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RESTRICTED STOCK AGREEMENT

Shareholder Agreement

RESTRICTED STOCK AGREEMENT | Document Parties: WII COMPONENTS, INC. | OGP IV, LLC | Olympus Growth Fund IV, LP | WII Holding, Inc You are currently viewing:
This Shareholder Agreement involves

WII COMPONENTS, INC. | OGP IV, LLC | Olympus Growth Fund IV, LP | WII Holding, Inc

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Title: RESTRICTED STOCK AGREEMENT
Governing Law: Delaware     Date: 11/13/2007
Law Firm: Kirkland Ellis    

RESTRICTED STOCK AGREEMENT, Parties: wii components  inc. , ogp iv  llc , olympus growth fund iv  lp , wii holding  inc
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Exhibit 10.1

RESTRICTED STOCK AGREEMENT

THIS RESTRICTED STOCK AGREEMENT (this “ Agreement ”) is made as of August 31, 2007, between WII Holding, Inc., a Delaware corporation (the “ Company ”), and John Fitzpatrick (“ Executive ”).

The Company and Executive desire to enter into an agreement pursuant to which Executive shall purchase, and the Company shall sell, 8,408.95 shares of the Company’s Common Stock, par value $0.01 per share (the “ Common Stock ”).  All of such shares of Common Stock acquired by Executive pursuant to this Agreement are referred to herein as “ Executive Stock .” Certain definitions are set forth in Section 8 of this Agreement.

Olympus Growth Fund IV, L.P. and its affiliates (the “ Investor ”) acquired capital stock of the Company pursuant to a Stock Purchase Agreement, dated as of January 9, 2007, among the Company, the Investor and the other stockholders of the Company party thereto.  Certain provisions of this Agreement are intended for the benefit of, and shall be enforceable by, the Investor.

In consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.             Purchase and Sale of Executive Stock .

(a)           Upon execution of this Agreement, Executive shall purchase, and the Company shall sell, 8,408.95 shares of Common Stock at a price of $0.01 per share. The Company shall deliver to Executive a copy of the certificate representing such shares of Common Stock (subject to Section 1(b) below), and Executive shall deliver to the Company a check in the aggregate amount of $84.09.

(b)           Until the occurrence of a Sale of the Company or a Public Offering, all certificates evidencing shares of Executive Stock shall be held by the Company for the benefit of Executive and the other holder(s) of Executive Stock.  Upon the occurrence of a Sale of the Company or a Public Offering, the Company shall deliver the certificates for the Executive Stock to the record holders thereof.

(c)           Within thirty (30) days after Executive purchases any Executive Stock from the Company, Executive may make an election with the Internal Revenue Service under Section 83(b) of the Internal Revenue Code and the regulations promulgated thereunder with respect to any such purchase in the form of Annex A attached hereto.

(d)           In connection with the purchase and sale of the Executive Stock hereunder, Executive represents and warrants to the Company that:

(i)            The Executive Stock to be acquired by Executive pursuant to this Agreement shall be acquired for Executive’s own account and not with a view to, or intention of, distribution thereof in violation of the 1933 Act, or any applicable state securities laws, and the Executive Stock shall not be disposed of in contravention of the 1933 Act or any applicable state securities laws.

(ii)           Executive is an executive officer or management employee of the Company or its Subsidiaries, is an “accredited investor” as defined in Rule 501(a) under Regulation D promulgated under the Securities Act, and, by reason of his business and financial experience, and the business and financial experience of those retained by or on behalf of Executive to advise him with respect to his subscription for the Executive Stock being purchased hereunder, Executive, together with such advisors, has such knowledge, sophistication and experience in

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business and financial matters so as to be capable of evaluating the risks and benefits of the investment in the Executive Stock.

(iii)          Executive is able to bear the economic risk of Executive’s investment in the Executive Stock for an indefinite period of time because the Executive Stock has not been registered under the 1933 Act and, therefore, cannot be sold unless subsequently registered under the 1933 Act or an exemption from such registration is available.

