EXHIBIT C
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ATALANTA/SOSNOFF CAPITAL CORPORATION
1996 LONG TERM INCENTIVE PLAN
RESTRICTED STOCK AWARD AGREEMENT
AWARD AGREEMENT made as of this 17th day of September 1997 by and
between Atalanta/Sosnoff Capital Corporation, a Delaware corporation (the
"Corporation"), and Xxxxx X. Xxxxxxxxx, President of the Corporation (the
"Participant").
R E C I T A L S
WHEREAS, the Compensation and Stock Option Committee (the "Committee")
of the Board of Directors on September 17, 1997, granted to the Participant a
Restricted Stock Award (the "Award") of 600,000 shares (the "Restricted Shares")
of Common Stock, par value $0.01 per share, of the Corporation under the terms
and conditions of the Corporation's 1996 Long Term Incentive Plan (the "Plan")
and
WHEREAS, the Committee instructed the Corporation to embody the
Restricted Stock Award in an Award Agreement containing the terms and conditions
determined by the Committee consistent with the Plan and such other terms not
inconsistent therewith as determined by the Chairman of the Board of the
Corporation.
NOW THEREFORE, this Agreement
W I T N E S S E T H:
Section 1. Acceptance of the Award; Payment of Purchase Price.
The Participant hereby accepts the Award and agrees to be
bound in all respects by this Agreement and the Plan. In payment for the Award
the Participant hereby tenders payment in the amount of $6,000 in full payment
of the purchase price for the Award, the receipt whereof is hereby acknowledged
by the Corporation.
Section 2. Definitions
All terms not otherwise defined herein shall have the meanings
ascribed to them in the Plan. The following terms shall have the meanings set
forth herein for purposes of this Agreement:
A. "Award" shall mean the Award of Restricted Stock granted by
the Committee under the provisions of this Agreement.
B. "Cause" shall mean, in the context of termination of the
employment of the Participant, any person for any of the
following events or conditions as determined by the Board of
Directors of the Corporation: (i) such person's failure to
perform, or negligence in the performance of, his duties and
responsibilities to the Corporation as a director or officer
or employee (other than by reason of death or disability),
(ii) fraud, embezzlement, the commission of a felony or other
material dishonesty with respect to the Corporation or any of
its affiliates, (iii) in the written opinion of counsel to
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the Corporation, the Participant's conduct shall require that
the Corporation answer "yes" to any of the "Disciplinary
Questions" set forth in Part I, Question 11 of Form ADV
promulgated under the Investment Advisers Act of 1940, as
currently in effect or as hereafter amended, and (iv) other
conduct that is materially harmful to the business, interests
or reputation of the Corporation.
C. "Disability" shall mean with respect to the Participant the
failure to perform his duties as an employee of the
Corporation or any subsidiary or affiliate by reason of
physical or emotional illness for a consecutive period of six
months or a non-consecutive period totalling six months in any
twelve month period. A Disability determination shall be made
by the Board of Directors of the Corporation on the basis of
competent medical advice from a physician or physicians
consulted by the Board.
D. "Change in Control" shall mean a Change in Control of a nature
that would be required to be reported in response to item I of
a Current Report on Form 8-K, as in effect on the date hereof,
pursuant to Section 13 or 15(d) of the Exchange Act; provided
that, without limitation, such a Change in Control shall be
deemed to have occurred at such time as (a) any "person" (as
such term is used in Sections 13(d) and 14(d) of the Exchange
Act) is or becomes the "beneficial owner" (as defined in Rule
13D-3 under the Exchange Act), directly or indirectly, of
securities of the Corporation representing twenty-five (25%)
percent or more of the
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combined voting power of the Corporation's outstanding
securities ordinarily having the right to vote at elections of
directors other than any such person that is an affiliate (as
such term is defined in Rule 12b-2 under the Exchange Act) on
the effective date of the Award; or (b) individuals who
constitute the Board of Directors of the Corporation on the
date hereof (the "Incumbent Board") cease for any reason to
constitute at least one half of the members thereof, provided
that any person becoming a director subsequent to the date
hereof whose election or nomination for election by the
Corporation's stockholders was approved by a vote of a
majority of the directors comprising the Incumbent Board,
shall be, for purposes of this clause (b), considered as
though he were a member of the Incumbent Board; or (c) a sale
by the Corporation of all or substantially all of its assets
or the liquidation of the Corporation. Notwithstanding
anything in the foregoing to the contrary, no Change in
Control shall be deemed to have occurred for purposes of this
Agreement by virtue of any transaction which results in the
ownership by the Participant, or by a group of persons,
including the holders of a majority of the outstanding Common
Stock of the Corporation, directly or indirectly, of a
majority of the voting securities of any corporation which
acquires all or substantially all of the assets of the
Corporation, whether by way of merger, consolidation, sale of
such assets or otherwise.
