EXHIBIT 10.1
SENIOR MANAGER AMENDED AND RESTATED
RESTRICTED STOCK AGREEMENT
This Senior Manager Amended and Restated Restricted Stock Agreement
(this "Agreement") is made as of this 17th day of April, 2006 (the "Effective
Date") between Xxxxxxx Company, a Delaware corporation (the "Company"), and the
undersigned (the "Restricted Shareholder"). Certain capitalized terms used
herein are defined in Section 6 hereof.
WHEREAS, the Company believes it to be in the best interests of the
Company and its shareholders to take action to promote work-force stability, to
reward performance and otherwise align the Restricted Shareholder's interests
with those of the Company;
WHEREAS, accordingly, the Company issued restricted stock to the
Restricted Shareholder in accordance with the provisions of a Senior Manager
Restricted Stock Agreement between the Company and the Restricted Shareholder
dated as of December 19, 2003 (the "Original Agreement");
WHEREAS, the Company desires to be assured that the confidential
information and goodwill of the Company will be preserved for the exclusive
benefit of the Company; and
WHEREAS, the Company and the Restricted Shareholder desire to amend
and restate the Original Agreement in its entirety as set forth herein and to
cause the Original Agreement to be of no further force and effect as of the
Effective Date hereof.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. PURCHASE AND SALE OF RESTRICTED SHAREHOLDER STOCK.
(a) Upon execution of the Original Agreement and payment of the
Original Purchase Price (as hereinafter defined), the Company issued to the
Restricted Shareholder that number of shares of Class B Common Stock, par value
$0.01 per share, of the Company (the "Class B Common Stock") set forth below
such Restricted Shareholder's name on the signature page attached hereto, for a
purchase price of $0.01 per share (the "Original Purchase Price"). All of such
shares of Class B Common Stock purchased by the Restricted Shareholder pursuant
to the Original Agreement are referred to herein as "Restricted Shareholder
Stock." To secure the Company's rights under the Repurchase Option in Section 3,
the Company has retained possession of the certificates representing the
Restricted Shareholder Stock and has provided the Restricted Shareholder with
copies thereof.
(b) The Restricted Shareholder, in his or her sole discretion, may
have made an effective election with the Internal Revenue Service (the "IRS")
under Section 83(b) of the Code and the regulations promulgated thereunder. The
Restricted Shareholder understands that under applicable law such election must
have been filed with the IRS no later than thirty (30) days after any
acquisition of the Restricted Shareholder Stock to be effective. If the
Restricted Shareholder filed an effective election, the excess of the fair
market value of the Restricted Shareholder Stock
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(which the IRS may assert is different from the fair market value determined by
the parties) covered by such election over the amount paid by the Restricted
Shareholder for the stock would have been treated as ordinary income received by
the Restricted Shareholder, and the Company or its subsidiary, Xxxxxxx Bedding
Company, would have withheld from the Restricted Shareholder's compensation all
amounts required under applicable law. If the Restricted Shareholder did not
file an effective election, all appreciation on the Restricted Shareholder Stock
from the date of the Original Agreement would generally be taxable as ordinary
income when such stock vests pursuant to the Original Agreement, as amended and
restated hereby.
(c) In connection with the acquisition of the Restricted Shareholder
Stock pursuant to the Original Agreement, the Restricted Shareholder represented
and warranted to the Company, and hereby reaffirms such representations and
warranties as of the date hereof, that:
(i) the Restricted Shareholder Stock acquired by the Restricted
Shareholder has been acquired for the Restricted Shareholder's own account,
for investment only and not with a view to, or intention of, distribution
thereof in violation of the Securities Act, or any applicable state
securities laws, and the Restricted Shareholder Stock will not be disposed
of in contravention of the Securities Act or any applicable state
securities laws or this Agreement or the Securityholders' Agreement;
(ii) the Restricted Shareholder, either alone or acting in
conjunction with a Purchaser Representative (as such term is defined in
Regulation D of the Securities Act), generally has such knowledge and
experience in business and financial matters and with respect to
investments in securities of privately held companies so as to enable the
Restricted Shareholder to understand and evaluate the risks and benefits of
his or her investment in the Restricted Shareholder Stock;
(iii) the Restricted Shareholder has no need for liquidity in his
or her investment in the Restricted Shareholder Stock and is able to bear
the economic risk of his or her investment in the Restricted Shareholder
Stock for an indefinite period of time and understands that the Restricted
Shareholder Stock has not been registered or qualified under the Securities
Act or any applicable state securities laws, by reason of the issuance of
the Restricted Shareholder Stock in a transaction exempt from the
registration and qualification requirements of the Securities Act or such
state securities laws and, therefore, cannot be sold unless subsequently
registered or qualified under the Securities Act or such state securities
laws or an exemption from such registration or qualification is available;
(iv) the Restricted Shareholder acknowledges that he or she is
aware that the Shares may not be sold pursuant to Rule 144 promulgated
under the Securities Act unless all of the conditions of that Rule are met.
