EXHIBIT 10.16
THRIFT PLAN LIQUIDITY AGREEMENT
THRIFT PLAN LIQUIDITY AGREEMENT dated as of November 6, 1996
between Xxxxxx Micro Inc., a Delaware corporation ("MICRO"), and the Xxxxxx
Thrift Plan (together with its successors and permitted assigns, the "THRIFT
PLAN").
In consideration of the mutual promises set forth below (the
mutuality, adequacy and sufficiency of which are hereby acknowledged), the
parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1. DEFINITIONS. The following terms, as used herein, have
the following meanings:
"BENEFITS TRANSFER AGREEMENT" means the Employee Benefits Transfer
and Assumption Agreement of even date herewith among Micro, Xxxxxx Industries
Inc. and Xxxxxx Entertainment Inc.
"COMMISSION" means the Securities and Exchange Commission.
"ELIGIBLE REPURCHASE PERIOD" means the period commencing on the
effective date of the initial Public Offering and ending on the effective date
of any registration statement filed pursuant to Section 2.1(b); provided that
the "Eligible Repurchase Period" shall not include any period (i) commencing on
the date of delivery of a written notice by Micro pursuant to Section 2.1(a),
2.1(b) or 2.1(c) and (ii) ending on the day following the earliest to occur of
(a) the last day of effectiveness of the registration statement in respect of
which such notice was delivered, (b) the day after the date on which such
registration statement is withdrawn pursuant to Section 2.3 or (c) the 90th day
after the date of such written notice,
if such registration statement shall not have been declared effective by such
time.
"FAIR MARKET VALUE" means, with respect to one share of Micro Common
Stock as of any date, the reported closing price on such date of a share of
Micro Common Stock on such exchange or market as is the principal trading market
for the Micro Common Stock (regardless of whether such listed or traded share of
Micro Common Stock is of the same class as the share of Micro Common Stock in
respect of which the determination of Fair Market Value is being made).
"LIQUIDITY EVENT" means any event that requires that shares of Micro
Common Stock held by the Thrift Plan be sold in order to fund a distribution to
a participant required pursuant to the terms of the Thrift Plan consistent with
past practice.
"MICRO COMMON STOCK" means the common stock of Micro, including
without limitation the Class A common stock and the Class B common stock, par
value $0.01 per share, of Micro.
"PUBLIC OFFERING" means a public offering of Micro Common Stock
pursuant to an effective registration statement under the Securities Act, other
than pursuant to a registration statement on Form S-4 or Form S-8 or any
successor or similar form.
"REGISTRABLE SECURITIES" means, as of any date, (i) shares of Micro
Common Stock held by the Thrift Plan that the trustees of the Thrift Plan
determine, in their good faith opinion, should be sold as of such date in order
to comply with the provisions of Section 404(a) of The Employee Retirement
Income Security Act of 1974, as amended and (ii) shares of Micro Common Stock in
respect of which a Liquidity Event has occurred as of such date. Registrable
Securities shall cease to be Registrable Securities when (x) a registration
statement with respect to the disposition of such securities shall have become
effective under the Securities Act and such securities shall have been disposed
of pursuant to such effective registration statement, (y) such securities shall
have been sold under circumstances in which all of the applicable conditions of
Rule 144 under the Securities Act are met or (z) such securities may be sold
pursuant to Rule 144(k) under the Securities Act or otherwise in the public
market without being registered under the Securities Act.
