STOCKHOLDERS AGREEMENT
dated effective as of May 9, 1997
by and among
RBPI HOLDING CORPORATION
and
EACH OF THE STOCKHOLDERS
REFERRED TO HEREIN
TABLE OF CONTENTS
1. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. General Restrictions on Disposition. . . . . . . . . . . . . . . . . . . 4
3. Right of First Refusal . . . . . . . . . . . . . . . . . . . . . . . . . 6
4. Grant and Exercise of Options. . . . . . . . . . . . . . . . . . . . . . 8
(a) Grant of Options. . . . . . . . . . . . . . . . . . . . . . . . . . 8
(b) Call Options. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(c) Exercise of Options . . . . . . . . . . . . . . . . . . . . . . . . 9
(d) Restriction on Transfer . . . . . . . . . . . . . . . . . . . . . . 9
(e) Subsequent Transactions . . . . . . . . . . . . . . . . . . . . . . 9
5. Call Options to Investor Stockholders. . . . . . . . . . . . . . . . . . 10
(a) Grant of Call Options to Investor Stockholders. . . . . . . . . . . 10
(b) Exercise of Call Options by Investor Stockholders . . . . . . . . . 10
6. Options in Respect of Divorce. . . . . . . . . . . . . . . . . . . . . . 10
7. Co-Sale Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(a) Tag-Along Rights. . . . . . . . . . . . . . . . . . . . . . . . . . 11
(b) Drag-Along Rights . . . . . . . . . . . . . . . . . . . . . . . . . 11
8. Termination of Restrictions and Options. . . . . . . . . . . . . . . . . 12
9. Stock Certificate Legend . . . . . . . . . . . . . . . . . . . . . . . . 12
10. Certain Actions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(a) Charter and Bylaws. . . . . . . . . . . . . . . . . . . . . . . . . 12
(b) Voting of Shares. . . . . . . . . . . . . . . . . . . . . . . . . . 12
(c) Effect of Other Laws and Agreements . . . . . . . . . . . . . . . . 13
(d) Right to Purchase Shares. . . . . . . . . . . . . . . . . . . . . . 13
11. Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
12. Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
13. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
14. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
15. Invalid Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
16. Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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17. Multiple Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . 14
18. Execution of Documents . . . . . . . . . . . . . . . . . . . . . . . . . 14
19. Continuation of Rights . . . . . . . . . . . . . . . . . . . . . . . . . 15
20. Enforcement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
21. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
22. Cumulative Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
23. Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
24. Obligations of Stockholder's Spouse. . . . . . . . . . . . . . . . . . . 15
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STOCKHOLDERS AGREEMENT
This Stockholders Agreement ("Agreement") is entered into effective as of
May 9, 1997 (the "Effective Date"), by and among RBPI Holding Corporation, a
Delaware corporation (the "Company"), and the undersigned stockholders of the
Company (the "Stockholders").
RECITALS
A. The Stockholders have acquired shares of the common stock of the
Company, par value $0.01 per share.
B. The Management Stockholders (as defined below) and the Company are
entering into a Registration Rights Agreement (the "Registration Rights
Agreement"), dated as of even date herewith, pursuant to which the Management
Stockholders are being granted certain registration rights.
C. In connection with the acquisition of Shares (as defined below) by the
Stockholders, the Stockholders are entering into this Agreement, which, among
other things, imposes certain restrictions and grants certain rights relating to
the transfer of Shares now or hereafter owned by the Management Stockholders.
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties do hereby
agree as follows:
1. DEFINITIONS. (a) As used in this Agreement, the following terms shall
have the respective meanings indicated:
"Affiliate" means any person or entity directly or indirectly
controlling, controlled by or under common control with any other person or
entity.
"Call Option" means the right and option granted by each Management
Stockholder and Other Holder to the Company and certain others to require such
Management Stockholder or Other Holder under circumstances specified herein to
sell all of his Shares to the Company or certain others in accordance with the
terms of this Agreement.
"Cause" means (i) the continued failure of a Management Stockholder to
substantially perform his duties with the Company or any Subsidiary of it (other
than any such failure resulting from Disability), after a demand for substantial
performance is delivered in writing to the Management Stockholder by its Board
of Directors which specifically identifies the manner in which such Management
Stockholder has not substantially performed his duties, (ii) the engaging by a
Management Stockholder in willful, reckless or negligent misconduct which is
injurious to the Company or any Subsidiary of it, monetarily or otherwise, or
(iii) the charging of a Management Stockholder with a felony.
"Deemed Value of the Company" means the positive difference between
(a) the sum of the Enterprise Value of the Company and the amount of the
Company's and the
Operating Company's cash; and (b) an amount equal to all indebtedness
reflected on the balance sheet of the Company in accordance with GAAP and the
Operating Company.
"Enterprise Value of the Company" means the result obtained by
multiplying (a) the Operating Company's Consolidated EBITDA (as defined in the
Indenture, dated as of even date herewith, pertaining to the Operating Company's
issuance of $70 million aggregate principal amount of senior subordinated notes
due 2004) for the then most recent twelve fiscal months, by (b) the lesser of
(i) 5.4 or (ii) the multiple of twelve-month EBITDA then generally being
utilized to value companies comparable to the Operating Company, as determined
in the sole discretion of the Board of Directors of the Company.
"Derivative Holder" of any Management Stockholder means a person to
whom a Management Stockholder makes a Disposition pursuant to Sections 2(b)(i),
2(b)(ii), 2(b)(iv), or 2(b)(v) hereof.
"Disability" means the Management Stockholder shall have been absent
from his duties with his employer, as a result of the Management Stockholder's
incapacity due to physical or mental illness, for six consecutive months and
that within 30 days after receiving a notice of termination from his employer,
the Management Stockholder shall not have returned to the full-time performance
of his duties. The notice of termination shall be in writing and shall set
forth in reasonable detail the facts claimed to provide the basis for the
employer's determination that a "Disability" exists.
