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EXHIBIT 10.14
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STOCKHOLDERS' AGREEMENT
DATED AS OF APRIL 7, 2004
AMONG
AC SAFETY HOLDING CORP.
AND
THE HOLDERS THAT ARE PARTIES HERETO
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TABLE OF CONTENTS
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PAGE
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SECTION 1.
DEFINITIONS.................................................
1
SECTION 2. CERTAIN DISPOSITIONS AND
ISSUANCES BY THE COMPANY........... 10
SECTION 3. TRANSFERS; ADDITIONAL
PARTIES............................... 15
3.1 Restrictions; Permitted
Dispositions............................ 15
3.2 Additional
Parties.............................................. 16
3.3 Securities Restrictions;
Legends................................ 17
SECTION 4. REGISTRATION
RIGHTS......................................... 18
SECTION 5. REPURCHASE
RIGHTS........................................... 30
SECTION 6. BOARD OF
DIRECTORS.......................................... 32
SECTION 7. FINANCIAL STATEMENTS;
ACCESS; CONFIDENTIALITY............... 34
SECTION 8. TRANSACTIONS WITH
AFFILIATES................................ 35
SECTION 9. PREFERRED STOCK CERTIFICATE
OF DESIGNATIONS................. 36
SECTION 10. VOTING
AGREEMENT............................................ 36
SECTION 11.
NOTICES.....................................................
37
SECTION 12. REPRESENTATIONS AND WARRANTIES OF
THE COMPANY............... 37
SECTION 13. REPRESENTATIONS AND WARRANTIES OF
THE HOLDERS............... 38
SECTION 14. MISCELLANEOUS
PROVISIONS.................................... 40
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EXECUTION COPY
STOCKHOLDERS' AGREEMENT dated as of April
7, 2004 (this "Agreement") among AC
SAFETY HOLDING CORP., a Delaware
corporation (the "Company"), and the HOLDERS
that are parties hereto.
WHEREAS, each Holder deems it to be in the best interest of the
Company and the Holders that provision be
made for the continuity and stability
of the business and policies of the Company
and, to that end, the Company and
the Holders hereby set forth herein their
agreement with respect to the Common
Stock, Preferred Stock, Restricted Stock
and Options owned by them.
NOW, THEREFORE, in consideration of the premises and of the
mutual
consents and obligations hereinafter set
forth, the parties hereto hereby agree
as follows:
Section 1.
Definitions.
As used in this Agreement:
"Aearo" means Aearo Corporation, a Delaware corporation.
"Aearo Company" means Aearo Company I, a Delaware corporation
and
wholly owned subsidiary of Aearo.
"Affiliate of the Company or the Bear Group" means any Person
that,
directly or indirectly, through one or more
intermediaries, controls, or is
controlled by, or is under common control
with, the Company or the Bear Group,
as applicable. As used in this definition,
the term "control," including the
correlative terms "controlling,"
"controlled by" and "under common control with"
means possession, directly or indirectly,
of the power to direct or cause the
direction of management or policies
(whether through ownership of securities or
any partnership or other ownership
interest, by contract or otherwise) of a
Person.
"Affiliate of a Holder" means for any Holder who is not a member
of
the Bear Group: (i) an individual Holder's
siblings and children (including
those by adoption), the lineal descendants
of such siblings and children, and in
any such case, any trust whose primary
beneficiary is such individual Holder or
such Holder's siblings, children and/or
lineal descendants; (ii) the legal
representative or guardian of such
individual Holder or of any such immediate
family members in the event such individual
Holder or any such immediate family
members becomes mentally incompetent; and
(iii) for any Holder that is not a
natural person, any Person that, directly
or indirectly, through one or more
intermediaries, controls, or is controlled
by, or is under common control with,
such Holder. As used in this definition,
the term "control," including the
correlative terms "controlling,"
"controlled by" and "under common control with"
means possession, directly or indirectly,
of the power to direct or cause the
direction of management or policies
(whether through ownership of securities or
any partnership or other ownership
interest, by contract or otherwise) of a
Person.
<PAGE>
"Bear Group" means, collectively, Bear Stearns Merchant Banking
Partners II, L.P., Bear Stearns Merchant
Banking Investors II, L.P., Bear
Stearns MB-PSERS II, L.P., The BSC Employee
Fund V, L.P. and The BSC Employee
Fund VI, L.P. and each of their respective
Affiliates, including, without
limitation, any investment funds managed or
controlled by Bear Stearns Merchant
Capital II, L.P.
"Bear Group Directors" shall have the meaning ascribed to such term
in
Section 6(a).
"Board" means the board of directors of the Company and any
duly
authorized committee thereof. All
determinations by the Board required pursuant
to the terms of this Agreement to be made
by the Board shall be made in good
faith and should be binding and
conclusive.
"Bylaws" means the bylaws of the Company, as may be amended,
supplemented or restated from time to time
in accordance with the terms thereof
and hereof.
"Capital Stock" means any and all shares, interests, participation
or
other equivalents (however designated) of
corporate stock of a Person and, in
the case of the Company, shall include all
Common Stock and Preferred Stock.
