EXHIBIT 10.18
MANAGEMENT STOCKHOLDER'S AGREEMENT
(PURCHASED STOCK AND OPTIONS)
This Management Stockholder's Agreement (this "Agreement") is
entered into as of ____ __, 2005 (the "Effective Date") between Affinia Group
Holdings Inc., a Delaware corporation (the "Company"), and the undersigned
person (the "Management Stockholder") (the Company and the Management
Stockholder being hereinafter collectively referred to as the "Parties"). All
capitalized terms not immediately defined are hereinafter defined in Section
7(b) of this Agreement or in the Option Plan (as such term is defined below) or,
if not defined therein, in the Stock Option Agreement (as such term is defined
below).
WHEREAS, pursuant to the Stock and Asset Purchase Agreement,
dated as of July 8, 2004 (as amended, modified or supplemented from time to
time, the "Purchase Agreement") between Affinia Group, Inc. (f/k/a AAG Opco
Corp.), a Delaware corporation ("Affinia") and a wholly owned subsidiary of the
Company, and Xxxx Corporation, a Virginia corporation ("Xxxx"), Affinia
purchased the automotive aftermarket business from Xxxx (the date of such
purchase, the "Closing Date");
WHEREAS, in connection with the transactions contemplated by
the Purchase Agreement, Cypress Merchant Banking Partners II L.P., a Delaware
limited partnership, Cypress Merchant Banking II C.V., a limited partnership
formed under the laws of Xxx Xxxxxxxxxxx, 00xx Xxxxxx Partners II L.P., a
Delaware limited partnership, Cypress Side-By-Side L.L.C., a Delaware limited
liability company and other investors have entered into a Stockholders
Agreement, dated as of the Closing Date (the "Investor Stockholders Agreement");
WHEREAS, the Management Stockholder has been selected by the
Company to purchase shares of Common Stock and/or to receive options to purchase
shares of Common Stock (together with any options to purchase shares of Common
Stock granted to the Management Stockholder after the Effective Time, the
"Options") pursuant to the terms set forth below and the terms of the 2005 Stock
Incentive Plan of the Company (the "Option Plan") and the Nonqualified Stock
Option Agreement dated as of the date hereof, entered into by and between the
Company and the Management Stockholder (the "Stock Option Agreement"); and
WHEREAS, this Agreement is one of several other agreements
("Other Management Stockholders' Agreements") which have been or in the future
will be entered into between the Company and other individuals who are or will
be key employees of the Company or one of its subsidiaries (collectively, the
"Other Management Stockholders").
NOW THEREFORE, to implement the foregoing and in consideration
of the grant of Options and of the mutual agreements contained herein, the
Parties agree as follows:
1. Issuance of Purchased Stock; Options
(a) Subject to the terms and conditions hereinafter set forth,
the Management Stockholder hereby subscribes for and shall purchase, as of the
Effective Date, and the Company shall issue and deliver to the Management
Stockholder as of the Effective Date, [________] shares of Common Stock, at a
per share purchase price of $[100.00] (the "Base Price"), which price is
equivalent to the effective per share purchase price paid by
Cypress for the shares of the Company (all such shares acquired by the
Management Stockholder, the "Purchased Stock"). The aggregate purchase price for
all shares of the Purchased Stock is $[________].
(b) Subject to the terms and conditions hereinafter set forth
and as set forth in the Option Plan, as of the Effective Date the Company is
issuing to the Management Stockholder Options to acquire shares of Common Stock,
at an initial exercise price per share equal to the Base Price, and the Parties
shall execute and deliver to each other copies of the Stock Option Agreement
concurrently with the issuance of the Options.
(c) The Company shall have no obligation to issue or sell any
Purchased Stock or issue any Options to any person who (i) is a resident or
citizen of a state or other jurisdiction in which the sale of the Common Stock
to him would constitute a violation of the securities or "blue sky" laws of such
jurisdiction or (ii) is not an employee of the Company or any of its
subsidiaries on the date hereof.
2. Management Stockholder's Representations, Warranties and
Agreements.
(a) The Management Stockholder agrees and acknowledges that he
will not, directly or indirectly, offer, transfer, sell, assign, pledge,
hypothecate or otherwise dispose of (any of the foregoing acts being referred to
herein as a "transfer") any shares of Purchased Stock or Common Stock issuable
upon exercise of the Options ("Option Stock"; together with all Purchased Stock,
Net Settled Stock and any other Common Stock otherwise acquired and/or held by
the Management Stockholder Entities, "Stock"), except as otherwise provided for
herein. If the Management Stockholder is a Rule 405 Affiliate, the Management
Stockholder also agrees and acknowledges that he will not transfer any shares of
the Stock unless:
(i) the transfer is pursuant to an effective registration
statement under the Securities Act of 1933, as amended, and the rules
and regulations in effect thereunder (the "Act"), and in compliance
with applicable provisions of state securities laws; or
(ii) (A) counsel for the Management Stockholder (which counsel
shall be reasonably acceptable to the Company) shall have furnished the
Company with an opinion, reasonably satisfactory in form and substance
to the Company, that no such registration is required because of the
availability of an exemption from registration under the Act and (B) if
the Management Stockholder is a citizen or resident of any country
other than the United States, or the Management Stockholder desires to
effect any transfer in any such country, counsel for the Management
Stockholder (which counsel shall be reasonably satisfactory to the
Company) shall have furnished the Company with an opinion or other
advice reasonably satisfactory in form and substance to the Company to
the effect that such transfer will comply with the securities laws of
such jurisdiction.
Notwithstanding the foregoing, the Company acknowledges and agrees that any of
the following transfers are deemed to be in compliance with the Act and this
Agreement (including without limitation any restrictions or prohibitions herein)
and no opinion of counsel is required in connection therewith: (x) a transfer
made pursuant to Section 3, 4, 5, 6 or 9 hereof, (y) a transfer upon the death
or Disability of the Management Stockholder to the Management Stockholder's
Estate or a transfer to the executors, administrators, testamentary
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trustees, legatees or beneficiaries of a person who has become a holder of Stock
in accordance with the terms of this Agreement; provided that it is expressly
understood that any such transferee shall be bound by the provisions of this
Agreement, and (z) a transfer made after the Effective Date in compliance with
the federal securities laws to a Management Stockholder's Trust, provided that
such transfer is made expressly subject to this Agreement and that the
transferee agrees in writing to be bound by the terms and conditions hereof.
(b) From and after the Effective Date until such time as the
applicable transfer restrictions no longer apply to such Stock and the Company
has reissued a certificate representing such Stock, the certificate (or
certificates) representing the Stock shall bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF UNLESS SUCH TRANSFER, SALE, ASSIGNMENT,
PLEDGE, HYPOTHECATION OR OTHER DISPOSITION COMPLIES WITH THE
PROVISIONS OF THE MANAGEMENT STOCKHOLDER'S AGREEMENT DATED AS
OF ____ __, 2005 BETWEEN AFFINIA GROUP HOLDINGS INC. (THE
"COMPANY") AND THE MANAGEMENT STOCKHOLDER NAMED ON THE FACE
HEREOF (A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
COMPANY).