"Disposition" means any sale, transfer, encumbrance, gift, donation,
assignment, pledge, hypothecation, mortgage, creation of a security interest in
or lien on, placement in a trust (voting or otherwise), or other disposition of
any Shares or any interest therein or participation therein, or the stock
certificate or certificates representing any Shares, or any voting trust
certificate or certificates issued with respect to Shares whether voluntary or
involuntary, and whether during an individual Management Stockholder's or Other
Holder's lifetime or upon or after his death, including, but not limited to, any
Disposition by operation of law, by court order, by judicial process, or by
foreclosure, levy or attachment.
"Fair Value" means the result obtained by multiplying (a) the result
obtained by dividing (i) the Deemed Value of the Company by (ii) the number of
Shares outstanding, on a fully-diluted basis, by (b) the number of Shares being
valued.
"Family Group" with respect to a Management Stockholder, means the
Management Stockholder, the Management Stockholder's spouse and children or
grandchildren (whether natural or adopted) and any trust established solely for
the benefit of the Management Stockholder and/or the spouse and/or the children
or grandchildren (whether natural or adopted) of a Management Stockholder.
"Investor Stockholders" means Reliant Partners, L.P. and Reliant
Partners II, L.P.
"Management Stockholders" means the Stockholders who are officers or
key employees of the Company or a Subsidiary of it and are designated as
Management Stockholders on Schedule 1 to this Agreement; officers and key
employees of the Company or a Subsidiary
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of it who receive Shares pursuant to any incentive plan; and any
self-directed individual retirement account of a Management Stockholder
("XXX"); provided, however, that (except for the purposes of Section
4(b)(ii)) no person shall be a Management Stockholder after such time as he
(and/or his Derivative Holders) no longer beneficially owns any Shares and he
is no longer employed by the Company or a Subsidiary of it.
"Other Holders" means any Derivative Holders, Third Party Buyers and
persons to whom any Disposition of Shares is made by any Derivative Holder or
Third Party Buyer in accordance with the terms and conditions of this Agreement
(other than pursuant to Section 2(b)(vii) hereof), provided, however, that
neither the Company, any Investor Stockholder nor any Management Stockholder
shall be deemed an "Other Holder."
"Operating Company" means Reliant Building Products, Inc., a Delaware
corporation.
"Pro Rata Part" means, in any particular instance, the proportion that
the number of Shares owned by a Stockholder (assuming for this purpose that all
options, warrants, rights and exchangeable or convertible securities to purchase
or acquire Shares ("Share Equivalents") owned by such Stockholder have been
fully exercised, exchanged or converted) bears to the aggregate number of Shares
owned by all Stockholders (assuming for this purpose that all Share Equivalents
owned by all Stockholders have been fully exercised, exchanged or converted).
"Sale of the Company" means the sale of more than 50% of the Common
Stock, assets or earning power of the Company or more than 50% of the stock,
assets or earning power of the Operating Company to any entity, person or group
(as those terms are used in Section 13(d)(3) of the Securities Exchange Act of
1934) whether through purchase, merger, consolidation, combination or otherwise;
provided, however, that the term "Sale of the Company" shall not include any
such sale to an Affiliate of one or more of the Investor Stockholders unless the
Management Stockholders are required in connection with such sale to terminate
their equity investment in the Company.
"Securities Act of 1933" means the Securities Act of 1933, together
with any amendments thereto and rules and regulations thereunder and any similar
federal statute, rules, or regulations in force in the future.
"Share" means any share of Common Stock. The terms "Share" and
"Common Stock" shall include and apply to any equity security into which the
original Shares and/or Common Stock are converted or for which the original
Shares or Common Stock are exchanged, as well as dividends and other
distributions on Shares of Common Stock that are paid in the form of an equity
security.
"Subsidiary" means, with respect to any person, any corporation or
other entity of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions are at the time directly or indirectly owned by
such person.
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"Termination Date" means (i) in the case where the Management
Stockholder's employment is terminated by the Company or any Subsidiary of it
for Disability, 30 days after notice of termination is given to the Management
Stockholder (provided that the Management Stockholder has not returned to the
performance of his duties on a full-time basis during such 30-day period), (ii)
in the case where the Management Stockholder's employment is terminated by the
Company or any Subsidiary of it for any other reason, the date on which the
Company gives notice of termination, (iii) in the case where the Management
Stockholder's employment is terminated voluntarily by the Management
Stockholder, the date of such termination, and (iv) in the case where the
Management Stockholder's employment is terminated due to death, the date of the
Management Stockholder's death.
"Third Party Buyer" means any Proposed Buyer to whom a Disposition of
Offered Shares is made pursuant to Section 3 hereof.
"Transferee" means any person (including an Other Holder) not a party
to this Agreement directly or indirectly receiving Shares, or any interest
therein, or the stock certificate or certificates representing any Shares, or
any voting trust certificate or certificates issued with respect to Shares, from
a Management Stockholder or Other Holder pursuant to a Disposition except
pursuant to Section 2(b)(vii) hereof.
