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Exhibit 10.2
1999 STOCKHOLDERS' AGREEMENT
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AGREEMENT, dated as of September 23, 1999 (this "Agreement"), by and
among Xxxxxxx Holdings, Inc., a Delaware corporation ("Holdings"), Xxxxxxx
Holdings, LLC, a Delaware limited liability company ("Xxxxxxx LLC") and the
members of management of the Xxxxxxx Company, a Delaware corporation (the
"Company") who are, from time to time, a party hereto.
RECITALS
Holdings desires to grant stock options and to sell shares of Common
Stock to certain employees and such employees desire to receive such options or
purchase such shares, and in connection therewith, the parties hereto desire to
restrict the sale, assignment, transfer, encumbrance or other disposition of
certain shares of capital stock of Holdings and to set forth their agreements on
certain related matters.
Accordingly, in consideration of the premises and of the terms and
conditions herein contained, the parties hereto mutually agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the meanings
ascribed to them below:
"1999 Stock Option Plan" shall mean the plan adopted by the Board of
Directors of Holdings on September 23, 1999, as amended from time to time.
"Affiliate" of any Person shall mean any other Person directly or
indirectly controlled by, controlling or under common control with such Person.
For the purposes of this definition, "control", when used with respect to any
Person, means the power to directly or indirectly direct the management and
policies of such person, whether through the ownership of voting securities, by
contract or otherwise; the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Agreement" shall have the meaning ascribed thereto in the Preamble
hereof.
"Approved Retirement" shall mean the retirement of a holder of
Management Securities on or after his or her sixty-fifth (65th) birthday or, if
earlier, either for Good Reason or if approved by the Board of Directors of
Holdings.
"Business Day" means any day other than a Saturday, Sunday, federal
holiday or other day on which commercial banks in New York City are authorized
or required to close under the laws of the State of New York.
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"Certificate of Incorporation" means the Certificate of Incorporation
of Holdings.
"Change of Control" means (a) any change in the ownership of the
capital stock of Holdings if, immediately after giving effect thereto, (i) the
Fenway Investors will hold, directly or indirectly, less than 50% of the number
of shares of Common Stock held by the Fenway Investors and their Affiliates as
of the date hereof or (ii) any Person (or group of Persons acting in concert)
other than the Fenway Investors and their Affiliates will hold, directly or
indirectly, greater than 50% of the number of shares of Common Stock outstanding
or (b) any sale or other disposition of all or substantially all of the assets
of Holdings (including, without limitation, by way of a merger or consolidation
or through the sale of all or substantially all of the stock of its Subsidiaries
or sale of all or substantially all of the assets of Holdings and its
Subsidiaries, taken as a whole) to another Person (the "Change of Control
Transferee") if, immediately after giving effect thereto, any Person (or group
of Persons acting in concert) other than the Fenway Investors and their
Affiliates will have the power to elect a majority of the members of the board
of directors (or other similar governing body) of the Change of Control
Transferee.
"Common Stock" shall mean the shares of common stock, par value $.01
per share, of Holdings and the shares of Class B common stock, par value $.01
per share, of Holdings.
"Company" shall have the meaning ascribed thereto in the Preamble
hereof.
"Covered Sale" shall have the meaning ascribed thereto in Section
2.1(a) hereof.
"Disability" shall mean a holder of Management Shares becomes
physically or mentally incapacitated or disabled so that he or she is unable to
perform for the Company or a Subsidiary substantially the same services as he or
she performed prior to incurring such incapacity or disability or to devote his
or her full working time or use his or her best efforts to advance the business
and welfare of the Company or a Subsidiary for an aggregate period of six months
during any 12-month period.
"Drag-Along Right" shall have the meaning ascribed thereto in Section
2.1(a) hereof.
"Duly Endorsed" shall mean that a stock certificate is duly endorsed in
blank by the Person or Persons in whose name such certificate is registered or
that such certificate is accompanied by a duly executed stock or security
assignment, separate from the certificate itself, with the signature(s) thereon
guaranteed by a commercial bank or trust company or a member of a national
securities exchange or of the National Association of Securities Dealers, Inc.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any similar federal statute then in effect, and a reference to a
particular section thereof shall be deemed to include a reference to the
comparable section, if any, of any such similar federal statute.
"Fair Market Value" shall mean the value determined in good faith by
Holdings' Board of Directors at the applicable date. If the Board determination
is challenged by a holder of Management Shares, a mutually acceptable investment
banker or appraiser shall establish the
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Fair Market Value. If the holder of Management Shares and Holdings cannot agree
upon an investment banker or appraiser each shall choose an investment banker or
appraiser and the two investment bankers or appraisers shall choose a third
investment banker or appraiser who alone shall establish the Fair Market Value.