Among the current conditions for use of Rule 144 by certain holders is the
availability to the public of current information about the Company. Such
information is not now available, and the Company has no current plans to
make such information available;
(v) the Restricted Shareholder has had an opportunity to ask
questions and receive answers concerning the terms and conditions of the
offering of the Restricted
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Shareholder Stock and has had full access to or been provided with such
other information concerning the Company as the Restricted Shareholder has
requested; and
(vi) This Agreement constitutes the legal, valid and binding
obligation of the Restricted Shareholder, enforceable in accordance with
its terms, and the execution, delivery and performance of this Agreement by
the Restricted Shareholder does not and will not conflict with, violate or
cause a breach of any agreement, contract or instrument to which the
Restricted Shareholder is a party or any judgment, order or decree to which
the Restricted Shareholder is subject.
(d) As an inducement to the Company to issue the Restricted
Shareholder Stock to the Restricted Shareholder and as a condition thereto, the
Restricted Shareholder acknowledged and agreed, and hereby reaffirms as of the
date hereof, that:
(i) neither the issuance of the Restricted Shareholder Stock to
the Restricted Shareholder nor any provision contained herein shall entitle
the Restricted Shareholder to remain on the Board of or in the employment
of the Company or any of its Subsidiaries, if any, or affect the rights of
the Company, its shareholders or any of its Subsidiaries to terminate the
Restricted Shareholder's service to or employment with the Company or any
of its Subsidiaries at any time for any reason; and
(ii) except as provided in any other agreement between the
Company and/or Xxxxxxx Bedding Company or any Subsidiary thereof and the
Restricted Shareholder, the Company shall have no duty or obligation to
disclose to the Restricted Shareholder, and the Restricted Shareholder
shall have no right to be advised of, any material information regarding
the Company and its Subsidiaries, if any, at any time prior to, upon or in
connection with the forfeiture of the Restricted Shareholder Stock upon the
termination of the Restricted Shareholder's service to or employment with
the Company or a Subsidiary thereof.
(e) In connection with the issuance and sale by the Company to the
Restricted Shareholder of the Restricted Shareholder Stock, the Company
represented and warranted, and hereby reaffirms as of the date hereof, that:
(i) the Company is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
incorporation and has all requisite corporate power and authority to own,
lease and operate the assets used in its business, to carry on its business
as presently conducted, to enter into this Agreement, to perform its
obligations hereunder, and to consummate the transactions contemplated
hereby;
(ii) the Company has taken all corporate action necessary to
authorize its execution and delivery of this Agreement, its performance of
its obligations thereunder, and its consummation of the transactions
contemplated thereby;
(iii) this Agreement constitutes a valid and binding obligation
of the Company, enforceable in accordance with its terms; and
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(iv) the Restricted Shareholder Stock has been duly authorized
and validly issued, fully paid and nonassessable and, as of the date of the
Original Agreement was free of all Encumbrances created by or through the
Company. For purposes of this clause, "Encumbrance" means any security
interest, mortgage, lien, pledge, charge, easement, reservation,
restriction, or similar right of any third party.
2. VESTING OF RESTRICTED SHAREHOLDER STOCK.
(a) General.
(i) Vesting. The shares of Restricted Shareholder Stock granted
hereunder (the "Shares") will be deemed "vested" (the "Vested Shares") as
follows: (a) 18.75% of the Shares shall be deemed Vested Shares as of the date
hereof and (b) Shares that are not Vested Shares as of the date hereof shall
become Vested Shares in accordance with this Section 2, based upon the Company's
achievement of the Consolidated Adjusted EBITDA targets set forth below (each,
the "Target EBITDA") for each of the Company's fiscal years ending December 30,
2006, December 29, 2007 and December 27, 2008 (the "Measurement Years").
EBITDA Targets
(dollars in millions)
MEASUREMENT CUMULATIVE 90% OF TARGET 90% OF CUMULATIVE ELIGIBLE
YEARS TARGET EBITDA TARGET EBITDA EBITDA TARGET EBITDA SHARES
----------- ------------- ------------- ------------- ----------------- --------
2006
2007
2008
The minimum Target EBITDA numbers set forth above shall be equitably adjusted by
the Board for acquisitions and dispositions made by the Company (whether by
purchase or sale of assets or stock, merger, consolidation or otherwise) and
such adjustments may take into account the pro forma annual Consolidated
Adjusted EBITDA of any acquired business, as determined by the Board.
(A) Performance Based Vesting. At the end of each Measurement Year, on
the Measurement Date, the percentage of Shares set forth above shall be eligible
to vest (the "Eligible Shares"). On each Measurement Date, 50% of the Eligible
Shares shall become Vested Shares if at least 90% of the Target EBITDA amount
was met for the prior Measurement Year. If more than 90% of the Target EBITDA
amount was met for the prior Measurement Year, then the Eligible Shares shall
become Vested Shares on a straight line basis such that an additional 5% of
Eligible Shares shall become Vested Shares for each 1% that actual Consolidated
Adjusted EBITDA exceeds 90% of the Target EBITDA amount.
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(ii) Change of Control.