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E. "Effective Date" shall mean with respect to any Award, the
date on which the Award is approved by the Committee.
F. "Involuntary Termination" shall mean termination of the
Participant's employment by reason of a Change in Control, death, Disability or
termination without cause or the death of Xxxxxx X. Xxxxxxx.
G. "Voluntary Termination" shall mean the termination of the
Participant's employment by reason of resignation or termination for Cause.
3. Rights as a Shareholder
3.1 Upon the Award of Restricted Stock to a Participant and
from and after the date of issuance of certificate(s) representing such
Restricted Stock, such Participant shall, subject to the restrictions set forth
in Sections 3.2, 4 and 8 hereof(or in any promissory note and/or pledge
agreement entered into pursuant to this Agreement) have all of the rights of a
shareholder with respect to such Restricted Stock, including but not limited to:
(a) the right to vote the Restricted Shares and the right; (b) to receive all
dividends paid thereon, if any; and (c) subject to Section 3.2 hereof, to sell,
transfer or otherwise dispose of such Restricted Stock.
3.2 Subject to Sections 3.2(c), 4 and 8 hereof:
(a) If at any time on or after the Effective Date
of this Award the Participant, shall wish to transfer or otherwise dispose of
(other than in a transaction contemplated under Section 3.2(c) hereof) all or
any portion of such Participant's
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shares of Restricted Stock as to which the Corporation's right of repurchase
shall have lapsed pursuant to Sections 4 and 5 hereof, he shall deliver written
notice (the "Offer Notice") to the Corporation stating his wish to make such
transfer and the number of Restricted Shares he wishes to be transferred (the
"Offered Shares"), and certifying that such transfer which he wishes to make is
pursuant to a bona fide third party offer to acquire the Offered Shares for
consideration (a "Bona Fide Third-Party Offer"). The Offer Notice shall further
state the name of the person who made the Bona Fide Third-Party Offer and the
terms thereof, including a description and a statement of the aggregate cash
value of all consideration, including any consideration other than cash (the
"Offered Price"). The Corporation shall have the irrevocable and exclusive
right of first refusal, as hereinafter provided, to purchase all (but not less
than all) of the Offered Shares at the Offered Price. Any exercise of the right
of first refusal to purchase the Offered Shares pursuant to this Section 3.2(a)
shall be by a written notice (the "Acceptance Notice") delivered by the
Corporation to the Participant within 15 days after delivery by the Participant
of an Offer Notice. An Acceptance Notice shall fix a date for the closing of
such purchase (the "Closing Date"), which date shall be not less than 10 and not
more than 20 business days after the date on which the Acceptance Notice is
given.
(b) Failure to furnish the Acceptance Notice within
the 15 day period set forth in Section 3.2(a) shall constitute a waiver of the
Corporation's right of first refusal with respect to the Bona Fide Third-Party
Offer which may be accepted by the Participant provided that the sale of the
Offered Shares pursuant thereto is
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consummated in accordance with its terms within 30 days after the expiration of
such 15 day period.
(c) Notwithstanding the foregoing, the right of first
refusal set forth in Section 3.2(a) shall not apply to open-market transactions
effected on a national securities exchange or in the over-the-counter market in
Broker's Transactions as defined in Rule 144 under the Securities Act of 1933,
as amended, whether or not such Rule would otherwise be applicable to such sale.