The Fair Market Value shall be based on an assumed sale of 100% of the
outstanding capital stock of Holdings and shall be determined using customary
criteria generally employed within the investment banking community at the time
such determination is made for valuing an entity similar to Holdings. The
investment banker's or appraiser's determination shall be conclusive and binding
on the Principal Stockholder, Holdings and the holder of Management Shares.
Holdings shall bear all costs incurred in connection with the services of such
investment banker or appraiser unless the Fair Market Value established by the
investment banker or appraiser is (i) less than or equal to 110% of the Board of
Directors' determination, in which case the holder of Management Shares shall
promptly pay or reimburse Holdings for such costs or (ii) greater than 110% but
less than 125% of the Board of Directors' determination, in which case the
holder of Management Shares shall promptly pay or reimburse Holdings for 50% of
such costs.
"Fenway Investors" shall mean each of Fenway Partners Capital Fund,
L.P., a Delaware limited partnership, Fenway Partners Capital Fund II, L.P., a
Delaware limited partnership and their respective Subsidiaries and Affiliates.
"Good Reason" shall mean (i) the assignment to a holder of Management
Securities of any duties materially inconsistent with such holder's position,
(ii) a request of a holder of Management Securities to relocate his office to a
distance of greater than seventy-five (75) miles from the present site of his
office or (iii) a material diminution in the position, authority, duties or
responsibility of a holder of Management Securities.
"Holdings" shall have the meaning ascribed thereto in the Preamble
hereof.
"Holdings Note" shall have the meaning ascribed thereto in Section
4.1(a).
"Initial Public Offering" shall mean the occurrence of each of (i) the
effectiveness of a registration statement under the Securities Act covering any
capital stock of Holdings or the Company (other than preferred stock that is not
convertible into common stock) and (ii) the completion of a sale of such capital
stock thereunder, which sale results in (A) Holdings or the Company becoming a
reporting company under Section 12(b) or 12(g) of the Securities Exchange Act of
1934, as amended, and (B) such capital stock being traded on the New York Stock
Exchange or the American Stock Exchange, or being quoted on the Nasdaq Stock
Market or being traded or quoted on any other national stock exchange or
securities system.
"Lock-Up Period" shall mean in the case of an Initial Public Offering,
the 180-day period commencing on the effective date of the registration
statement covering capital stock of Holdings or the Company sold in such Initial
Public Offering, and, in the case of any subsequent registered offering, the
90-day period commencing on the effective date of the registration statement
relating to such offering, or, in either case, such lesser period as may be
agreed upon with the underwriters of such offering.
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"Management Representative" shall have the meaning ascribed thereto in
Section 5.4.
"Management Securities" shall mean (i) the Management Shares, (ii) the
stock options granted to management of the Company or Holdings under the 1999
Stock Option Plan and (iii) any shares of Common Stock issued upon exercise
under the stock options under (ii).
"Management Shares" shall mean the shares of Common Stock of Holdings
issued on or after the date hereof to management of the Company who are parties
hereto.
"Permitted Transferee" shall have the meaning ascribed thereto in
Section 3.1.
"Person" shall mean an individual, partnership, joint venture,
corporation, trust, unincorporated organization or entity, government, or any
department or agency thereof, or any other similar entity.
"Principal Stockholder" shall mean Xxxxxxx Holdings, LLC, a Delaware
limited liability company controlled by the Fenway Investors, which now or
hereafter holds shares of Common Stock of Holdings.
"Principal Stockholder Consideration" shall have the meaning ascribed
thereto in Section 2.1(a) hereof.
"Principal Stockholder Shares" shall mean the shares of Common Stock
beneficially owned by the Principal Stockholder or any of its Affiliates or any
of its transferees.
"Put Date" shall have the meaning ascribed thereto in Section 4.2(a).
"Repurchase Disability" shall have the meaning ascribed thereto in
Section 4.2(a).
"Repurchase Period" shall have the meaning ascribed thereto in Section
4.1(a).
"Repurchase Price" shall have the meaning ascribed thereto in Section
4.1(a).
"Second Repurchase Period" shall have the meaning ascribed thereto in
Section 4.1(a).
"SEC" shall mean the Securities and Exchange Commission, or any other
federal agency at the time administering the Securities Act or the Securities
and Exchange Act of 1934, as amended.
