EXHIBIT 4.11
MANAGEMENT STOCKHOLDERS
AGREEMENT
OF
NEFF CORP
This Management Stockholders
Agreement (“ Agreement ”) is entered into as of
June 3, 2005, by and among Neff Corp., a Delaware corporation (the
“ Company ”), Iron Merger Partnership, a
Delaware limited partnership (“ Iron ”) and each
of the individual purchasers who become parties hereto from time to
time in accordance with the terms hereof (each individually, a
“ Management Stockholder ,” and collectively,
the “ Management Stockholders ”). These
parties are sometimes referred to herein individually by name or as
a “ Party ” and collectively as the “
Parties .”
RECITALS
:
WHEREAS, each of the Management
Stockholders is an employee, executive officer, consultant or
director of the Company or one or more subsidiaries of the
Company;
WHEREAS, the Company has issued (or
may hereafter issue) to each Management Stockholder shares of the
Company’s common stock, par value $0.01 per share (“
Common Stock ”), as a result of the exercise by such
Management Stockholder of vested options to purchase Common Stock
(“ Vested Options ”), which options were issued
(or may hereafter be issued) to such Management Stockholder
pursuant to the 2005 Stock Option Plan of Neff Corp. (the “
Stock Option Plan ”) or any other employee benefit,
stock purchase or compensation plan adopted by the board of
directors of the Company (the “ Board ”) prior
to, on or after the date hereof;
WHEREAS, the Company, Iron and the
Management Stockholders desire to enter into this Agreement to
provide for certain matters with respect to the ownership and
transfer by the Management Stockholders of all shares of Common
Stock now held by or hereafter issued to or acquired by the
Management Stockholders whether as a result of the exercise of
Vested Options or otherwise (collectively, the “
Restricted Shares ”); and
WHEREAS, capitalized terms used
herein without definition elsewhere in this Agreement are defined
in Section 11.
AGREEMENT
:
NOW, THEREFORE, in consideration of
the foregoing and the mutual agreements set forth herein, and other
good and valuable consideration, the receipt and adequacy of which
is hereby acknowledged, the Parties hereto, intending to be legally
bound, hereby agree as follows:
Section
1.
Sales to Third Parties .
(a)
Each Management Stockholder hereby agrees that he or she shall not
sell, assign, transfer, convey, pledge or otherwise dispose of
(collectively, “ Transfer ”) any Restricted
Shares without the prior written consent of the Company, which
consent shall have been authorized by a majority of the members of
the Board and which consent may be (i) withheld in
the sole
discretion of the Board, or (ii) given subject to reasonable terms
and conditions determined by the Board in its sole
discretion. Each Management Stockholder further agrees that
in connection with any Transfer consented to by the Company, the
Management Stockholder shall, if requested by the Company, deliver
to the Company an opinion of counsel in form and substance
reasonably satisfactory to the Company and counsel for the Company,
to the effect that the Transfer is not in violation of this
Agreement, the Securities Act of 1933, as amended (the “
Securities Act ”), or the securities laws of any
state. Any purported Transfer in violation of the provisions
of this Section 1 shall be null and void and shall have no force or
effect.
(b)
(i)
If a Management Stockholder (the “ Offering
Stockholder ”) shall have received a bona
fide offer or offers from a third party or parties to
purchase any Restricted Shares, and the Transfer shall have been
approved pursuant to Section 1(a), prior to selling any Restricted
Shares to the third party or parties, the Offering Stockholder
shall deliver to the Company and Iron a letter (the “
Offer Notice ”) signed by the Offering Stockholder
setting forth: (A) the name of the third party or parties; (B) the
prospective purchase price per share of the Restricted Shares; (C)
all material terms and conditions contained in the offer of the
third party or parties; and (D) the Offering Stockholder’s
offer (irrevocable by its terms for 60 days following the later of
(x) the date of the receipt of such offer or (y) the six month
anniversary of the date such Restricted Shares were first purchased
by the Management Stockholder (such 60-day period, the “
Offer Period ”)) to sell to the Company and Iron all
(but not less than all) of the Restricted Shares covered by the
offer of the third party or parties, for a purchase price per share
and on other terms and conditions not less favorable to the Company
and Iron than those contained in the offer of the third party or
parties (an “ Offer ”).