(A) Shares that are not Vested Shares will accelerate as set
forth below upon a Change of Control solely if the Company (a) achieves at least
90% of the Target EBITDA for the Measurement Year immediately preceding the year
in which the Change of Control occurs, and (b) the actual Consolidated Adjusted
EBITDA for the Measurement Year immediately preceding the year in which the
Change of Control occurs exceeds the actual Consolidated Adjusted EBITDA for the
preceding year. If (x) the conditions set forth in clauses (a) and (b) above are
met, and (y) the Company achieves 90% of the Cumulative Target EBITDA above for
the Measurement Year completed immediately prior to the Change of Control, then
50% of the Shares that were Eligible Shares but which did not previously become
Vested Shares (the "Missed Shares") and 50% of the Shares that are not yet
Eligible Shares shall become Vested Shares. If the Company achieves more than
90% of the Cumulative Target EBITDA above for the immediately preceding
Measurement Year, then a number of Missed Shares and Shares that are not yet
Eligible Shares will become Vested Shares, determined on a straight line basis
such that an additional 5% of the Missed Shares and 5% of the Shares that are
not yet Eligible Shares will become Vested Shares for each 1% that actual
Consolidated Adjusted EBITDA for the immediately preceding Measurement Year
exceeds 90% of the Cumulative Target EBITDA set forth above.
(B) Notwithstanding the foregoing paragraph, Shares that are not
Vested Shares will accelerate upon a Change of Control which occurs in the
Measurement Year ending December 30, 2006 as follows: if the Company achieves
90% of the 2006 Year to Date Target EBITDA (as defined below) for the month
completed immediately prior to the Change of Control, then 50% of the Shares
that are not yet Eligible Shares shall become Vested Shares. The Target EBITDA
for each month in 2006 is set forth below and the 2006 Year to Date Target
EBITDA represents the cumulative Target EBITDA for the period commencing January
1, 2006 and ending on the last day of such month (the "Year to Date Target
EBITDA"). If the Company achieves more than 90% of the 2006 Year to Date Target
EBITDA for the month completed immediately prior to the Change of Control, then
a number of Shares that are not yet Eligible Shares will become Vested Shares,
determined on a straight line basis such that an additional 5% of the Shares
that are not yet Eligible Shares will become Vested Shares for each 1% that
actual Consolidated Adjusted EBITDA for the period commencing January 1, 2006
and ending on the last day of the month immediately preceding the Change of
Control exceeds 90% of the 2006 Year to Date Target EBITDA.
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2006 MONTHLY 2006 YEAR TO DATE
TARGET EBITDA TARGET EBITDA
MONTH (DOLLARS IN MILLIONS) (DOLLARS IN MILLIONS)
--------- --------------------- ---------------------
January
February
March
April
May
June
July
August
September
October
November
December
(b) In the event the Restricted Shareholder ceases to serve on the
Board of, or be employed by the Company or any of its Subsidiaries on a
full-time basis for any reason, then (i) all Shares of Restricted Shareholder
Stock shall cease vesting effective as of the date upon which the Restricted
Shareholder ceases to so serve or be so employed (the "Termination Date") and,
(ii) in the event that the Company achieves the Target EBITDA with respect to
the Measurement Year in which such termination occurs, then the Eligible Shares
with respect to such year multiplied by a fraction, the numerator of which shall
equal the number of whole months during such year that the Restricted
Shareholder served on the Board or remained employed with the Company and the
denominator of which is 12, shall become Vested Shares as of the end of such
year.
3. REPURCHASE OF SHARES.
(a) In the event that the Restricted Shareholder ceases to serve on
the Board of, or be employed by the Company or any of its Subsidiaries on a
full-time basis for any reason, then all Shares of Restricted Shareholder Stock
(whether held by the Restricted Shareholder or by one or more of the Restricted
Shareholder's transferees) which as of the date of termination:
(i) have not vested pursuant to Section 2 hereof, will be subject
to repurchase by the Company, at its option (the "Non-Vested Repurchase
Option"), for the
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lower of the Original Purchase Price of the Restricted Shareholder Stock
and Fair Market Value as of the date of repurchase;
(ii) have vested pursuant to Section 2 hereof, will be subject to
repurchase by the Company, at its option (the "Vested Repurchase Option"),
for Fair Market Value as of the date of repurchase.
(b) In the event of a Change of Control, then all Shares of Restricted
Shareholder Stock (whether held by the Restricted Shareholder or by one or more
of the Restricted Shareholder's transferees) which, as of the date of such
Change of Control, have not become Vested Shares pursuant to Section 2, will be
subject to repurchase by the Company, at its option (the "Non-Vested Change of
Control Repurchase Option") for the lower of the Original Purchase Price of the
Restricted Shareholder Stock and Fair Market Value.
