock certificates together with duly executed instruments of assignment
separate from certificates, deeds, bills of sale, properly endorsed certificates
of title and other specific conveyances requested by SLH. The assumption by SLH
of the Transfer Liabilities shall be further evidenced by the delivery by SLH to
Seafield of such other instruments as Seafield may reasonably request and as may
otherwise be required by this Agreement, the Distribution Agreement and the
Other Agreements. In addition, upon the reasonable request of any of party to
this Agreement, the other party will on and after the Distribution Date execute
and deliver to the requesting party such other documents, releases, assignments
and other instruments as may be required to effectuate completely the
transactions contemplated by this Agreement.
9
5.8. Notices. All notices, requests, claims, demands and other
communications hereunder (collectively, "Notices") shall be in writing and shall
be given (and shall be deemed to have been duly given upon receipt) by delivery
in person, by cable, telegram, telex or other standard form of
telecommunications, or by registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:
If to Seafield:
Seafield Capital Corporation
0000 Xxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: President
If to SLH:
SLH Corporation
0000 Xxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: President
or to such other address as any party hereto may have furnished to the other
parties by a notice in writing in accordance with this Section 9.05. Copies of
all notices, requests, claims, demands and other communications hereunder shall
also be given to:
Xxxxxxx & Xxxx X.X.
0000 Xxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxxx Xxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
5.9 Entire Understanding. This Agreement sets forth the entire
agreement and understanding of the parties hereto in respect to the transactions
contemplated hereby and supersedes all prior agreements, arrangements and
understandings relating to the subject matter hereof.
5.10 Written Consent of Sole Stockholder. Seafield owns all of the
issued and outstanding capital stock of SLH, consisting of 100 shares of $0.001
par value Common Stock. The officer of Seafield executing this Agreement has
been duly authorized by the Board of Directors of Seafield, consistent with its
Articles of Incorporation and Bylaws, to vote such stock and execute written
consents of the holders of such stock, and his execution of this Agreement shall
constitute the written consent of the Sole Stockholder of SLH to this
transaction.
10
5.11 Approval of Seafield's and SLH's Boards of Directors. Consistent
with and in accordance with the Certificates of Incorporation and Bylaws of
Seafield and SLH, the Boards of Directors of Seafield and SLH have authorized
and approved of this agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered on the date first above written.
SEAFIELD CAPITAL CORPORATION
Attest:
_______________________ By: _____________________________
Xxxxxx X. Xxxxxxxxx W Xxxxxx Xxxxx XX
Secretary Chairman
SLH CORPORATION
Attest:
_______________________ By: _____________________________
Xxxxxx X. Xxxxxxxxx Xxxxx X. Xxxxxx, CFA
Secretary President
11
ACKNOWLEDGEMENTS
STATE OF MISSOURI )
) ss.
COUNTY OF XXXXXXX )
BE IT REMEMBERED, that on this __st day of _________, 199_, before me, the
undersigned, a notary public in and for said state, came W. Xxxxxx Xxxxx XX
Chairman and Xxxxxx X. Xxxxxxxxx, Secretary, respectively of Seafield Capital
Corporation, a Missouri corporation, to me personally known to be such officers
and the same persons who executed as such officers the foregoing instrument on
behalf of said corporation, and such persons duly acknowledged the execution of
the same to be the act and deed of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year last above mentioned.
_____________________________
Notary Public in and for said
County and State
My commission expires:
, 19
STATE OF MISSOURI )
) ss.
COUNTY OF XXXXXXX )
BE IT REMEMBERED, that on this __st day of _________, 199_, before me, the
undersigned, a notary public in and for said state, came Xxxxx X. Xxxxxx, CFA,
Chairman and Xxxxxx X. Xxxxxxxxx, Secretary, respectively of SLH Corporation, a
Kansas corporation, to me personally known to be such officers and the same
persons who executed as such officers the foregoing instrument on behalf of said
corporation, and such persons duly acknowledged the execution of the same to be
the act and deed of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year last above mentioned.
