EXHIBIT 4.4
SOVEREIGN SPECIALTY CHEMICALS, INC.
EMPLOYEE SUBSCRIPTION AGREEMENT
AGREEMENT dated as of [_______], 2000 by and between Sovereign
Specialty Chemicals, Inc., a Delaware corporation (the "Corporation"), and
________ (the "Subscriber").
Section 1. Agreement to Sell and Purchase Securities. Subscriber
agrees to purchase [______] shares of the common stock, par value $0.01 per
share (the "Voting Common Stock"), of the Corporation, at a purchase price
of $100.00 per share. The shares of the Voting Common Stock to be purchased
by the Subscriber pursuant to this Agreement, and the shares of the
non-voting common stock, par value $0.01 per share (the "Non-Voting Common
Stock"), of the Corporation received by the Subscriber upon the voluntary
conversion of his Voting Common Stock in accordance with the Corporation's
Amended and Restated Articles of Incorporation, are referred to as the
"Shares."
Section 2. Closing. The delivery of the Shares to the Subscriber
shall take place at a closing (the "Closing") on ________, 2000 or at such
other date as the Corporation and the Subscriber may agree in writing. The
Subscriber shall pay for the Shares by check or by such other form of
payment acceptable to the Corporation so that at Closing, the Corporation
can deliver the Shares against receipt of cleared funds. The time and date
at and upon which the Closing occurs is herein called the "Closing Date."
Section 3. Representations and Warranties of Subscriber. The
Subscriber for himself represents, warrants and agrees that:
(a) The Subscriber is acquiring the Shares to be acquired by him
hereunder for his own account, for investment and not with a view to the
sale or distribution thereof, nor with any present intention of
distributing or selling the same. Except as expressly provided in this
Agreement, the Subscriber will have no right to Transfer the Shares and
must bear the economic risk of the Subscriber's investment for an
indefinite period of time. There is not now and there may never be any
public market for the Shares. For the purposes of this Agreement,
"Transfer" shall mean any sale, transfer, assignment, exchange, grant of a
participation in, gift, hypothecation, encumbrance, pledge or other
disposition by testamentary bequest, inter vivos transfer or otherwise of
any securities or any interests therein, whether direct or indirect.
(b) The Subscriber is a citizen or resident of the United States
of America and has entered into this Agreement within the United States of
America.
Section 4. Management Fees. The Subscriber hereby acknowledges
and agrees that SSCI Investors LLC ("Investors"), the majority shareholder
of the Corporation, or its affiliates will receive management and other
fees and expenses from the Corporation.
Section 5. Transfer Provisions. The Subscriber and Corporation
agree that the Subscriber is entitled to certain tag along rights, is
subject to certain obligations to Transfer his Shares under certain
circumstances (including termination of employment and certain sales by
Investors) and is subject to certain restrictions on his ability to
Transfer his Shares, all of which are described in Exhibit A.
Section 6. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without
regard to its rules of conflict of laws. The Subscriber hereby irrevocably
and unconditionally consents to submit to the exclusive jurisdiction of the
courts of the State of Delaware and of the United States of America located
in the State of Delaware for any litigation arising out of or relating to
this Agreement and the transactions contemplated hereby (and agrees not to
commence any litigation relating thereto except in such courts), waives any
objection to the laying of venue of any such litigation in such Delaware
courts and agrees not to plead or claim that such litigation brought in any
such Delaware court has been brought in an inconvenient forum.
Section 7. Assignment; Binding Effect; Third Party Beneficiaries.
Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by either of the parties hereto (whether by
operation of law or otherwise) without the prior written consent of the
other party. Subject to the preceding sentence, this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns. Investors and its affiliates are third
party beneficiaries under this Agreement. Notwithstanding anything
contained in this Agreement to the contrary, nothing in this Agreement
(other than as set forth in the preceding sentence), express or implied, is
intended to confer on any person other than the parties hereto or their
respective heirs, successors, executors, administrators and assigns any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.
Section 8. Entire Agreement. This Agreement constitutes the
entire agreement among the parties with respect to the subject matter
hereof and supersede all prior agreements and understandings (oral and
written) among the parties with respect thereto.
Section 9. Incorporation of Exhibit. Exhibit A hereto is hereby
incorporated herein and made a part hereof for all purposes as if fully set
forth herein.
Section 10. Severability. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining
terms and provisions of this Agreement or otherwise affecting the validity
or enforceability of any of the terms or provisions of this Agreement in
any other jurisdiction. If any provision of this Agreement is so broad as
to be unenforceable, the provision shall be interpreted to be only so broad
as is enforceable.