(c) The Non-Vested Change of Control Repurchase Option, together with
the Non-Vested Repurchase Option and the Vested Repurchase Option, are referred
to collectively as the "Repurchase Options." The Repurchase Options shall be
exercised by the Company, or its designee, from time to time, by delivering to
the Restricted Shareholder a written notice of exercise and a check in the
amount of the Original Purchase Price or Fair Market Value, as determined in
accordance with Sections 3(a) and (b) above. Upon delivery of such notice and
payment of the purchase price as described above, the Company, or its designee,
shall become the legal and beneficial owner of the Shares of Restricted
Shareholder Stock being repurchased and all rights and interest therein or
related thereto, and the Company, or its designee, shall have the right to
transfer to its own name the number of Shares of Restricted Shareholder Stock
being repurchased without further action by the Restricted Shareholder or any of
his or her transferees. If the Company or its designee elect to exercise the
repurchase rights pursuant to this Section 3 and the Restricted Shareholder or
his or her transferee fails to deliver the Shares of Restricted Shareholder
Stock in accordance with the terms hereof, the Company, or its designee, may, at
its option, in addition to all other remedies it may have, deposit the purchase
price in an escrow account administered by an independent third party (to be
held for the benefit of and payment over to the Restricted Shareholder or his or
her transferee in accordance herewith), whereupon the Company shall by written
notice to the Restricted Shareholder cancel on its books the certificates(s)
representing such Shares of Restricted Shareholder Stock registered in the name
of the Restricted Shareholder and all of the Restricted Shareholder's or his or
her transferee's right, title, and interest in and to such Shares of Restricted
Shareholder Stock shall terminate in all respects.
(d) Notwithstanding the foregoing, if at any time the Company elects
to purchase any Class B Common Stock pursuant to this Section 3, the Company
shall pay the purchase price for the Class B Common Stock it purchases (i)
first, by offsetting indebtedness, if any, owing from such Restricted
Shareholder to the Company and (ii) then, by the Company's delivery of cash for
the remainder of the purchase price, if any, against delivery of the
certificates or other instruments representing the Class B Common Stock so
purchased, duly endorsed; provided that, if any such cash payment at the time
such payment is required to be made would result (A) in a violation of any law,
statute, rule, regulation, policy, order, writ, injunction, decree or judgment
promulgated or entered by any federal, state, local or foreign court or
governmental authority applicable to the Company or any of its Subsidiaries or
any of its or their property or
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(B) after giving effect thereto, a Financing Default, or (C) if the Board
determines in good faith that immediately prior to such purchase there shall
exist a Financing Default which prohibits such purchase, dividend or
distribution ((A) through (C) collectively the "Cash Deferral Conditions"), the
portion of the cash payment so affected may be made by the Company's delivery of
a promissory note or senior preferred shares of the Company with a liquidation
preference equal to the balance of the purchase price. The promissory note or
senior preferred shares shall accrue interest or yield, as the case may be,
annually at the "prime rate" published in The Wall Street Journal on the date of
issuance, which interest or yield, as the case may be, shall be payable at
maturity or upon payment of distributions by the Company. The value of each such
senior preferred share shall as of its issuance be deemed to equal (A) the
portion of the cash payment paid by the issuance of such preferred shares
divided by (B) the number of senior preferred shares so issued. Any senior
preferred shares or the promissory note shall be redeemed or payable when and to
the extent the Cash Deferral Condition which prompted their issuance no longer
exists.
(e) In the event that Restricted Shareholder Stock is repurchased
pursuant to this Section 3, the Restricted Shareholder and his or her
successors, assigns or Representatives shall take (at the Company's expense) all
steps necessary and desirable to obtain all required third-party, governmental
and regulatory consents and approvals and take all other actions necessary and
desirable to facilitate consummation of such repurchase in a timely manner.
4. LEGEND.
The certificates representing the Restricted Shareholder Stock will
bear the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
REPURCHASE AND CERTAIN OTHER AGREEMENTS SET FORTH IN A SENIOR MANAGER
AMENDED AND RESTATED RESTRICTED STOCK AGREEMENT DATED AS OF APRIL 17, 2006
BETWEEN THE COMPANY AND THE OTHER SIGNATORY THERETO. A COPY OF SUCH
AGREEMENT MAY BE OBTAINED BY THE HOLDER HEREOF AT THE COMPANY'S PRINCIPAL
PLACE OF BUSINESS WITHOUT CHARGE.
THE SALE, TRANSFER, ASSIGNMENT, PLEDGE, OR ENCUMBRANCE OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE RIGHTS OF THE HOLDER OF
SUCH SECURITIES IN RESPECT OF THE ELECTION OF DIRECTORS ARE SUBJECT TO A
SECURITYHOLDERS' AGREEMENT DATED DECEMBER 19, 2003 AMONG THL BEDDING
HOLDING COMPANY AND CERTAIN HOLDERS OF ITS OUTSTANDING CAPITAL STOCK.
COPIES OF SUCH AGREEMENT MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE
BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THL BEDDING
HOLDING COMPANY.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR ANY STATE SECURITIES
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OR BLUE SKY LAWS. THESE SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT OR
LAWS."
5. RESTRICTIONS ON TRANSFER, CONVERSION AND VOTING.
(a) The Company and the Restricted Shareholder acknowledge and agree
that the Shares of Restricted Shareholder Stock are subject to and restricted by
the Securityholders' Agreement and with respect to such Shares of Restricted
Shareholder Stock, the Restricted Shareholder shall be an "Employee" or "Senior
Manager," as the case may be, and as each such term is used in the
Securityholders' Agreement. Notwithstanding anything to the contrary contained
in the Securityholders' Agreement, no Shares of Restricted Shareholder Stock
that have not become Vested Shares pursuant to Section 2 hereof may be
transferred to any Person and no Shares of Restricted Shareholder Stock that are
Vested Shares may be transferred to any Person who is not an Affiliate of the
Restricted Shareholder. The Vested Shares may be transferred by will or the laws
of descent and distribution.