"REGISTRATION EXPENSES" means all (i) registration and filing fees,
(ii) fees and expenses of compliance with
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securities or blue sky laws and the reasonable fees and disbursements of counsel
in connection with blue sky qualifications of the Registrable Securities, (iii)
printing expenses, (iv) internal expenses of Micro (including, without
limitation, all salaries and expenses of officers and employees performing legal
or accounting duties), (v) fees and disbursements of counsel for Micro, (vi)
customary fees and expenses for independent certified public accountants
retained by Micro (including the expenses of any comfort letters or costs
associated with the delivery by independent certified public accountants of a
comfort letter or comfort letters), (vii) fees and expenses of any special
experts retained by Micro in connection with such registration and (viii) fees
and expenses of listing the Registrable Securities to be registered pursuant to
this Agreement on a securities exchange.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
ARTICLE 2
REGISTRATION PROVISIONS; SHARE REPURCHASES
SECTION 2.1. SECURITIES ACT REGISTRATION. (a) Micro may elect, by
delivery of written notice to the Thrift Plan, to effect the registration, as
soon as practicable following the initial Public Offering, of Registrable
Securities on Form S-1 under the Securities Act; provided that if such
registration shall not have been effected within 90 days following such initial
Public Offering, Micro shall be obligated to repurchase such Registrable
Securities on the terms and conditions set forth in Section 2.4(a). The Thrift
Plan shall deliver written notice to Micro, within ten days after receipt by the
Thrift Plan of such written notice from Micro, of the number of Registrable
Securities to be included in such registration. Whether to make any election to
effect the registration of such Registrable Securities shall be in the sole and
absolute discretion of Micro.
(b) Micro may elect, by delivery of written notice to the Thrift
Plan, to effect the registration, as soon as practicable following the first
anniversary of the effective date of the initial Public Offering, of the
Registrable Securities on Form S-3 under the Securities Act; provided that if
such registration shall not have been effected within 90 days following such
anniversary, Micro
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shall be obligated to repurchase such Registrable Securities on the terms and
conditions set forth in Section 2.4(a). The Thrift Plan shall deliver written
notice to Micro, within ten days after receipt by the Thrift Plan of such
written notice from Micro, of the number of Registrable Securities to be
included in such registration. Whether to make any election to effect the
registration of such Registrable Securities shall be in the sole and absolute
discretion of Micro.
(c) Micro shall deliver written notice to the Thrift Plan in the
event that Micro is required to use its best efforts to effect a registration
pursuant to Section 7.01(b) of the Stock Option, SAR and ISU Conversion and
Exchange Agreement dated as of September 4, 1996 among Micro and the other
parties thereto. The Thrift Plan shall then deliver written notice to Micro,
within ten days after receipt by the Thrift Plan of such written notice from
Micro, of the number of Registrable Securities to be included in any such
registration, and Micro shall use its best efforts to include such Registrable
Securities in such registration.
SECTION 2.2. EFFECTIVENESS OF REGISTRATIONS. (a) Micro shall use its
best efforts to cause any registration pursuant to Section 2.1(a) to remain
effective (and not be subject to any stop order, injunction or other order or
requirement of the Commission or other governmental agency or court for any
reason) for a period of not less than 30 days following the date on which such
registration was declared effective, or, if earlier, the date on which all
Registrable Securities registered thereunder have been sold.
(b) Subject to Section 2.3(b), Micro shall use its best efforts to
cause any registration pursuant to Section 2.1(b) to remain effective (and not
be subject to any stop order, injunction or other order or requirement of the
Commission or other governmental agency or court for any reason) for the period
beginning on the date on which such registration was declared effective and
ending on the date on which all Registrable Securities registered thereunder
have been sold or, if earlier, the date on which no Registrable Securities
remain outstanding.
SECTION 2.3. EXPENSES; MICRO DISCRETION. (a) Micro shall pay all
Registration Expenses in connection with any registration effected pursuant to
the terms of this Agreement.
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(b) With respect to any registration statement filed or to be filed
pursuant to this Agreement, if the Board of Directors of Micro shall determine,
in its good faith judgment, that to maintain the effectiveness of such
registration statement or to permit such registration statement to become
effective (or, if no registration statement has yet been filed, to file such a
registration statement) would be significantly disadvantageous to Micro, Micro
may cause such registration statement to be withdrawn and the effectiveness of
such registration statement to be temporarily suspended or, if no registration
statement has yet been filed, delay the filing of such registration statement.