(b) Certain additional terms used in this Agreement are defined in
the Sections indicated opposite such terms below:
"Agreement" Opening Paragraph
"Allocated Shares" Section 6
"Callable Shares" Section 5(b)
"Company" Opening Paragraph
"Company Notice" Section 5(a)
"Company Notice of Acceptance" Section 3(b)
"Divorced Stockholder" Section 6
"Effective Date" Opening Paragraph
"Equity Securities" Section 10(d)
"Exercise Notice" Section 4(c)
"Going Public Date" Section 8
"Initial Company Notice
of Acceptance" Section 3(b)
"Notice of Acceptance" Section 3(b)
"Notice of Divorce" Section 6
"Notice of Proposed Sale" Section 3(a)
"Offered Shares" Section 3(a)
"Proposed Buyer" Section 3(a)
"Proposed Transferor" Section 3
"Registration Rights Agreement" Recital B
"Stockholders" Opening Paragraph
2. GENERAL RESTRICTIONS ON DISPOSITION. (a) During the term of this
Agreement, no Management Stockholder or Other Holder shall directly or
indirectly make a Disposition of
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Shares except as permitted by and in accordance with the provisions of this
Agreement. Except as provided in Section 2(b) hereof, each Disposition
effected, or attempted or purported to be effected, by any of the Management
Stockholders or Other Holders shall require the prior written consent of the
Company. Any Disposition effected, or purported or attempted to be effected,
by a Management Stockholder or Other Holder not in accordance with the terms
and conditions of this Agreement, or to a person who is below 18 years of age
or who has been adjudged incompetent or insane (except Dispositions to the
custodian, guardian or trustee of such persons), or to a person prohibited by
law from holding Shares, shall be void AB INITIO and of no force or effect
and shall not bind the Company.
(b) Notwithstanding the provisions of Section 2(a) hereof, a
Management Stockholder or Other Holder may make a Disposition of any or all of
his Shares as follows:
(i) Any transfer of Shares or title to Shares effected upon the
death of a Management Stockholder or Other Holder through testamentary
disposition or under the laws of intestate succession, provided, however, that
such Shares shall first have been subject to Call Options as provided by Section
4(b) hereof;
(ii) Any transfer of Shares or of title to Shares to a guardian
of the estate of any Management Stockholder or Other Holder incident to
guardianship proceedings resulting from the incapacity or insanity of the
Management Stockholder or Other Holder, provided, however, that such Shares
shall first have been subject to Call Options as provided by Section 4(b)
hereof;
(iii) Any transfer of Shares pursuant to Sections 3, 4, 5, 6
or 7 hereof;
(iv) Any transfer of Shares by a Management Stockholder (or by a
Derivative Holder of such Management Stockholder) to a member of such Management
Stockholder's Family Group, provided, however, that the Management Stockholder
shall retain sole control over the voting, disposition, initiation or
participation in any stockholder litigation, and other decisions with respect to
such Shares;
(v) Any transfer of Shares from an XXX to the beneficiary of
such XXX (which shall be the Management Stockholder) or to another XXX of the
Management Stockholder, provided, however, that the Management Stockholder shall
retain sole control over the voting, disposition, initiation or participation in
any stockholder litigation, and other decisions with respect to such Shares;
(vi) Any Management Stockholder may pledge any or all Shares now
or hereafter owned by him or grant a security interest therein to secure
indebtedness of the Management Stockholder owing to a bank or other financial
institution approved by the Company; provided, however, that any Transferee
pursuant to this Section 2(b)(vi) shall, except with the prior written consent
of the Company, acquire no rights other than a security interest in the Shares
entitling such Transferee to the proceeds from any sale of the Shares pursuant
to the terms of this Agreement (including Sections 3, 4, 5 and 7 hereof, which
shall apply to such Shares) and not title to the Shares or any other rights
incident thereto; and
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(vii) Any transfer of Shares pursuant to the Registration
Rights Agreement.
(c) Notwithstanding the provisions of Section 2(b) hereof, (i) prior
to the consummation of any Disposition referred to in clauses (iii) or (iv)
of Section 2(b) hereof, the Company shall have received the opinion of its
counsel, or counsel reasonably satisfactory to it, that such Disposition does
not require registration under the Securities Act of 1933, or any applicable
state securities laws and (ii) prior to the consummation of any Disposition
referred to in Section 2(b) hereof (other than Section 2(b)(vi) and (vii)),
the Transferee (and such Transferee's spouse) shall, as a condition to its
receipt or acquisition of Shares, execute an appropriate document confirming
that such Transferee (and such Transferee's spouse) takes such Shares subject
to the terms and conditions of this Agreement, including without limitation,
the restrictions contained in this Section 2, the rights of first refusal
provided in Section 3 hereof, the Call Options and other restrictions
provided in Sections 4 and 5 hereof, the options in respect of divorce
provided in Section 6 hereof and the co-sale rights provided in Section 7
hereof. The Company may elect to not give effect on its books to any
Disposition or purported Disposition of Shares held or owned by any
Management Stockholder or Other Holder to any Transferee unless all the
conditions hereof affecting such Disposition shall have been complied with.
(d) If Shares are purchased from the Company by a member of a
Management Stockholder's Family Group, such purchaser shall be deemed to be a
Derivative Holder of suchManagement Stockholder for purposes of this
Agreement.
3. RIGHT OF FIRST REFUSAL. In the event that a Management Stockholder or
Other Holder (the "Proposed Transferor") receives a bona fide offer for the sale
of any or all of his Shares, and he desires to sell any or all of his Shares
pursuant to Section 2(b)(iii) hereof, any such sale shall be effected only
pursuant to the following procedures:
(a) The Proposed Transferor shall prepare a written notice ("Notice
of Proposed Sale") setting forth the number of Shares desired to be sold
("Offered Shares"), the identity and address of the proposed buyer (the
"Proposed Buyer"), the price per share at which the Offered Shares are offered
to be sold, and the other terms and conditions of the proposed sale.