(b) Prior to any Transfer, the transferee shall agree, by execution of
a Joinder Agreement, to be bound by this Agreement as holder of Restricted
Shareholder Stock and by the Securityholders' Agreement as an "Employee" or
"Senior Manager", as the case may be. Any Transfer or attempted Transfer of any
Restricted Shareholder Stock in violation of the preceding sentence shall be
void, and the Company shall not record such Transfer on its books or treat any
purported transferee of such Restricted Shareholder Stock as the owner of such
stock for any purpose.
(c) The Restricted Shareholder agrees that so long as the Restricted
Shareholder owns Shares of Restricted Shareholder Stock which have not become
Vested Shares pursuant to Section 2 hereof, the Restricted Shareholder shall be
obligated to vote all of his, her or its Shares of Restricted Shareholder Stock
which have not become Vested Shares pursuant to Section 2 hereof in the same
manner and proportions as the votes cast by the holders of a majority of the
Company's voting capital stock not subject to such repurchase rights. If the
Restricted Shareholder fails or refuses to vote his, her or its Shares of
Restricted Shareholder Stock which have not become Vested Shares pursuant to
Section 2 hereof as required by, or votes his, her or its Shares of Restricted
Shareholder Stock which have not become Vested Shares pursuant to Section 2
hereof in contravention of this Section 5(c), then the Restricted Shareholder
hereby grants to each of the President and Treasurer of the Company, acting
solely in his or her capacity as such, an irrevocable proxy, coupled with an
interest, to vote such Shares in accordance with Section 5(c).
6. DEFINITIONS.
The following terms shall have the meanings ascribed below:
"Affiliate" of any particular Person means any other Person
controlling, controlled by or under common control with such particular Person
or, with respect to any individual, such individual's spouse and descendants
(whether natural or adopted) and any trust, partnership, limited liability
company or similar vehicle established and maintained solely for the
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benefit of (or the sole members or partners of which are) such individual, such
individual's spouse and/or such individual's descendants.
"Board" means the Board of Directors of the Company.
"Change of Control" shall mean the consummation of a transaction,
whether in a single transaction or in a series of related transactions that are
consummated contemporaneously (or consummated pursuant to contemporaneous
agreements), with any other party or parties, other than an Affiliate of THL, on
an arm's-length basis, pursuant to which (a) a party or group (as defined under
Rule 13d under the Securities Exchange Act of 1934, as amended) who is not a
stockholder of the Company on the Effective Date, acquires, directly or
indirectly (whether by merger, stock purchase, recapitalization, reorganization,
redemption, issuance of capital stock or otherwise), more than 50% of the voting
stock of the Company, (b) such party or parties, directly or indirectly, acquire
assets constituting all or substantially all of the assets of the Company and
its Subsidiaries on a consolidated basis, or (c) prior to an initial public
offering of the Company common stock pursuant to an offering registered under
the Securities Act, Xxxxxx X. Xxx Equity Fund V, L.P., a Delaware limited
partnership, and its affiliates cease to have the ability to elect, directly or
indirectly, a majority of the Board.
"Class A Common Stock" means the Company's Class A Common Stock, $0.01
par value per share.
"Class B Common Stock" has the meaning set forth in Section 1(a)
hereof.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Consolidated Adjusted EBITDA" has the meaning set forth in the Credit
Agreement.
"Credit Agreement" shall mean the Amended and Restated Credit and
Guaranty Agreement, dated as of August 27, 2004, among Xxxxxxx Bedding Company,
as Company, THL-SC Bedding Company and certain subsidiaries of the Company, as
Guarantors, the financial institutions listed therein, as Lenders, UBS
Securities LLC, as Joint Lead Arranger and as Co-Syndication Agent, Deutsche
Bank AG, New York Branch, as Administrative Agent and Collateral Agent, General
Electric Capital Corporation, as Co-Documentation Agent, CIT Lending Services
Corporation, as Co-Documentation Agent, and Xxxxxxx Sachs Credit Partners L.P.,
as Sole Bookrunner, a Joint Lead Arranger and as Co-Syndication Agent.
"Fair Market Value" shall be determined by the Board in good faith.
Upon such determination, the Company shall promptly provide the Restricted
Shareholder with notice of the Fair Market Value so determined (the "Board
Notice"). In the event of a determination of Fair Market Value with respect to
Class B Common Stock owned by a Senior Manager, such Senior Manager shall have
the right to contest such determination in good faith, by delivery of written
notice to the Company within ten (10) days of delivery of the Board Notice. If
the Senior Manager does not notify the Company of any disagreement therewith,
then the Fair Market Value shall be as set forth in the Board Notice. If the
Senior Manager does notify the Company of his or her disagreement with the Fair
Market Value set forth in the Board Notice within such 10-day time period, then
the Company must retain an independent third party appraiser to make
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such Fair Market Value determination (the "Final Determination"), and such Final
Determination shall govern; provided, however, that if the Final Determination
of Fair Market Value equals less than 110% of the Fair Market Value set forth in
the Board Notice, then the Senior Manager shall pay for all costs and expenses
of the third party appraiser.