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE NOT REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
THE SECURITIES LAWS OF ANY STATE, AND NO SALE, ASSIGNMENT,
TRANSFER, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT
(A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
ACT AND IN COMPLIANCE WITH ALL APPLICABLE STATE SECURITIES OR
"BLUE SKY" LAWS OR (B) IF THE COMPANY HAS BEEN FURNISHED WITH
AN OPINION OF COUNSEL WHICH SHALL BE REASONABLY SATISFACTORY
TO THE COMPANY TO THE EFFECT THAT SUCH SALE, ASSIGNMENT,
TRANSFER, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION IS NOT IN
VIOLATION OF THE ACT OR APPLICABLE STATE SECURITIES LAWS."
(c) The Management Stockholder acknowledges that he has been
advised that (i) a restrictive legend in the form heretofore set forth shall be
placed on the certificates representing the Stock and (ii) a notation shall be
made in the appropriate records of the Company indicating that the Stock is
subject to restrictions on transfer and appropriate stop transfer restrictions
will be issued to the Company's transfer agent with respect to the Stock. If the
Management Stockholder is a Rule 405 Affiliate, the Management Stockholder also
acknowledges that (1) the Stock must be held indefinitely and the Management
Stockholder must continue to bear the economic risk of the investment in the
Stock unless it is subsequently registered under the Act or an exemption from
such registration is available, (2) when and if shares of the Stock may be
disposed of without registration in reliance on Rule 144 of the rules and
regulations promulgated under the Act, such disposition can be made only in
limited amounts in accordance with the terms and conditions of such Rule and
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(3) if the Rule 144 exemption is not available, public sale without registration
will require compliance with some other exemption under the Act.
(d) If any shares of the Stock are to be disposed of in
accordance with Rule 144 under the Act or otherwise, the Management Stockholder
shall promptly notify the Company of such intended disposition and shall deliver
to the Company at or prior to the time of such disposition such documentation as
the Company may reasonably request in connection with such sale and, in the case
of a disposition pursuant to Rule 144, shall deliver to the Company an executed
copy of any notice on Form 144 required to be filed with the SEC.
(e) The Management Stockholder agrees that, if any shares of
the Stock are offered to the public pursuant to an effective registration
statement under the Act (other than registration of securities issued on Form
X-0, X-0 or any successor or similar form), the Management Stockholder will not
effect any public sale or distribution of any shares of the Stock not covered by
such registration statement from the time of the receipt of a notice from the
Company that the Company has filed or imminently intends to file such
registration statement to, or within 180 days (or such shorter period as may be
consented to by the managing underwriter or underwriters) in the case of the
initial Public Offering and ninety (90) days (or in an underwritten offering
such shorter period as may be consented to by the managing underwriter or
underwriters, if any) in the case of any other Public Offering after, the
effective date of such registration statement, unless otherwise agreed to in
writing by the Company.
(f) The Management Stockholder represents and warrants that
(i) with respect to the Stock, he has received and reviewed the available
information relating to the Stock, including having received and reviewed the
documents related thereto, certain of which documents set forth the rights,
preferences and restrictions relating to the Options and the Stock underlying
the Options and (ii) he has been given the opportunity to obtain any additional
information or documents and to ask questions and receive answers about such
information, the Company and the business and prospects of the Company which he
deems necessary to evaluate the merits and risks related to his investment in
the Stock and to verify the information contained in the information received as
indicated in this Section 2(f), and he has relied solely on such information.
(g) The Management Stockholder further represents and warrants
that (i) his financial condition is such that he can afford to bear the economic
risk of holding the Stock for an indefinite period of time and has adequate
means for providing for his current needs and personal contingencies, (ii) he
can afford to suffer a complete loss of his investment in the Stock, (iii) he
understands and has taken cognizance of all risk factors related to the purchase
of the Stock, (iv) his knowledge and experience in financial and business
matters are such that he is capable of evaluating the merits and risks of his
purchase of the Stock as contemplated by this Agreement, (v) his participation
in the purchase of the Purchased Stock is voluntary and (vi) he is a resident of
the State of [_________________].
3. Transferability of Stock. The Management Stockholder agrees
that he will not transfer any shares of the Stock at any time during the period
commencing on the Effective Date and ending on the earliest to occur (the date
of such event, the "Lapse Date") of (i) the seventh anniversary of the Closing
Date, (ii) the date of consummation of a Qualified Public Offering and (iii) a
Change in Control; provided, however, that the Management Stockholder may
transfer shares of Stock during such time pursuant to one of
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the following exceptions: (a) transfers permitted by Section 5 or 6; (b)
transfers permitted by clauses (y) and (z) of Section 2(a); (c) a sale of shares
of Common Stock pursuant to an effective registration statement under the Act
filed by the Company, including without limitation a sale pursuant to Section 9
(excluding any registration on Form X-0, X-0 or any successor or similar form);
(d) transfers permitted pursuant to the Sale Participation Agreement (as defined
in Section 7); (e) transfers to Cypress and its Affiliates or (f) other
transfers permitted by the Board in its sole discretion. No transfer of any such
shares in violation hereof shall be made or recorded on the books of the Company
and any such transfer shall be void ab initio and of no effect.
4. Right of First Refusal. (a) If, at any time after the Lapse
Date and prior to the date of consummation of a Qualified Public Offering, the
Management Stockholder receives a bona fide offer to purchase any or all of his
Stock (the "Third Party Offer") from a third party (which, for the avoidance of
doubt, shall not include any transfers pursuant to clauses (y) and (z) of
Section 2(a) or pursuant to the Sale Participation Agreement) (the "Offeror"),
which the Management Stockholder wishes to accept, the Management Stockholder
shall cause the Third Party Offer to be reduced to writing and shall notify the
Company in writing of his wish to accept the Third Party Offer. The Management
Stockholder's notice to the Company shall contain an irrevocable offer to sell
such Stock to the Company (in the manner set forth below) at a purchase price
equal to the price contained in, and on the same terms and conditions of, the
Third Party Offer, and shall be accompanied by a copy of the Third Party Offer
(which shall identify the Offeror). At any time within fifteen (15) days after
the date of the receipt by the Company of the Management Stockholder's notice,
the Company shall have the right and option to purchase, or to arrange for a
third party to purchase, all (but not less than all) of the shares of Stock
covered by the Third Party Offer, pursuant to Section 4(b).