"Cause" means, with respect to the termination of employment of
any
Management Holder by the Company or any
Subsidiary thereof (each, an
"Employer"): (i) if such Management Holder
is at the time of termination a party
to an employment or retention agreement
with an Employer thereof which defines
such term, the meaning given therein, and
(ii) in all other cases, that in the
Board's determination such termination is
based on such Management Holder's: (A)
continuing failure, for more than 10 days
after the Employer's notice to such
Management Holder thereof, by such
Management Holder to perform such duties as
are reasonably requested by the Employer as
documented in writing to such
Management Holder; (B) failure to observe
material policies generally applicable
to directors, employees and/or consultants
of an Employer unless such failure is
capable of being cured and is cured within
10 days of such Management Holder
receiving notice of such failure; (C)
commission of any act of fraud, theft or
financial dishonesty with respect to an
Employer or any criminal act involving
moral turpitude or any felony; (D)
violation of the provisions of any
employment, consulting, non-competition or
confidentiality agreement with an
Employer or any of its Affiliates unless
such violation is capable of being
cured and is cured within 10 days of such
Management Holder receiving notice of
such violation; (E) chronic absenteeism; or
(F) abuse of alcohol or another
controlled substance.
"CEO Director" shall have the meaning ascribed to such term in
Section
6(a)(i).
"Class A Common Stock" means the Company's Class A Common Stock,
par
value $.01 per share.
"Class A Common Stock Director" shall have the meaning ascribed
to
such term in Section 6(d).
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"Co-Investment Rights Agreement" means the Co-Investment Rights
Agreement dated as of the date hereof
between Vestar Capital Partners IV, L.P.
and Bear Stearns Merchant Manager II,
LLC.
"Come Along Option" shall have the meaning ascribed to such term
in
Section 2(b).
"Commission" means the Securities and Exchange Commission or any
other
federal agency at the time administering
the Securities Act.
"Common Stock" means the common stock of the Company, par value
$.01
per share. For the avoidance of doubt, for
purposes of this Agreement, "Common
Stock" shall not include Class A Common
Stock.
"Confidential Information" shall have the meaning ascribed to
such
term in Section 7(c).
"Deemed Held Shares" shall have the meaning ascribed to such term
in
Section 2(a)(ii).
"Demand Notice" shall have the meaning ascribed to such term in
Section 4(a)(i).
"Demand Registration" means the Bear Group's rights to demand
registration of all or part of their shares
of Common Stock or Preferred Stock
pursuant to Section 4(a).
"DGCL" means the Delaware General Corporation Law.
"Disposition" means any direct or indirect assignment, sale,
transfer,
gift, pledge, hypothecation or other
encumbrance, or any other disposition, of
Common Stock or Preferred Stock (or any
interest therein or right thereto) or of
all or part of the voting power (other than
the granting of a revocable proxy)
associated with the Common Stock or
Preferred Stock (or any interest therein)
whatsoever, or any other transfer of
beneficial ownership of Common Stock or
Preferred Stock whether voluntary or
involuntary, including, without limitation
(i) as a part of any liquidation of a
Holder's assets or (ii) as a part of any
reorganization of a Holder pursuant to the
United States or other bankruptcy law
or other similar debtor relief laws.
"Employer" shall have the meaning ascribed to such term in the
definition of "Cause".
"Exchange Act" means the Securities Exchange Act of 1934, as
amended,
and the rules and regulations
thereunder.
"Excluded Securities" means: (A) securities issued in a
Qualified
Public Offering; (B) securities issuable
upon the exercise, exchange or
conversion of Common Stock, Preferred Stock
or convertible securities and shares
of Common Stock issuable upon the
conversion of the Preferred Stock; (C)
securities issued in connection with any
Board-approved merger, acquisition or
other business combination; (D) securities
issued by the Company to give effect
to any stock dividend or distribution,
stock split, reverse stock split,
subdivision or combination or other similar
pro rata recapitalization event
affecting any class or series of the
3
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Company's Capital Stock; and (E) securities
issued in connection with the
transactions contemplated by the
Co-Investment Rights Agreement.
"Executive Management Holder" means (i) each Management Holder
who
entered into an employment agreement with
the Company or a Subsidiary thereof on
or prior to the date hereof or (ii) any
other Management Holder who enters into
an employment agreement with the Company or
a Subsidiary thereof following the
date hereof and who is designated by the
Board (or the compensation committee
thereof) as an "Executive Management
Holder."
"Exercising Offerees" shall have the meaning ascribed to such term
in
Section 2(a)(i).