Section 11. Termination. The provisions of Sections 3, 4 and 5 of
Exhibit A shall terminate and shall cease to be binding on the parties
hereto upon the initial public offering ("IPO") of Shares registered under
the U.S. Securities Act of 1933, as amended, whether by the Corporation or
by shareholders.
IN WITNESS WHEREOF, this Agreement has been duly executed as of
the date first above written.
SOVEREIGN SPECIALTY CHEMICALS, INC.
By:
--------------------------------
Name:
Title:
Address for Notices:
Xxxxx 0000
000 Xxxx Xxxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Chief Financial Officer
SUBSCRIBER
-----------------------------------
[Name]
Subscriber's Address for Notices:
-----------------------------------
-----------------------------------
-----------------------------------
Subscriber's Taxpayer I.D. No:
-----------------------------------
AGREED WITH RESPECT TO
SECTION 4 OF EXHIBIT A:
SSCI INVESTORS LLC
By: SSCI Investors Inc.
By:
-------------------------
Name:
Title:
Address for Notices:
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attn: General Counsel
Exhibit A
Transfer Provisions
Section 1. Transfer Restrictions. (a) The Subscriber shall not
Transfer all or part of any Shares owned of record by him in violation of
the provisions of this Section. Any Transfer in violation of the provisions
of this Section shall have no effect and be null and void.
(b) So long as such restriction is applicable hereunder or by
law, each of the certificates representing the Shares held by the
Subscriber hereto shall be stamped with the following legend:
THESE SHARES ARE SUBJECT TO CERTAIN LIMITATIONS ON
TRANSFER AND TO CERTAIN VOTING AGREEMENTS AND
OBLIGATIONS AS ARE SET FORTH IN A SUBSCRIPTION
AGREEMENT WITH SOVEREIGN SPECIALTY CHEMICALS, INC.,
INCLUDING, BUT NOT LIMITED TO, RESTRICTIONS ON THEIR
SALE, TRANSFER, PLEDGE OR OTHER DISPOSITION AND VOTING
OBLIGATIONS TO EFFECT CERTAIN TRANSACTIONS. A COPY OF
SUCH AGREEMENT IS ON FILE WITH THE SECRETARY OF
SOVEREIGN SPECIALTY CHEMICALS, INC. SUCH TRANSFER
RESTRICTIONS AND VOTING OBLIGATIONS SHALL BE BINDING ON
FUTURE TRANSFEREES AND HOLDERS.
(c) The Subscriber, by acceptance of the Shares, agrees, prior to
any offer to sell, sale or other disposition or Transfer of part or all of
the Shares, to give written notice to the Corporation of his intention to
effect such sale or other disposition or Transfer. Each such notice shall
describe the manner and circumstances of the proposed sale or other
disposition or Transfer in sufficient detail. The Corporation will advise
the Subscriber within 10 Business Days after submission of such notice,
whether he is entitled to so Transfer the securities. If such holder is
entitled to so Transfer, he shall submit the certificate representing the
Shares to the Corporation in proper form for Transfer and accompanied by
appropriate instruments of Transfer. Such certificate shall also be
accompanied by an undertaking in writing by the transferee to be bound by
all the terms of this Agreement. Each certificate thus transferred (and
each of the stock certificates evidencing any untransferred balance of the
securities evidenced by such certificate) shall bear the restrictive legend
set forth in Section 1(b) of this Exhibit A, unless such legend is not
required by this Agreement. For the purposes of this Agreement, "Business
Day" shall mean a day that is not a Saturday, a Sunday or a day on which
banking institutions in New York, New York are not required to open.
(d) Except as permitted by Section 3, 4 or 5 of this Exhibit A,
the Subscriber shall not, at any time from the date hereof until the
earlier of (x) the IPO and (y) the fifth anniversary of the date of this
Agreement, without the consent of the Corporation and Investors, Transfer
any Shares owned by him ("Restricted Shares").
(e) Notwithstanding any provision to the contrary contained in
this Agreement and upon compliance with Section 1(c) of this Exhibit A:
(i) The Subscriber may Transfer Restricted Shares to: (1) a
spouse or any lineal ancestor or descendant; (2) the trustee or trustees of
a trust or trusts at any time established for the primary benefit of the
Subscriber or the spouse or any lineal ancestor or descendant of the
Subscriber, provided that each and every trustee who may vote any
Restricted Shares shall be the Subscriber or a person referred to in this
paragraph (e)(i) or a bank or trust company; and (3) a partnership or
partnerships, all of the general and limited partners of which are the
Subscriber and/or one or more of the persons referred to with respect to
the Subscriber in this paragraph (e) (other than a bank or trust company);
provided that (x) any such trust or partnership shall have no terms
inconsistent with the obligations of the Subscriber under this Agreement,
and (y) as a condition of Transfer, any Permitted Transferee shall execute
and deliver to the Corporation an agreement in form and substance
reasonably satisfactory to the Corporation pursuant to which the Permitted
Transferee agrees to be bound by all of the provisions of this Agreement.