(b) The Company shall have the right and option to purchase,
or to arrange for a third party to purchase, all of the shares of Stock covered
by the Third Party Offer at the same price and on substantially the same terms
and conditions as the Third Party Offer (or, if the Third Party Offer includes
any consideration other than cash, then at the sole option of the Company, at
the equivalent all cash price, determined in good faith by the Company's Board),
by delivering a certified bank check or checks in the appropriate amount (or by
wire transfer of immediately available funds, if the Management Stockholder
Entities provide to the Company wire transfer instructions) (and any such
non-cash consideration to be paid) to the Management Stockholder at the
principal office of the Company against delivery of certificates or other
instruments representing the shares of Stock so purchased, appropriately
endorsed by the Management Stockholder. If at the end of the 15-day period, the
Company has not tendered the purchase price for such shares in the manner set
forth above, the Management Stockholder may, during the succeeding 60-day
period, sell not less than all of the shares of Stock covered by the Third Party
Offer, to the Offeror on terms no less favorable to the Management Stockholder
than those contained in the Third Party Offer. Promptly after such sale, the
Management Stockholder shall notify the Company of the consummation thereof and
shall furnish such evidence of the completion and time of completion of such
sale and of the terms thereof as may reasonably be requested by the Company. If,
at the end of sixty (60) days following the expiration of the 15-day period
during which the Company is entitled hereunder to purchase the Stock, the
Management Stockholder has not completed the sale of such shares of the Stock as
aforesaid, all of the restrictions on sale, transfer or assignment contained in
this Agreement shall again be in effect with respect to such shares of the
Stock.
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5. The Management Stockholder's Right to Resell Stock and
Options to the Company.
(a) Except as otherwise provided herein and for the purpose of
providing a market for the Stock or Options for the applicable Management
Stockholder Entities, if, prior to the Lapse Date, either (x) prior to
Retirement, the Management Stockholder's employment with the Company (or any of
its subsidiaries) terminates as a result of the death or Disability of the
Management Stockholder or (y) after Retirement, the Management Stockholder dies
or suffers a Disability, then the applicable Management Stockholder Entity,
shall, for one year following the date of (x) such termination for death or
Disability or (y) such death or Disability, respectively (as applicable, the
"Put Period"), have the right to:
(i) With respect to the Stock, sell to the Company, and the
Company shall be required to purchase, on one occasion, all of the
shares of Stock then held by the applicable Management Stockholder
Entities at a per share price equal to Fair Market Value (the "Section
5 Repurchase Price") at the time of the purchase;
(ii) With respect to any outstanding Options, receive from the
Company, on one occasion, in exchange for all of the exercisable
portions of the Options then held by the applicable Management
Stockholder Entities, an amount equal to the product of (x) the excess,
if any, of the Section 5 Repurchase Price at the time of the exchange
over the Option Exercise Price and (y) the number of Exercisable Option
Shares, which Options shall be terminated in exchange for such payment,
which shall be payable in shares of Stock (the "Net Settled Stock"). In
the event the foregoing Option Excess Price is zero or a negative
number, all outstanding exercisable portions of the Options granted to
the Management Stockholder under the Option Plan shall be automatically
terminated without any payment in respect thereof. In the event that
the Management Stockholder Entities do not exercise the foregoing
rights, the exercisable but unexercised portions of the Options shall
terminate in accordance with the terms of Section 4(a) of the Stock
Option Agreement. Subject to the Stock Option Agreement, the
unexercisable portions of the Options held by the applicable Management
Stockholder Entities shall terminate without payment immediately upon
termination of employment in accordance with Section 3(c) of the Stock
Option Agreement.
(iii) For 30 days following the six month anniversary (the
"Settled Stock Put Period") of the receipt by the applicable Management
Stockholder Entities of the Net Settled Stock, sell to the Company, and
the Company shall be required to purchase, on one occasion, all such
Net Settled Stock held by the applicable Management Stockholder
Entities at a per share price equal to the Section 5 Repurchase Price
at the time of the purchase.
(b) In the event the applicable Management Stockholder
Entities intend to exercise their rights pursuant to Section 5(a), such
Management Stockholder Entities shall send written notice to the Company, (i) at
any time during the Put Period, of their intention to sell shares of Stock in
exchange for the payment referred to in Section 5(a)(i) and/or to exchange such
Options for Net Settled Stock or (ii) at any time during the Settled Stock Put
Period, of their intention to sell the Net Settled Stock in exchange for the
payment referred to in Section 5(a)(iii)(the "Redemption Notice"). The
completion of the purchases or exchanges shall take place at the principal
office of the Company on the tenth business day after the giving of the
Redemption Notice. The applicable Section 5 Repurchase Price shall be paid by
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delivery to the applicable Management Stockholder Entities of a certified bank
check or checks in the appropriate amount payable to the order of each of the
applicable Management Stockholder Entities (or by wire transfer of immediately
available funds, if the Management Stockholder Entities provide to the Company
wire transfer instructions) and the Net Settled Stock shall be delivered to the
applicable Management Stockholder Entities, both against delivery of
certificates or other instruments representing the Stock so purchased and
appropriate documents canceling the Options so terminated appropriately endorsed
or executed by the applicable Management Stockholder Entities or any duly
authorized representative.
(c) Notwithstanding anything in Section 5(a) to the contrary
and subject to Section 10(a), if there exists and is continuing a default or an
event of default on the part of the Company or any subsidiary of the Company
under any material loan, guarantee or other agreement under which the Company or
any subsidiary of the Company has borrowed money or if the repurchase referred
to in Section 5(a) would result in a default or an event of default on the part
of the Company or any subsidiary of the Company under any loan, guarantee or
other agreement under which the Company or any subsidiary of the Company has
borrowed money or if a repurchase would not be permitted under Section 170 of
the Delaware General Corporation Law (the "DGCL") or would otherwise violate the
DGCL (or if the Company reincorporates in another state, the business
corporation law of such state) (each such occurrence being an "Event"), the
Company shall not be obligated to repurchase any of the Stock from the
applicable Management Stockholder Entities until the first business day which is
ten (10) calendar days after all of the foregoing Events have ceased to exist
(the "Repurchase Eligibility Date"); provided, however, that the number of
shares of Stock subject to repurchase under this Section 5(c) shall be that
number of shares of Stock, as specified in the Redemption Notice and held by the
applicable Management Stockholder Entities at the time of delivery of the
Redemption Notice in accordance with Section 5(b) hereof (as may be adjusted
pursuant to Section 7(a)). Notwithstanding the foregoing and subject to Section
6(d), if an Event exists and is continuing for ninety (90) days, the Management
Stockholder Entities shall be permitted by written notice to rescind any
Redemption Notice but the Management Stockholder Entities shall have another
thirty (30) days from the date the Event ceases to exist to give another
Repurchase Notice on the terms applicable to the first Redemption Notice.
6. The Company's Option to Purchase Stock and Options of
Management Stockholder Upon Certain Terminations of
Employment.