_____________________________
Notary Public in and for said
County and State
My commission expires:
, 19
Exhibit E
SLH CORPORATION
1997 STOCK INCENTIVE PLAN
1. PURPOSE
The SLH Corporation 1997 Stock Incentive Plan is designed to enable Non-Employee
Directors of and qualified executive, managerial, supervisory and professional
officers and employees of the Company and its Subsidiaries to acquire or
increase their ownership of the $.01 par value common stock of the Company on
reasonable terms. The opportunity so provided is intended to xxxxxx in
participants a strong incentive to exert maximum effort for the continued
success and growth of the Company and its Subsidiaries and the enhancement of
stockholders' interests, to aid in retaining individuals who exert such efforts
and to assist in attracting the best available individuals in the future.
2. DEFINITIONS
When used herein, the following terms shall have the meaning set forth below:
2.1 "Board" means the Board of Directors of SLH Corporation.
2.2 "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
2.3 "Committee" means the members of the Board's Nominating and
Compensation Committee. Each Committee member shall be, at any time that an
Option is granted hereunder, a Non-Employee Director.
2.4 "Company" means SLH Corporation.
2.5 "Director" means a member of the Board.
2.6 "Distribution Date" means the date on which Shares are distributed
by Seafield Capital Corporation to is shareholders.
2.7 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
2.8 "Fair Market Value" means with respect to the Company's Shares, the
average of the closing "bid" and "asked" prices of the Shares, as reported on
the OTC Bulletin Board, or, if not so reported, the closing sales price as
reported by any other appropriate reporting system of general circulation, on
the date for which the value is to be determined, or if there is no closing
"bid" and "asked" price or sales price on such date, then on
the first day following such date for which there is a closing "bid" and "asked"
price (where value is to be determined on the Distribution Date) or on the last
day prior to such date for which prices for Shares were so reported (where value
is to be determined as of a date other than the Distribution Date).
2.9 "Grantee" means a person to whom an Option is granted.
2.10 "Incentive Stock Option" or "ISO" means an Option awarded under the
Plan which meets the terms and conditions established by Code Section 422 and
applicable regulations thereunder for such an Option.
2.11 "Non-Employee Director" means a Director who is a "Non-Employee
Director" within the meaning of both (i) Rule 16b-3 under the Exchange Act or
any successor rule of similar import, and (ii) Section 162(m) of the Code and
applicable regulations thereunder.
2.12 "Non-Qualified Stock Option" or "NQSO" means an Option awarded
under the Plan which by its terms and conditions is not an ISO.
2.13 "Option" means the right to purchase, at a price, for a term, under
conditions, and for cash or other considerations fixed either by the Plan or by
the Committee in accordance with such restrictions as the Plan and the Committee
impose, a number of Shares specified by the Plan or the Committee, as the case
may be. An Option can be either an ISO or NQSO or a combination thereof.
2.14 "Plan" means the Company's 1997 Stock Incentive Plan.
2.15 "Securities Act" means the Securities Act of 1933, as amended.
2.16 "Shares" means shares of the Company's $.01 par value common stock
or, if by reason of the adjustment provisions hereof any rights under an Option
granted under the Plan pertain to any other security, such other security.
2.17 "Subsidiary" means any business, whether or not incorporated, in
which the Company, at the time an Option is granted or in other cases at the
time of reference, owns directly or indirectly not less than 50% of the equity
interest.
2.18 "Successor" means the legal representative of the estate of a
deceased Grantee or the person or persons who shall acquire the right to
exercise an Option, by bequest or inheritance or by reason of the death of the
Grantee, as provided in accordance with Section 8 hereof.
2
2.19 "Tax Date" means the date on which the amount of tax to be withheld
with respect to an Option is determined.
2.20 "Term" means the period during which a particular Option may be
exercised.
3. ADMINISTRATION OF THE PLAN
3.1 The Plan shall be administered by the Committee, comprised from
time to time of not fewer than two members, each of whom shall be Non-Employee
Directors.