"Financing Default" means any event of default or breach under (i) the
Credit Agreement, (ii) that certain senior unsecured floating rate loan facility
by and among THL-SC Bedding Company, certain of its subsidiaries, certain
lenders, party thereto and Deutsche Bank, A.G., Cayman Islands Branch, as
administrative agent, as amended, modified, restated or refinanced from time to
time, (iii) the covenant contained in the Indenture which permits repurchases by
the Company of employee stock not exceeding a specified amount in the aggregate,
or (iv) any other similar notes or instruments that the Company or its
Subsidiaries may issue from time to time.
"Fully Diluted Shares" means, as of any date of determination, the
number of shares of Class A Common Stock and Class B Common Stock outstanding,
plus (without duplication) shares of Class A Common Stock and Class B Common
Stock issuable, whether at such time or upon the passage of time or the
occurrence of future events, upon the exercise, conversion or exchange of all
then-outstanding rights, warrants, options, convertible securities, or
exchangeable securities or indebtedness, or other rights, exercisable for or
convertible or exchangeable into, directly or indirectly, Class A Common Stock
or Class B Common Stock or securities exercisable for or convertible or
exchangeable into Class A Common Stock or Class B Common Stock, as the case may
be, whether at the time of issuance or upon the passage of time or the
occurrence of some future event.
"Indenture" shall mean that certain Indenture, dated as of December
19, 2003, governing the Company's Senior Subordinated Notes due 2013, as
amended, modified, restated or refinanced from time to time.
"Measurement Date" shall mean the date upon which the Company shall
have received its audited financial statements for the prior Measurement Year,
beginning with the Measurement Year ending December 30, 2006.
"Person" shall be construed broadly and shall include, without
limitation, an individual, a partnership, an investment fund, a limited
liability company, a corporation, an association, a joint stock company, a
trust, a joint venture, an unincorporated organization and a governmental entity
or any department, agency or political subdivision thereof.
"Representative" means, with respect to the deceased Restricted
Shareholder, the duly appointed, qualified and acting personal representative
(or personal representatives collectively) of the estate of the deceased
Restricted Shareholder (or portion of such estate that includes Restricted
Shareholder Stock), whether such personal representative holds the position of
executor, administrator or other similar position qualified to act on behalf of
such estate.
"Restricted Shareholder Stock" has the meaning set forth in Section
1(a) hereof. The Restricted Shareholder Stock will continue to be Restricted
Shareholder Stock in the hands of any holder other than the Restricted
Shareholder (except for the Company and except for
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transferees in a Public Sale) and, except as otherwise provided herein, each
such other holder of the Restricted Shareholder Stock will succeed to all rights
and obligations attributable to the Restricted Shareholder as a holder of the
Restricted Shareholder Stock hereunder. The Restricted Shareholder Stock will
also include shares of the Company's capital stock issued with respect to the
Restricted Shareholder Stock by way of a stock split, stock dividend or other
recapitalization.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor federal law then in force.
"Securityholders' Agreement" means the Securityholders' Agreement
dated December 19, 2003 between the Company and certain stockholders of the
Company, as amended, modified or supplemented from time to time.
"Senior Manager" shall mean each of Xxxxxxx Xxx Xxxxx, Xxxxxxx X.
Xxxxxxxxx, and Xxxxxx X. Xxxxxx, and/or any other Persons designated by the
Board as Senior Managers (collectively, the "Senior Managers").
"Subsidiary" means any Person of which (i) a majority of the
outstanding share capital, voting securities or other equity interests are
owned, directly or indirectly, by the Company or (ii) the Company is entitled,
directly or indirectly, to appoint a majority of the board of directors or
managers or comparable supervisory body of such Person.
"THL" means Xxxxxx X. Xxx Equity Fund V, L.P., a Delaware limited
partnership, Xxxxxx X. Xxx Parallel Fund V, L.P., Xxxxxx X. Xxx Cayman Fund V,
L.P., 1997 Xxxxxx X. Xxx Nominee Trust, Xxxxxx X. Xxx Investors Limited
Partnership, Xxxxxx Investments Holdings, LLC, Xxxxxx Investments Employees'
Securities Company I LLC, and Xxxxxx Investments Employees' Securities Company
II, LLC.
"Transfer" means the sale, transfer, assignment, pledge or other
disposal (whether with or without consideration and whether voluntarily or
involuntarily or by operation of law) of any Restricted Shareholder Stock.
7. GENERAL PROVISIONS.
(a) Severability. It is the desire and intent of the parties hereto
that the provisions of this Agreement be enforced to the fullest extent
permissible under the laws and public policies applied in each jurisdiction in
which enforcement is sought. Accordingly, if any particular provision of this
Agreement shall be adjudicated by a court of competent jurisdiction to be
invalid, prohibited or unenforceable for any reason, such provision, as to such
jurisdiction, shall be ineffective, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of this
Agreement or affecting the validity or enforceability of such provision in any
other jurisdiction. Notwithstanding the foregoing, if such provision could be
more narrowly drawn so as not to be invalid, prohibited or unenforceable in such
jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without
invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.
16
(b) Entire Agreement. This Agreement and the Securityholders'
Agreement embody the complete agreement and understanding among the parties
hereto with respect to the subject matter hereof and supersedes and preempts any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way,
including the Original Agreement.