(a) Termination for Cause by the Company, Termination by the
Management Stockholder without Good Reason (other than due to his Retirement,
death or Disability) and other Call Events. Except as otherwise provided herein,
if, prior to the Lapse Date, (i) the Management Stockholder's active employment
with the Company (and/or, if applicable, its subsidiaries) is terminated by the
Company (and/or, if applicable, its subsidiaries) for Cause , (ii) the
Management Stockholder's active employment with the Company (and/or, if
applicable, its subsidiaries) is terminated by the Management Stockholder
without Good Reason (other than due to his Retirement, death or Disability) (a
"Section 6(a)(ii) Call Event"), (iii) the beneficiaries of a Management
Stockholder's Trust shall include any person or entity other than the Management
Stockholder, his spouse (or ex-spouse) or his lineal descendants (including
adopted children) or (iv) the Management Stockholder shall otherwise effect a
transfer of any of the Stock other than as permitted in this Agreement (other
than as may be required by applicable law or an order of a court having
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competent jurisdiction) after notice from the Company of such impermissible
transfer and a reasonable opportunity to cure such transfer (each, a "Section
6(a) Call Event"):
(A) the Company (for the purpose of providing a market for
the Stock for the applicable Management Stockholder Entities) may purchase all
or any portion of the shares of the Stock then held by the applicable Management
Stockholder Entities at a per share purchase price equal to the lesser of (x)
the Base Price and (y) Fair Market Value (any such applicable repurchase price,
the "Section 6(a) Repurchase Price"), except that, in the case of a Section
6(a)(ii) Call Event that occurs on or after December 31, 2007, the Section 6(a)
Repurchase Price shall be equal to Fair Market Value;
(B) subject to the Stock Option Agreement, all Options
(whether or not then exercisable) held by the applicable Management Stockholder
Entities will terminate immediately without payment in respect thereof; and
(C) the Company (for the purpose of providing a market for
the Stock for the applicable Management Stockholder Entities) may purchase all
or any portion of the shares of the Stock issued upon the exercise of any of the
Options that is not terminated pursuant to clause (B) at a per share purchase
price equal to the Section 6(a) Repurchase Price.
(b) Termination without Cause by the Company (other than due
to his death or Disability), and Termination by the Management Stockholder with
Good Reason. Except as otherwise provided herein, if, prior to the Lapse Date,
(i) the Management Stockholder's active employment with the Company (and/or, if
applicable, its subsidiaries) is terminated by the Company (and/or, if
applicable, its subsidiaries) without Cause (other than due to his death or
Disability), or (ii) the Management Stockholder's active employment with the
Company (and/or, if applicable, its subsidiaries) is terminated by the
Management Stockholder with Good Reason (each, a "Section 6(b) Call Event"):
(A) the Company (for the purpose of providing a market for
the Stock for the applicable Management Stockholder Entities) may purchase all
or any portion of the shares of such Stock then held by the applicable
Management Stockholder Entities at a per share purchase price equal to Fair
Market Value; and
(B) the Company may purchase all or any portion of the
exercisable Options held by the applicable Management Stockholder Entities for
an amount equal to the product of (x) the excess, if any, of the price equal to
Fair Market Value over the Option Exercise Price and (y) the number of
Exercisable Option Shares, which Options shall be terminated in exchange for
such payment. In the event the foregoing Option Excess Price is zero or a
negative number, all outstanding exercisable stock options granted to the
Management Stockholder under the Option Plan shall be automatically terminated
without any payment in respect thereof. In the event that the Company does not
exercise the foregoing rights, the exercisable but unexercised portions of the
Options shall terminate in accordance with the terms of Section 4(a) of the
Stock Option Agreement. Subject to the Stock Option Agreement, the unexercisable
portions of the Options held by the applicable Management Stockholder Entities
shall terminate without payment immediately upon termination of employment in
accordance with Section 3(c) of the Stock Option Agreement.
(c) Death or Disability. Except as otherwise provided herein,
if, prior to the Lapse Date, either (x) prior to Retirement, the Management
Stockholder's employment
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with the Company (and/or, if applicable, its subsidiaries) is terminated as a
result of the death or Disability of the Management Stockholder or (y) after
Retirement, the Management Stockholder dies or suffers a Disability (any event
in clause (x) or clause (y), a "Section 6(c) Call Event"), then the Company may
(for the purpose of providing a market for the Stock):
(A) With respect to the Stock, purchase all or any portion
of the shares of Stock then held by the applicable Management Stockholder
Entities at a per share price equal to Fair Market Value; and
(B) With respect to the Options, purchase all or part of
the exercisable portions of the Options for an amount equal to the product of
(x) the excess, if any, of Fair Market Value over the Option Exercise Price and
(y) the number of Exercisable Option Shares, which portions shall be terminated
in exchange for such payment. In the event the foregoing Option Excess Price is
zero or a negative number, all outstanding exercisable stock options granted to
the Management Stockholder under the Option Plan shall be automatically
terminated without any payment in respect thereof.
(d) Call Notice. The Company shall have a period of 210 days
from the later of (i) the date of any Call Event (or, if later, with respect to
a Section 6(a) Call Event, the date after discovery of, and the applicable cure
period for, an impermissible transfer constituting a Section 6(a) Call Event)
and (ii) thirty (30) days from the date the Management Stockholder rescinds a
Redemption Notice pursuant to the last sentence of Section 5(c), in which to
give notice in writing to the Management Stockholder of its election to exercise
its rights and obligations pursuant to this Section 6 ("Repurchase Notice").
Notwithstanding the foregoing, with respect to Net Settled Stock, the Company
shall have a period of sixty (60) days following the five month anniversary of
the receipt by the Management Stockholder Entities of the Net Settled Stock to
give the Repurchase Notice. The completion of the purchases pursuant to the
foregoing shall take place at the principal office of the Company on the tenth
business day after the giving of the Call Notice. The applicable Repurchase
Price (including any payment with respect to the Options as described in this
Section 6) shall be paid by delivery to the applicable Management Stockholder
Entities of a certified bank check or checks in the appropriate amount payable
to the order of each of the applicable Management Stockholder Entities (or by
wire transfer of immediately available funds, if the Management Stockholder
Entities provide to the Company wire transfer instructions) against delivery of
certificates or other instruments representing the Stock so purchased and
appropriate documents cancelling the Options so terminated, appropriately
endorsed or executed by the applicable Management Stockholder Entities or any
duly authorized representative.