"Fair Market Value" means:
(a) the per share fair market value of a share of Common Stock or
a
share of
Preferred Stock, as the case may be, as such fair market value
was
last determined
in good faith by the Board (or the compensation committee
thereof) in
consultation with the Chief Executive Officer of the Company
prior to the
date of determination or, if the Board (or the compensation
committee
thereof) determines in good faith that such fair market value
has
materially
changed from the amounts as last determined by the Board (or
the
compensation
committee thereof) prior to the date of determination, the
fair market
value as determined in good faith by the Board (or the
compensation
committee) in consultation with the Chief Executive Officer of
the Company as
of the most recent practicable date prior to the date of
determination;
and
(b) notwithstanding the preceding paragraph (a), in the case of
an
Executive
Management Holder whose employment with the applicable Employer
is terminated
other than for Cause or who has resigned for Good Reason:
(i) the per share fair market value of a share of Common Stock
or
a share of Preferred Stock, as the case may be, as such fair
market
value is agreed to in writing by the selling Executive
Management
Holder and the Board (or the compensation committee thereof);
(ii) if the selling Executive Management Holder and the Board
(or
the compensation committee thereof) cannot so agree, the per
share
fair market value as agreed to in writing by the Board and the
holders
of a majority of all outstanding shares of Common Stock held by
the
Executive Management Holders (excluding the Capital Stock held by
the
selling Management Holder); or
(iii) if the Board and the holders of a majority of all
outstanding shares of Common Stock held by the Executive
Management
Holders cannot so agree, the per share fair market value as
determined
by an independent appraisal firm selected and agreed to in writing
by
the Board and the holders of a majority of the outstanding shares
of
Common Stock held by the Executive Management Holders
(excluding
shares of Common Stock held by the selling Executive Management
Holder); provided that if the Board and such holders cannot so
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agree, such independent appraisal firm shall be selected by the
American Arbitration Association;
provided,
however, that in each case of clauses (i), (ii) and (iii), the
per share fair
market value shall be based on the going concern value for a
private company
(unless the Company's shares of Common Stock are publicly
traded or quoted
at the time of determination (in which case, such fair
market value
shall be determined pursuant to (d) below)) and shall in no
way be affected,
or discounted, by the selling Executive Management
Holder's
ownership of less than a majority of shares of Common Stock. In
the event that
per share fair market value is determined pursuant to clause
(iii) above, all
reasonable fees and expenses of the independent appraisal
firm shall be
borne by the selling Executive Management Holder unless the
price determined
by the independent appraisal firm exceeds 10% of the
amount
originally determined by the Board (or the compensation
committee
thereof), in
good faith, in which case the reasonable fees and expenses
shall be paid by
the Company.
(c) Notwithstanding anything to the contrary contained in (a) or
(b)
above, (i) in
the case of an Executive Management Holder who is terminated
other than for
Cause or who resigns for Good Reason, the per share fair
market value of
a share of Preferred Stock shall be deemed to be no less
than the
Original Cost thereof plus the value of accrued but unpaid
dividends
thereon and (ii) for purposes of determining the per share fair
market value of
a share of Common Stock, the fair market value of a share
of Preferred
Stock shall be deemed to be (x) if such fair market value is
being determined
pursuant to the exercise of rights under the third
sentence of
Section 5(a), the greater of fair market value and Original
Cost and (y) in
all other cases, the Original Cost thereof plus the value
of accrued but
unpaid dividends thereon.
(d) Notwithstanding anything to the contrary contained in (a), (b)
or
(c) above, if
any securities of the Company are publicly traded or quoted
at the time of
determination, then the per share fair market value of such
securities shall
be the average closing trading price of such securities
during the
thirty day period preceding the date of determination as quoted
on the largest
exchange on which such securities are traded or quoted.
(e) At any time in which the Board is permitted to determine the
fair
market value of
any security in accordance with this Agreement, neither the
Company nor any
officer, director, employee or agent of the Company shall
have any
liability with respect to the valuation of such securities that
are bought or
sold at such fair market value even though the fair market
value, as so
determined, may be more or less than actual fair market value.
Each of the
Company and its officers, directors, employees and agents shall
be fully
protected in relying in good faith upon the records of the
Company
and upon
information, opinions, reports or statements presented to the
Company by any
Person as to matters which the Company or such director,
officer,
employee or agent reasonably believes are within such other
Person's
professional or expert competence and who has been selected
with
reasonable care
by or on behalf of the Company in determining such fair
market value.
The per share fair market value of Common Stock or Preferred
Stock, as the
case may be, as of the date hereof and until the first
determination
5
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of fair market
value thereof by the Board shall be deemed to be Original
Cost, subject to
appropriate adjustment by the Board for stock splits,
stock dividends,
combinations and similar transactions.
"Good Reason" means, with respect to the termination of employment
by
any Management Holder: (i) if such
Management Holder is at the time of
termination a party to an employment or
retention agreement with an Employer
thereof which defines such term, the
meaning given therein, and (ii) in all
other cases, the taking of any action by
the applicable Employer which (A)
materially decreases such Management
Holder's total annual salary and target
bonus or (B) materially adversely affects
such Management Holder's participation
in, or reduces such Management Holder's
benefits originally provided to such
Management Holder under the applicable
Employer's benefit plans, except, in each
of (A) and (B), to the extent that such
action applies to (x) the employees of
such Employer that hold titles or
responsibilities similar to such Management
Holder or (y) such Employer's employees
generally.
"Group" shall have the meaning ascribed thereto in Section 13(d)(3)
of
the Exchange Act.