(iv)          Executive and his advisors have had an opportunity to ask questions and receive answers concerning the terms and conditions of the offering of Executive Stock and has had full access to such other information concerning the Company as Executive has requested.

(v)           This Agreement constitutes the legal, valid and binding obligation of Executive, enforceable in accordance with its terms, and the execution, delivery and performance of this Agreement by Executive do not and shall not conflict with, violate or cause a breach of any agreement, contract or instrument to which Executive is a party or any judgment, order or decree to which Executive is subject.

(e)           As an inducement to the Company to issue the Executive Stock to Executive, as a condition thereto, Executive acknowledges and agrees that:

(i)            neither the issuance of the Executive Stock to Executive nor any provision contained herein shall entitle Executive to remain in the employment of the Company and/or its Subsidiaries or affect the right of the Company to terminate Executive’s employment at any time;

(ii)           the Company shall have no duty or obligation to disclose to Executive, and Executive shall have no right to be advised of, any material information regarding the Company and its Subsidiaries at any time prior to, upon or in connection with the repurchase of Executive Stock upon the termination of Executive’s employment with the Company and its Subsidiaries or as otherwise provided hereunder; and

(iii)          he shall be bound by the obligations set forth in Section 6 hereof.

2.             Vesting of Executive Stock .

(a)           Except as otherwise provided in Sections 2(b) , 2(c) and 2(d) below, the Executive Stock shall become vested in accordance with the following schedule (provided that if only clause (ii) is satisfied in a given year, then half of the amount that would vest if both (i) and (ii) were satisfied shall vest as of such fiscal year end) , if (i) the Company’s EBITDA meets the applicable EBITDA Target Amount as of such fiscal year end, and (ii) if as of each such date Executive is, and has been since the date hereof, employed by the Company or any of its Subsidiaries:

Date

 

Annual Percentage of
Executive Stock Vested

 

Company’s fiscal year ending on or around December 31, 2007

 

25

%

Company’s fiscal year ending on or around December 31, 2008

 

25

%

Company’s fiscal year ending on or around December 31, 2009

 

25

%

Company’s fiscal year ending on or around December 31, 2010

 

25

%

 

(b)           To the extent the EBITDA Target Amount is not achieved in a certain fiscal year (a “ Missed Fiscal Year ”), if the Company’s EBITDA in a subsequent fiscal year (through and including the last fiscal year) is at least equal to the EBITDA Target Amount for such fiscal year (an “ Achieved Fiscal

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Year ”), then for each Missed Fiscal Year, if the Company’s aggregate EBITDA for such Missed Fiscal Year and all subsequent fiscal years (up to and including the Achieved Fiscal Year) is at least equal to the sum of the EBITDA Target Amounts for such fiscal years, then the percentage of Executive Stock that will be vested for achieving the Achieved Fiscal Year shall include the percentage of the Executive Stock for such Missed Fiscal Year.  If the percentage of Executive Stock for any Missed Fiscal Year is vested in accordance with this Section 2(b) , such fiscal year shall no longer be deemed to be a Missed Fiscal Year.  Notwithstanding anything set forth herein to the contrary, (i) all Executive Stock shall become fully vested on the date that is seven (7) years from the date hereof, provided that Executive is, and has been since the date hereof, employed by the Company or any of its Subsidiaries on such date, and (ii) in no event shall the aggregate amount of Executive Stock to be vested exceed the amount of Executive Stock purchased hereunder.