(e) Delay of Call. Notwithstanding any other provision of this
Section 6 to the contrary and subject to Section 10(a), if there exists and is
continuing any Event, the Company shall delay the repurchase of any of the Stock
or the Options (pursuant to a Call Notice timely given in accordance with
Section 6(d) hereof) from the applicable Management Stockholder Entities until
the Repurchase Eligibility Date; provided, however, that (i) the number of
shares of Stock subject to repurchase under this Section 6 shall be that number
of shares of Stock (as may be adjusted pursuant to Section 7(a)), (ii) in the
case of a repurchase pursuant to Section 6(b) or 6(c), the number of Exercisable
Option Shares for purposes of calculating the Option Excess Price payable under
this Section 6 shall be the number of Exercisable Option Shares, in each case
held by the applicable Management Stockholder Entities at the time of delivery
of (and as set forth in) a Call Notice in accordance with Section 6(d) hereof
and (iii) the Company may, at its election and in lieu of paying the
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repurchase price under paragraph (a), (b) or (c) of this Section 6, deliver a
note payable in annual installments up to five years, bearing interest at the
stated rate of interest on the Company's senior subordinated notes issued on the
Closing Date, except that the annual installment payments shall be accelerated
if the Event shall cease to exist. All portions of the Options exercisable as of
the date of a Repurchase Notice, in the case of a repurchase pursuant to Section
6(b) or 6(c), shall continue to be exercisable until the repurchase of such
portions pursuant to such Call Notice, provided that to the extent that any
portions of the Options are exercised after the date of such Call Notice, the
number of Exercisable Option Shares for purposes of calculating the Option
Excess Price shall be reduced accordingly. Notwithstanding the foregoing, if an
Event exists and is continuing for ninety (90) days, the Management Stockholder
Entities shall be permitted by written notice to cause the Company to rescind
any Repurchase Notice but the Company shall have another thirty (30) days from
the date the Event ceases to exist to give another Repurchase Notice on the
terms applicable to the first Repurchase Notice.
(f) Calculation of Option Excess Price. For the avoidance of
doubt, in any instance where the Company exchanges cash or Stock for Options as
set forth in Sections 5 and 6 above, the applicable Option Excess Price shall be
calculated in tranches based on the applicable Option Exercise Prices relative
to the applicable Repurchase Price, and not on an aggregate net basis, such that
the Option Excess Price of any Options having the same Option Exercise Price,
where the Option Excess Price is greater than zero, shall not be netted against
the Option Excess Price of any Options having a different Option Exercise Price,
where the Option Excess Price is less than or equal to zero.
7. Adjustment of Repurchase Price; Definitions.
(a) Adjustment of Repurchase Price. In determining the
applicable repurchase price of the Stock and Options, as provided for in
Sections 5 and 6, above, appropriate adjustments shall be made for any stock
dividends, splits, combinations, recapitalizations or any other adjustment in
the number of outstanding shares of Stock in order to maintain, as nearly as
practicable, the intended operation of the provisions of Sections 5 and 6.
(b) Definitions. Terms used herein and as listed below shall
be defined as follows:
"Act" shall have the meaning set forth in Section 2(a)(i) hereof.
"Agreement" shall have the meaning set forth in the introductory
paragraph.
"Base Price" shall have the meaning set forth in Section 1(a) hereof.
"Board" shall mean the board of directors of the Company.
"Call Events" shall mean, collectively, Section 6(a) Call Events,
Section 6(b) Call Events, and Section 6(c) Call Events.
"Call Notice" shall have the meaning set forth in Section 6(d) hereof.
"Closing Date" shall have the meaning set forth in the first "whereas"
paragraph.
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"Common Stock" shall mean the Company's common stock, par value $0.01
per share.
"Company" shall have the meaning set forth in the introductory
paragraph.
"Custody Agreement and Power of Attorney" shall have the meaning set
forth in Section 9(e) hereof.
"DGCL" shall have the meaning set forth in Section 5(c) hereof.
"Disability" shall mean "Disability" as such term may be defined in the
Stock Option Agreement entered into by the Management Stockholder Agreement and
the Company. Any question as to the existence of the Disability of the
Management Stockholder as to which the Management Stockholder and the Company
cannot agree shall be determined in writing by a qualified independent physician
mutually acceptable to the Management Stockholder and the Company. If the
Management Stockholder and the Company cannot agree as to a qualified
independent physician, each shall appoint such a physician and those two
physicians shall select a third who shall make such determination in writing.
The determination of Disability made in writing to the Company and the
Management Stockholder shall be final and conclusive for all purposes of this
Agreement.
"Event" shall have the meaning set forth in Section 5(c) hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended (or any successor section thereto).
"Exercisable Option Shares" shall mean the shares of Common Stock that,
at the Repurchase Calculation Date, could be purchased by the Management
Stockholder upon exercise of the outstanding and then-vested and exercisable
portion of such Options.
"Good Reason" shall mean "Good Reason" as such term may be defined in
any employment agreement or change-in-control agreement in effect at the time of
termination between the Management Stockholder and the Company or any of its
subsidiaries or Rule 405 Affiliates; or, if there is no such employment or
change-in-control agreement, "Good Reason" shall mean (A) the failure of the
Company to pay or cause to be paid the Management Stockholder's base salary or
target annual bonus, when due hereunder or a reduction in the base salary or
annual bonus from the levels applicable in prior calendar years (other than any
across the board reduction of 15% or less which similarly affects similarly
situated employees) (B) any substantial and sustained diminution in the
Management Stockholder's title, authority or responsibilities or (C) any
relocation of the Management Stockholder's principal place of employment by more
than 50 miles from the current location as of the date of this Agreement,
without the Management Stockholder's consent; provided that either of the events
described in clauses (A) and (B) shall constitute Good Reason only if the
Company fails to cure such event within 30 days after receipt from the
Management Stockholder of written notice of the event which constitutes Good
Reason; provided, further, that "Good Reason" shall cease to exist for an event
on the 60th day following the later of its occurrence or the Management
Stockholder's knowledge thereof, unless the Management Stockholder has given the
Company written notice thereof prior to such date.
"Group" shall mean "group," as such term is used for purposes of
Section 13(d) or 14(d) of the Exchange Act.
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"Investors" shall have the meaning set forth in the second "whereas"
paragraph.
"Management Stockholder" shall have the meaning set forth in the
introductory paragraph.
"Management Stockholder Entities" shall mean the Management
Stockholder's Trust, the Management Stockholder and the Management Stockholder's
Estate, collectively.
"Management Stockholder's Estate" shall mean the conservators,
guardians, executors, administrators, testamentary trustees, legatees or
beneficiaries of the Management Stockholder.
"Management Stockholder's Trust" shall mean a partnership, limited
liability company, corporation, trust or custodianship, the beneficiaries of
which may include only the Management Stockholder, his spouse (or ex-spouse) or
his lineal descendants (including adopted) or, if at any time after any such
transfer there shall be no then living spouse or lineal descendants, then to the
ultimate beneficiaries of any such trust or to the estate of a deceased
beneficiary.
"Maximum Repurchase Amount" shall have the meaning set forth in Section
10(a) hereof.
"Notice" shall have the meaning set forth in Section 9(b) hereof.
"Offeror" shall have the meaning set forth in Section 4(a) hereof.
"Option" shall have the meaning set forth in the fourth "whereas"
paragraph.
"Option Excess Price" shall mean the aggregate amount paid or payable
by the Company in respect of Exercisable Option Shares, as determined pursuant
to Section 5 or 6, as applicable.