(b) The Proposed Transferor shall deliver the Notice of Proposed Sale
to the Company. If the Company determines to purchase Offered Shares, it shall
give written notice of its acceptance of the Proposed Transferor's offer to the
Proposed Transferor ("Initial Company Notice of Acceptance") within 30 days of
its receipt of such notice. The Initial Company Notice of Acceptance shall set
forth an acceptance of the price and other terms and conditions set forth in the
Notice of Proposed Sale. If the Company determines not to purchase all the
Offered Shares, the Company shall transmit the Notice of Proposed Sale to the
Stockholders within 30 days of its receipt of such notice. Each Stockholder
(other than the Proposed Transferor) shall have the option to purchase some or
all of the Offered Shares at the price and upon the terms and conditions set
forth in the Notice of Proposed Sale. In order to exercise the option to
purchase the Offered Shares, a Stockholder shall give written notice of
acceptance of the Proposed Transferor's offer to the Company ("Notice of
Acceptance") within 30 days of receiving the Notice of Proposed Sale. Each
Notice of Acceptance shall set forth (i)
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an acceptance of the price and other terms and conditions set forth in the
Notice of Proposed Sale and (ii) the minimum and maximum number of Offered
Shares that such Stockholder desires to purchase. For a period of 75 days
after receiving the Notice of Proposed Sale from the Proposed Transferor, the
Company (on behalf of itself and, if applicable, Stockholders) may elect to
purchase all but not less than all the Offered Shares by delivering a written
notice to such effect (the "Company Notice of Acceptance") to the Proposed
Transferor setting forth the number of Offered Shares to be purchased by the
Company and, if applicable, by each Stockholder.
(c) If the Company receives proper Notices of Acceptance which
collectively attempt to exercise options to purchase an aggregate number of
Shares which exceeds the number of Offered Shares (other than Shares to be
purchased by the Company), only a number of such options equal to the number
of Offered Shares (other than Shares to be purchased by the Company) shall be
honored. Options to purchase Shares shall be honored in the following order:
(i) first, all options exercised by the Company; and (ii) second, all options
exercised by Stockholders. If the number of Offered Shares exceeds the
aggregate number of options exercised by the Company pursuant to clause (i)
above, but is not sufficient to permit all the options attempted to be
exercised by Stockholders pursuant to clause (ii) above to be honored, then
the excess number of Offered Shares shall be allocated PRO RATA among such
Stockholders in accordance with the number of shares of Common Stock owned by
each such Stockholder. In no event, shall any Stockholder be required to
purchase more than the maximum number of Offered Shares specified in its
Notice of Acceptance.
(d) The closing of any purchase of any Offered Shares pursuant to
Sections 3(a), 3(b) and 3(c) hereof shall be held at the principal office of
the Company on the date and at the time designated by the Company in the
Company Notice of Acceptance, which such date shall be within 90 days of the
date of the Notice of Proposed Sale received by the Company from the Proposed
Transferor. At the closing, the Proposed Transferor shall (i) represent in
writing that he has good title to the Offered Shares being sold, free and
clear of all liens and (ii) deliver certificates for the Offered Shares in
transferable form and the persons whose options to purchase such Offered
Shares have been honored shall deliver payment therefor.
(e) If the Company or any Stockholder who delivered a timely Notice
of Acceptance fails on the designated closing date to purchase the Offered
Shares allocated to such person pursuant to Section 3(c) hereof, then such
unpurchased Offered Shares shall be reallocated to each of the other persons
who, pursuant to Section 3(c) hereof, would have received an allocation of
such Shares if no Notice of Acceptance had been delivered by the person
failing to purchase the unpurchased Shares.
(f) In the event that the Company has (i) not given the Company
Notice of Acceptance to the Proposed Transferor pursuant to Sections 3(b)
hereof within 75 days after receiving the Notice of Proposed Sale with
respect to Offered Shares, (ii) provided written notice to the Proposed
Transferor that no person intends to exercise his right of first refusal with
respect to Offered Shares, or (iii) given the Company Notice of Acceptance
exercising options for a number of Shares which is less than the number of
Offered Shares, then the Proposed Transferor shall be free for a period of 60
days immediately following such 75-day period to sell the Offered Shares to
the Proposed Buyer specified in the Notice of Proposed Sale at a price and
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upon terms not less favorable to the Proposed Transferor than those offered
in the Notice of Proposed Sale. Similarly, if the Company or any Stockholder
who delivered a timely Notice of Acceptance fails to purchase the Offered
Shares on the designated closing date, and if such Offered Shares cannot be
reallocated pursuant to Section 3(e) hereof, then the Proposed Transferor
shall not be required to sell any Offered Shares to the Company or any
Stockholder and shall be free for a period of 60 days immediately following
the designated closing date to sell the Offered Shares to the Proposed Buyer
specified in the Notice of Proposed Sale at a price and upon terms not less
favorable to the Proposed Transferor than those offered in the Notice of
Proposed Sale. The Offered Shares purchased by the Proposed Buyer shall
continue to be subject to the terms and conditions of this Agreement, as
provided in Section 2(c) hereof.
(g) In the event that a sale of Offered Shares to the Proposed Buyer
pursuant to Section 3(f) hereof is not completed within the applicable time
period provided in Section 3(f) hereof, such Offered Shares shall continue to be
subject to the rights of first refusal, Call Options, options in respect of
divorce, co-sale rights and other restrictions contained in this Agreement.
4. GRANT AND EXERCISE OF OPTIONS.
(a) GRANT OF OPTIONS. Subject to the limitations of this Agreement,
each of the Management Stockholders hereby grants a Call Option to the Company
and certain others, both as described below.
(b) CALL OPTIONS. (i) In the event a Management Stockholder's
employment with the Company or any Subsidiary of it is terminated for any reason
(including voluntary or involuntary, with or without Cause, or as a result of
death or Disability), the Company shall have a Call Option with respect to (A)
all of the Shares owned by such Management Stockholder and (B) all Shares owned
or held by any Other Holders that were transferred to such Other Holder by such
Management Stockholder (or his Derivative Holder) or that were transferred to
such Other Holder by any Other Holder who had directly or indirectly received a
Disposition of such Shares from such Management Stockholder (or his Derivative
Holder). The Call Option pursuant to this Section 4(b)(i) shall be exercisable
at a purchase price equal to Fair Value, determined as of the Termination Date.