"Section 2.1 Event" shall have the meaning ascribed thereto by Section
2.1(a) hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended, or
any similar federal statute then in effect, and a reference to a particular
section thereof shall be deemed to include a reference to the comparable
section, if any, of any such similar federal statute.
"Xxxxxxx LLC" shall have the meaning ascribed thereto in the Preamble
hereof.
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"Stock Option" shall have the meaning ascribed thereto in Section
4.1(a).
"Subsidiary" shall mean any Person of which Holdings at the time (i)
owns, directly or indirectly through a Subsidiary, at least a majority of the
outstanding capital stock (or other shares of beneficial interest) entitled to
vote generally or (ii) controls the board of directors of such Person.
"Tag-Along Right" shall have the meaning ascribed thereto in Section
2.1(a) hereof.
"Termination Date" shall mean the date on which a holder of Management
Securities ceases to be employed by Holdings, the Company or any Subsidiary
thereof for any reason including, without limitation, by reason of death or
disability; PROVIDED, HOWEVER, that such holder shall not be considered to have
ceased to be employed by the Holdings, the Company or any Subsidiary thereof if
he or she continues to be employed by Holdings, the Company or any Subsidiary
thereof.
"Third Party" shall mean a Person or Persons which are not Affiliates
of Holdings.
ARTICLE II
TAG-ALONG AND DRAG-ALONG RIGHTS
Section 2.1 SALE OF COMMON STOCK TO A THIRD PARTY.
(a) If at any time, or from time to time, the Principal Stockholder
proposes to sell for its own account (other than in a sale pursuant to a
registration statement under the Securities Act) shares of Common Stock (a
"Section 2.1 Event") to a Third Party that is not an Affiliate of the Principal
Stockholder and, following such sale, the Principal Stockholder ceases to own,
in the aggregate, at least seventy-five percent (75%) of the shares of Common
Stock owned by the Principal Stockholder as of the date of this Agreement (each
such sale, a "Covered Sale"), each holder of Management Shares shall have the
right to participate with respect to the Management Shares that each holds, (a
"Tag-Along Right"), and the Principal Stockholder or such Third Party shall have
the right to require the holders of Management Shares to participate with
respect to such shares (a "Drag-Along Right"), in each such sale on a pro rata
basis (based on (i) the aggregate number of shares of Common Stock to be sold by
the Principal Stockholder in such Covered Sale and any related transactions (but
not in any other sales) compared to (ii) the aggregate number of Principal
Stockholder Shares then owned by the Principal Stockholder, as appropriately
adjusted for any stock dividends, stock splits, reverse stock splits,
combinations, recapitalizations and similar events occurring after the date of
this Agreement) for the same consideration per share, and otherwise on the same
terms (the "Principal Stockholder Consideration"), as the Principal Stockholder
sells its shares of Common Stock; PROVIDED, HOWEVER, that the Principal
Stockholder or Third Party shall only be entitled to exercise its Drag-Along
Right hereunder pursuant to a Covered Sale by the Principal Stockholder or its
Affiliates of at least 80% of the shares of Common Stock owned by the Principal
Stockholder as of the date of this Agreement.
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(b) Prior to or within two calendar days following the occurrence of a
Section 2.1 Event, the Principal Stockholder, in its sole discretion, may notify
the holders of Management Shares in writing of its intention to consummate or of
the occurrence of such Section 2.1 Event (which notice shall set forth the terms
upon which such Section 2.1 Event is intended to be or shall have been
consummated) in the manner and upon the terms and conditions provided in this
Section 2.1(b). If the Principal Stockholder, in its sole discretion, shall have
given prior written notice to each of the holders of Management Shares of its
intention to engage in a Section 2.1 Event, then each of the holders of
Management Shares shall have 15 calendar days from the receipt of such notice
within which to exercise its Tag-Along Right pursuant to this Section 2.1, and
the failure of a holder of Management Shares to notify the Principal Stockholder
of its intention to exercise its Tag-Along Right within such 15 calendar days
shall operate as a waiver of such Tag-Along Right; PROVIDED, HOWEVER, that the
Principal Stockholder having delivered written notice of its intention to engage
in a Section 2.1 Event shall not be construed as providing any assurance that a
Section 2.1 Event shall be consummated, and the delivery of such notice shall
not give rise to any rights on the part of the holders of Management Shares
other than those expressly set forth in this Agreement. If the Principal
Stockholder, in its sole discretion, shall not have given prior written notice
of its intention to engage in a Section 2.1 Event, then the Principal
Stockholder shall notify the holders of Management Shares in writing of the
occurrence of a Section 2.1 Event not later than two calendar days following the
consummation of such Section 2.1 Event, and the holders of Management Shares
shall have 15 calendar days from the receipt of such notice within which to
exercise their Tag-Along Rights pursuant to this Section 2.1. The failure of
each of the holders of Management Shares to notify the Principal Stockholder of
its intention to exercise its Tag-Along Right within such 15 calendar days shall
operate as a waiver of such Tag-Along Right. The delivery of any notice
regarding a Section 2.1 Event pursuant to the provisions of this Section 2.1
shall not operate as a waiver of the Principal Stockholder's or a Third Party's
Drag-Along Rights in respect of the Section 2.1 Event specified in such notice.