(c) Counterparts. This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
(d) Successors and Assigns. Except as otherwise provided herein, this
Agreement shall bind and inure to the benefit of and be enforceable by the
Restricted Shareholder, the Company, and their respective successors, assigns,
heirs, representative and estate, as the case may be (including subsequent
holders of Restricted Shareholder Stock); provided that the rights and
obligations of the Restricted Shareholder under this Agreement shall not be
assignable except in connection with a permitted transfer of Restricted
Shareholder Stock hereunder.
(e) Governing Law and Remedies. The parties acknowledge and agree that
they are bound by their arbitration obligations under Exhibit A attached hereto,
which the parties also hereby agree to execute contemporaneously and is an
integral part of this Agreement. The parties agree and acknowledge that all
provisions of this Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware exclusively and without reference to
principles of conflict of laws. The Federal Arbitration Act ("FAA") will
supersede state laws to the extent inconsistent. The Arbitrator(s) shall have no
authority to apply the law of any other jurisdiction.
/S/CRE RESTRICTED SHAREHOLDER'S INITIALS TO ACKNOWLEDGE AGREEMENT TO GOVERNING
LAW AND REMEDIES PROVISION IN SECTION 7(E).
(f) Remedies. Each of the parties to this Agreement and any such
Person granted rights hereunder whether or not such Person is a signatory hereto
shall be entitled to enforce its rights under this Agreement specifically to
recover damages and costs (including reasonable attorney's fees) for any breach
of any provision of this Agreement and to exercise all other rights existing in
its favor. The parties hereto agree and acknowledge that money damages may not
be an adequate remedy for any breach of the provisions of this Agreement and
that any party and any such Person granted rights hereunder whether or not such
Person is a signatory hereto may in its sole discretion submit the matter to
arbitration for specific performance and/or other injunctive relief (without
posting any bond or deposit) in order to enforce or prevent any violations of
the provisions of this Agreement.
(g) Amendment and Waiver. The provisions of this Agreement may be
amended and waived only with the prior written consent of the Company and the
Restricted Shareholder and no course of conduct or failure or delay in enforcing
the provisions of this Agreement shall be construed as a waiver of such
provisions or affect the validity, binding effect or enforceability of this
Agreement or any provision hereof.
17
(h) Notices. Any notice provided for in this Agreement must be in
writing and must be either personally delivered, transmitted via facsimile,
mailed by first class mail (postage prepaid and return receipt requested) or
sent by reputable overnight courier service (charges prepaid) to the recipient
at the address below indicated or at such other address or to the attention of
such other person as the recipient party has specified by prior written notice
to the sending party. Notices will be deemed to have been given hereunder and
received when delivered personally, when received if transmitted via facsimile,
five (5) days after deposit in the U.S. mail and one (1) day after deposit with
a reputable overnight courier service.
If to the Company, to:
Xxxxxxx Company
Xxx Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: Chief Financial Officer and General Counsel
With a copy to:
Xxxxxx X. Xxx Partners, L.P.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Xxxx X. Xxxxxxxx
Xxxxxx Xxxxxx
If to the Restricted Shareholder, to the address set forth underneath the
Restricted Shareholder's name on the signature pages hereto.
(i) Business Days. If any time period for giving notice or taking
action hereunder expires on a day which is a Saturday, Sunday or holiday in the
state in which the Company's chief executive office is located, the time period
for giving notice or taking action shall be automatically extended to the
business day immediately following such Saturday, Sunday or holiday.
(j) Survival of Representations, Warranties and Agreements. All
representations, warranties and agreements contained herein shall survive the
consummation of the transactions contemplated hereby and the termination of this
Agreement indefinitely.
(k) Descriptive Headings. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
(l) Construction. Where specific language is used to clarify by
example a general statement contained herein, such specific language shall not
be deemed to modify, limit or restrict in any manner the construction of the
general statement to which it relates. The language used in this Agreement shall
be deemed to be the language chosen by the parties to express their mutual
intent, and no rule of strict construction shall be applied against any party.
18
(m) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(n) Nouns and Pronouns. Whenever the context may require, any pronouns
used herein shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns and pronouns shall include the plural and vice
versa.
(o) Acknowledgement and Waiver; Termination of Original Agreement. The
Restricted Shareholder hereby represents and warrants that he or she has access
to adequate information regarding the terms of this Agreement, the scope and
effect of the provisions set forth herein, including the effect of this
Agreement on the vesting provisions contained in the Original Agreement, and all
other matters encompassed by this Agreement, to make an informed and
knowledgeable decision with regard to enter into this Agreement. The Restricted
Shareholder further represents and warrants that he or she has not relied on the
Company in deciding to enter into this Agreement and has instead made his or her
own independent analysis and decision to enter into this Agreement. By execution
of this Agreement, the Restricted Shareholder hereby agrees and acknowledges
that the Original Agreement shall be of no further force and effect as of the
date hereof.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have executed this Senior Manager
Amended and Restated Restricted Stock Agreement as of the date first written
above.