(ii)
Upon receipt of such Offer Notice, the Company shall have an option
to purchase any or all of the Restricted Shares described in the
Offer Notice at the purchase price and upon the terms and
conditions specified in the Offer. If the Company desires to
exercise the option set forth in the preceding sentence, it shall
deliver a notice (an “ Election Notice ”) to the
Offering Stockholder and Iron at any time during the first 45 days
of the Offer Period (such 45-day period, the “ Election
Period ”), which Election Notice shall specify the number
of Restricted Shares subject to the Offer to be acquired. In
the event that the Company delivers an Election Notice for less
than all of the Restricted Shares subject to the Offer, such
Election Notice shall not be effective unless and until Iron
delivers an Election Notice to purchase the remaining Restricted
Shares subject to the Offer pursuant to Section 1(b)(iii)
below.
(iii)
In the event the Company does not deliver an Election Notice before
the end of the Election Period or any Election Notice so delivered
does not relate to the purchase of all the Restricted Shares
described in the Offer Notice, then Iron (or, in its discretion,
any other Principal Stockholder(s) designated by Iron) shall have
the option to purchase no less than all of the remaining Restricted
Shares subject to the Offer at the purchase price and upon the
terms and conditions specified in the Offer by delivering an
Election Notice to the Offering Stockholder and the Company within
15 days after the first to occur of (A) the expiration of the
Election Period or (B) receipt of an Election Notice from the
Company which relates to less than all of the Restricted Shares
described in the Offer Notice. In the event Election Notices
are delivered by both the Company and Iron (or any other applicable
Principal Stockholder), and, as a result of miscalculation or
similar error, the aggregate number of Restricted Shares described
in such Election Notices exceeds the aggregate number of Restricted
Shares specified in the Offer,
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the number of
Restricted Shares to be purchased by Iron (or any other applicable
Principal Stockholder) shall be reduced accordingly.
(iv)
If either the Company or Iron (or any other applicable Principal
Stockholder) delivers an Election Notice, then it shall be
obligated to purchase, and the Offering Stockholder shall be
obligated to sell, the Restricted Shares described in such Election
Notice at the purchase price per share and on other terms and
conditions indicated in the Offer, except that the closing of such
purchase and sale shall occur on a closing date selected by the
Company or Iron (or any other applicable Principal Stockholder), as
applicable; provided, however, that, (A) in the case of a sale to
the Company, such closing date shall be not less than 45 days nor
more than 90 days following the date of the Offer Notice and (B) in
the case of a sale to Iron (or any other applicable Principal
Stockholder), such closing date shall be not less than 60 days nor
more than 90 days following the date of the Offer Notice.
Unless otherwise mutually agreed, the closing shall be consummated
at the principal offices of the Company.
(v)
If neither the Company nor Iron (or any other applicable Principal
Stockholder) delivers an Election Notice to the Offering
Stockholder within the time periods described in Section 1(b)(ii)
and 1(b)(iii), as applicable, or the Election Notices delivered in
the aggregate relate to less than all of the Restricted Shares
subject to the Offer, then the Offering Stockholder may, during the
period beginning on the 61 st day following the
receipt of the Offer Notice by the Company and Iron and ending on
the 90 th day following the
receipt of the Offer Notice by the Company and Iron, sell to the
third party or parties all (but not less than all) of the
Restricted Shares covered by the Offer, for the purchase price and
on the other terms and conditions contained in the
Offer.
(c)
Notwithstanding the foregoing but subject to Section 1(d) below,
nothing in this Section 1 shall prevent the Transfer of any
Restricted Shares by any Management Stockholder to (i) the Company
or any Principal Stockholder; or (ii) (A) any member of a
Management Stockholder’s immediate family (the “
Permitted Family Members ”), (B) trusts for the
benefit of Permitted Family Members, and (C) upon a Management
Stockholder’s death, the Management Stockholder’s
executors, administrators, testamentary trustees, legatees and
beneficiaries; provided that, in the case of subclause (A) and (B),
the Management Stockholder retains the sole and exclusive right to
vote or dispose of any Restricted Shares transferred to the
Permitted Family Member (each such person and entity described in
clause (ii) a “ Permitted Transferee ” and
collectively, the “ Permitted Transferees
”).