In the case of a Third Party's exercise of its Drag-Along Rights pursuant to the
provisions of this Section 2. 1, the Third Party shall deliver written notice to
the holders of Management Shares, not later than two calendar days following the
occurrence of a Section 2.1 Event, with respect to which such Drag-Along Rights
have been exercised, of its intention to exercise such Drag-Along Rights in
respect of such Section 2.1 Event. The consummation of any transaction pursuant
to the Third Party's exercise of its Drag-Along Rights shall occur within 15
calendar days following the delivery of the notice specified in this Section
2.1(c).
(c) The Principal Stockholder shall not enter into a transaction which
would constitute a Section 2.1 Event unless the Third Party shall have agreed in
writing, prior to the consummation of such transaction, to be bound by the
Tag-Along Right provided in this Section 2.1 applicable to that transfer;
PROVIDED, HOWEVER, that such agreement shall not be construed as providing any
assurance that a Section 2.1 Event shall be consummated and shall not give rise
to any liability on the part of Holdings to the holders of Management Shares.
The Principal Stockholder (and any subsequent transferee bound by the provisions
of this sentence) shall not transfer any shares of Common Stock (other than in a
sale pursuant to a registration statement under the Securities Act) in a
transaction that constitutes a Covered Sale or in a transaction with an
Affiliate, unless prior to such transfer, the transferee or Affiliates, as the
case may be, agrees in writing, in form and substance satisfactory to the
holders of Management Shares and
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Holdings, to be bound by the provisions of this Section 2.1 as if such
transferee were a "Principal Stockholder" solely for purposes of this Article
II. Upon consummation of a Covered Sale by the Principal Stockholder at which
Tag-Along Rights have been exercised or waived hereunder, the shares of Common
Stock sold thereunder shall be deemed free and clear of any further Tag- Along
Rights hereunder.
Section 2.2 LEGEND ON CERTIFICATES. Each certificate representing
Management Shares from time to time issued and outstanding shall bear the
following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
PROVISIONS OF THE 1999 STOCKHOLDERS' AGREEMENT DATED AS OF SEPTEMBER
23, 1999 AMONG XXXXXXX HOLDINGS, INC., THE HOLDER OF THIS CERTIFICATE
AND THE OTHER PARTIES THERETO, AS AMENDED AND IN EFFECT FROM TIME TO
TIME (A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF XXXXXXX
HOLDINGS, INC. AND WILL BE MAILED TO A STOCKHOLDER WITHOUT CHARGE
WITHIN FIVE DAYS AFTER RECEIPT BY XXXXXXX HOLDINGS INC. OF A WRITTEN
REQUEST THEREFOR FROM SUCH STOCKHOLDER).
NO TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE
MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933 (THE "ACT") AND ANY APPLICABLE STATE
SECURITIES AND "BLUE SKY" LAWS OR (B) IF XXXXXXX HOLDINGS, INC. HAS
BEEN FURNISHED WITH AN OPINION OF COUNSEL FOR THE HOLDER, WHICH OPINION
AND COUNSEL SHALL BE REASONABLY SATISFACTORY TO XXXXXXX HOLDINGS, INC.,
TO THE EFFECT THAT SUCH TRANSFER IS EXEMPT FROM THE PROVISIONS OF
SECTION 5 OF THE ACT AND THE RULES AND REGULATIONS IN EFFECT THEREUNDER
AND SUCH STATE SECURITIES AND BLUE SKY LAWS.
Section 2.3 REMOVAL OF LEGEND. Upon termination of this Agreement or
upon consummation of an Initial Public Offering, Holdings shall, upon request by
the holders of Management Shares immediately prior to the above events, issue a
new certificate representing the Management Shares held by the holders of
Management Shares with the following legend:
NO TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE
MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933 (THE "ACT") AND ANY APPLICABLE STATE
SECURITIES AND "BLUE SKY" LAWS OR (B) IF XXXXXXX HOLDINGS, INC. HAS
BEEN FURNISHED WITH AN OPINION OF COUNSEL FOR THE HOLDER, WHICH OPINION
AND COUNSEL SHALL BE REASONABLY SATISFACTORY TO XXXXXXX HOLDINGS, INC.,
TO THE EFFECT THAT
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SUCH TRANSFER IS EXEMPT FROM THE PROVISIONS OF THEREUNDER AND SUCH
STATE SECURITIES AND BLUE SKY LAWS.