(c)           Shares of Executive Stock which have become vested are referred to herein as “ Vested Shares ” and all other shares of Executive Stock are referred to herein as “ Unvested Shares .”  Upon the occurrence of a Sale of the Company, all Unvested Shares shall become Vested Shares at the time of such event if the Investor receives an aggregate amount in such Sale of the Company in respect of the capital stock of the Company held by the Investor at least equal to the product of (i) the Investor’s aggregate original cost for all of the capital stock of the Company held by the Investor at the time of such Sale of the Company, and (ii) the Target Return Rate set forth in Appendix A for the year in which such Sale of the Company is consummated.  Any Unvested Shares held by Executive at the time of a Sale of the Company (excluding the Unvested Shares that shall become Vested Shares in connection with such Sale of the Company in accordance with this Section 2(c) ) shall be subject to repurchase by the Company in accordance with the terms of Section 3 below.  All Unvested Shares held by Executive at the time of a Public Offering shall remain outstanding and be subject to the original vesting schedule set forth in Section 2(a) above.

(d)           Notwithstanding anything herein to the contrary, the Board may, in its sole discretion, accelerate the vesting of shares of Executive Stock at any time.

3.             Repurchase Option .

(a)           In the event Executive ceases to be employed by the Company and its Subsidiaries for any reason (the “ Termination ”), the Executive Stock (whether held by Executive or one or more of Executive’s transferees) shall be subject to repurchase by the Company and the Investor pursuant to the terms and conditions set forth in this Section 3 (the “ Repurchase Option ”).

(b)           The purchase price for each Unvested Share shall be the lesser of (i) Executive’s Original Cost for such share and (ii) the Fair Market Value for such share (in each case, with shares having the lowest cost subject to repurchase prior to shares with a higher cost).  The purchase price for each Vested Share shall be the Fair Market Value for such share; provided that, if Executive is terminated for Cause, then the purchase price for each Vested Share shall be the lesser of (A) Executive’s Original Cost for such share and (B) the Fair Market Value for such share (in each case, with shares having the lowest cost subject to repurchase prior to shares with a higher cost).

(c)           The Board may elect to purchase all or any portion of the Unvested Shares and/or the Vested Shares by delivering written notice (the “ Repurchase Notice ”) to the holder or holders of the Executive Stock within 120 days after the Termination. The Repurchase Notice shall set forth the number of Unvested Shares and Vested Shares to be acquired from each holder of Executive Stock, the aggregate consideration to be paid for such shares and the time and place for the closing of the transaction. The number of shares to be repurchased by the Company shall first be satisfied to the extent possible from the shares of Executive Stock held by Executive at the time of delivery of the Repurchase Notice. If the number of shares of

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Executive Stock then held by Executive is less than the total number of shares of Executive Stock the Company has elected to purchase, the Company shall purchase the remaining shares elected to be purchased from the other holder(s) of Executive Stock under this Agreement pro rata according to the number of shares of Executive Stock held by such other holder(s) at the time of delivery of such Repurchase Notice (determined as close as practicable to the nearest whole shares). The number of Unvested Shares and Vested Shares to be repurchased hereunder shall be allocated among Executive and the other holders of Executive Stock (if any) pro rata according to the number of shares of Executive Stock to be purchased from such persons.

(d)           If for any reason the Company does not elect to purchase all of the Executive Stock pursuant to the Repurchase Option, the Investor shall be entitled to exercise the Repurchase Option for the shares of Executive Stock the Company has not elected to purchase (the “ Available Shares ”). As soon as practicable after the Company has determined that there will be Available Shares, but in any event within 120 days after the Termination, the Company shall give written notice (the “ Option Notice ”) to the Investor setting forth the number of Available Shares and the purchase price for the Available Shares. The Investor may elect to purchase any or all of the Available Shares by giving written notice to the Company within 30 days after the Option Notice has been given by the Company.  As soon as practicable, and in any event within ten days after the expiration of the 30-day period set forth above, the Company shall notify each holder of Executive Stock as to the number of shares being purchased from such holder by the Investor (the “ Supplemental Repurchase Notice ”). At the time the Company delivers the Supplemental Repurchase Notice to the holder(s) of Executive Stock, the Company shall also deliver written notice to the Investor setting forth the number of shares the Investor is entitled to purchase, the aggregate purchase price and the time and place of the closing of the transaction. The number of Unvested Shares and Vested Shares to be repurchased hereunder shall be allocated among the Company and the Investor pro rata according to the number of shares of Executive Stock to be purchased by each of them.