(d)
In addition to the restrictions set forth elsewhere in this
Agreement, any Transfer of Restricted Shares by a Management
Stockholder to a transferee shall be permitted only if the
transferee shall agree in writing to be bound by the terms and
conditions of this Agreement pursuant to an instrument of
assumption reasonably satisfactory in form and substance to the
Board. Upon the execution of the instrument of assumption by
such transferee, such transferee shall be deemed to be a Management
Stockholder for all purposes of this Agreement except that, (A) in
the case of a Transfer to a Permitted Transferee, all provisions
that relate to termination of employment of a Management
Stockholder and the effects thereof shall continue to apply to such
Management Stockholder transferor and not to such Permitted
Transferee and (B) in the case of a Transfer to a Person other than
a Permitted Transferee made
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in compliance
with this Agreement, Sections 2 and 3 of this Agreement shall cease
to apply following such Transfer.
Section
2.
Company’s Rights to Repurchase Shares .
(a)
(i)
Except as otherwise set forth in Section 2(a)(ii), with respect to
all Restricted Shares held by any Management Stockholder and his or
her Permitted Transferees, during the period beginning on the date
of the Management Stockholder’s Termination of Employment (as
defined below) and ending on the nine month anniversary of the
later of (A) the date of such Termination of Employment; or (B) the
date of the exercise of any Vested Options held by the Management
Stockholder as of the date of such Termination of Employment, the
Company shall have the option to repurchase Restricted Shares held
by the Management Stockholder or his or her Permitted Transferees
(“ Call Right ”); provided, however, that,
notwithstanding the foregoing, in no event shall the Company
purchase any Restricted Shares pursuant to the Call Right prior to
the day immediately following the six month anniversary of the date
the Management Stockholder first purchased such Restricted Shares
(whether pursuant to the exercise of Vested Options or
otherwise). The Call Right may be exercised more than once,
but must be exercised with respect to all (but not less than all)
of the Restricted Shares outstanding on the date of any Call Notice
(as defined below). Except as otherwise set forth in Section
2(a)(ii), the repurchase price payable by the Company upon exercise
of the Call Right (“ Call Repurchase Price ”)
shall be the Fair Market Value (as defined below) of the Restricted
Shares subject to the Call Right on the date of the Call Notice;
provided, however, that, notwithstanding the foregoing, in the
event of the Management Stockholder’s Termination of
Employment for Cause, the Call Repurchase Price shall be the lesser
of (A) Fair Market Value of the Restricted Shares subject to the
Call Right on the date of the Call Notice or (B) the Effective Date
Price. The Call Right shall be exercised by written notice
(“ Call Notice ”) to the Management Stockholder
given in accordance with Section 10(f) of this Agreement on or
prior to the last date on which the Call Right may be exercised by
the Company.
(ii)
Notwithstanding Section 2(a)(i), in the event of the Management
Stockholder’s Termination of Employment on or prior to the
eighth anniversary of the date hereof for any reason other than by
the Company without Cause, by the Company for Cause, or due to
death or Disability, the Company shall be required to exercise its
Call Right with respect to all Restricted Shares then held by the
Management Stockholder or his or her Permitted Transferees.
Subject to Section 2(c), the Company’s purchase of Restricted
Shares pursuant to this Section 2(a)(ii) shall occur on such date
as is set forth in the Call Notice, which date shall be as soon as
reasonably practicable following the date of the Management
Stockholder’s Termination of Employment; provided, however,
that, notwithstanding the foregoing, in no event shall the Company
purchase any Restricted Shares pursuant to the Call Right prior to
the day immediately following the six month anniversary of the date
the Management Stockholder first purchased such Restricted Shares
(whether pursuant to the exercise of Vested Options or
otherwise). Except as may otherwise be specifically provided
in any Employment Agreement or other written agreement entered into
between the Company and any Management Stockholder, the Call
Repurchase Price with respect to Restricted Shares purchased by the
Company pursuant to this Section 2(a)(ii) shall be equal to the
lesser of (A) the Fair Market Value of the Restricted Shares
subject to the Call Right on the date of the Call Notice or (B) the
Effective Date Price.