XXXXXXX COMPANY
By: /s/ Xxxxxxx X. Xxxxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxxxx
Executive Vice President and
Chief Financial Officer
RESTRICTED SHAREHOLDER:
The Xxxxxxx Xxx Xxxxx Revocable Trust
/s/ The Xxxxxxx Xxx Xxxxx Revocable Trust
-----------------------------------------
Signature
Address:
--------------------------------
--------------------------------
--------------------------------
Shares of Restricted Shareholder Stock
Purchased 183529
EXHIBIT A - ARBITRATION CLAUSE
(1) In consideration of the benefits described in the Senior Manager
Amended and Restated Restricted Stock Agreement executed by THE XXXXXXX XXX
XXXXX REVOCABLE TRUST (the "Restricted Shareholder" or "you") and XXXXXXX
COMPANY, a Delaware corporation (the "Company"), on the same date hereto and
into which this Exhibit A is incorporated, ("Agreement"), the Company and you
hereby agree that any controversy or claim arising under federal, state and
local statutory or common or contract law between the Company and you involving
the construction or application of any of the terms, provisions, or conditions
of the Agreement, including, but not limited to, breach of contract, tort,
and/or fraud, must be submitted to arbitration on the written request of either
party served on the other. Arbitration shall be the exclusive forum for any such
controversy. For example, if the Company and you have a dispute concerning the
interpretation or enforceability of one or more restrictive covenants, the
parties will resolve the dispute exclusively through arbitration. The
Arbitrator's decision shall be final and binding on both parties.
(2) If any claim or cause of action at law or in equity is filed by either
party in any state or federal court which results in arbitration being compelled
and/or the claim or cause of action being dismissed, stayed, and/or removed to
arbitration pursuant to this Agreement, the party who instituted the claim or
cause of action in state or federal court, either wholly or in substantial part,
shall, at the discretion of the Arbitrator(s), reimburse the respondent for its
reasonable attorneys' fees, costs, and necessary disbursements to the extent
permitted by law, in addition to any other relief to which it may be entitled,
related to the state or federal court claim or action.
(3) Excluding the initial filing fee, which shall be borne by the claimant,
the cost of arbitration shall be borne by the Company, unless the Arbitrator
determines that any claim(s) brought by you was/were wholly frivolous or
fraudulent. If an arbitration or any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party, either
wholly or in substantial part, shall, at the discretion of the Arbitrator, be
entitled to its reasonable attorneys' fees, costs, and necessary disbursements
to the extent permitted by law, in addition to any other relief to which it may
be entitled.
(4) If the Restricted Shareholder submits any controversy or claim to
arbitration, the arbitration will be conducted in Atlanta, Georgia and all
claims shall be submitted to and administered by the American Arbitration
Association's Southeast Case Management Center in Atlanta, Georgia. If the
Company submits any controversy or claim to arbitration, the arbitration shall
be conducted at the American Arbitration Association's Local or Regional Office
that is geographically closest to the Restricted Shareholder's place of
residence and all claims shall be submitted to and administered by the American
Arbitration Association's corresponding Case Management Center.
(5) The arbitration shall comply with and be governed by the American
Arbitration Association's Commercial Arbitration Rules ("Rules") effective as of
the execution date below, to the extent such Rules are not contrary to the
express provisions of this Agreement. The parties also agree that the American
Arbitration Association Optional Rules for Emergency Measures of Protection
("Emergency Rules") shall apply to proceedings brought by either party. The
above
Rules and Emergency Rules can be found at the following page of the American
Arbitration Association's website, xxx.xxx.xxx:
xxxx://xxx.xxx.xxx/xx.xxx?xxx00000. You acknowledge that you should read these
Rules and Emergency Rules and that it is your responsibility to be familiar with
them prior to signing the Agreement. If you are unable to access the Rules
and/or Emergency Rules at the above website, you can request a copy of them from
a Company official prior to signing the Agreement.
(6) The parties agree and acknowledge that all provisions of this Agreement
shall be governed by and construed in accordance with the laws of the State of
Delaware exclusively and without reference to principles of conflict of laws.
The Federal Arbitration Act ("FAA") will supersede state laws to the extent
inconsistent. Any claim(s) involving the construction or application of this
Agreement must be submitted to arbitration within the statute of limitations
period for such claim(s) under Delaware state law and shall be dismissed if the
statute of limitations period is not met. The Arbitrator(s) shall have no
authority to apply the law of any other jurisdiction.
(7) The dispute shall be heard and determined by one Arbitrator, unless
both parties mutually consent in writing signed by you and an authorized
representative of Company to a panel of three (3) Arbitrators. Unless both
parties mutually consent otherwise, the parties agree and request that the
Arbitrator(s) issue a reasoned award in accordance with Commercial Arbitration
Rule R-42(b).
I UNDERSTAND THAT BY SIGNING THIS AGREEMENT I AM GIVING UP MY RIGHT TO A
JURY TRIAL.
Executed effective as of this 17th day of April, 2006
Xxxxxxx Company
/s/ The Xxxxxxx Xxx Xxxxx Revocable Trust By: /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------------- --------------------------------
The Xxxxxxx Xxx Xxxxx Revocable Trust Xxxxxxx X. Xxxxxxxxx
Executive Vice President and
Chief Financial Officer
Social Security #:
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