3.2 The Committee shall have plenary authority, subject to provisions
of the Plan (including without limitation the provisions of Section 6 hereof
respecting Options granted the Non-Employee Directors pursuant to Section 6.2),
to determine when and to whom Options shall be granted, the Term of each Option,
the number of Shares covered by it, the participation by Grantees in other
plans, and any other terms or conditions of each such Option. The number of
Shares, the Term and the other terms and conditions of a particular Option need
not be the same, even as to similarly situated Grantees. The Committee's
actions in granting Options and fixing their size, Term, and other terms and
conditions shall be final and conclusive on all persons. Notwithstanding
anything in the Plan to the contrary, the maximum number of Shares with respect
to which Options may be granted under the Plan to any individual other than a
Non-Employee Director is 65,000.
3.3 The Committee shall have the sole responsibility for construing and
interpreting the Plan, for establishing and amending such rules and regulations
as it deems necessary or desirable for the proper administration of the Plan,
and for resolving all questions arising under the Plan. Any decision or action
taken by the Committee arising out of or in connection with the construction,
administration, interpretation and effect of the Plan and of its rules and
regulations shall, to the extent permitted by law, be within its absolute
discretion, except as otherwise specifically provided herein, and shall be
conclusive and binding upon all Grantees, all Successors, and any other person,
whether that person is claiming under or through any Grantee or otherwise.
3.4 The Committee shall designate one of its members as Chairman. It
shall hold its meetings at such times and places as it may determine. A
majority of its members shall constitute a quorum, and all determinations of the
Committee shall be made by a majority of its members. Any determination reduced
to writing and signed by all members shall be fully as effective as
3
if it had been made by a majority vote at a meeting duly called and held. The
Committee may appoint a Secretary, who need not be a member of the Committee.
The Committee may make such rules and regulations for the conduct of its
business as it shall deem advisable.
3.5 Service on the Committee shall constitute service as a Director, so
that the members of the Committee shall be entitled to indemnification and
reimbursement as Directors pursuant to its Bylaws and to any agreements between
the Company and its Directors providing for indemnification.
3.6 The Committee shall regularly inform the Board as to its actions
with respect to all Options under the Plan and the Terms and conditions of such
Option grants in a manner, at such times, and in such form as the Board may
reasonably request.
4. ELIGIBILITY
Options may be granted under the Plan only to either (a) employees of the
Company or a Subsidiary who have executive, managerial, supervisory or
professional responsibilities or (b) Non-Employee Directors; provided that only
NQSOs may be granted to Non-Employee Directors. Officers shall be employees for
this purpose, whether or not they are also Directors. Options may be granted to
eligible employees and Non-Employee Directors whether or not they have received
prior Options under the Plan or under any previously adopted plan, and whether
or not they are participants in other benefit plans of the Company or any
Subsidiary.
5. SHARES SUBJECT TO PLAN
The Company hereby reserves 260,000 Shares for issuance in connection with
Options under the Plan, subject to adjustment under Section 17. The Shares so
issued may be unreserved Shares held in the treasury, however acquired, or
Shares which are authorized but unissued. Any Shares subject to issuance upon
exercise of Options but which are not issued because of a surrender, lapse,
expiration or termination of any such Option prior to issuance of the Shares,
any Shares withheld by the Company as payment of the exercise price pursuant to
Section 11.4 or pursuant to a tax withholding election permitted under Section
19.2 hereof, and any Shares owned by a Grantee which are used in the exercise of
an Option under Section 11.3 hereof shall be deemed issued under the Plan.
6. GRANTING OF OPTIONS
6.1 Subject to the terms of the Plan, the Committee may from time to
time grant Options to persons eligible under Section 4 above; provided that if
4
Options are granted to a Non-Employee Director either for more than 16,200
Shares or with a grant date other than either the Distribution Date (in the case
of Non-Employee Directors who are first appointed or elected on the date this
Plan is first approved by the Board) or on the later of the Distribution Date
and the date a Non-Employee Director first assumes office as a Director (in the
case of any Non-Employee Director who first assumes office as a Director after
the date this Plan is first approved by the Board), such grant shall be subject
to approval by the Company's stockholders.