If any Restricted Shares are transferred to a Permitted Transferee, such
Permitted Transferee shall take and hold such Restricted Shares, and such
Restricted Shares shall be, subject to this Agreement and to the rights,
obligations and restrictions provided herein with respect to the original
Subscriber of such Restricted Shares as of the date of this Agreement, as
if such Permitted Transferee were such original Subscriber.
(ii) Any Transfer of Restricted Shares otherwise permitted
by this paragraph (e) shall not be made unless in compliance with all
applicable laws, including, without limitation, the securities laws of the
United States of America and the states thereof.
(iii) For purposes of this Agreement, "Permitted Transferee"
shall mean any Person to whom Shares are Transferred by the Subscriber or
any previous Permitted Transferees, excluding any Shares Transferred
pursuant to Section 3 or 4 of this Exhibit A and excluding any Shares sold
after the consummation of an IPO in compliance with this Section.
(f) No purported Transfer of any Restricted Share or any share
certificate bearing the legend set forth in Section 1(b) of this Exhibit A
in violation of this Agreement shall be of any force or effect, and no such
Transfer shall be made or recorded on the books of the Corporation.
Section 2. Holdback. Each holder of Shares agrees that, if
requested by the Corporation or the managing underwriters, if any, in
writing, he will not directly or indirectly (x) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant for the sale
of or otherwise dispose of or transfer any shares of Voting or Non-Voting
Common Stock or securities convertible into or exchangeable or exercisable
for shares of Voting or Non-Voting Common Stock or (y) Transfer any Shares
in any manner or during any period required by the managing underwriters.
Requests under this section need not be uniformly applied to all
shareholders.
Section 3. Take Along Rights. If, prior to an IPO, Investors, any
affiliate of Investors, or any officer, director, employee, participant,
shareholder or member of Investors, or any affiliate thereof (together, the
"Investors Parties") desire to Transfer or exchange directly or indirectly
(by merger or otherwise), at least 50% of the shares of Voting and
Non-Voting Common Stock beneficially owned by the Investors Parties (any
such transaction being referred to herein as an "Exit Sale") to any person
who is not an affiliate of the transferring Investors Party or an Affiliate
of Investors, Investors may require, pursuant to a written notice delivered
to the Subscriber at least 20 days prior to the closing of the proposed
Exit Sale, that the Subscriber sell to the prospective purchaser,
concurrently with and on the terms (including price) and subject to the
conditions of the Exit Sale, up to that number of Shares owned by the
Subscriber as shall equal the product of (x) a fraction, the numerator of
which is the number of shares of Voting and Non-Voting Common Stock held by
the Investors Parties proposed to be transferred in the Exit Sale and the
denominator of which is the number of shares of Voting and Non-Voting
Common Stock owned by the Investors Parties, and (y) the number of Shares
owned by the Subscriber. If the Investors Parties propose the Transfer of
all or substantially all of the assets or business, (whether by merger,
sale or otherwise) of the Corporation, then Investors and the Corporation
shall have the right to require the Subscriber to take promptly all action
necessary or appropriate (including voting their Shares in favor of such
transaction) in order to effect such transaction. The Subscriber covenants
and agrees that it shall take such actions as are necessary to consummate
the transactions contemplated by this paragraph.
Section 4. Tag Along Rights. If, prior to an IPO, the Investors
Parties desire to Transfer (other than Transfer to any other Investors
Party or Related Party (as defined below)), directly or indirectly, shares
of Voting or Non-Voting Common Stock, the Investors Parties shall provide
the Subscriber with written notice (the "Tag Along Notice") (which may, but
need not be, incorporated into the notice required pursuant to Section 3 of
this Exhibit A) setting forth:
(i) the number of shares of common stock proposed to be
Transferred;
(ii) the identity of the prospective purchaser;
(iii) all material terms and conditions of such proposed
transaction; and
(iv) that the party transferring shares of common stock
requiring a tag-along notice (the "Transferring Party") is offering the
Subscriber (the "Non-Transferring Party") the right to participate in such
Transfer on a pro rata basis on the same terms and conditions as are
applicable to the Transferring Party, provided that the Investors Parties
may Transfer (x) up to 15% of the shares of Voting and Non-Voting Common
Stock beneficially owned by them in the aggregate as of the Closing Date
without complying with this Section 4 and (y) to other Investors Parties or
the Related Parties. This Section 4 shall not apply to any redemption or
Transfer of shares of Voting or Non-Voting Common Stock made in connection
with any employee stock purchase plans. Tag-Along rights shall not apply,
and the 15% computation referred to in the preceding clause (x) shall
exclude, shares of Voting and Non-Voting Common Stock sold to employees of
the Corporation by any Investors Party or its affiliates within 365 days
after the date hereof.