Section 4. Repurchase Option Upon Voluntary Termination
At any time prior to a Change in Control of the
Corporation or in the case of a Change in Control where the Participant does not
agree to remain an employee of the Corporation or its successor for a period of
18 months from the effective date of such Change in Control under a binding
agreement with the Corporation or its successor in the same capacity at the same
compensation level as then in effect, the Corporation shall have the right to
repurchase from a Participant, upon written notice to such Participant, all or a
part of the following percentages of the number of Restricted Shares issued
pursuant to this Award made to the Participant upon Voluntary Termination of the
Participant's employment.
(i) 100%, provided such Voluntary Termination occurs prior
to the first anniversary of the Effective Date of the Award.
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(ii) 75%, provided such Voluntary Termination occurs on or
after the first anniversary but prior to the second anniversary of
the Effective Date of the Award.
(iii) 50%, provided such Voluntary Termination occurs on
or after the second anniversary but prior to the third anniversary
of the Effective Date of the Award.
(iv) 25%, provided such Voluntary Termination occurs on or
after the third anniversary but prior to the fourth anniversary of
the Effective Date of the Award.
In the event the Corporation elects to exercise its right, pursuant
to the preceding paragraph, to repurchase a percentage of the Restricted Shares
issued pursuant to this Award made to the Participant, the purchase price shall
be the aggregate price paid by the Participant for such Restricted Shares
pursuant to Section 1 of this Agreement. During such time Restricted Shares are
subject to the option to repurchase pursuant to this Section 4, such Restricted
Shares may not be sold, transferred or otherwise disposed of by the Participant.
Section 5. No Repurchase Option Upon Involuntary Termination
The Corporation shall not have the right to repurchase
from a Participant any Restricted Stock issued pursuant to this Award Agreement
made to the
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Participant upon Involuntary Termination of the Participant's employment
provided, however, that
(a) in the event the Involuntary Termination arises as a
result of a Change in Control, Participant shall have agreed with the
Corporation or its successor under a binding agreement to remain in the same
capacity at the same compensation level for a period of 18 months from the
effective date of the Change in Control, and
(b) in the event the Involuntary Termination arises as a
result of the death of Xxxxxx X. Xxxxxxx, Participant shall agree to serve the
Corporation under a binding agreement for a period from the date of such death
to the earliest to occur of (i) Participant's death, (ii) Participant's
Disability or (iii) a Change in Control..
Section 6. Payment of Taxes; Loan Agreement
The Participant shall be required to discharge any and all federal,
state and local taxes, if any, incurred as a result of his receipt of the Award
and any such taxes related to the lapse of the Corporation's right to purchase
Restricted Shares issued pursuant to the Award. The Corporation shall lend the
Participant, at his request, funds to defray such taxes on the following basis:
(a) If, and to the extent, that the earnings distributed to a
Participant attributable to the Restricted Shares (whether in the form of
dividends or other distributions to the Participant) after the payment of his
personal income taxes thereon (as determined by the Participant's personal
federal, state and local tax returns for the tax year in question) are not
sufficient to defray such Participant's personal tax liability
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as set forth in the Participant's returns arising solely from the taxable
compensation, if any, attributable to the grant of the Award of Restricted
Shares to the Participant or to the lapse of the Corporation's right to
repurchase the Restricted Shares of the Participant at such Participant's cost
in the applicable tax year, any such deficiency shall be loaned by the
Corporation to the Participant. Such loans shall be made at the Participant's
request at any time within 90 days from the date the Corporation is required to
withhold and deposit funds from the Participant's cash compensation in respect
of the tax liability associated with Restricted Shares, and shall be adjusted,
if necessary, based upon the Participant's returns. Each such loan shall be
evidenced by a note (in the form annexed hereto as Exhibit A) maturing in four
years from the date of issue and shall bear simple interest, which shall accrue
to maturity, at the "applicable federal rate" as defined in Section 1274(d) of
the Code. Any such note shall be secured by a pledge of the portion of the
Restricted Shares to which such tax liability is attributable equal at the date
of the loan to the Fair Market Value of the Restricted Shares to the value
thereof under a pledge agreement (in the form annexed hereto as Exhibit B).
(b) The payment period for any such notes will be adjusted in
the following events.