"Holders" means the holders of securities of the Company who
are
parties hereto.
"Initial Notice" shall have the meaning ascribed thereto in
Section
4b(i).
"IRA" shall have the meaning ascribed to such term in Section
3.2(c).
"Management Holder" means Holders who are currently employed or
serve
as consultants or directors to the Company
or any of its Subsidiaries (and
includes the Executive Management
Holders).
"Merger Agreement" means the Agreement and Plan of Merger, dated as
of
March 10, 2004, by and among the Company,
AC Safety Acquisition Corp. and Aearo
as it may be amended, supplemented or
restated from time to time.
"NASD" means the National Association of Securities Dealers,
Inc.
"Non-Bear Group Holders" means, collectively, the Holders other
than
the Bear Group including their permitted
transferees.
"Notice of Acceptance" shall have the meaning ascribed thereto
in
Section 2(e)(iv).
"Offer to Resell" shall have the meaning ascribed thereto in
Section
2(e)(ii).
"Offered Securities" shall have the meaning ascribed thereto in
Section 2(e)(i).
"Offerees" shall have the meaning ascribed thereto in Section
2(a)(i).
"Offeror" shall have the meaning ascribed thereto in Section
2(a)(i).
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"Option" means the options to purchase Common Stock issued to
Holders
pursuant to the 2004 Stock Incentive Plan
or any other similar plan approved by
the Company.
"Original Cost" means:
(a) With respect to a share of Common Stock, the price per share
paid
by the holder of
such share, subject to appropriate adjustment by the Board
for stock
splits, stock dividends, combinations and similar transactions;
and
(b) With respect to a share of Preferred Stock, $1,000 per
share,
subject to
appropriate adjustment by the Board for stock splits, stock
dividends,
combinations and similar transactions.
"Permitted Disposition" shall have the meaning given to such term
in
Section 3.1.
"Person" shall be construed broadly and shall include, without
limitation, an individual, a partnership, a
limited liability company, a
corporation, an association, a joint stock
company, a trust, a joint venture, an
unincorporated organization and a
governmental entity or any department, agency
or political subdivision thereof.
"Piggyback Notice" shall have the meaning ascribed to such term
in
Section 4(b).
"Piggyback Registration Rights" means the registration rights
pursuant
to a Piggy Back Notice in Section 4(b).
"Preemptive Offer" shall have the meaning ascribed to such term
in
Section 2(e)(i).
"Preemptive Offeree" shall have the meaning ascribed to such term
in
Section 2(e)(i).
"Preferred Stock" means shares of the Company's Series A
Preferred
Stock, par value, $.01 per share.
"Proportionate Percentage" means, with respect to any Holder, (i)
in
respect of shares of Common Stock, a
fraction (expressed as a percentage) the
numerator of which is the total number of
shares of Common Stock held by such
Holder (including any Deemed Held Shares
held by such Holder) and the
denominator of which is the total number of
shares of Common Stock outstanding
at the time of determination (including any
Deemed Held Shares held by all
Holders), and (ii) in respect of the
Preferred Stock, a fraction (expressed as a
percentage) the numerator of which is the
total number of shares of Preferred
Stock held by such Holder and the
denominator of which is the total number of
shares of Preferred Stock outstanding at
the time of determination.
"Prospectus" shall mean the prospectus included in any
Registration
Statement, as amended or supplemented by
any prospectus supplement with respect
to the terms of the offering of any portion
of the securities covered by such
Registration Statement and, in each case,
by all other amendments and
supplements to such prospectus, including
post-effective amendments and, in each
case, all material incorporated by
reference in such prospectus.
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"Proxy" shall have the meaning ascribed to such term in Section
10(b).
"Public Sale" means any sale, occurring simultaneously with or
after
an initial public offering, of Common Stock
or Preferred Stock to the public
pursuant to an offering registered under
the Securities Act or to the public in
the manner described by the provisions of
Rule 144(f).
"Qualified Public Offering" means an underwritten public offering
of
Common Stock by the Company pursuant to an
effective registration statement
filed by the Company with the Securities
and Exchange Commission (other than on
Forms S-4 or S-8 or successors to such
forms) under the Securities Act, pursuant
to which (a) the per share price of the
Common Stock sold in such offering is
equal to at least 150% of the Original Cost
paid by the Bear Group for its
shares of Common Stock on the date of
consummation of the transactions
contemplated by the Merger Agreement and
(b) the aggregate offering price of the
Common Stock sold in such offering is at
least $50,000,000.
"Realization Event" means (i) the consummation of a Sale of the
Company or (ii) the consummation of any
transaction or series of related
transactions in which the Bear Group sells
at least 50% of the shares of Common
Stock purchased by them on the date hereof
and 50% of the shares of Preferred
Stock purchased by them on the date hereof
(excluding any shares sold or
transferred in connection with the
transactions contemplated by the
Co-Investment Rights Agreement).