Micro shall not be liable for the failure of any such registration statement to
become effective provided that Micro complies with its obligations under this
Agreement; provided that, if any registration effected pursuant to Section
2.1(a) or 2.1(b) is so withdrawn or delayed for a period of more than 120
consecutive days, Micro shall be obligated to repurchase the Registrable
Securities to have been included in such registration on the terms and
conditions set forth in Section 2.4(a).
SECTION 2.4 SHARE REPURCHASES. (a) Subject to Section 2.4(d), if a
registration of Registrable Securities shall not have been effected during the
applicable time period specified in Section 2.1(a) or 2.1(b), or if required
pursuant to Section 2.3(b), the Thrift Plan may elect, by written notice
delivered to Micro within 90 days following the expiration of the time period
specified in Section 2.1(a) or Section 2.1(b), respectively, or the expiration
of the 120-day period referred to in Section 2.3(b), to sell to Micro the
Registrable Securities otherwise to have been included in such registration at a
purchase price, payable in cash, equal to the Fair Market Value of such
Registrable Securities as of the date such purchase is effected pursuant to
Section 2.4(c) and otherwise in the manner set forth herein.
(b) Subject to Section 2.4(d), at any time during the Eligible
Repurchase Period, the Thrift Plan may elect, by written notice delivered to
Micro, to sell to Micro, and Micro shall be required to purchase from the Thrift
Plan, the shares of Micro Common Stock with respect to which a Liquidity Event
has occurred, at a purchase price, payable in cash, equal to the Fair Market
Value of such shares as of the date such purchase is effected pursuant to
Section 2.3(c) and otherwise in the manner set forth herein; provided that Micro
shall not be obligated to make a repurchase pursuant to this Section 2.4(b) on
more than one occasion during any calendar month.
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(c) The closing of any repurchase made pursuant to this Section 2.4
shall be effected in one lump sum and, subject to Section 2.4(b), shall be
consummated as promptly as practicable following receipt of the written notice
from the Thrift Plan referred to in Section 2.4(a) or 2.4(b) upon at least five
days' prior notice by Micro of the date, time and place of the closing of such
repurchase.
(d) Notwithstanding anything herein to the contrary, (i) Micro shall
not be obligated to make any such purchase if Micro determines in good faith
that such purchase would adversely affect the qualification of the transactions
contemplated by the Exchange Agreement or Reorganization Agreement (as defined
in the Benefits Transfer Agreement) for tax-free treatment under Section 355 of
the Internal Revenue Code, as amended, or if such purchase would be prohibited
by the terms of any credit facility or financing agreement of Micro then in
effect, and (ii) Micro shall not be obligated to repurchase pursuant to Section
2.4(a), during any fiscal year, Registrable Securities of the type described in
clause (i) of the definition of "Registrable Securities" having an aggregate
purchase price in excess of the greater of $10 million or 3% of the stockholders
equity of Micro as of the beginning of such fiscal year (it being understood
that shares of Micro Common Stock shall be repurchased on a first-come,
first-served basis until the limit for such fiscal year has been reached).
(e) Micro hereby agrees to use commercially reasonable efforts to
negotiate the terms of each credit facility and financing agreement of Micro so
as to minimize any restrictions on the ability of Micro to make repurchases
hereunder.
ARTICLE 3
MISCELLANEOUS
SECTION 3.1. HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not control or affect the meaning or
construction of any provisions hereof.
SECTION 3.2. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement and understanding of the parties hereto in respect of the subject
matter contained herein. This Agreement supersedes all prior agreements and
understandings between the parties hereto with respect to the subject matter
hereof.
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SECTION 3.3. NOTICES. Any notice, request, instruction or other
document to be given hereunder by either party hereto to the other party hereto
shall be in writing (including telecopier or similar writing) and shall be given
to such party at its address set forth on the signature pages hereof, or to such
other address as the party to whom notice is to be given may provide in a
written notice to the party giving such notice. If notice is given pursuant to
this Section of a successor or permitted assign of a party to this Agreement,
then notice shall thereafter be given as set forth above to such successor or
assign. Each such notice, request or other communication shall be effective (i)
if given by telecopy, when such telecopy is transmitted to the telecopy number
specified on the signature pages hereof and electronic or oral confirmation of
receipt is received, (ii) if given by mail, at the close of business on the
third business day after such communication is deposited in the mails with first
class postage prepaid addressed as aforesaid or (iii) if given by any other
means, when delivered at the address specified in this Section 3.3.