(i) In the event the Participant's employment by the
Corporation terminates as a result of the death or Disability of
such Participant, no outstanding note shall have a payment period
ending sooner than one year
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from the date of such Participant's death or the determination of
his Disability, as applicable.
(ii) In the event Participant's employment by the
Corporation terminates as a result of Participant's voluntary
resignation such note shall have a payment period ending no sooner
than (i) two years from such voluntary resignation, if the
Participant's Restricted Shares are not subject to repurchase by
the Corporation at such date or (ii) the later of (A) two years
from the date of such voluntary resignation and (B) the date upon
which the Participant's Restricted Shares would have been no longer
subject to the Corporation's right of repurchase had such resigned
Participant remained an employee of the Corporation until the date
upon which such Restricted Shares would have been no longer subject
to repurchase by the Corporation hereunder.
(iii) In no event shall the payment period be longer than
a period ending on the date upon which the Participant sells his
Restricted Shares for cash.
(iv) The Participant may, at his option, apply Restricted
Shares at their fair market value to the repayment of principal or
interest on all or any part of a note, if such Restricted Shares,
at the time of such application, are not subject to repurchase by
the Corporation.
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Section 7. Adjustment Upon Changes in Common Stock
In the event that there is any change in the Common Stock, through
merger, consolidation, reorganization, recapitalization or otherwise, or if
there shall be any dividend on the Common Stock payable in such Common Stock or
if there shall be a stock split, combination of shares or other changes in
Atalanta/Sosnoff Capital Corporation's capital structure, the number of shares
in the Award shall be appropriately adjusted by the Committee to reflect any
such changes. Neither the issuance of Common Stock for adequate consideration,
nor the issuance of rights or options with respect to the Common Stock or any
other stock based awards to employees of the Corporation under the Plan or a
comparable benefit plan shall be considered a change in Atalanta/Sosnoff Capital
Corporation's capital structure. No adjustment provided for in this Section 7
shall require the issuance of any fractional share.
Section 8. Compliance with Securities and Exchange Commission Requirements
No certificate for Restricted Shares awarded under this Agreement
shall be issued until the Corporation shall have taken such action, if any, as
is then required, in its opinion, in order to comply with the provisions of the
Securities Act of 1933, as amended, the Exchange Act, as amended, and any other
applicable laws, as well as with the requirements of any exchange on which the
Common Stock may, at the time, be listed. Such action may include, but is not
limited to, the registration of the Restricted Shares or the delivery to the
Corporation with respect to the Restricted
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Shares awarded to a Participant of a written representation by the Participant,
in form satisfactory to the Corporation, that it is the Participant's intention
to acquire the Restricted Shares for investment and not for resale. If such a
written representation is requested, the Corporation shall not be required to
transfer any shares to the Participant until the representation is received in
form satisfactory to the Corporation, and any certificate for Restricted Shares
issued upon receipt of such a representation shall bear a legend to the effect
that such shares have been acquired for investment and have not been registered
under the Securities Act of 1933, as amended, and may not be disposed of except
in compliance therewith.
Section 9. Conflicting Terms.
To the extent that there may be any conflict between any term or
condition of the Plan and term or condition of this Award Agreement, the term or
condition of this Award Agreement shall control.
Section 10. Legend.
Each certificate representing Restricted Shares awarded pursuant to
this Agreement shall bear a legend referring hereto and to the Plan and to the
restrictions on disposition contained herein and therein.
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Section 11. Shares Acquired for Investment.
The Participant hereby acknowledges that the Restricted Shares
constituting the Award have not been registered under the Securities Act of
1933, as amended, or any applicable state securities law, and represent that he
is acquiring the Restricted Shares for his own account and not with a view to
the distribution thereof. He further acknowledges that he has been informed by
the Corporation that the certificate representing the Restricted Shares will
bear a restrictive legend to the following effect:
"The Shares represented by this Certificate have not been
registered under the Securities Act of 1933, as amended (the
'Act'), and no disposition thereof may be made in violation of the
Act and the rules and regulations promulgated thereunder and unless
the Corporation shall have received an opinion of counsel
reasonably satisfactory to it that such disposition may be effected
without violating the Act."
Section 12. Continued Validity.