"Registrable Securities" means shares of Common Stock and
Preferred
Stock; provided that any Registrable
Securities shall cease to be Registrable
Securities when (i) a registration
statement with respect to the sale of such
Registrable Securities has been declared
effective under the Securities Act and
such Registrable Securities have been
disposed of in accordance with the plan of
distribution set forth in such registration
statement, (ii) such Registrable
Securities are distributed pursuant to Rule
144 (or any similar provision then
in force) under the Securities Act or (iii)
such Registrable Securities shall
have been otherwise transferred and new
certificates for them not bearing a
legend restricting further Disposition
under the Securities Act shall have been
delivered by the Company in accordance with
applicable law; and provided further
that any securities that have ceased to be
Registrable Securities shall not
thereafter become Registrable Securities.
Notwithstanding any other provision of
this Agreement, with respect to any
Registration Statement that only registers
shares of Common Stock, "Registrable
Securities" shall only include shares of
Common Stock and with respect to any
Registration Statement that only registers
shares of Preferred Stock, "Registrable
Securities" shall only include shares of
Preferred Stock.
"Registration Expenses" shall have the meaning ascribed to such
term
in Section 4(e).
"Registration Statement" means any Registration Statement of
the
Company which covers Registrable
Securities, including the Prospectus,
amendments and supplements to such
Registration Statement, including
post-effective amendments, all exhibits
thereto and all material incorporated by
reference in such Registration
Statement.
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"Repurchase Event" means, with respect to a Management Holder,
such
Management Holder shall cease to be
employed by, to be a director of or to be a
consultant to the Company or any of its
Subsidiaries for any reason.
"Resale Notice" shall have the meaning ascribed to such term in
Section 2(e)(ii).
"Resale Notice Period" shall have the meaning ascribed to such term
in
Section 2(e)(ii).
"Resale Period" shall have the meaning ascribed to such term in
Section 2(e)(ii).
"Restated Certificate" means the Company's Restated Certificate
of
Incorporation, as it may be amended,
supplemented or restated from time to time,
including, without limitation, pursuant to
the Certificate of Designations,
Preferences and Rights for the Preferred
Stock.
"Restricted Group" shall have the meaning ascribed to such term
in
Section 7(c).
"Restricted Stock" means the restricted Common Stock issued to
Holders
pursuant to the 2004 Stock Incentive Plan
or other similar plan approved by the
Company.
"Sale of the Company" means, with respect to the Company, (i)
any
merger, consolidation or other business
combination of the Company, Aearo or
Aearo Company with or into any other
entity, recapitalization, spin-off,
distribution or any other similar
transaction, whether in a single transaction
or series of related transactions, where
the Bear Group and its permitted
transferees, collectively, cease to
beneficially own at least 50% of the voting
power of the Voting Securities of the
entity surviving or resulting from such
transaction (or the ultimate sole parent
thereof) (such ownership being based
solely on the Voting Securities
beneficially owned by such Persons immediately
prior to such event), (ii) any transaction
or series of related transactions as
a result of which the Bear Group and its
respective permitted transferees,
collectively, cease to beneficially own at
least 50% of the voting power of the
Voting Securities of the Company (or the
ultimate sole parent thereof) or (iii)
any sale of all or substantially all of the
assets, property or business of the
Company and its Subsidiaries.
"Sale Notice" shall have the meaning ascribed to such term in
Section
2(a).
"Securities Act" means the Securities Act of 1933, as amended, and
the
rules and regulations thereunder.
"Selling Holders' Counsel" shall have the meaning ascribed to
such
term in Section 4(d)(ii).
"Subject Employee" shall have the meaning ascribed to such term
in
Section 3.2(c).
"Subsidiary" means any corporation, company or entity with respect
to
which a specified Person (or a Subsidiary
thereof) has the power to vote or
direct the voting of sufficient securities
to elect a majority of the board of
directors or comparable governing body.
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"Tag Along Notice" shall have the meaning ascribed to such term
in
Section 2(a).
"Tag Along Transaction" shall have the meaning ascribed to such
term
in Section 2(a).
"Term" shall have the meaning ascribed to such term in Section
10(a).
"2004 Deferred Compensation Plan" means the Company's 2004
Deferred
Compensation Plan, as it may be amended,
supplemented or restated from time to
time.
"2004 Stock Incentive Plan" means the Company's 2004 Stock
Incentive
Plan, as it may be amended, supplemented or
restated from time to time.
"Underwritten Offering" means a sale of shares of Common Stock
or
Preferred Stock to an underwriter for
reoffering to the public.
"Vestar" means, collectively, Vestar Equity Partners, L.P. and
its
Affiliates.
"Voting Securities" shall mean, at any time, shares of any class
of
Capital Stock of the Company which are then
entitled to vote generally in the
election of Directors or on any other
matter.
Section 2.
Certain Dispositions and Issuances by the Company.
(a) Tag Along
Transaction.
