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 Dana Corporation, a Virginia corporation ("Dana"),
Affinia
purchased the automotive aftermarket business from Dana (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 The Netherlands, 55th Street 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
S-8, S-4 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 S-8, S-4 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
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