"Option Exercise Price" shall mean the then-current exercise price of
the shares of Common Stock covered by the applicable Option.
"Option Plan" shall have the meaning set forth in the fourth "whereas"
paragraph.
"Option Stock" shall have the meaning set forth in Section 3(a) hereof.
"Other Management Stockholders" shall have the meaning set forth in the
sixth "whereas" paragraph.
"Other Management Stockholders' Agreements" shall have the meaning set
forth in the seventh "whereas" paragraph.
"Parties" shall have the meaning set forth in the introductory
paragraph.
"Person" shall mean "person," as such term is used for purposes of
Section 13(d) or 14(d) of the Exchange Act.
"Piggyback Registration Rights" shall have the meaning set forth in
Section 9(a).
12
"Proposed Registration" shall have the meaning set forth in Section
9(b) hereof.
"Public Offering" shall mean the sale of shares of Common Stock to the
public subsequent to the date hereof pursuant to a registration statement under
the Act which has been declared effective by the SEC (other than a registration
statement on Form X-0, X-0 or any other similar form).
"Purchased Stock" shall have the meaning set forth in the fifth
"whereas" paragraph.
"Qualified Public Offering" shall mean a Public Offering, which results
in an active trading market of 20% or more of the Common Stock.
"Repurchase Calculation Date" shall mean the last day of the month
preceding the later of (i) the month in which the event giving rise to the right
to repurchase occurs and (ii) the month in which the Repurchase Eligibility Date
occurs.
"Repurchase Eligibility Date" shall have the meaning set forth in
Section 5(c) hereof.
"Repurchase Price" shall mean the amount to be paid in respect of the
Stock and Options to be purchased by the Company pursuant to Section 5(a),
Section 6(a), 6(b), or 6(c), as applicable.
"Request" shall have the meaning set forth in Section 9(b) hereof.
"Restricted Group" shall mean, collectively, the Company, its
subsidiaries, the Investors and their respective Rule 405 Affiliates.
"Restricted Stock" shall have the meaning set forth in the fifth
"whereas" paragraph.
"Restricted Stock Agreement" shall have the meaning set forth in the
fifth "whereas" paragraph.
"Rule 405 Affiliate" shall mean an Affiliate of the Company as defined
under Rule 405 of the rules and regulations promulgated under the Act and as
interpreted in good faith by the Board.
"Sale Participation Agreement" shall mean that certain sale
participation agreement entered into by and between the Management Stockholder
and the Investors dated as of the date hereof.
"SEC" shall mean the Securities and Exchange Commission.
"Stock" shall have the meaning set forth in Section 3(a) hereof.
"Stock Option Agreement" shall have the meaning set forth in the fourth
"whereas" paragraph.
"Third Party Offer" shall have the meaning set forth in Section 4(a)
hereof.
"Transaction Agreement" shall have the meaning set forth in the first
"whereas" paragraph.
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"Transfer" shall have the meaning set forth in Section 2(a) hereof.
8. The Company's Representations and Warranties.
(a) The Company represents and warrants to the Management
Stockholder that (i) this Agreement has been duly authorized, executed and
delivered by the Company and is enforceable against the Company in accordance
with its terms, (ii) the Stock, when issued and delivered in accordance with the
terms hereof and the other agreements contemplated hereby, will be duly and
validly issued, fully paid and nonassessable and (iii) assuming the Management
Stockholder's representations in Section 2 are true and correct, the issuance of
the Purchased Stock and Options does not violate any "blue sky" or other
securities law of any jurisdiction or require the Company to file a registration
statement with the SEC or apply to qualify any securities under the "blue sky"
or other securities law of any jurisdiction.
(b) If the Company becomes subject to the reporting
requirements of Section 12 of the Exchange Act, the Company will file the
reports required to be filed by it under the Act and the Exchange Act and the
rules and regulations adopted by the SEC thereunder, to the extent required from
time to time to enable the Management Stockholder to sell shares of Stock
without registration under the Exchange Act within the limitations of the
exemptions provided by (A) Rule 144 under the Act, as such Rule may be amended
from time to time, or (B) any similar rule or regulation hereafter adopted by
the SEC. Notwithstanding anything contained in this Section 8(b), the Company
may de-register under Section 12 of the Exchange Act if it is then permitted to
do so pursuant to the Exchange Act and the rules and regulations thereunder and,
in such circumstances, shall not be required hereby to file any reports which
may be necessary in order for Rule 144 or any similar rule or regulation under
the Act to be available. Nothing in this Section 8(b) shall be deemed to limit
in any manner the restrictions on sales of Stock contained in this Agreement.
9. "Piggyback" Registration Rights. Effective upon the date of
this Agreement and until the later of (i) the first occurrence of a Qualified
Public Offering and (ii) the seventh anniversary of the Effective Date:
(a) The Management Stockholder hereby agrees to be bound by
all of the terms, conditions and obligations of the piggyback registration
rights contained in Section 5.4 of the Investor Stockholder Agreement entered
into by and among the Company and investors party thereto (the "Piggyback
Registration Rights"), as in effect on the date hereof (subject to any
amendments thereto to which the Management Stockholder has agreed in writing to
be bound), and, if the Company is selling stock, shall have all of the rights
and privileges of a "Holder" (as defined in the Investor Stockholders Agreement)
with respect to Piggyback Registration Rights (including, without limitation,
the right to participate in the Qualified Public Offering and any rights to
indemnification and/or contribution from the Company and/or the Investors), in
each case as if the Management Stockholder were an original party (other than
the Company) to the Investor Stockholder Agreement, subject to applicable and
customary underwriter restrictions; provided, however, that at no time shall the
Management Stockholder have any rights to request registration under Section 5.3
of the Investor Stockholders Agreement; and provided further, that the
Management Stockholder shall not be bound by any amendments to the Investor
Stockholder Agreement unless the Management Stockholder consents in writing
thereto provided that such consent will not be unreasonably withheld. All Stock
purchased or held by the applicable Management Stockholder Entities pursuant to
this Agreement shall be deemed to be "Registrable Securities" as defined in the
Investor Stockholder Agreement.
14
(b) In the event of a sale of Common Stock by the Company in
accordance with the terms of the Investor Stockholder Agreement, the Company
will promptly notify the Management Stockholder in writing (a "Notice") of any
proposed registration (a "Proposed Registration"). If within fifteen (15) days
of the receipt by the Management Stockholder of such Notice, the Company
receives from the applicable Management Stockholder Entities a written request
(a "Request") to register shares of Stock held by the applicable Management
Stockholder Entities (which Request will be irrevocable unless otherwise
mutually agreed to in writing by the Management Stockholder and the Company),
shares of Stock will be so registered as provided in this Section 9; provided,
however, that for each such registration statement only one Request, which shall
be executed by the applicable Management Stockholder Entities, may be submitted
for all Registrable Securities held by the applicable Management Stockholder
Entities.