(ii) Unless the Call Option under Section 4(b)(i) hereof shall
have become simultaneously exercisable, if a Management Stockholder is adjudged
incompetent or insane, declares bankruptcy, or is the subject of any petition
for involuntary bankruptcy, the Company shall have a Call Option with respect to
(A) all of the Shares owned by such Management Stockholder, whether or not such
Management Stockholder continues to be an employee of the Company or any
Subsidiary of it, and (B) all Shares owned by any Other Holders that were
transferred to such Other Holder by such Management Stockholder (or his
Derivative Holder) or that were transferred to such Other Holder by another
Other Holder who had directly or indirectly received a Disposition of such
Shares from such Management Stockholder (or his Derivative Holder). Similarly,
if an Other Holder dies, is adjudged incompetent or insane, declares bankruptcy
or is the subject of any petition for involuntary bankruptcy, the Company shall
have a Call Option with respect to all of the Shares owned by such Other Holder.
A Call Option pursuant to this Section 4(b)(ii) shall be exercisable at a
purchase price equal to Fair
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Value. For purposes of determining such Fair Value and the times at which
the Call Option can be exercised, the date of the Management Stockholder's or
Other Holder's death, adjudication of incompetency or insanity, declaration
of bankruptcy or filing of a petition for involuntary bankruptcy shall be
deemed the Termination Date.
(iii) The Call Options provided for in Sections 4(b)(i) and
4(b)(ii) hereof shall become exercisable as of the Termination Date of the
Management Stockholder or Other Holder and shall remain exercisable for a period
of 90 days thereafter; provided, however, that in the event of the death of a
Management Stockholder, the period of exercise of the Call Option may be
extended, by written notice given by the Company to the administrator of the
estate or personal representative of such deceased Management Stockholder within
90 days after the Termination Date, to the period ending on the first
anniversary of the Termination Date. The Call Option shall be exercised in the
manner set forth in Section 4(c) hereof.
(c) EXERCISE OF OPTIONS. (i) A Call Option may be exercised by the
Company (or any Investor Stockholder exercising a Call Option pursuant to
Section 5(b) hereof) delivering written notice of exercise ("Exercise Notice")
to the Management Stockholder or Other Holder. The Exercise Notice shall state
the number of Shares to be purchased and designate a closing date for the sale
within 30 days of the date of the Exercise Notice.
(ii) Any closing pursuant to this Section 4 shall be held at the
principal office of the Company on the date and time designated in the Exercise
Notice. There shall be a single closing for all sales in connection with any
event giving rise to a Call Option. At the closing, the Management Stockholder
or other Person selling Shares shall (i) represent in writing that he has good
title to the Offered Shares being sold, free and clear of all liens and (ii)
deliver certificates in transferable form for the Shares to be sold and the
Company (or any Investor Stockholder exercising a Call Option pursuant to
Section 5(b) hereof) shall deliver payment therefor.
(d) RESTRICTION ON TRANSFER. Notwithstanding any other provision of
this Agreement, no Management Stockholder or Other Holder who received Shares
from such Management Stockholder (or from any other Holder who had received such
Shares from such Management Stockholder) may make or purport to make a
Disposition of Shares pursuant to Section 2(b)(iii) hereof for 60 days after
such Management Stockholder receives notice of termination by the Company for
Cause or within 60 days prior to giving notice to the Company of voluntary
termination.
(e) SUBSEQUENT TRANSACTIONS. If a Call Option of the type described
in Section 4(b) is exercised and, within 120 days after such exercise, a written
definitive agreement is entered into for the Sale of the Company or a
registration statement is filed with the Securities and Exchange Commission
covering a public offering of the Common Stock for consideration or at a price
per share that exceeds the price per share paid upon exercise of such Call
Option, the Company shall pay to the Management Stockholder or Derivative
Holder, as the case may be, an amount equal to the excess of (i) the amount such
Management Stockholder or Derivative Holder would have received if such Person's
Shares sold pursuant to such Call Option had been disposed of in such Sale of
the Company or public offering, over (ii) the amount paid to such person upon
exercise of such Call Option; provided, however, that notwithstanding anything
9
contained herein to the contrary, this Section 4(e) shall not apply in the
event such Call Option arose as a result of a Management Stockholder's
termination of employment for Cause.
5. CALL OPTIONS TO INVESTOR STOCKHOLDERS.
(a) GRANT OF CALL OPTIONS TO INVESTOR STOCKHOLDERS. If the Company
does not or determines not to exercise its rights pursuant to Section 4 hereof
with respect to Call Options within 30 days after such rights become
exercisable, then any such rights that would have been exercisable by the
Company shall be exercisable by any one or more of the Investor Stockholders at
the same price, at the same times (adjusted for the 30-day delay occasioned by
the period in which the Company could have exercised its Call Option) and
subject to the same procedures that would have applied if the Company had
exercised the Call Option. As soon as practicable after determining that
Investor Stockholders will have the right to exercise Call Options pursuant to
this Section 5(a), the Company shall give written notice (the "Company Notice")
to the Investor Stockholders setting forth the number of Shares subject to the
Call Option, and the price therefor. Investor Stockholders shall elect to
exercise such Call Option by giving an Exercise Notice to the Company within 30
days of delivery of the Company Notice.
(b) EXERCISE OF CALL OPTIONS BY INVESTOR STOCKHOLDERS. If Investor
Stockholders deliver Exercise Notices which collectively attempt to exercise
Call Options for an aggregate number of Shares which exceeds the number of
Shares held by the Management Stockholder and Other Holders whose Shares are
subject to the Call Option ("Callable Shares"), only a number of options equal
to the number of Callable Shares shall be honored. The Call Options shall be
honored in the following order: (A) first, all Call Options that the Company
determines to exercise; and (B) second, all Call Options exercised by the
Investor Stockholders. If the number of Callable Shares exceeds the total
number of Call Options exercised by the Company pursuant to clause (A) above,
but is not sufficient to permit all the additional Call Options attempted to be
exercised by the Investor Stockholders pursuant to clause (B) above to be
honored, then the excess number of Callable Shares shall be allocated PRO RATA
among the Investor Stockholders in accordance with the number of Shares owned by
each such Investor Stockholder. Any Callable Shares in excess of the aggregate
number of Call Options that are exercised shall remain subject to all the terms
and conditions of this Agreement.