Within 10 Business Days following the delivery of the Tag
Along Notice, the Non-Transferring Party shall, by notice in writing to the
Transferring Party, have the opportunity to sell to the prospective
purchaser (upon the same terms and conditions as the Transferring Party) up
to that number of Shares owned by such Non-Transferring Party as shall
equal the product of (x) a fraction, the numerator of which is the number
of Shares owned by the Non-Transferring Party as of the date of such
proposed sale and the denominator of which is the aggregate number of
shares of Voting and Non-Voting Common Stock owned as of the date of such
Tag Along Notice by Investors Parties and the Non-Transferring Party and
any other participating person, and (y) the number of shares of Voting and
Non-Voting Common Stock proposed to be sold. The amount of shares of Voting
and Non-Voting Common Stock to be sold by the Transferring Party shall be
reduced if and to the extent necessary to provide for such sale of Shares
by the Non-Transferring Party. If the Non-Transferring Party does not elect
to participate in such sale within the 10 Business Day period referred to
above, the Transferring Party shall be entitled to consummate such sale
without the participation of the Non-Transferring Party.
For the purposes of this Agreement, "Related Party" with
respect to any person shall mean, as of the time of any Transfer, (i) any
person or entity that, directly or indirectly, through one or more
intermediaries, has voting control of, or is under common voting control
with, or is controlled by such person, (ii) with respect to individuals,
such individual's spouse, parents, children, siblings and/or grandchildren,
and (iii) a trust, corporation, partnership or other entity, whose
beneficiaries, shareholders, partners, or owners, or other persons or
entities holding a controlling interest in which, consist solely of such
person and/or such other persons or entities referred to in the immediately
preceding clauses (i) or (ii).
Section 5. Certain Consequences of Termination of Subscriber's
Employment. (a) If at any time the Subscriber shall cease to be employed by
the Corporation or any subsidiary thereof as a result of a Termination by
the Corporation for Cause (as defined below), the Corporation shall have
the right (a "Call Option") to purchase all but not less than all of the
Shares owned by the Subscriber and his Permitted Transferees at an
aggregate price equal to the lower of the (i) price paid by the Subscriber
pursuant to this Agreement or (ii) Fair Market Value of the Shares to be
purchased on the date of the Call Notice (the "Applicable Valuation Date").
For the purposes of this Agreement, "Termination by the
Corporation for Cause": means termination by the Corporation or any of its
subsidiaries or affiliates of the Subscriber's employment for: (i)
misappropriation of any significant monies or significant assets or
properties of the Corporation or any of its subsidiaries, (ii) conviction
of a felony or a crime involving moral turpitude, (iii) substantial and
repeated failure to comply with directions of the Chief Executive Officer
of the Corporation or other superior of the Subscriber or the board of
directors of the Corporation or any of its subsidiaries or affiliates, (iv)
gross negligence or willful misconduct, (v) chronic alcoholism or drug
addiction together with the Subscriber's refusal to cooperate with or
participate in counseling and/or treatment of same or (vi) any willful
action or inaction of the Subscriber which, in the reasonable opinion of
the Corporation, constitutes dereliction (willful neglect or willful
abandonment of assigned duties), or a material breach of any policy or rule
of the Corporation or any of its subsidiaries. For the purposes of this
Agreement, "Fair Market Value" shall be determined by the Corporation in
good faith.
(b) If at any time the Subscriber shall cease to be employed by
the Corporation or any subsidiary thereof other than as a result of a
Termination by the Corporation for Cause, the Corporation shall have the
right, to purchase all but not less than all the Shares owned by the
Subscriber or his Permitted Transferees at a price equal to the Fair Market
Value on the Applicable Valuation Date of the Shares to be purchased.
(c) If the Corporation desires to exercise a Call Option, it
shall give written notice thereof (a "Call Option Notice") to the
Subscriber and the Permitted Transferees of the Subscriber within 60 days
of the occurrence of the event giving rise to such Call Option; such Call
Option shall expire if such notice is not given within such period. The
Subscriber and the Permitted Transferees of the Subscriber shall deliver to
the Corporation certificates representing the Shares, free and clear of all
claims, liens, or encumbrances, together with blank stock powers, duly
executed with all signature guarantees at a closing at the principal office
of the Corporation on the seventh day after the Call Option Notice has been
given to the Subscriber. The proceeds from the purchase of the Shares
pursuant to the Call Option shall be paid by check, which shall be
delivered to the Subscriber at the closing of such purchase.