SECTION 3.4. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without regard to
the conflicts of law rules of such state.
SECTION 3.5. SEVERABILITY. The invalidity or unenforceability of any
provision of this Agreement in any jurisdiction shall not affect the validity,
legality or enforceability of the remainder of this Agreement in such
jurisdiction or the validity, legality or enforceability of this Agreement,
including any such provision, in any other jurisdiction, it being intended that
all rights and obligations of the parties hereunder shall be enforceable to the
fullest extent permitted by law.
SECTION 3.6. SUCCESSORS, ASSIGNS. Neither this Agreement nor any
right, remedy, obligation or liability arising hereunder or by reason hereof
shall be assignable by Micro or by the Thrift Plan; provided that the Thrift
Plan may assign its rights hereunder to the Micro Thrift Plan or the
Entertainment Thrift Plan (each as defined in the Benefits Transfer Agreement)
in connection with any transfer of Micro Common Stock to the Micro Thrift Plan
or Entertainment Thrift Plan, respectively, pursuant to Section 3.1 of the
Benefits Transfer Agreement; provided that each such assignee shall have
executed and delivered to Micro an instrument in form and substance satisfactory
to Micro pursuant to which such assignee shall have agreed to be bound by the
terms of this Agreement. This Agreement is
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binding upon the parties to this Agreement and their respective successors and
permitted assigns and inures to the benefit of the parties to this Agreement and
their respective successors and assigns. Neither this Agreement nor any
provision hereof shall be construed so as to confer any right or benefit upon
any entity other than the parties to this Agreement, those who agree to be bound
hereby and their respective successors and assigns. References to a party to
this Agreement are also references to any successor or permitted assign of such
party and, when appropriate to effect the binding nature of this Agreement for
the benefit of another party, any other successor or assign of a party.
SECTION 3.7. AMENDMENTS; WAIVERS. (a) No failure or delay on the
part of either party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.
(b) Neither this Agreement nor any term or provision hereof may be
amended or waived except by an instrument in writing signed by the parties
hereto.
SECTION 3.8. COUNTERPARTS. This Agreement may be executed in two
counterparts, both of which shall be an original with the same effect as if the
signatures thereto and hereto were upon the same instrument.
SECTION 3.9. REMEDIES. The parties hereby acknowledge and agree that
in the event of any breach of this Agreement, the parties would be irreparably
harmed and could not be made whole by monetary damages. Each party hereto
accordingly agrees (i) not to assert by way of defense or otherwise that a
remedy at law would be adequate, and (ii) in addition to any other remedy to
which the parties may be entitled, that the remedy of specific performance of
this Agreement is appropriate in any action in court. The rights and remedies
herein provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 3.10. EFFECTIVENESS. This Agreement shall become effective
commencing on the effective date of the initial Public Offering.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
XXXXXX MICRO INC.
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
0000 Xxxxx Xxxxxx Xxxxx
Xxxxx Xxx, XX 00000
Telecopy: (000) 000-0000
INGRAM THRIFT PLAN
By X.X. HEAD, R.E. CLAVERIE
AND T.H. XXXX,
as Co-Trustees
By: /s/ Xxxxxxx X. Head
---------------------------------
Name: Xxxxxxx X. Head
Title: Co-Trustee
Address: 0000 Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
By: /s/ R.E. Claverie
---------------------------------
Name: R.E. Claverie
Title: Co-Trustee
Address: 0000 Xxxxxxx Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
By: /s/ T.H. Xxxx
---------------------------------
Name: T.H. Xxxx
Title: Co-Trustee
Address: 000 Xxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
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