Participant agrees that in the event of invalidity of any part or
provision of the Plan, or this Award Agreement, such invalidity shall not affect
the validity of any other part or provision of the Plan, of this Agreement.
Section 13. Choice of Law.
This Award Agreement shall be construed and enforced in accordance
with the laws of the State of New York.
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Section 14. Notices and Deliveries
All notices hereunder shall be in writing. Any notices, payments,
or deliveries to the Corporation or the Committee shall be directed to the
Corporation or the Committee, as the case may be, at the following address:
Atalanta/Sosnoff Capital Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Chairman
Any notices, payments or deliveries (other than to the Corporation or the Board)
shall be directed to the addressee at the address designated by said addressee
by notice to the Committee. The Corporation may designate a new address for
purposes of this Agreement by notice to the Participant. Any Participant or
beneficiary may designate a new address for the purposes of this Agreement by
notice to the Committee. If no address is designated by the Participant or
beneficiary, all notices may be sent to his last known address. Unless otherwise
specified herein, notices shall be delivered by hand or sent by registered or
certified mail, return receipt requested.
Section 14. Binding Upon Heirs. Etc,
This Agreement shall be binding upon, and shall inure to the
benefit of, the Corporation, its successors and assigns, and each Participant,
his heirs, executors, administrators and legal representatives.
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IN WITNESS WHEREOF, the Corporation and the Participant have
executed this Award Agreement as of the day first above written.
Atalanta/Sosnoff Capital Corporation
by: /S/ Xxxxxx X. Xxxxxxx
--------------------------------
Xxxxxx X. Xxxxxxx
Chairman of the Board
/S/ Xxxxx X. Xxxxxxxxx
--------------------------------
Xxxxx X. Xxxxxxxxx
EXHIBIT A
THIS NOTE IS SECURED UNDER THE TERMS OF A PLEDGE AGREEMENT
DATED: , 1998
PROMISSORY NOTE
$ [Date]
New York, New York
FOR VALUE RECEIVED, the undersigned, ("Payor"),
promises to pay to the order of ATALANTA/SOSNOFF CAPITAL CORPORATION, a Delaware
Corporation ("Payee"), the principal sum of ___________ Dollars ($___) , or as
much thereof as may be outstanding or unpaid, in lawful money of the United
States, on _______________ 199__, and to pay interest thereon on on the unpaid
principal balance hereof at an annual rate of interest of ________% (equal to
the applicable federal rate as announced by the Internal Revenue Service
("Federal Rate") in effect on the date of issue. Terms used herein not otherwise
defined herein have the meanings set forth in Payee's 1996 Long Term Incentive
Plan and in the Award Agreement between Payor and Payee dated September 17,
1997.
The payment of principal and interest hereunder shall be made at the
offices of Payee, which are located at 000 Xxxx Xxxxxx, Xxx Xxxx, X.X. 00000 or
at such other place as Payee or any other holder hereof may designate from time
to time.
The following events shall constitute an "Event of Default" hereunder,
namely, if Payor fails to pay when due any amount payable under this Note, or if
proceedings under any bankruptcy or insolvency law are commenced by or against
Payor, or if a general assignment for the benefit of creditors in made, or if a
trustee or receiver of Payor's property is appointed.
The holder hereof shall be entitled, upon the occurrence of an Event of
Default to accelerate payment of the unpaid balance of this Note, in which event
the entire unpaid principal balance hereof shall immediately be due and payable
to the holder hereof.
Upon a Change in Control of Payee or the sale of Restricted Shares by
the Payor, the holder hereof shall be entitled to accelerate payment of that
percentage (the "Accelerated Percentage") of the unpaid balance of the Note
which the cash portion of the consideration paid, if any, for the Restricted
Shares in connection with a Change in Control or sale bears to the total
consideration paid for such Restricted Stock. In such event the Accelerated
Percentage of the unpaid balance of the Note shall be due and immediately
payable to the holder hereof.
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In the event the Payor's employment by the Payee terminates as a result
of the death or Disability of the Payor, this Note's maturity shall be adjusted
so that it ends no sooner than one year from the date of the Payor's death or
the determination of his Disability, as applicable.