(c) The maximum number of shares of Stock which will be
registered pursuant to a Request will be the lowest of (i) the number of shares
of Stock then held by the Management Stockholder Entities, including all shares
of Stock which the Management Stockholder Entities are then entitled to acquire
under an unexercised portion of the Options to the extent then exercisable,
multiplied by a fraction, the numerator of which is the number of shares of
Stock being sold by the Company and any affiliated or unaffiliated investment
partnerships and investment limited liability companies investing with the
Company and the denominator of which is the aggregate number of shares of Stock
owned by the Company and any investment partnerships and investment limited
liability companies investing with the Company or (ii) the maximum number of
shares of Stock which the Company can register in connection with such Request
in the Proposed Registration without adverse effect on the offering in the view
of the managing underwriters (reduced pro rata as more fully described in
subsection (d) of this Section 9 or (iii) the maximum number of shares which the
Management Stockholder (pro rata based upon the aggregate number of shares of
Stock the Management Stockholder and all Other Management Stockholders have
requested to be registered) is permitted to register under the Piggyback
Registration Rights.
(d) If a Proposed Registration involves an underwritten
offering and the managing underwriter advises the Company in writing that, in
its opinion, the number of shares of Stock requested to be included in the
Proposed Registration exceeds the number which can be sold in such offering, so
as to be likely to have an adverse effect on the price, timing or distribution
of the shares of Stock offered in such Public Offering as contemplated by the
Company, then the Company will include in the Proposed Registration (i) first,
100% of the shares of Stock the Company proposes to sell and (ii) second, to the
extent of the number of shares of Stock requested to be included in such
registration which, in the opinion of such managing underwriter, can be sold
without having the adverse effect referred to above, the number of shares of
Stock which the selling Investors and any affiliated or unaffiliated investment
partnerships and investment limited liability companies investing with the
selling Investors, the Management Stockholder and all Other Management
Stockholders (together, the "Holders") have requested to be included in the
Proposed Registration, such amount to be allocated pro rata among all requesting
Holders on the basis of the relative number of shares of Stock then held by each
such Holder (including upon exercise of any exercisable portion of the Options)
(provided that any shares thereby allocated to any such Holder that exceed such
Holder's request will be reallocated among the remaining requesting Holders in
like manner).
15
(e) Upon delivering a Request the Management Stockholder will,
if requested by the Company, execute and deliver a custody agreement and power
of attorney having customary terms and in form and substance reasonably
satisfactory to the Company with respect to the shares of Stock to be registered
pursuant to this Section 9 (a "Custody Agreement and Power of Attorney"). The
Custody Agreement and Power of Attorney will provide, among other things, that
the Management Stockholder will deliver to and deposit in custody with the
custodian and attorney-in-fact named therein a certificate or certificates (to
the extent applicable) representing such shares of Stock (duly endorsed in blank
by the registered owner or owners thereof or accompanied by duly executed stock
powers in blank) and irrevocably appoint said custodian and attorney-in-fact as
the Management Stockholder's agent and attorney-in-fact with full power and
authority to act under the Custody Agreement and Power of Attorney on the
Management Stockholder's behalf with respect to the matters specified therein.
(f) The Management Stockholder agrees that he will execute
such other agreements as the Company may reasonably request to further evidence
the provisions of this Section 9.
10. Pro Rata Repurchases; Dividends. (a) Notwithstanding
anything to the contrary contained in Section 4, 5 or 6, if at any time
consummation of any purchase or payment to be made by the Company pursuant to
this Agreement and the Other Management Stockholders Agreements would result in
an Event, then the Company shall make purchases from, and payments to, the
Management Stockholder and Other Management Stockholders pro rata (on the basis
of the proportion of the number of shares of Stock each such Management
Stockholder and all Other Management Stockholders have elected or are required
to sell to the Company) for the maximum number of shares of Stock permitted
without resulting in an Event (the "Maximum Repurchase Amount"). The provisions
of Section 5(c) and 6(e) shall apply in their entirety to payments and
repurchases with respect to shares of Stock which may not be made due to the
limits imposed by the Maximum Repurchase Amount under this Section 10(a). Until
all of such Stock is purchased and paid for by the Company, the Management
Stockholder and the Other Management Stockholders whose Stock is not purchased
in accordance with this Section 10(a) shall have priority, on a pro rata basis,
over other purchases of Stock by the Company pursuant to this Agreement and
Other Management Stockholders' Agreements.
(b) In the event any dividends are paid with respect to the
Stock, the Management Stockholder will be treated in the same manner as all
other holders of Common Stock with respect to shares of Stock then owned by the
Management Stockholder, and, with respect to any Options held by the Management
Stockholder, in accordance, as applicable, with Section 4(b) of the Stock Option
Agreement.
11. Rights to Negotiate Repurchase Price. Nothing in this
Agreement shall be deemed to restrict or prohibit the Company from purchasing,
redeeming or otherwise acquiring for value shares of Stock or Options from the
Management Stockholder, at any time, upon such terms and conditions, and for
such price, as may be mutually agreed upon in writing between the Parties,
whether or not at the time of such purchase, redemption or acquisition
circumstances exist which specifically grant the Company the right to purchase,
or the Management Stockholder the right to sell, shares of Stock or any Options
under the terms of this Agreement; provided that no such purchase, redemption or
acquisition shall be consummated, and no agreement with respect to any such
purchase, redemption or acquisition shall be entered into, without the prior
approval of the Board.
16
12. Covenant Regarding 83(b) Election. Except as the Company
may otherwise agree in writing, the Management Stockholder hereby covenants and
agrees that he will make an election provided pursuant to Treasury Regulation
1.83-2 with respect to the Stock, including without limitation, the Stock to be
acquired upon each exercise of the Management Stockholder's Options and any
grant of Restricted Stock; and Management Stockholder further covenants and
agrees that he will furnish the Company with copies of the forms of election the
Management Stockholder files within thirty (30) days after the date hereof, and
within thirty (30) days after each exercise of Management Stockholder's Options
and with evidence that each such election has been filed in a timely manner.
13. Notice of Change of Beneficiary. Immediately prior to any
transfer of Stock to a Management Stockholder's Trust, the Management
Stockholder shall provide the Company with a copy of the instruments creating
the Management Stockholder's Trust and with the identity of the beneficiaries of
the Management Stockholder's Trust. The Management Stockholder shall notify the
Company as soon as practicable prior to any change in the identity of any
beneficiary of the Management Stockholder's Trust.
14. Recapitalizations, etc. The provisions of this Agreement
shall apply, to the full extent set forth herein with respect to the Stock or
the Options, to any and all shares of capital stock of the Company or any
capital stock, partnership units or any other security evidencing ownership
interests in any successor or assign of the Company (whether by merger,
consolidation, sale of assets or otherwise) which may be issued in respect of,
in exchange for, or substitution of the Stock or the Options by reason of any
stock dividend, split, reverse split, combination, recapitalization,
liquidation, reclassification, merger, consolidation or otherwise.