(i) Subject to the provisions of Section 2(b), prior to the
consummation of a Qualified Public Offering, if any Bear Group
Holder
(the "Offeror") desires to effect any Disposition of shares of
Common
Stock or Preferred Stock to any third party following which
such
Offeror shall have Disposed of at least 5% of the number of shares
of
Common Stock or Preferred Stock, as applicable (when aggregated
with
all prior such sales or Dispositions), that such Offeror
originally
owned to a transferee or Group (each a "Tag Along Transaction"),
such
Holder shall give written notice to the remaining Holders (the
"Offerees") at least fifteen (15) days prior to the anticipated
sale
date offering such Holders the option to participate in such Tag
Along
Transaction. The notice shall set forth the material terms of
the
proposed Tag Along Transaction and identify the contemplated
transferee or Group (a "Sale Notice").
(ii) Each of the Offerees may, by written notice to the Offeror
(a "Tag Along Notice"), delivered within ten (10) days after the
date
of the Sale Notice (each such Offeree delivering such timely
notice
being an "Exercising Offeree"), elect to Dispose of a number of
shares
of Common Stock or Preferred Stock, as applicable, in such Tag
Along
Transaction, which will not exceed such Exercising Offerees's
Proportionate Percentage of the total number of shares of Common
Stock
or Preferred Stock, as applicable, that the Offeror proposes to
Dispose of in the applicable Tag Along Transaction. This number
of
shares may
include shares of Common Stock and Preferred Stock to be
distributed to such
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Exercising Offeree in connection with such Tag Along Transaction
from
the 2004 Deferred Compensation Plan or any similar plan or which
such
Exercising Offeree may obtain by exercising any Options or shares
of
Restricted Stock held by such Exercising Offeree that are vested as
of
the date of such Tag Along Notice or which would vest in
connection
with such Tag Along Transaction (collectively, the "Deemed Held
Shares").
(iii) If none of the Offerees delivers a timely Tag Along
Notice,
then the Offeror may thereafter consummate the Tag Along
Transaction,
on the same terms and conditions as are described in the Sale
Notice
for a period of one hundred twenty (120) days thereafter. In the
event
the Offeror has not consummated the Tag Along Transaction within
such
one hundred twenty (120) day period, the Offeror shall not
thereafter
consummate a Tag Along Transaction without first providing a
Sale
Notice and an opportunity to the Exercising Offerees to sell in
the
manner provided above. If one or more of Exercising Offeree gives
the
Offeror a timely Tag Along Notice, then the Offeror shall use
its
commercially reasonable best efforts to cause the prospective
transferee or Group to agree to acquire all shares identified in
all
timely Tag Along Notices, upon the same terms and conditions as
applicable to the shares held by the Offeror. Each Exercising
Offeree
shall take all reasonably necessary actions approved by the Bear
Group
in connection with the consummation of the Tag Along
Transaction,
including executing such agreements and such instruments and
other
actions reasonably necessary to provide the representations,
warranties, covenants and indemnities, as well as escrow
arrangements
relating to such Tag Along Transaction but only to the extent
similar
agreements and instruments are executed and actions taken by the
Bear
Group in connection with such Tag Along Transaction; provided,
however, that (i) any representations, warranties, covenants,
indemnities, escrow agreements and other provisions and
agreements
made by the Exercising Offerees shall be several and not joint
and
(ii) to the extent the Exercising Offerees are required to
provide
indemnities in connection with the Disposition of their shares
of
Common Stock or Preferred Stock, no Exercising Offeree shall be
required to provide indemnification that would result in an
aggregate
liability to such Exercising Offeree in excess of such
Exercising
Offeree's net proceeds from such Disposition pursuant to this
Section
2(a)(iii), as applicable, and such indemnities shall be made by
all
Exercising Offerees participating in the applicable transaction
or
transactions, severally and not jointly. Each Holder hereby waives
any
claims such Holder may have against the Board or the Bear Group
in
connection with the Tag Along Transaction. If such prospective
transferee or Group is unable or unwilling to acquire all
shares
proposed to be included in the Tag Along Transaction upon such
terms,
then the Offeror may elect to cancel such Tag Along Transaction or
to
allocate the maximum number of shares that each prospective
transferee
or Group is willing to purchase among the Offeror and the
Exercising
Offerees
in the proportion that each such Exercising Offeree's and the
Offeror's Proportionate Percentage bears to the total
Proportionate
Percentages of the Offeror and the Exercising Offerees (e.g., if
the
Sale Notice contemplated a Tag Along Transaction of 10%
Proportionate
Percentage by the Offeror, and if the Offeror at such time owns
a
11
<PAGE>
30% Proportionate Percentage and one Exercising Offeree who owns a
20%
Proportionate Percentage elects to participate, then the Offeror
would
be entitled to sell a 6% Proportionate Percentage (30%/50%
multiplied
by the 10% Proportionate Percentage) and the Exercising Offeree
would
be
entitled to sell a 4% Proportionate Percentage (20%/50%
multiplied
by the 10% Proportionate Percentage).