6.2 Each person who is a Non-Employee Director as of the Distribution
Date shall, as of the Distribution Date, receive a grant of Options respecting
16,200 Shares, and each Non-Employee Director who first becomes a Director after
the Distribution Date shall, upon first becoming a Director, receive a grant of
Options respecting 16,200 Shares, in all cases without further action by the
Committee, the Board or otherwise.
6.3 Pursuant to Code Section 422 and applicable regulations, an Option shall
not be deemed to be an ISO to the extent that the aggregate Fair Market Value,
as determined on the date or dates of grant, of Shares with respect to which
such ISOs are exercisable for the first time by any individual during any
calendar year (under all stock option incentive plans of the Company or a
Subsidiary) exceeds $100,000. ISOs which first become exercisable during a
calendar year shall be taken into account in the order granted. Options that
exceed the $100,000 limit shall be treated as NQSOs.
6.4 The purchase price of each Share subject to an Option (other than
Options granted to Non-Employee Directors pursuant to Section 6.2 hereof) shall
be fixed by the Committee, provided the purchase price for all Options shall not
be less than 100% of the Fair Market Value of the Shares on the date the Option
is granted. The purchase price of each Share subject to an Option granted to a
Non-Employee Director pursuant to Section 6.2 hereof shall be 100% of the Fair
Market Value of the Shares on the effective grant date of such Option.
6.5 Notwithstanding Section 6.4 above, pursuant to Code Section 422 and
applicable regulations, the minimum purchase price of an ISO shall be 110% of
the Fair Market Value of the Shares on the date the ISO is granted with respect
to Grantees who at the time of grant are deemed to own 10% or more of the voting
power of the Company's outstanding Shares.
6.6 Each Option (other than an Option granted to Non-Employee Directors
pursuant to Section 6.2 hereof) shall expire and all rights to purchase Shares
thereunder shall cease on the date fixed by the Committee. Options
5
granted to Non-Employee Directors pursuant to Section 6.2 hereof shall expire on
the tenth anniversary of the effective date of grant.
6.7 Notwithstanding Section 6.6 above, pursuant to Code Section 422 and
applicable regulations, ISO Options shall expire and all rights to purchase
Shares thereunder shall cease no later than the fifth anniversary of the date on
which the Option was granted with respect to Grantees who at the time of grant
are deemed to own 10% or more the voting power of the Company, and no later than
the tenth anniversary of the date on which the Option was granted with respect
to other Grantees.
6.8 Each Option (other than Options granted to Non-Employee Directors
pursuant to Section 6.2 hereof) shall become exercisable at the time, and for
the number of Shares, fixed by the Committee. Options granted to Non-Employee
Directors pursuant to Section 6.2 hereof shall become exercisable in four equal
installments: one-fourth on the effective date of grant and one-fourth on each
of the first, second and third anniversaries of the effective date of grant.
7. NON-TRANSFERABILITY OF RIGHTS
No ISO and no rights under any ISO shall be assignable or transferable otherwise
than by will or the laws of descent and distribution and, except to the extent
otherwise provided in Section 11, the rights and the benefits of any such Option
may be exercised and received, respectively, during the lifetime of the Grantee
only by him or by his guardian or legal representative.