In the event Payor's employment by the Payee terminates as a result of
Payor's voluntary resignation this Note's maturity shall be adjusted so that it
ends no sooner than (i) two years from such voluntary resignation, if the
Payor's Restricted Shares are not subject to repurchase by the Payee at such
date or (ii) the later of (A) two years from the date of such voluntary
resignation and (B) the date upon which the Payor's Restricted Shares would have
been no longer subject to the Payee's right of repurchase had such resigned
Payor remained an employee of the Payee until the date upon which such
Restricted Shares would have been no longer subject to repurchase by the Payee
at Payor's cost.
Notwithstanding the preceding two paragraphs, in no event shall the
maturity of this Note be longer than a period ending on the date upon which the
Payor sells his Restricted Shares for cash.
Payor may at any time and without penalty or premium, prepay this Note
in whole or in part, provided that on any such prepayment Payor shall pay
accrued interest on the principal amount so prepaid to the date of such
prepayment. Upon a
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Change in Control of Payee, all amounts payable to Payor in consideration for or
otherwise in respect of Restricted Stock held by Payor shall be paid to or held
by Payee and applied toward the prepayment of this Note in accordance with the
preceding sentence, provided, however, that any excess of such amounts over the
principal amount of and accrued interest on this Note shall be paid to Payor.
The Payor may, at his option, apply Restricted Shares at their Fair
Market Value to the repayment of principal or interest on all or any part of
this Note, if such Restricted Shares, at the time of such application, are not
subject to repurchase by the Payee at Payor's cost.
Payor does hereby waive any right of reduction of or offset against any
payment of principal, interest or other sums owing hereunder. In addition, Payor
waives presentment, demand for payment, notice of dishonor, notice of protest,
and all other notices or demands in connection with the delivery, acceptance,
performance, default, endorsement or guarantee of any installment of this Note.
In the event this Note is not promptly paid when due, Payor shall pay
(i) interest on such unpaid principal amount at a rate equal to the lesser of
20% per annum or the highest lawful rate in the State of New York and (ii) all
costs of enforcement and collection of this Note, including reasonable
attorneys' fees and expenses.
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Payor does hereby agree and understand that if any term, condition,
clause or provision of this Note shall be determined or declared to be void or
invalid in law or otherwise, then only that term, condition, clause or provision
shall be stricken from this Note and in all other respects this Note shall be
valid and continue in full force, affect and operation.
Notwithstanding the place where this Note may be executed, Payor
expressly agrees that all the terms and provisions hereof shall be governed by
and construed in accordance with the laws of the State of New York. Payor hereby
consents to the jurisdiction of the United States District Court for the
Southern District of New York and the Supreme Court of the State of New York,
County of New York, to resolve any dispute or disputes which might arise under
this Note.
Any failure by Payee or any other holder hereof to exercise any right
hereunder shall not be construed a waiver of the right to exercise the same or
any other right at any other time and from time to time thereafter.
Payor does hereby agree and understand that all terms and provisions of
this Note shall be binding upon, and inure to the benefit of, and be enforceable
by, the parties hereto, and their respective heirs, successors and assigns.
---------------------------------
(Payor)
EXHIBIT B
PLEDGE AGREEMENT
----------------
PLEDGE AGREEMENT (the "Agreement"), dated as of this _____ day of 19__,
by and between Atalanta/Sosnoff Capital Corporation (the "Corporation"), a
Delaware corporation, and ___________________ (the "Participant").
WHEREAS, , the Corporation and Participant have entered into an Award
Agreement (the "Award Agreement") pursuant to which the Participant was awarded
__________________ shares (the "Restricted Shares") of Common Stock of the
Corporation (the "Award") in accordance with the terms of the Corporation's 1996
Long Term Incentive Plan (the "Plan"); and
WHEREAS, , pursuant to the Award Agreement, the Corporation has agreed
to loan to the Participant $_____________ (the "Loan") to defray the federal,
state and local taxes incurred by the Participant acting as a result of the
Award; and
WHEREAS, , simultaneously with the execution and delivery of this
Agreement, the Participant will execute and deliver to the Corporation a
promissory note (the "Note") evidencing the Loan; and
WHEREAS, , as a condition to the making of the Loan, the Corporation
and the Participant have agreed and are willing to enter into this Agreement;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Pledge
1.1 The Participant hereby pledges, assigns and hypothecates
Restricted Shares (the "Shares") to the Corporation and hereby grants to the
Corporation a lien on, and security interest in, the Shares and in all proceeds
thereof, as collateral security for the due performance of all of the
Participant's obligations under the Note, the Award Agreement and the Plan. The
Note, the Award Agreement, the Plan, this Agreement and all other documents
delivered in connection therewith shall be referred to collectively as the "Loan
Documents".