(iv) Notwithstanding the provisions of this Section 2(a), the
Bear Group may take any of the following actions without
complying
with the provisions of this Section 2(a): (a) during the first
twelve
(12) months of this Agreement, the Bear Group may Dispose of up to
10%
of the shares of Common Stock and 10% of the shares of Preferred
Stock
then owned by it, (b) the Bear Group may Dispose of shares of
Common
Stock and Preferred Stock to any Affiliate of the Bear Group
(provided
that such Affiliate transferee agrees in writing to be bound by
this
Agreement to the same extent as any other member of the Bear
Group)
and (c) the Bear Group may Dispose of shares of Common Stock
and
Preferred Stock to Vestar or one or more of its Affiliates in
connection with the transactions contemplated by the
Co-Investment
Rights Agreement.
(b) Come Along Transaction.
(i) If, at any time, (A) the Bear Group holds at least fifty
percent (50%) of the outstanding shares of Common Stock and the
Bear
Group approves the Disposition of at least fifty percent (50%) of
the
shares of Common Stock and/or Preferred Stock held by the Bear
Group
as of the date hereof or (B) the holders of at least fifty
percent
(50%) of the outstanding shares of Common Stock (including the
Bear
Group) approve a Disposition of at least fifty percent (50%) of
the
outstanding shares of Common Stock and/or Preferred Stock (in
either
of (A) or (B), a "Come Along Transaction"), then each Non-Bear
Group
Holder shall raise no objections against, and, if a stockholder
vote
is required by law in connection therewith, consent to, the Come
Along
Transaction, and if the Come Along Transaction is structured as (1)
a
merger or consolidation of the Company or an asset sale, each
Non-Bear
Group Holder hereby waives any dissenters rights, appraisal rights
or
similar rights in connection with such merger, consolidation or
asset
sale or (2) a sale of Capital Stock of the Company, each
Non-Bear
Group Holder shall agree to sell his or its pro rata portion of
shares
of Common Stock and/or Preferred Stock which are the subject of
the
Come Along Transaction (including his or its Deemed Held Shares).
Each
Non-Bear Group Holder shall take all reasonably necessary
actions
approved by the Bear Group in connection with the consummation of
the
Come Along Transaction and executing such agreements and such
instruments and other actions reasonably necessary to provide
the
representations, warranties, covenants and indemnities, as well
as
escrow arrangements relating to such Come Along Transaction but
only
to the extent similar agreements and instruments are executed
and
actions taken by the Bear Group in connection with such Come
Along
Transaction; provided, however, that (x) any representations,
warranties, covenants, indemnities, escrow agreements and other
provisions and agreements made by the Non-Bear Group
12
<PAGE>
Holders shall be several and not joint and (y) to the extent
the
Non-Bear Group Holders are required to provide indemnities in
connection with the Disposition of their shares of Common Stock
or
Preferred Stock, no Non-Bear Group Holder shall be required to
provide
indemnification that would result in an aggregate liability to
such
Non-Bear Group Holder in excess of such Non-Bear Group Holder's
net
proceeds from such Disposition pursuant to this Section 2(b)(i),
as
applicable, and such indemnities shall be made by all Non-Bear
Group
Holders participating in the applicable transaction or
transactions,
severally and not jointly. Each Holder hereby waives any claims
such
Holder may have against the Board or the Bear Group in connection
with
the Come Along Transaction.
(c) The Company and the Non-Bear Group Holder shall cooperate
in
causing any
Deemed Held Shares that are ultimately included in a Tag Along
Transaction or a
Come Along Transaction to be delivered to the Non-Bear
Group Holder
immediately prior to the closing of such Tag Along Transaction
or Come Along
Transaction in order that the Non-Bear Group Holder may
exercise his
rights under Section 2(a) or that the Bear Group may exercise
its rights under
Section 2(b), as the case may be.
(d) Upon the closing of the sale of any shares of Common Stock
or
Preferred Stock
(including any Deemed Held Shares) pursuant to this Section
2, the Holders
shall deliver at such closing, against payment of the
purchase price
therefor, certificates representing their shares of Common
Stock or
Preferred Stock to be sold, duly endorsed for Disposition or
accompanied by
duly endorsed stock powers, and evidence of good title to
the shares to be
sold and the absence of liens, encumbrances and adverse
claims with
respect thereto and such other matters as are reasonably deemed
necessary by the
Company for the proper Disposition of such shares on the
books of the
Company.
(e) Preemptive Rights.
(i) Except for Excluded Securities, prior to the consummation
of
a Qualified Public Offering, the Company shall not issue or sell
to,
or exchange with, the Bear Group (i) any Common Stock, (ii) any
Preferred Stock, (iii) any other equity security of the Company
or
(iv) any option, call, warrant or other right to subscribe for,
purchase or otherwise acquire any security of the Company specified
in
the foregoing clauses (i) through (iii), unless, in each case,
the
Company shall have first offered to sell to each Non-Bear Group
Holder
(each, a "Preemptive Offeree") the percentage of such securities
equal
to the
percentage of outstanding shares of Common Stock held by such
Preemptive Offeree as of such date (the "Offered Securities") at
a
price and on such other terms and conditions as shall have been
specified by the Company in a writing delivered to such
Preemptive
Offeree (the "Preemptive Offer"). A Preemptive Offer by its
terms
shall remain open and irrevocable for a period of thirty (30)
days
from the date of delivery to each Preemptive Offeree.