8. DEATH, DISABILITY, RETIREMENT AND OTHER TERMINATION OF EMPLOYMENT
8.1 Subject to the terms of the Plan, the Committee may make such
provisions concerning exercise or lapse of Options upon the Grantee's death,
disability, retirement, or other termination of employment as it shall in its
discretion determine, provided:
(i) no provision shall extend the Term of an Option,
(ii) except upon a Grantee's death or disability no provision shall
permit an ISO to be exercised after the date three months following the
Grantee's termination of employment,
(iii) no provision shall permit an Option to be exercised after the
date which is twelve months following a Grantee's death or disability,
6
(iv) no provision shall permit a NQSO to be exercised after the date
which is three years following the Grantee's retirement from the Company or a
Subsidiary,
(v) except upon a Grantee's death, disability or retirement, no
provision shall permit an NQSO to be exercised after the date which is six
months following a Grantee's termination of employment,
(vi) Options granted to a Non-Employee Director pursuant to Section
6.2 hereof shall expire to the extent unexercised on the date which is 90 days
after the date said Non-Employee Director's term as a Director shall terminate;
provided further, that in the event of the death of a Non-Employee Director
during such person's term as a Director or during the 90-day period following
expiration of such term, such Options shall expire to the extent unexercised by
such person's Successor on that date which is 12 months after the date of death,
and
(vii) No provision representing disability or retirement shall be
made a part of any option granted to a Non-Employee Director pursuant to
Section 6.2 hereof, except to the extent provided for in clause (vi) above.
For purposes of this Section 8, the term "disability" shall mean the inability
of the Grantee to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be expected to
result in death or to last for a continuous period of not less than twelve
months, based on the opinion of a qualified physician (or other medical
certificate) and other evidence acceptable to the Committee, and the term
"retirement" shall mean normal retirement at or after attaining age 65.
8.2 Unless the Committee determines otherwise (but only with respect to
Options granted other than to Non-Employee Directors pursuant to Section 6.2
hereof), Options which pursuant to their terms are exercisable following
termination of a Grantee's employment or the expiration of a Non-Employee
Director's term as a Director:
(i) may be exercised only to the extent exercisable upon the date
such employment terminates, or such term as a Director expires if such
termination or expiration is other than by reason of the Grantee's death, or, in
the case of Options granted other than to Non-
7
Employee Directors pursuant to Section 6.2 hereof, disability or retirement, and
(ii) shall be accelerated if not yet vested and shall be exercisable
in full,free and clear of all restrictions if such termination or expiration is
by reason of the Grantee's death or, in the case of Options granted other than
to Non-Employee Directors pursuant to Section 6.2 hereof, disability or
retirement.
8.3 Each Grantee may name, from time to time, any beneficiary or
beneficiaries (who may be named contingently or successively) to whom any
benefit or rights under the Plan is to be paid or transferred in case of his
death before he receives any or all of such benefit or exercises such rights.
Each designation will revoke all prior designations by the same Grantee, shall
be in a form prescribed by the Committee, and will be effective only when filed
by the Grantee in writing with the Committee during his lifetime. In the
absence of any such designation, benefits or rights remaining unpaid or
unexercised at the Grantee's death shall be paid to or shall be exercisable by
his estate, subject to the terms hereof.
8.4 Transfers of employment between the Company and a Subsidiary, or
between Subsidiaries, shall not constitute termination of employment for
purposes of any Option. The Committee may specify in the terms and conditions
of an Option grant whether any authorized leave of absence or absence for
military or governmental service or for any other reason shall constitute a
termination of employment for purposes of the Option and the Plan.
9. PROVISIONS RELATING TO CHANGE IN CONTROL OR EXTRAORDINARY CORPORATE
TRANSACTION
Notwithstanding any provision in this Plan to the contrary, all outstanding
Options shall become exercisable immediately if any of the following events
occur, unless, in the case of Options granted other than to Non-Employee
Directors pursuant to Section 6.2 hereof, otherwise determined by the Committee:
(1) Any "person" (as defined in Sections 13(d) and 14(d) of the
Exchange Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company
representing twenty-five percent (25%) or more of the combined voting power of
the Company's then outstanding securities, provided that this provision shall
not apply to the direct, indirect or beneficial ownership of Shares by
descendants of X.X. Xxxxx or their spouses, or
8
(2) At any time there shall cease to be a majority of the Board
comprised as follows: individuals who on the date this Plan is adopted by the
Board constitute the Board and any new Director(s) whose election by the Board
or nomination for election by the Company's shareholders was approved by a vote
of at least two-thirds (2/3) of the Directors then still in office who either
were Directors on the date this Plan is adopted by the Board or whose election
or nomination for election was previously so approved, or
(3) Any merger or consolidation involving the Company, provided that if
the Company is the surviving entity in a merger then with respect to any Grantee
whose employment with the surviving entity in such merger is confirmed for the
then remaining term of his employment agreement, if any, such merger shall not
be considered a merger for purposes of this Section 9, or
(4) The adoption or approval by the Company's Board and stockholders of
a plan of complete liquidation and dissolution of the Company.