6. OPTIONS IN RESPECT OF DIVORCE. In the event of the divorce of any
Management Stockholder or Other Holder (except for the spouse of a Management
Stockholder) ("Divorced Stockholder"), the former spouse of such Divorced
Stockholder shall promptly offer to sell to the Divorced Stockholder, at Fair
Value, all Shares (the "Allocated Shares") transferred by the Divorced
Stockholder to the former spouse as a result of the divorce or otherwise held by
the former spouse (including, without limitation, by direct or indirect
Disposition from the Management Stockholder to such former spouse pursuant to
Section 2(b)(iv) hereof). In the event that the Divorced Stockholder does not
purchase all of such Allocated Shares, the Divorced Stockholder and former
spouse shall promptly give written notice of the divorce to the Secretary of the
Company which shall promptly give written notice to the other Stockholders,
specifying the number of Allocated Shares which the Divorced Stockholder has
declined to purchase ("Notice of Divorce"). The Company and such Stockholders
shall have the option to purchase any or all of the remaining Allocated Shares
from the former spouse of the Divorced Stockholder at Fair Value. Allocated
Shares shall be allocated among the Company and/or the
10
Stockholders in accordance with the priorities and procedures contained in
Sections 3(c), 3(d) and 3(e) hereof. In the event that any Management
Stockholder or Other Holder marries following the date of this Agreement, the
new spouse of such Management Stockholder or Other Holder shall immediately
execute an appropriate document confirming that such spouse is subject to the
terms and conditions of this Agreement, including without limitation, the
restrictions contained in Section 2, the rights of first refusal provided in
Section 3 hereof, the Call Options and other restrictions provided in
Sections 4 and 5 hereof, and the co-sale rights provided in Section 7 hereof.
7. CO-SALE RIGHTS.
(a) TAG-ALONG RIGHTS. If the Investor Stockholders propose to make a
Disposition of more than 50% of the Shares owned by the Investor Stockholders
(other than to an Investor Stockholder or to an Affiliate of any Investor
Stockholder), the Company shall notify each Management Stockholder of such
intended Disposition, the terms thereof and the name and address of the proposed
transferee. Each Management Stockholder shall have the right to participate in
the Disposition described in such notice in a manner such that each Stockholder
(including each Management Stockholder and each Investor Stockholder) will be
entitled to sell up to its Pro Rata Part of the total number of Shares that the
Investor Stockholders propose to sell or otherwise dispose of pursuant to such
Disposition. Each Management Stockholder shall have until the 30th day
following such Management Stockholder's receipt of the notice to notify the
Company of its election to participate in such Disposition pursuant to this
Section 7(a). Failure of any Management Stockholder to submit such notice within
the applicable period shall constitute an election on the part of such
Management Stockholder not to participate in such Disposition. Each Investor
Stockholder's portion of the total Shares to be disposed of in such Disposition
shall be reduced to the extent necessary to permit the Management Stockholders
to exercise their rights under this Section 7(a). If any Management Stockholder
elects to sell less than his Pro Rata Part of the total Shares, the Management
Stockholders and the Investor Stockholders shall be entitled to take up the
deficiency in accordance with the priorities and procedures specified in
Sections 3(c), 3(d) and 3(e) hereof. The Disposition shall not be consummated by
the Investor Stockholders unless, simultaneously therewith, each Management
Stockholder who has notified the Company of such Management Stockholder's
election to participate in such Disposition is permitted to sell his Pro Rata
Part of the total Shares (or such lesser amount of the total Shares as such
Management Stockholder may desire) to the transferee stated in the notice for
the consideration and on the terms set forth in the notice. A Management
Stockholder shall participate by delivering to the transferee the Shares to be
sold in the Disposition.
(b) DRAG-ALONG RIGHTS. In the event that the Investor Stockholders
agree to sell or transfer 85% or more of their Shares in a bona fide
arm's-length transaction with an unaffiliated third party, then, upon the demand
of such Investor Stockholders, each Management Stockholder and Other Holder
shall sell or transfer his Pro Rata Part of the total number of Shares that the
Investor Stockholders propose to sell or otherwise transfer pursuant to such
transaction on the same terms and conditions as those on which the Investor
Stockholders have agreed to sell or transfer their Shares.
11
8. TERMINATION OF RESTRICTIONS AND OPTIONS. All provisions in
Sections 2, 3, 4 (other than 4(e)), 5, 6 and 7 hereof regarding the Shares
(including the restrictions on Disposition, the rights of first refusal, the
Call Options and the Co-Sale Rights) shall terminate as of the first date
("Going Public Date") (i) following the expiration of any lock-up period in
connection with a Registration Statement (other than a Registration Statement
on Form S-8) filed by the Company for the registration of Common Stock under
the Securities Act of 1933, and (ii) when the gross proceeds to the Company
of such offering are at least $30 million. In each case where an Exercise
Notice or Notice of Acceptance, as the case may be, has been given prior to
the Going Public Date, the parties shall consummate the transaction as
contemplated in such notice and without giving effect to this Section 8.
9. STOCK CERTIFICATE LEGEND. A copy of this Agreement shall be filed
with the secretary of the Company and kept with the Company's records. The
certificates evidencing the Shares (and all certificates issued in exchange
therefor or substitution thereof) held by Management Stockholders shall bear
the following legend so long as the restrictions of this Agreement are in
effect:
THE SALE OR TRANSFER OF THE SHARES EVIDENCED BY THIS CERTIFICATE IS
SUBJECT TO CERTAIN RIGHTS AND RESTRICTIONS, INCLUDING CERTAIN CALL
OPTIONS, AND RIGHTS OF FIRST REFUSAL, CONTAINED IN A STOCKHOLDERS
AGREEMENT DATED AS OF MAY __, 1997, A COPY OF WHICH MAY BE OBTAINED
WITHOUT CHARGE AT THE PRINCIPAL PLACE OF BUSINESS OF THE COMPANY.