(e)           The closing of the purchase of the Executive Stock pursuant to the Repurchase Option shall take place on the date designated by the Company in the Repurchase Notice or Supplemental Repurchase Notice, which date shall not be more than 60 days nor less than 15 days after the delivery of the later of either such notice to be delivered. The Company and/or the Investor shall pay for the Executive Stock to be purchased pursuant to the Repurchase Option by delivery of a check or wire transfer of funds.  In addition, the Company may pay the purchase price for such shares by offsetting bona fide debts owed by Executive to the Company or any of its subsidiaries.  The purchasers of Executive Stock hereunder shall be entitled to receive customary representations and warranties from the sellers regarding such sale of shares (including, without limitation, representations and warranties regarding good title to such shares, free and clear of any liens or encumbrances) and to require all sellers’ signatures be guaranteed by a national bank or reputable securities broker.

(f)            The right of the Company and the Investor to repurchase Vested Shares pursuant to this Section 3 shall terminate upon the first to occur of the Sale of the Company or a Public Offering.

(g)           Notwithstanding anything to the contrary contained in this Agreement, all repurchases of Employee Stock by the Company shall be subject to applicable restrictions contained in the Delaware General Corporation Law and in the Company’s and its Subsidiaries’ debt financing agreements with unaffiliated third parties. If any such restrictions prohibit the repurchase of Employee Stock hereunder which the Company is otherwise required to make, the time periods provided in this Section 3 shall be suspended, and the Company may make such repurchases as soon as it is permitted to do so under such restrictions.

4.             Restrictions on Transfer .

(a)           Transfer of Stockholder Shares . The Executive shall not sell, transfer, assign, pledge or otherwise dispose of (whether with or without consideration and whether voluntarily or involuntarily or

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by operation of law) any interest in Executive’s Unvested Shares or Vested Shares, except in accordance with the provisions of Section 3 hereof or in accordance with Section 8 of the Stockholders Agreement.

(b)           The certificates representing the Executive Stock shall bear the following legend:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED ON AUGUST 31, 2007, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ ACT ”), AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN EXEMPTION FROM REGISTRATION THEREUNDER. THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER, CERTAIN REPURCHASE OPTIONS AND CERTAIN OTHER AGREEMENTS SET FORTH IN A RESTRICTED STOCK AGREEMENT BETWEEN THE COMPANY AND A CERTAIN INVESTOR DATED AS OF AUGUST 31, 2007, AS AMENDED AND MODIFIED FROM TIME TO TIME. A COPY OF SUCH AGREEMENT MAY BE OBTAINED BY THE HOLDER HEREOF AT THE COMPANY’S PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE.”

(c)           No holder of Executive Stock may sell, transfer or dispose of any Executive Stock (except pursuant to an effective registration statement under the 1933 Act) without first delivering to the Company an opinion of counsel (reasonably acceptable in form and substance to the Company) that neither registration nor qualification under the 1933 Act and applicable state securities laws is required in connection with such transfer.

5.             Transfer . Prior to transferring any Executive Stock (other than a Public Sale or an Approved Sale (as defined in the Stockholders Agreement)) to any Person, the Executive shall cause the prospective transferee to be bound by this Agreement and to execute and deliver to the Company and the Investor a counterpart of this Agreement.

6.     Non-Compete. Non-Solicitation .

(a)           Executive hereby acknowledges that, during the course of his employment with the Company and its Subsidiaries he has and shall become familiar with the Company’s and its Subsidiaries’ trade secrets and other Confidential Information. Executive acknowledges and agrees that the Company and its Subsidiaries would be irreparably damaged if he were to provide services to or otherwise participate in the business of any person or entity competing with the Company or its Subsidiaries or providing services similar to those of the Company and its Subsidiaries and that











 
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