Any Options not exercised prior to consummation of a transaction referred to in
(3) or (4) above shall terminate upon consummation of such transaction, unless,
in the case of Options granted other than to Non-Employee Directors pursuant to
Section 6.2 hereof, otherwise determined by the Committee.
10. WRITING EVIDENCING OPTIONS
Each Option granted under the Plan shall be evidenced by a writing which may,
but need not, be in the form of an agreement to be signed by the Grantee. The
writing shall set forth the nature and size of the Option grant, its Term, the
other terms and conditions thereof, other than those set forth in the Plan, and
such other information as the Committee directs. Acceptance of, or receipt of
the benefits of, an Option grant by the Grantee shall be conclusively presumed
to be assent to the terms and conditions set forth therein, whether or not the
writing is in the form of an agreement to be signed by the Grantee.
11. EXERCISE OF RIGHTS UNDER OPTIONS
11.1 A person entitled to exercise an Option may do so by delivery of a
written notice to that effect specifying the number of Shares with respect to
which the Option is being exercised and any other information the Committee may
prescribe.
11.2 The notice of exercise shall be accompanied by payment in full of
the purchase price for any Shares to be purchased, with such payment being made
in cash or in Shares having a Fair Market Value at that time
9
equivalent to the purchase price of such Shares to be purchased, or a
combination thereof.
11.3 In lieu of delivery of a stock certificate or certificates
evidencing Shares tendered by the Grantee in payment of the purchase price in
exercising an NQSO (but not on ISO), the Grantee may furnish a notarized
statement executed by the Grantee, in such form as prescribed by the Committee,
as payment for all or a portion of the purchase price for such Shares. The
statement shall recite the number of Shares being purchased by the Grantee
pursuant to the Option and the number of Shares owned by the Grantee which
otherwise could be freely delivered as payment of the purchase price by the
Grantee based on their Fair Market Value at that time. The Grantee will then be
issued a certificate for new Shares equal to the number of Shares- acquired by
the Grantee hereunder upon exercise of the Option, less the number of Shares
owned by the Grantee and described in the notarized statement. No Shares shall
be issued upon exercise of an Option until full payment has been made therefor.
11.4 In lieu of payment by the Grantee in cash or in Shares or by
delivery of a notarized statement of ownership pursuant to Sections 11.2 and
11.3, respectively, the Grantee may elect to pay all or part of the purchase
price for Shares pursuant to an exercise of an NQSO (but not an ISO) by
requesting the Company to reduce the number of Shares otherwise issuable to the
Grantee upon the exercise of the Option by the number of Shares with a Fair
Market Value at that time sufficient to pay the exercise price. Any such
election shall be made by delivering written notice thereof to the Company,
together with such information and documents as the Committee may prescribe.
11.5 Upon exercise of an Option but before a distribution of Shares in
satisfaction thereof, the Grantee may request in writing that the Shares to be
issued in satisfaction of the Option exercise be issued in the name of the
Grantee and another person as joint tenants with right of survivorship or as
tenants in common.
11.6 All notices or requests to the Company provided for herein shall be
delivered to the Secretary of the Company.
12. EFFECTIVE DATE OF THE PLAN AND DURATION
12.1 The Plan shall become effective on the Distribution Date, subject
to approval by any governmental body having jurisdiction over the Company with
respect to this Plan within the time limits applicable to any such governmental
approvals.