1.2 The Participant shall on the date hereof deliver the
certificates for the Shares to the Corporation, to be held by the Corporation
pursuant to Section 4 hereof, together with stock powers duly endorsed in blank.
2. Stock Dividends, Distributions, Etc. If, prior to the termination of
this Agreement, the Corporation shall authorize the issuance of any stock
dividend or shall make any distribution in connection with any reclassification,
increase or reduction of capital, whether as an addition to, in substitution of,
or in exchange for any of the Shares or otherwise, the Participant agrees to
deliver or to cause same to be delivered to the Corporation, in the exact form
received, with the endorsement of the Participant
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when necessary, and appropriate stock powers duly endorsed in blank, to be held
by the Corporation, subject to the terms hereof, as additional security for the
Participant's obligations under the Loan Documents. Any sums of money paid in
respect of the Shares pursuant to a cash dividend declared by the Corporation's
Board of Directors based solely upon the Corporation's earnings ("Ordinary
Dividends") shall be paid to the Participant. Any sums of money and property
paid or distributed upon or in respect of the Shares upon the liquidation or
dissolution of the Corporation and any sum to be paid in respect of the Shares
pursuant to a dividend, distribution, or the like, other than Ordinary
Dividends, shall, subject to the terms of this Agreement, be paid to the
Participant provided, however, that if following such payment the amount of
cash, if any, plus the fair market value (as determined by the Board of
Directors of the Corporation) of the Shares and any other property then held
pursuant to the terms of this Agreement is less than the remaining principal
balance on the Note plus accrued interest thereon, such sums of money and
property shall be held by the Corporation as additional security for the
Participant's obligations under the Loan Documents.
3. Voting Rights. So long as the Participant is not in default
hereunder and under the Loan Documents, the Participant shall be entitled to
exercise all voting rights with respect to the Shares.
4. Transfer.
4.1 Upon execution and delivery of this Agreement, the
Corporation shall receive all Certificates representing the pledged Shares and
stock powers duly
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endorsed in blank, in forms satisfactory to the Corporation. No subsequent
transfer of any of the Participant's rights in the Shares shall be made without
the prior written consent of the Corporation.
4.2 In the event that the Participant shall have made all
payments due under the Note and provided the Participant is not otherwise in
default under the Loan Documents, then the Corporation shall, within three (3)
business days after payment in full of the Note, deliver the certificates for
the Shares to the Participant along with the blank stock powers, whereupon this
Agreement shall terminate.
4.3 In the event that the Participant desires to sell or
otherwise transfer less than the total number of Shares to a third party, the
Corporation, upon written notice to the Corporation by the Participant, shall
deliver the certificates) representing such lesser number of Shares to the
Participant for such purpose, provided the Participant repays or has previously
repaid to the Corporation (together with any interest due under the Note) that
percentage of the Loan which in at least equal to the percentage such lesser
number of Shares bears to the total number of Shares.
4.4 The obligation of the Participant under this Agreement are
absolute and unconditional, and are not subject to any counterclaim, set-off,
deduction or defense that the Participant may have against the Corporation. The
Participant unconditionally waives (a) notice of any event of default under the
Loan Documents; (b) all notices, which may be required by statute, rule of law
or otherwise, to preserve intact any rights of the Corporation against the
Participant, including, without limitation, any demand, presentment and protect,
proof of notice of non-payment under the Note,
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and notice of any failure on the part of the Participant to perform and comply
with any agreement, term or condition of the Loan Documents, or any requirement
on the part of the Corporation to mitigate the damages resulting from any
default under the Loan Documents.