Shares held by Investor Stockholders shall bear the following legend as long as
the restrictions of this Agreement are in effect:
THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RIGHTS AND OBLIGATIONS CONTAINED IN A STOCKHOLDERS AGREEMENT DATED AS
OF MAY __, 1997, A COPY OF WHICH IS ON FILE AT THE OFFICE OF THE
CORPORATION AND WHICH WILL BE FURNISHED WITHOUT CHARGE BY THE
CORPORATION TO THE HOLDER HEREOF UPON WRITTEN REQUEST.
10. CERTAIN ACTIONS.
(a) CHARTER AND BYLAWS. Neither the certificate of incorporation nor
the bylaws of the Company shall be amended in any manner which is inconsistent
with the terms of this Agreement unless such amendment is first approved in the
same manner as an amendment to this Agreement is required to be approved under
Section 16 hereof.
(b) VOTING OF SHARES. Each Stockholder agrees to vote its or his
shares of capital stock of the Company at all times in whatever manner is
necessary to effect the purposes of this Agreement, and to refrain from voting
such shares in any manner not consistent with this Agreement.
12
(c) EFFECT OF OTHER LAWS AND AGREEMENTS. The rights of the
Management Stockholders and Other Holders and the obligations of the Company
under this Agreement shall be subject to any restrictions on the purchase of
Shares which may be imposed by the General Corporation Law of the State of
Delaware.
(d) RIGHT TO PURCHASE SHARES. Except as otherwise provided herein
and for so long as a Management Stockholder owns Shares and is an employee of
the Company or one of its Subsidiaries, such Management Stockholder (but no
Other Holder) shall have the right, but not the obligation, to purchase or
subscribe for his pro rata share of any of the following proposed to be issued
or sold by the Company: (i) any unissued or treasury shares of any class of
capital stock of the Company (whether now or hereafter authorized), (ii) any
obligations, evidences of indebtedness, or other securities of the Company
convertible into or exchangeable for, or carrying or accompanied by any rights
to receive, purchase, or subscribe to, any such unissued or treasury shares, or
(iii) any right to subscribe to or to receive, or any warrant or option for the
purchase of, any of the foregoing securities (all of the foregoing being called
"Equity Securities"); provided, however, that such Management Stockholder shall
not have any right under this Section 10(d) to purchase or subscribe for any of
the following:
(w) any Equity Securities issued, sold or optioned for compensation
purposes to any director, officer, employee, or consultant of the Company,
as determined by the Board of Directors of the Company in its sole
discretion;
(x) any Equity Securities issued, sold or optioned for consideration
other than cash; or
(y) any Equity Securities issued, sold or optioned after the date of
any expiration or termination of this Agreement; or
(z) any Equity Securities issued, sold or optioned on or prior to the
Effective Date.
11. CAPTIONS. The captions, headings, and arrangements used in this
Agreement are for convenience only and do not in any way affect, limit, amplify,
or modify the terms and provisions hereof.
12. NOTICE. Whenever this Agreement requires or permits any consent,
approval, notice, request or demand from one party to another, the consent,
approval, notice, request or demand must be in writing to be effective and shall
be deemed to be delivered and received (i) if personally delivered or if
delivered by telex or telecopy with telephonic confirmation, when actually
received by the party to whom notice is sent, (ii) if delivered by mail within
the United States (whether actually received or not), at the close of business
on the third business day next following the day when placed in the federal
mail, postage prepaid, certified or registered, addressed to the appropriate
party or parties, at the address of such Party set forth, and with a copy as
specified, on Schedule 2 to this Agreement (or at such other address as such
party may designate by written notice to all other parties in accordance
herewith), or (iii) if delivered by mail to any party located outside the United
States, when received by the party to whom notice is sent.
13
13. GOVERNING LAW. THIS AGREEMENT SHALL BE SUBJECT TO AND GOVERNED BY THE
LAWS OF THE STATE OF TEXAS APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
ENTIRELY WITHIN SUCH STATE.
14. ASSIGNMENT. This Agreement and all the provisions hereof shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, assigns, executors, administrators or successors, but (except
as provided in the final sentence of this Section) neither this Agreement nor
any of the rights, interests or obligations hereunder shall be assigned by any
of the parties hereto without the prior written consent of the other parties,
except with respect to rights, interests and obligations hereunder which are
binding upon Transferees after Dispositions of Shares permitted by this
Agreement. This Agreement is not intended to confer upon any other person except
the parties hereto any rights or remedies hereunder. Without limiting the
generality of the foregoing, it is understood that the Investor Stockholders may
transfer Shares, including to their respective partners (both general and
limited), and it is agreed that, following any such transfer, this Agreement and
all the applicable provisions hereof shall be binding upon and shall inure to
the benefit of any such transferee (including the partners of the Investor
Stockholders) receiving Shares, in each case without any requirement for the
consent of any party hereto.
15. INVALID PROVISIONS. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws effective during
the term of this Agreement, such provision shall be fully severable; this
Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part of this Agreement; and the
remaining provisions of this Agreement shall remain in full force and effect and
shall not be affected by the illegal, invalid or unenforceable provision or by
its severance from this Agreement. Furthermore, in lieu of each such illegal,
invalid or unenforceable provision there shall be added automatically as a part
of this Agreement a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.
16. AMENDMENTS. This Agreement may be amended, at any time and from time
to time in whole or in part, or terminated, only by an instrument in writing,
duly executed by the Company and the holders of at least a majority of the
Shares beneficially owned by the Management Stockholders and at least a majority
of the Shares beneficially owned by the Investor Stockholders.