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(b)
In addition, the Company shall have a Call Right effective
immediately prior to any Change in Control to occur following the
date hereof; provided, however, that the Call Repurchase Price in
such event shall be no less than the per share consideration for
the Common Stock paid in connection with such Change in
Control.
(c)
Subject to Section 5 below, the repurchase of Restricted Shares
pursuant to the exercise of a Call Right shall take place on a date
specified by the Company, but in no event following the later of
(i) the 60 th
day following the date of the
Call Notice or (ii) the 10 th day following the receipt by the Company
of all necessary governmental approvals. On such date, the
Management Stockholder and his or her Permitted Transferees shall
transfer the Restricted Shares subject to the Call Notice to the
Company, free and clear of all liens and encumbrances, by
delivering to the Company the certificates representing the
Restricted Shares to be purchased, duly endorsed for transfer to
the Company or accompanied by a stock power duly executed in blank,
and the Company shall pay to the Management Stockholder the Call
Repurchase Price. The Management Stockholder shall use all
commercially reasonable efforts to assist the Company in order to
expedite all proceedings described in this Section 2.
Section 3.
Management Stockholders’ Rights to Sell Shares
.
(a)
With respect to all Restricted Shares held by any Management
Stockholder and his or her Permitted Transferees, during the period
beginning on the date of the Management Stockholder’s
Termination of Employment by the Company without Cause or due to
death or Disability and ending on the nine month anniversary of the
later of (i) the date of such Termination of Employment; or (ii)
the date of the exercise of any Vested Options held by any
Management Stockholder as of the date of such Termination of
Employment, the Management Stockholder (or his representative or
estate, if applicable) shall have the right to require the Company
to repurchase, in a single transaction, no less than all of the
Restricted Shares held by the Management Stockholder and his or her
Permitted Transferees (“ Put Right ”); provided,
however, that, notwithstanding the foregoing, in no event shall the
Company purchase any Restricted Shares pursuant to the Put Right
prior to the day immediately following the six month anniversary of
the date the Management Stockholder first purchased such Restricted
Shares (whether pursuant to the exercise of Vested Options or
otherwise). The repurchase price payable by the Company upon
exercise of the Put Right (“ Put Repurchase Price
”) shall be the Fair Market Value of the Restricted Shares
subject to the Put Right on the date of the Put Notice. The
Put Right shall be exercised by written notice (“ Put
Notice ”) to the Company given in accordance with Section
10(f) of this Agreement on or prior to the last date on which the
Put Right may be exercised by the Management
Stockholder.
(b)
Subject to Section 5 below, the repurchase of Restricted Shares
pursuant to the exercise of a Put Right shall take place on a date
specified by the Company, but in no event following the later of
the 60 th day following the date of the Put Notice
or the 10 th
day following the receipt by
the Company of all necessary governmental approvals. On such
date, the Management Stockholder and his or her Permitted
Transferees shall transfer the Restricted Shares subject to the Put
Notice to the Company, free and clear of all liens and
encumbrances, by delivering to the Company the certificates
representing the Restricted Shares to be purchased, duly endorsed
for transfer to the Company or accompanied by a stock power duly
executed in blank, and the Company shall pay to the Management
Stockholder the Put Repurchase Price.
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The Management
Stockholder shall use all commercially reasonable efforts to assist
the Company in order to expedite all proceedings described in this
Section 3.
Section
4.
Involuntary Transfers .
(a)
In the case of any transfer of title or beneficial ownership of
Restricted Shares upon default, foreclosure, forfeit, divorce,
court order or otherwise, other than by a voluntary decision on the
part of a Management Stockholder (each, an “ Involuntary
Transfer ”), the Management Stockholder shall promptly
(but in no event later than two days after the Involuntary
Transfer) furnish written notice (the “ Involuntary
Transfer Notice ”) to the Company indicating that the
Involuntary Transfer has occurred, specifying the name of the
person to whom the shares were transferred (the “
Involuntary Transferee ”), giving a detailed
description of the circumstances giving rise to, and stating the
legal basis for, the Involuntary Transfer.