15. Management Stockholder's Employment by the Company.
Nothing contained in this Agreement or in any other agreement entered into by
the Company and the Management Stockholder contemporaneously with the execution
of this Agreement (subject to, and except as set forth in, the applicable
provisions of any offer letter or letter of employment provided to the
Management Stockholder by the Company or any employment agreement entered by and
between the Management Stockholder and the Company) (i) obligates the Company or
any subsidiary of the Company to employ the Management Stockholder in any
capacity whatsoever or (ii) prohibits or restricts the Company (or any such
subsidiary) from terminating the employment of the Management Stockholder at any
time or for any reason whatsoever, with or without Cause, and the Management
Stockholder hereby acknowledges and agrees that neither the Company nor any
other person has made any representations or promises whatsoever to the
Management Stockholder concerning the Management Stockholder's employment or
continued employment by the Company or any subsidiary of the Company.
16. Binding Effect. The provisions of this Agreement shall be
binding upon and accrue to the benefit of the parties hereto and their
respective heirs, legal representatives, successors and assigns. In the case of
a transferee permitted under Section 2(a) or Section 3 (other than clauses (c)
or (d) thereof) hereof, such transferee shall be deemed the Management
Stockholder hereunder; provided, however, that no transferee (including without
limitation, transferees referred to in Section 2(a) or Section 3 hereof) shall
derive any rights under this Agreement unless and until such transferee has
delivered to the Company a valid undertaking and becomes bound by the terms of
this Agreement.
17
17. Amendment. This Agreement may be amended only by a written
instrument signed by the Parties hereto.
18. Closing. Except as otherwise provided herein, the closing
of each purchase and sale of shares of Stock pursuant to this Agreement shall
take place at the principal office of the Company on the tenth business day
following delivery of the notice by either Party to the other of its exercise of
the right to purchase or sell such Stock hereunder.
19. Applicable Law; Jurisdiction; Arbitration; Legal Fees.
(a) The laws of the State of Delaware applicable to contracts
executed and to be performed entirely in such state shall govern the
interpretation, validity and performance of the terms of this Agreement.
(b) In the event of any controversy among the parties hereto
arising out of, or relating to, this Agreement which cannot be settled amicably
by the parties, such controversy shall be finally, exclusively and conclusively
settled by mandatory arbitration conducted expeditiously in accordance with the
American Arbitration Association rules by a single independent arbitrator. Such
arbitration process shall take place within 100 miles of the New York City
metropolitan area. The decision of the arbitrator shall be final and binding
upon all parties hereto and shall be rendered pursuant to a written decision,
which contains a detailed recital of the arbitrator's reasoning. Judgment upon
the award rendered may be entered in any court having jurisdiction thereof.
(c) Notwithstanding the foregoing, the Management Stockholder
acknowledges and agrees that the Company, its subsidiaries, the Investors and
any of their respective Rule 405 Affiliates shall be entitled to injunctive or
other relief in order to enforce the covenant not to compete, covenant not to
solicit and/or confidentiality covenants as set forth in Section 24(a) of this
Agreement.
(d) In the event of any arbitration or other disputes with
regard to this Agreement or any other document or agreement referred to herein,
each Party shall pay its own legal fees and expenses, unless otherwise
determined by the arbitrator.
20. Assignability of Certain Rights by the Company. The
Company shall have the right to assign any or all of its rights or obligations
to purchase shares of Stock pursuant to Sections 4, 5 and 6 hereof.
21. Miscellaneous.
(a) In this Agreement all references to "dollars" or "$" are
to United States dollars and the masculine pronoun shall include the feminine
and neuter, and the singular the plural, where the context so indicates
(b) If any provision of this Agreement shall be declared
illegal, void or unenforceable by any court of competent jurisdiction, the other
provisions shall not be affected, but shall remain in full force and effect.
(c) If any payments of money, delivery of shares of Stock or
other benefits due to the Management Stockholder hereunder could cause the
application of an accelerated or additional tax under Section 409A of the
Internal Revenue Code of 1986, as amended (the
18
"Code"), such payments, delivery of shares or other benefits shall be deferred
if deferral will make such payment, delivery of shares or other benefits
compliant under Section 409A of the Code, otherwise such payment, delivery of
shares or other benefits shall be restructured, to the extent possible, in a
manner, determined by the Company and reasonably acceptable to the Management
Stockholder, that does not cause such an accelerated or additional tax.
22. Withholding. The Company or its subsidiaries shall have
the right to deduct from any cash payment made under this Agreement to the
applicable Management Stockholder Entities any minimum federal, state or local
income or other taxes required by law to be withheld with respect to such
payment.
23. Notices. All notices and other communications provided for
herein shall be in writing. Any notice or other communication hereunder shall be
deemed duly given (i) upon electronic confirmation of facsimile, (ii) one
business day following the date sent when sent by overnight delivery and (iii)
five (5) business days following the date mailed when mailed by registered or
certified mail return receipt requested and postage prepaid, in each case as
follows:
(a) If to the Company, to it at the following address:
Affinia Group Holdings Inc.
Suite 100
0000 Xxxxxxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Attention: Xxxxx Xxxxxx, General Counsel
with copies to:
The Cypress Group L.L.C.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
and
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx and Xxxxx X. Xxxxxxx
Telecopy: (000) 000-0000
(b) If to the Management Stockholder, to him at the address
set forth below under his signature;
or at such other address as either party shall have specified by notice in
writing to the other.
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24. Confidential Information; Covenant Not to Compete.
(a) In consideration of the Company entering into this
Agreement with the Management Stockholder, the Management Stockholder shall
enter into a Confidentiality, Non-Competition and Proprietary Information
Agreement with the Company or its Subsidiaries on the date hereof (or an
employment agreement containing similar provisions).
(b) In the event that the Management Stockholder breaches any
of the provisions of the Confidentiality, Non-Competition and Proprietary
Information Agreement (or any provision concerning similar matters contained in
an employment agreement entered into by the Management Stockholder and the
Company or its Subsidiaries), in addition to all other remedies that may be
available to the Company, such Management Stockholder shall be required to pay
to the Company any amounts actually paid to him by the Company in respect of any
repurchase by the Company of the Option or shares of Common Stock underlying the
Option held by such Management Stockholder.
25. Termination of Certain Provisions.
The provisions contained in Section 5 and the portion of any
other provision of this Agreement that incorporates the provisions of Section 5,
shall terminate, and be of no further force or effect upon the consummation of a
Qualified Public Offering.
[Signatures on next page.]
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IN WITNESS WHEREOF, the Parties have executed this Agreement
as of the date first above written.
AFFINIA GROUP HOLDINGS INC.
By:
------------------------
Name:
----------------------
Title:
---------------------
MANAGEMENT STOCKHOLDER:
Signature:
----------------
Printed Name:
-------------
ADDRESS:
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