10
12.2 The Plan shall remain in effect until all Options have been
exercised in accordance herewith, but no Options may be granted under the Plan
after December 31, 2001. The terms of any Option may be amended at any time
prior to the end of its Term in accordance with the Plan.
13. DATE OF OPTION GRANT
The date of an Option grant shall be the date on which the Committee's
determination to grant the same is final, or such later date as shall be
specified by the Committee in connection with its determination; provided that
the date of grant for an Option granted pursuant to Section 6.2 hereof shall be
as specified in Section 6.
14. SHAREHOLDER STATUS
No person shall have any rights as a shareholder by virtue of the grant of an
Option under the Plan, except with respect to Shares actually issued to that
person.
15. POSTPONEMENT OR NON-EXERCISE
The Company shall not be required to issue any certificate or certificates for
Shares upon the exercise of an Option granted under the Plan prior to (i) the
obtaining of any approval from any governmental agency which the Company shall,
in its sole discretion, determine to be necessary or advisable, (ii) the taking
of any action in order to comply with restrictions or regulations incident to
the maintenance of a public market for its Shares; and (iii) the completion of
any registration or other qualification of such Shares under any state or
Federal law or rulings or regulations of any governmental body which the Company
shall, in its sole discretion, determine to be necessary or advisable. The
Company shall not be obligated by virtue of any terms and conditions of any
Option or any provisions of the Plan to recognize the exercise of an Option or
to sell or issue shares in violation of the Securities Act or the law of any
government having jurisdiction thereof. Any postponement or delay by the
Company in recognizing the exercise of any Option or in issuing any Shares
hereunder shall not extend the Term of an Option and neither the Company nor its
directors or officers shall have any obligation or liability to the Grantee of
an Option, to a Successor or to any other person with respect to any Shares as
to which the Option shall lapse because of such postponement.
16. TERMINATION, SUSPENSION OR MODIFICATION OF PLAN
The Board may terminate, suspend or modify the Plan at any time and in any
manner, provided, however, that to the extent stockholder approval is required
by the Code (including without limitation, pursuant to Sections 162 or 422
thereof)
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or regulations promulgated thereunder, or is required by regulations issued
under the Securities Act or the Exchange Act, in order to create or preserve
Company or Grantee benefits or rights under or with respect to Options, the
Board shall not, without authorization of the stockholders, effect any change
(other than through adjustment for changes in capitalization or as otherwise
herein provided) which:
(i) increases the aggregate number of Shares for which Options may be
granted under the Plan or increases in the maximum number of Shares for which
Options may be granted to any one Grantee;
(ii) lowers the minimum option price;
(iii) lengthens the maximum period during which an Option may be
exercised;
(iv) materially modifies the requirements as to eligibility to
participate in the Plan;
(v) extends the period of time during which Options may be granted;
or
(vi) materially increases the benefits of the Plan accruing to
Grantees.
Notwithstanding the foregoing, (i) the Board may amend the Plan, without
stockholder authorization, to comply with section 16(b) of the Exchange Act or
regulations issued thereunder, to effect registration of the Plan or securities
issuable thereunder under the Securities Act or the laws of any state, or to
obtain any required regulatory approval and (ii) if amendments to the Code or to
the Securities Act or Exchange Act, or regulations issued thereunder, are
adopted after the date of adoption of the Plan, which amendments permit
termination, suspension or modification of the Plan, including but not limited
to the changes referred to above, without stockholder approval, no authorization
by the Company's stockholders of any Board action hereunder shall be required.
No termination, suspension or modification of the Plan shall adversely affect
any right acquired by any Grantee or any Successor under an Option granted
before the date of such termination, suspension or modification unless such
Grantee or Successor shall consent but it shall be conclusively presumed that
any adjustment for changes in capitalization as provided for herein does not
adversely affect any such right.