ARTICLE III
TRANSFER RIGHTS
Section 3.1 RESTRICTIONS ON TRANSFERS OF SHARES. Subject to Article IV
hereof, prior to the earlier of (i) the termination of the Lock-Up Period
following an Initial Public Offering or (ii) a Change of Control, the Management
Securities shall not be transferable or transferred, assigned, pledged or
hypothecated in any way (whether by operation of law or otherwise) except that
each of the holders of Management Shares may transfer such Management Shares to
his or her spouse, child, estate, personal representative, heir or successor or
to a trust for the benefit of such holder or his or her spouse, child or heir (a
"Permitted Transferee"). This Agreement shall be binding on and enforceable
against any person who is a Permitted Transferee of the Management Shares. The
stock certificates issued to evidence Management Shares hereunder shall bear a
legend referring to this Agreement and the restrictions contained herein.
ARTICLE IV
REPURCHASE OF SHARES
Section 4.1 PURCHASE OF SHARES UPON TERMINATION OF MANAGEMENT.
(a) In the event that the Termination Date occurs for any reason prior
to an Initial Public Offering or a Change of Control in respect of a holder of
Management Securities, subject to Section 4.2 below, Management Shares held by
such holder shall be subject to repurchase as follows:
i. Holdings, during the sixty (60) days following the
later of (A) the Termination Date or (B) the date on
which the stock options held by such holder of
Management Securities who has been terminated become
exercisable in accordance with the term of such stock
option (the "Repurchase Period"), shall have a
one-time right to purchase all, but not less than
all, of the Management Shares then owned by such
holder.
ii. If Holdings does not elect to purchase the Management
Shares during the Repurchase Period, then the
Principal Stockholder, during the thirty (30) days
following the expiration of the Repurchase Period
(the "Second Repurchase Period"), shall have a
one-time right to purchase all, but not less than
all, of the Management Shares then owned by such
holder.
iii. The purchase price (the "Repurchase Price") for each
Management Share shall be the Fair Market Value.
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iv. If Holdings or the Principal Stockholder elects to
purchase the Management Shares, it shall notify the
holder of Management Shares at or before the end of
the Repurchase Period or, in the case of the
Principal Stockholder, the Second Repurchase Period,
and the Repurchase Price shall be paid at a time set
by Holdings or the Principal Stockholder, as the case
may be, which time shall be within thirty (30) days
after the end of the Repurchase Period or Second
Repurchase Period, as the case may be, provided that
the holder of Management Shares has presented to
Holdings or the Principal Stockholder a Duly Endorsed
certificate representing Management Shares. The
Repurchase Price shall be paid in the form of cash
or, if Holdings has elected to purchase such
Management Shares, at the option of Holdings, in a
combination of (A) an amount of cash equal to the
cost of the repurchased Management Shares and (B) the
issuance of a Holdings Note ("Holdings Note") the
principal amount of which is equal to the difference
between the Repurchase Price for the Management
Shares and the cost of the Management Shares, bearing
interest at a rate equal to the weighted average
interest rate at such time pursuant to the
then-current senior credit facilities of the Company
or Holdings, as appropriate, provided that such rate
shall in no event exceed ten percent (10%) per annum;
provided further that up to fifty percent (50%) of
any interest payment shall, at the option of
Holdings, be payable in additional Holdings Notes of
like tenor. All Holdings Notes shall mature on the
earliest to occur of (x) the third anniversary of the
date on which the Holdings Note is issued, (y) the
sale of stock of Holdings pursuant to an Initial
Public Offering, or (z) a Change of Control.