17. MULTIPLE COUNTERPARTS. This Agreement has been executed in a number
of identical counterparts, each of which for all purposes is to be deemed an
original, and all of which constitute collectively one Agreement; but in making
proof of this Agreement, it shall not be necessary to produce or account for
more than one such counterpart. It is not necessary that each Stockholder
execute the same counterpart, so long as identical counterparts are executed by
the Company and each Stockholder.
18. EXECUTION OF DOCUMENTS. Whenever Shares are purchased or transferred
pursuant to this Agreement, the seller or sellers and the buyer or buyers shall
do all things and execute and deliver all documents and make all transfers as
may be necessary to consummate such purchase or transfer in accordance with the
applicable provisions of this Agreement.
14
19. CONTINUATION OF RIGHTS. The failure or refusal of a party hereto to
exercise any right granted in this Agreement with respect to any Shares shall
not be deemed a waiver of the right to exercise future rights which may arise
hereunder with respect to such Shares.
20. ENFORCEMENT. It is specifically agreed and understood that monetary
damages would not adequately compensate the Company and the non-breaching
Stockholders for the breach of this Agreement and this Agreement shall therefore
be specifically enforceable, and any breach or threatened breach of this
Agreement shall be the proper subject of a temporary or permanent injunction or
restraining order, without necessity of bond or other security.
21. ENTIRE AGREEMENT. This Agreement contains the entire understanding of
the parties hereto respecting the subject matter hereof and supersedes all prior
agreements, discussions, and understandings.
22. CUMULATIVE RIGHTS. The rights of the Company under this Agreement are
cumulative and in addition to all similar and other rights of the Company under
other agreements with the Stockholders and others.
23. TERM. Subject to Section 8 hereof, this Agreement shall have a term
of 30 years commencing on the date of this Agreement.
24. OBLIGATIONS OF STOCKHOLDER'S SPOUSE. The spouse of each stockholder
joins in the execution of this Agreement to evidence such spouse's knowledge of
its existence, and such spouse's acknowledgment of and agreement to the
provisions of this Agreement, and to evidence the desire of such spouse to bind
his or her interests, if any, in the Shares to the performance of this
Agreement. Accordingly, each stockholder's spouse agrees that in the event of
his or her death, or the death of the stockholder, or upon the divorce of such
spouse and such stockholder or the occurrence of any other event as herein
provided, the covenants and agreements made in this Agreement shall be, and
hereby are, accepted as binding on him or her individually, and upon all persons
ever to claim under or through him or her. This Section 24 is not intended to,
and shall not be construed as, conferring or creating any interest in Shares in
the spouse of any stockholder.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
15
This Agreement has been executed as of the date first written above.
RBPI HOLDING CORPORATION
By: /s/ Xxxxx X. Xxxxx
----------------------------------
Title: President
--------------------------------
RELIANT PARTNERS, L.P.
By: Group 31, Inc., its general partner
By: /s/ X. X. Xxxxxx
-----------------------------
Title: Vice President
--------------------------
RELIANT PARTNERS II, L.P.
By: FW Group Genpar, Inc., its general
partner
By: /s/ X. X. Xxxxxx
----------------------------------
Title: Vice President
-------------------------------
/s/ Xxxxx X. Xxxxx
-----------------------------------
XXXXX X. XXXXX
/s/ Xxx Xxxxx
-----------------------------------
SPOUSE OF XXXXX X. XXXXX
/s/ Xxxxxx X. Xxxx
-----------------------------------
XXXXXX X. XXXX
/s/ Xxxxx Xxxx
-----------------------------------
SPOUSE OF XXXXXX X. XXXX
/s/ Xxxxxxx X. Still
-----------------------------------
XXXXXXX X. STILL
16
/s/ Xxxxx Xxxx Still
-----------------------------------
SPOUSE OF XXXXXXX X. STILL
/s/ Xxxx X. Xxxxxx
-----------------------------------
XXXX X. XXXXXX
/s/ Xxxxx Xxxx Xxxxxx
-----------------------------------
SPOUSE OF XXXX X. XXXXXX
/s/ Xxxxx X. Xxxxx, Xx.
-----------------------------------
XXXXX X. XXXXX, XX.
/s/ Xxxxxx Xxxxx
-----------------------------------
SPOUSE OF XXXXX X. XXXXX, XX.
/s/ Xxxxxx Xxxxxxx
-----------------------------------
XXXXXX XXXXXXX
/s/ Xxxxx X. Xxxxxxx
-----------------------------------
SPOUSE OF XXXXXX XXXXXXX
17
SCHEDULE 1
MANAGEMENT STOCKHOLDERS
Xxxxx X. Xxxxx
Xxxxxx X. Xxxx
Xxxxxxx X. Still
Xxxx X. Xxxxxx
Xxxxx X. Xxxxx, Xx.
Xxxxxx Xxxxxxx
18
SCHEDULE 2
NOTICE ADDRESSES
THE COMPANY:
RBPI Holding Corporation
0000 XXX Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxx
INVESTOR STOCKHOLDERS:
Reliant Partners, L.P.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
Reliant Partners II, L.P.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
MANAGEMENT STOCKHOLDERS:
Xxxxx X. Xxxxx Xxxxxx Xxxxxxx
0000 Xxxxxxxxx Xxxxx 000 Xxxxxx Xxxxxx
Xxxxx, Xxxxx 00000 Xxxxx, Xxxxx 00000
Xxxxxx X. Xxxx Xxxx X. Xxxxxx
1504 Pecos X.X. Xxx 0000
Xxxxxxxxx, Xxxxx 00000 Xxxxxxx, Xxxxxxxxx 00000
Xxxxxxx X. Still Xxxxx X. Xxxxx, Xx.
0000 Xxxxxxxxx Xxxxxx 302 Martingale
Bryan, Texas 77802 Xxxxxxxxx Xxxx, Xxxxxxx 00000
19