17. ADJUSTMENTS FOR CHANGES IN CAPITALIZATION
17.1 In the event of a recapitalization, stock split, stock dividend,
combination or exchange of shares, merger, consolidation, rights offering,
reorganization or liquidation, or any other change in the corporate structure or
shares
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of the Company, the Committee shall (i) make equitable adjustments, to protect
against dilution or enlargement, in the number and kind of Shares authorized by
the Plan and, with respect to outstanding Options, in the number and kind of
Shares covered thereby and in the Option price, and (ii) make such arrangements,
which shall be binding upon the holders of unexpired Options for the
substitution of new Options for any unexpired Options then outstanding under the
Plan or for the assumption of any such unexpired Options.
17.2 The grant of any Option pursuant to the Plan shall not affect in any
way the right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure or to merge or
to consolidate or to dissolve, liquidate or sell, or transfer all or any part of
its business or assets, or the business, assets or stock of a Subsidiary.
18. NON-UNIFORM DETERMINATION
The Committee's determination under the Plan including, without limitation,
determination of the persons to receive Options, the form, amount and type of
Options (i.e., ISOs or NQSOs) the terms and provisions of Options and the
written material evidencing such Options, any amendments to the terms and
provisions of any Options, and the granting or rejecting of applications for
delivery of Shares or affidavits of ownership in lieu of cash payments, need not
be uniform and may be made selectively among otherwise eligible employees or
Non-Employee Directors whether or not such employees or Non-Employee Directors
are similarly situated.
19. TAXES
19.1 The Company may pay, withhold or require a Grantee to remit to it
amounts sufficient to satisfy the Company's federal, state, local or other tax
withholding obligations attributable to any Option exercise, after giving notice
to the Grantee, and the Company may defer issuance of Shares in connection with
an Option exercise if any such tax, charge or assessment may be pending, until
indemnified to its satisfaction.
19.2 In connection with the exercise of an NQSO, a Grantee may make an
irrevocable election to have Shares otherwise issuable withheld, or tender back
to the Company Shares received, or deliver to the Company previously-acquired
Shares, having a Fair Market Value at the time sufficient to satisfy all or part
of the Company's total federal, state, local and other tax withholding
obligations associated with the transaction.
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20. TENURE
Nothing in the Plan or in any agreement entered into pursuant to the Plan shall
confer upon any Grantee the right to continue in the employment of the Company
or any Subsidiary or affect any right which the Company or Subsidiary has to
terminate the employment of such participant. An employee terminated for cause,
as determined by the Company, shall forfeit all of his rights under the Plan,
except as to Options already exercised.
21. APPLICATION OF PROCEEDS
The proceeds received by the Company from the sale of its shares under the Plan
shall be used for general corporate purposes of the Company and its
Subsidiaries.
22. OTHER ACTIONS
Nothing in the Plan shall be construed to limit the authority of the Company to
exercise its corporate rights and powers, including, by way of illustration and
not by way of limitation, the right to grant options for proper corporate
purposes otherwise than under the Plan to any employee or any other person,
firm, corporation, association or other entity, or to grant options to, or
assume options of, any person in connection with the acquisition by purchase,
lease, merger, consolidation or otherwise, of all or any part of the business
and assets of any person, firm, corporation, association or other entity.
23. GENDER AND NUMBER
Except when otherwise indicated by the context, words in the masculine gender
when used in the Plan shall include the feminine gender, the singular shall
include the plural, and the plural shall include the singular.
24. REQUIREMENTS OF LAW, GOVERNING LAW
The granting of Options and the issuance of shares of Stock shall be subject to
all applicable laws, rules and regulations, and to such approvals by any
governmental agencies or national securities exchanges and self-regulating
entities as may be required. The Plan, and all agreements hereunder, shall be
construed in accordance with and governed by the laws of the State of Kansas.
25. EFFECT ON OTHER PLANS
Participation in this Plan shall not affect an employee's eligibility to
participate in any other benefit or incentive plan of the Company or a
Subsidiary. Any Options granted pursuant hereto shall not be used in
determining the benefits provided
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under any other plan of the Company or a Subsidiary unless specifically provided
therein.
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