v. The Management Shares shall be transferred to
Holdings or the Principal Stockholder, as applicable,
free and clear of all liens, encumbrances, mortgages,
pledges, security interests, restrictions, prior
assignments and claims of any kind or nature
whatsoever except those created by the Certificate of
Incorporation, the stock option, if any, between a
holder of Management Securities and Holdings, or this
Agreement. Notwithstanding the failure of a holder of
Management Shares to deliver the Duly Endorsed
certificate, the Management Shares represented
thereby shall be deemed to be owned by Holdings or
the Principal Stockholder, as applicable, upon (A)
the payment by Holdings or the Principal Stockholder,
as applicable, of the Repurchase Price to the holder
of Management Shares or his or her Permitted
Transferee or (B) notice to the holder of Management
Shares or such Permitted Transferee that Holdings or
the Principal Stockholder, as applicable, is holding
the Repurchase Price in the United States for the
account of the holder of Management Shares or such
Permitted Transferee, and upon such payment or notice
(x) the holder of Management Shares and such
Permitted Transferee will have no further rights in
or to such Management Shares, (y) Holdings or the
Principal Stockholder, as applicable, shall be
entitled to specific
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performance of such holder of Management Shares or
such Permitted Transferee's obligation to deliver
such Duly Endorsed certificates, and (z) the holder
of Management Shares and his or her Permitted
Transferee shall be jointly and severally liable for
all reasonable attorneys' fees and other costs and
expenses incurred by Holdings or the Principal
Stockholder, as applicable, in enforcing its right to
repurchase the Management Shares hereunder and shall
pay to Holdings or the Principal Stockholder, as
applicable, promptly upon demand, the amount of all
such fees and expenses.
vi. The holder of Management Shares or his or her
Permitted Transferee shall not be obligated to
transfer any Management Shares to Holdings or the
Principal Stockholder, as applicable, unless,
concurrently with the repurchase of such Management
Shares hereunder, Holdings or the Principal
Stockholder, as the case may be, repurchases all of
the Management Shares owned of record by the holder
of Management Shares or his or her Permitted
Transferee.
Section 4.2 PUT RIGHT OF HOLDERS OF MANAGEMENT SHARES.
(a) If the Termination Date of a holder of Management Securities occurs
prior to an Initial Public Offering or a Change of Control due to the death,
Disability or Approved Retirement of such holder of Management Shares or in the
event of a Change of Control (substituting 75% for 50% in such definition) in
which substantially all of the proceeds of such Change of Control are not
reinvested in a similar or like business to the manufacturing of bedding
products within one (1) year of such Change of Control, such holder of
Management Shares or his or her representative shall have a one-time right to
require Holdings to purchase all, but not less than all, of the Management
Shares then owned by such holder at Fair Market Value, PROVIDED, THAT such right
must be exercised within one-hundred-eighty (180) days after the Termination
Date, or, in the case of a Change of Control, the first anniversary of such
Change of Control. The Repurchase Price shall be paid on the Put Date, which
date shall be the later of (i) the thirtieth (30th) day after Holdings has
received notice of the election of the holder of Management Shares to exercise
his or her put right, or (ii) the day that the holder of Management Shares
presents to Holdings the Duly Endorsed certificate representing the Management
Shares, and shall be paid in the form of cash or, at the option of Holdings in
the event the purchase is following the death, Disability or Approved Retirement
of the holder of Management Shares, a combination of an amount of cash equal to
the cost of the repurchased Management Shares and the issuance of a Holdings
Note the principal amount of which is equal to the difference between the
Repurchase Price for the Management Shares and the cost of the Management
Shares, bearing interest at a rate equal to the weighted average interest rate
at which interest is calculated at such time pursuant to the then-current senior
credit facilities of the Company or Holdings, as appropriate, provided that such
rate shall in no event exceed ten percent (10%) per annum; provided further that
up to fifty percent (50%) of any interest payment shall, at the option of
Holdings, be payable in additional Holdings Notes of like tenor. All Holdings
Notes shall mature on the earliest to occur of (x) the third anniversary of the
date on which the Holdings Note is issued, (y) the sale of stock of Holdings
pursuant to an Initial Public Offering, or (z) a
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Change of Control. The Management Shares shall be transferred to Holdings free
and clear of all liens, encumbrances, mortgages, pledges, security interests,
restrictions, prior assignments and claims of any kind or nature whatsoever
except those created by the Certificate of Incorporation or this Agreement.