5. Default.
5.1 In the event of the Participant's default under the Loan
Documents, the Corporation may then cause the Shares to be registered in its
name or the name of its nominees, and the Corporation or its nominee may
thereafter exercise all of the rights attendant to a holder of such stock.
5.2 The Corporation may forthwith collect, receive,
appropriate and realize upon the Shares in accordance with the provisions of the
New York Uniform Commercial Code governing transactions secured by the pledge of
stock. In addition, the Participant agrees that the Corporation need not give
more than ten (10) days notice of the time and place of any public sale or of
the time after which a private sale or other intended disposition is to take
place and that such notice is deemed to constitute reasonable notification of
such matters.
5.3 In addition to the rights and remedies granted to the
Corporation and under the Loan Documents, the Corporation shall have all the
rights and remedies of a secured party under the Uniform Commercial Code of the
State of New York.
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6. Representations warranties and Covenants of the Participant. The
Participant represents and warrants that (a) he is the legal record holder and
beneficial owner of, and has good title to the Shares and the Shares are not
subject to any pledge, lien, mortgage, hypothecation, security interest, charge,
or other encumbrance whatsoever, except pursuant to the Loan Documents; (b) he
has full power, authority and legal right to pledge all the Shares pursuant to
this Agreement; (c) this Agreement has been duly executed and delivered by the
Participant and constitutes a legal, valid and binding obligation of the
Participant enforceable in accordance with its terms; (d) no consent of any
other party and no consent, license, permit, approval or authorization of,
exemption by, notice or report to, or registration, filing, declaration with,
any governmental authority, domestic or foreign, is required to be obtained by
the Participant in connection with the execution, delivery and performance of
this Agreement; (e) the execution, delivery and performance of this Agreement
will not violate any provision of any applicable law or regulation or of any
order, judgment, writ, award or decree of any court, arbitrator or governmental
authority, domestic or foreign, or of any mortgage, indenture, lease, contract,
or other agreement, instrument or undertaking to which the Participant is a
party or which purports to be binding upon the Participant or upon any of his
assets and will not result in the creation or imposition of any lien, charge or
encumbrance on, or security interest in, any of the assets of the Participant
except as contemplated by this Agreement; and (f) the pledge, assignment and
hypothecation of the Shares pursuant to this Agreement upon delivery of the
Shares to the Corporation, creates a valid first priority lien on, and security
interest in,
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the Shares and the proceeds thereof and is not subject to any pledge, lien,
mortgage, hypothecation, security interest, charge, option or encumbrance or to
any agreement purporting to grant to any third party a security interest in the
property or assets of the Participant which would include the Shares, other
than, and except to the extent provided by, the Loan Documents.
7. Further Assurances. Participant agrees that at any time and from
time to time upon the written request of the Corporation, the Participant will
execute and deliver such further documents and do such further acts and things
as the Corporation may reasonably request in order to effect the purposes of
this Agreement.
8. Termination. This Agreement shall terminate upon the delivery by the
Corporation to the Participant of the certificates for the Shares and the
related stock powers in accordance with Section 4.2 hereof.
9. Waivers, Amendments, Applicable Law; Miscellaneous. None of the
terms and provisions of this Agreement may be waived, altered, modified or
amended except by an instrument in writing, duly executed by the Corporation and
the Participant.
10. Successors and Assigns. This Agreement and all obligations of the
Participant hereunder shall be binding upon the Participant and his heirs, legal
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representatives, legatees, descendants and assigns and shall, together with the
rights and remedies of the Corporation hereunder, inure to the benefit of the
Corporation and its successor& and assigns.
11. Governing Law. This Agreement shall be governed by, and construed
and interpreted in accordance with, the laws of the State of New York.
12. Severability of Provisions. If any provision or any portion of any
provision of this Agreement or the application of any such provision or any
portion thereof to any person or circumstance shall be hold invalid or
unenforceable, the remaining portion of such provision and the remaining
provisions of this Agreement shall not be affected thereby and shall remain in
full force and effect.
13. Headings. Section headings herein are includes for the convenience
of reference only and shall not constitute a part of this document for any other
purpose.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed this _____ day of _ 1998.
ATALANTA/SOSNOFF CAPITAL CORPORATION
By:
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Title
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(Participant)