(b)
Upon the receipt of the Involuntary Transfer Notice, and for 60
days thereafter, the Company shall have the right to repurchase,
and the Involuntary Transferee shall have the obligation to sell,
all (but not less than all) of the Restricted Shares acquired by
the Involuntary Transferee for a repurchase price equal to the Fair
Market Value of such shares of Common Stock as of the date of the
Involuntary Transfer (the “ Involuntary Transfer
Repurchase Price ” and such right, the “
Involuntary Transfer Repurchase Right ”). The
Involuntary Transfer Repurchase Right shall be exercised by written
notice (the “ Involuntary Transfer Repurchase Notice
”) to the Involuntary Transferee given in accordance with
Section 10(f) of this Agreement on or prior to the last date on
which the Involuntary Transfer Repurchase Right may be exercised by
the Company.
(c)
Subject to Section 5 below, the repurchase of Restricted Shares
pursuant to the exercise of the Involuntary Transfer Repurchase
Right shall take place on a date specified by the Company, but in
no event following the later of the 60 th day following the date
of the date of the Involuntary Transfer Repurchase Notice or the
10 th day following the
receipt by the Company of all necessary governmental
approvals. On such date, the Involuntary Transferee shall
transfer the Restricted Shares subject to the Involuntary Transfer
Repurchase Notice to the Company, free and clear of all liens and
encumbrances, by delivering to the Company the certificates
representing the Restricted Shares to be purchased, duly endorsed
for transfer to the Company or accompanied by a stock power duly
executed in blank, and the Company shall pay to the Involuntary
Transferee the Involuntary Transfer Repurchase Price. The
Involuntary Transferee shall use all commercially reasonable
efforts to assist the Company in order to expedite all proceedings
described in this Section 4. If the Involuntary Transferee
does transfer the Restricted Shares to the Company as required, the
Company will cancel such Restricted Shares and deposit the funds in
a non-interest bearing account and make payment upon
delivery.
Section
5.
Repurchase Disability .
(a)
Notwithstanding anything to the contrary herein:
(i)
Except as otherwise provided by Section 5(c), the Company shall not
be permitted to purchase any Restricted Shares held by any
Management Stockholder or
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Involuntary
Transferee upon exercise of the Call Right, the Put Right or the
Involuntary Transfer Repurchase Right if the Board determines
that:
(ii)
The purchase of Restricted Shares would render the Company or its
subsidiaries unable to meet their obligations in the ordinary
course of business taking into account any pending or proposed
transactions, capital expenditures or other budgeted cash outlays
by the Company, including, without limitation, any proposed
acquisition of any other entity by the Company or any of its
subsidiaries;
(iii)
The Company is prohibited from purchasing the Restricted Shares by
applicable law restricting the purchase by a corporation of its own
shares; or
(iv)
The purchase of Restricted Shares would constitute a breach of,
default, or event of default under, or is otherwise prohibited by,
the terms of any loan agreement or other agreement or instrument to
which the Company or any of its subsidiaries is a party (the
“ Financing Documents ”) or the Company is not
able to obtain the requisite consent of any of its senior lenders
to the purchase of the Restricted Shares.
The events described in (i) through
(iii) above each constitute a “ Repurchase Disability
.”
(b)
Except as otherwise
provided by Section 5(c), in the event of a Repurchase Disability,
the Company shall notify in writing the Management Stockholder or
Involuntary Transferee who exercised the Put Right or with respect
to whom the Call Right or the Involuntary Transfer Repurchase Right
has been exercised (a “ Disability Notice
”). The Disability Notice shall specify the nature of
the Repurchase Disability. The Company shall thereafter
repurchase the Restricted Shares described in the Call Notice or
Involuntary Transfer Repurchase Notice as soon as reasonably
practicable after all Repurchase Disabilities cease to exist (or
the Company may elect, but shall have no obli
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