Notwithstanding anything to the contrary in the foregoing, Holdings' obligation
to repurchase any of the Management Shares shall be suspended if (i) such
repurchase would render Holdings unable to meet its obligations in the ordinary
course of business; (ii) Holdings is prohibited from doing so by applicable law
restricting the purchase by a corporation of its own shares; or (iii) such
repurchase would constitute a breach of or default or event of default under, or
is otherwise prohibited by, the terms of any loan agreement or other agreement
or instrument to which Holdings or any of its Subsidiaries is a party, any of
such events constituting a "Repurchase Disability." In the event of a Repurchase
Disability, Holdings shall repurchase the Management Shares as soon as
reasonably practicable after all Repurchase Disabilities cease to exist (and
Holdings may also elect, but shall have no obligation, to cause its nominee to
repurchase such Management Shares while any Repurchase Disabilities continue to
exist). In the event that Holdings suspends its obligation to repurchase
Management Shares pursuant to a Repurchase Disability, then, upon repurchase of
the Management Shares, Holdings shall pay to the holder of Management Shares or
his or her representative (as applicable) an additional amount equal to interest
on the original repurchase price calculated at the Applicable Federal Rate (as
set forth in Section 1274 of the Code or the Treasury Regulations promulgated
thereunder) from the date the repurchase would have occurred but for such
Repurchase Disability to (but not including) the date such repurchase actually
occurs.
(b) For so long as a holder of Management Shares or his or her
Permitted Transferee owns the Management Shares, Holdings agrees that it shall,
upon the written request of a holder of Management Shares, provide such holder
of Management Shares with annual consolidated financial statements of Holdings
promptly upon the completion of the preparation of such statements. The annual
consolidated financial statements shall be accompanied by an audit report by
Holdings' independent accountants.
ARTICLE V
MISCELLANEOUS
Section 5.1 PRIOR STOCKHOLDERS AGREEMENTS. By execution and delivery of
this Agreement to Holdings, the undersigned holders of Management Securities
agree that notwithstanding any prior agreement to the contrary, this Agreement
shall govern the relative rights and obligations of the holders of Management
Securities with respect to the subject matter contained herein for such
Management Securities.
Section 5.2 BINDING EFFECT; NO THIRD PARTY BENEFICIARIES. This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors, assigns and transferees except as set
forth in Section 2.1(c), and except to the extent that the terms of this
Agreement limit or otherwise restrict the transferability of any rights or
obligations hereunder. The provisions of this Agreement shall be binding upon
the parties hereto and their respective heirs, successors and assigns, and shall
not be for the benefit of any other Person.
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Section 5.3 WAIVER AND AMENDMENT. Any party hereto may waive its rights
under this Agreement at any time, and Holdings may waive its rights under this
Agreement with respect to any party hereto at any time; provided that no waiver
by Holdings shall operate to waive Holdings' rights under this Agreement with
respect to any party hereto not named in such waiver. Any agreement on the part
of any such party to any such waiver shall be valid only if set forth in an
instrument in writing signed by such party. This Agreement may be amended or
waived only by a written instrument signed by (i) Holdings, (ii) stockholders
owning of record a majority of the then outstanding Principal Stockholder's
Shares and (iii) the holders of a majority of Management Shares; PROVIDED,
HOWEVER, that the consent of the holders of majority of Management Shares shall
be required for any amendment or waiver which has a material adverse effect on
the rights of the holders of Management Shares as such under this Agreement. All
parties hereto shall be bound by any amendment or waiver approved as prescribed
in the foregoing sentence from and after the date of the receipt of a written
notice from Holdings setting forth such amendment or waiver and reciting its
approval or waiver, as the case may be, whether or not Management Shares held by
any stockholder shall have been marked to indicate such consent.
Section 5.4 REPRESENTATIVE OF HOLDERS OF MANAGEMENT SHARES. Each of the
holders of Management Securities hereby appoints Xxxxx X. Xxx (the "Management
Representative") or such other designee (as appointed in writing by the holders
of a majority in interest of Management Shares), as the agent, proxy and
attorney in fact for the holders of Management Securities for all purposes under
this Agreement (including, without limitation, full power and authority to act
on behalf of the holders of Management Securities pursuant to the direction of
the respective holders of Management Securities) (i) to give or receive any
notices or other communications required or permitted under the terms and
conditions of this Agreement (and such notice shall be deemed to have been duly
given when delivered by the Management Representative pursuant to the terms of
this Agreement) and (ii) to execute and deliver, should it elect to do so in its
sole discretion, on behalf of the holders of Management Securities, any
amendment to this Agreement so long as such amendments shall apply to all
parties to this Agreement, and (iii) to take all other actions to be taken by or
on behalf of the holders of Management Securities and exercise any and all
rights which the holders of Management Securities are permitted or required to
do or exercise under this Agreement. Each of the holders of Management
Securities hereby agrees to indemnify and hold harmless the Management
Representative from all losses, costs and expenses of any nature incurred by the
Management Representative arising out of or in connection with the
administration of his duties hereunder, unless such losses, costs or expenses
shall have been caused by the Management Representative's willful misconduct or
gross negligence.
Section 5.5 NOTICES. All notices and other communications provided for
herein shall be dated and in writing and shall be deemed to have been duly given
when delivered, if delivered personally, or when deposited in the mail, if sent
by registered or certified mail, return receipt requested, postage prepaid, or
sent by overnight delivery service, to the party to whom it is directed at the
following addresses:
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(a) If to Holdings, to:
Xxxxxxx Holdings, Inc.
c/o Fenway Partners, Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx
Telecopy: 000-000-0000
with copies to:
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
Telecopy: 000-000-0000
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(b) If to the holders of Management Securities, to them at:
Xxxxxxx Company
Xxx Xxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxx
Telecopy: 000-000-0000
with copies to:
Xxxxx Day, Xxxxxx & Xxxxx
3500 One Peachtree Center
000 Xxxxxxxxx Xxxxxx XX
Xxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxx, Esq.
Telecopy: 404-581-8330
and
Xxxxxx, Xxxxxxx & Xxxxxx, P.C.
Powers Ferry Landing, Ste. 224
0000 Xxxxxx Xxxxx Xxxx, XX
Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx
Telecopy: 000-000-0000
(c) If to the Principal Stockholder, to:
Xxxxxxx Holdings, LLC
c/o Fenway Partners, Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx
Telecopy: 000-000-0000
with copies to:
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn.: Xxxxxx X. Xxxxxx, Esq.
Telecopy: 000-000-0000
or at such other address as the parties hereto shall have specified by notice in
writing to the other parties.
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Notice so given pursuant to this Section 5.5 shall, in the case of
notice so given by mail, be deemed to be given and received on the fourth
calendar day after posting, in the case of notice so given by overnight delivery
service, on the date of actual delivery, and, in the case of notice given by
personal delivery, on the date of such personal delivery.
Section 5.6 APPLICABLE LAW. The laws of the State of Delaware shall
govern the interpretation, validity and performance of the terms of this
Agreement, regardless of the law that might be applied under principles of
conflicts of law.
Section 5.7 INTEGRATION. This Agreement and the documents referred to
herein or delivered pursuant hereto, which form a part hereof, contain the
entire understanding of the parties with respect to its subject matter. There
are no restrictions, agreements, promises, representations, warranties,
covenants or undertakings with respect to the subject matter hereof other than
those expressly set forth herein. This Agreement supersedes all prior agreements
and understandings between the parties with respect to its subject matter.
Section 5.8 DESCRIPTIVE HEADINGS, ETC. The headings in this Agreement
are for convenience of reference only and shall not limit or otherwise affect
the meaning of terms contained herein. Unless the context of this Agreement
otherwise requires, (a) words of any gender shall be deemed to include each
other gender; (b) words using the singular or plural number shall also include
the plural or singular number, respectively; and (c) references to "hereof"
"herein," "hereby" and similar terms shall refer to this entire Agreement.
Section 5.9 COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same instrument, and it shall not be necessary in
making proof of this Agreement to produce or account for more than one such
counterpart.
Section 5.10 SEVERABILITY. In the event that any one or more of the
provisions, paragraphs, words, clauses, phrases or sentences contained herein,
or the application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect and for any reason, the validity, legality and
enforceability of such provision, paragraph, word, clause, phrase or sentence in
every other respect, and of the other remaining provisions, paragraphs, words,
clauses, phrases or sentences hereof, shall not be in any way impaired, it being
intended that all rights, powers and privileges of the parties hereto shall be
enforceable to the fullest extent permitted by law.
Section 5.11 TERM. This Agreement shall terminate, with respect to each
holder of Management Shares, on the date on which such holder of Management
Shares no longer holds Management Shares.
Section 5.12 INJUNCTIVE RELIEF. It is hereby agreed and acknowledged
that it will be impossible to measure in money the damages that would be
suffered if the parties fail to comply with any of the obligations herein
imposed on them and that, in the event of any such failure, an aggrieved person
will be irreparably damaged and will not have an adequate remedy at law. Any
such person shall therefore be entitled to injunctive relief, including specific
performance, to
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enforce such obligations, without the posting of any bond, and, if any action
should be brought in equity to enforce any of the provisions of this Agreement,
none of the parties hereto shall raise the defense that there is an adequate
remedy at law.
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IN WITNESS WHEREOF, each of the undersigned has executed this Agreement
or caused this Agreement to be executed on its behalf as of the date first above
written.
XXXXXXX HOLDINGS, INC.
By:
-------------------------------
Name:
Title:
XXXXXXX HOLDINGS, LLC
By:
-------------------------------
Name:
Title: An Authorized Person
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HOLDERS OF MANAGEMENT SECURITIES:
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