(ii) If the Company is unable to make the Preemptive Offer or
hold the Preemptive Offer open for the entire 30-day period
referred
to in Section 2(e)(i), the Bear Group may purchase or cause to
be
purchased from the Company all of the Offered Securities that are
to
be offered to the Preemptive Offerees
13
<PAGE>
pursuant to Section 2(e)(i), in which case the Company's
obligations
under Section 2(e)(i) shall be deemed fully satisfied. Promptly
after
such purchase, the Bear Group shall or shall cause the
applicable
purchaser to offer (an "Offer to Resell") to each Preemptive
Offeree
the number of such Offered Securities that such Preemptive
Offerees
would otherwise be entitled to purchase pursuant to Section
2(e)(i),
at the same price paid by such purchaser and on the same terms
and
conditions. Such Offer to Resell by its terms shall remain open for
a
period of thirty (30) days from the date it is delivered (the
"Resale
Period"). Notice of any Preemptive Offeree's intention to accept
the
Offer to Resell shall be evidenced by a writing signed by such
Preemptive Offeree and delivered to the Bear Group and the
Company
prior to the end of the Resale Period (the "Resale Notice").
Within
five (5) days after receipt of the Resale Notice, the Bear Group
or
the applicable purchaser shall sell and each Preemptive Offeree
delivering a Resale Notice shall purchase the applicable
Offered
Securities which were the subject of the Offer to Resell, upon
the
terms and conditions of the Offer to Resell.
(iii) The Company may specify in the Preemptive Offer that all
or
a minimum amount of the Offered Securities must be sold to the
Preemptive Offerees and the Bear Group pursuant to Section
2(e)(v)
below, in which case any Notice of Acceptance (as defined below)
shall
be deemed conditioned upon the sale of all or such minimum amount,
as
applicable, of the Offered Securities pursuant to Section
2(e)(v).
(iv) Notice of a Preemptive Offeree's intent to accept, in
whole
or in part, a Preemptive Offer shall be irrevocable and evidenced
by a
writing (the "Notice of Acceptance") signed by such Preemptive
Offeree
and delivered to the Company prior to the end of the 30-day period
of
such Preemptive Offer, setting forth the number of Offered
Securities
to be purchased by such Preemptive Offeree (up to the number of
Offered Securities set forth in the Preemptive Offer received by
such
Preemptive Offeree pursuant to Section 2(e)), on the
above-described
terms and conditions.
(v) The Company shall have sixty (60) days from the expiration
of
the foregoing 30-day period to sell all or any part of such
Offered
Securities as to which Notices of Acceptance have not been given
by
the Preemptive Offerees to the Bear Group, but only upon terms
and
conditions (including, without limitation, purchase price,
representations, covenants, indemnification and interest
rates),
which, when taken as a whole, are no more favorable to the Bear
Group
and no less favorable to the Company than those set forth in
the
Preemptive Offer. Upon the closing of such sale to the Bear
Group
(which shall include full payment to the Company), each
Preemptive
Offeree shall purchase from the Company, and the Company shall sell
to
each Preemptive Offeree, the Offered Securities in respect of which
a
timely Notice of Acceptance was delivered to the Company by
such
Preemptive Offeree, on the terms specified in the Preemptive
Offer.
14
<PAGE>
(vi) Any Offered Securities not purchased by the Preemptive
Offerees or the Bear Group in accordance with Section 2(e)(v) may
not
be sold or otherwise disposed of to the Bear Group until they
are
again offered to the Preemptive Offerees under the procedures
specified in this Section 2(e).
Section 3.
Transfers; Additional Parties.
3.1 Restrictions; Permitted Dispositions.
Without the written consent of the Board, except as otherwise
provided
in this Agreement, no Non-Bear Group Holder
shall make any Disposition, directly
or indirectly, through an Affiliate or
otherwise. The preceding sentence shall
apply with respect to all shares of Common
Stock and Preferred Stock held at any
time by a Non-Bear Group Holder (including,
without limitation, all shares of
Common Stock acquired upon the exercise of
any Option, any shares of Restricted
Stock and any shares of Common Stock and
Preferred Stock distributed pursuant to
the 2004 Deferred Compensation Plan or any
similar plan), regardless of the
manner in which such Non-Bear Group Holder
initially acquired Common Stock or
Preferred Stock, as applicable.
Notwithstanding the foregoing, the following
Dispositions shall be permitted (each, a
"Permitted Disposition"):
(a) By any
Non-Bear Group Holder (i) in the case of shares of Common
Stock or
Preferred Stock, with respect to a Public Sale in connection
with
the exercise of
registration rights pursuant to Section 4, (ii) subject to
Section 4(f), a
Public Sale of Common Stock, (iii) any sale of Common Stock
or Preferred
Stock to any other Holder with the consent of the Board or
(iv) pursuant to
Section 5 of this Agreement;
(b) By Vestar to any of its Affiliates or to its limited partners
in a
pro rata
distribution, in each case, in accordance with the other
provisions of
this Agreement;
(c) By any individual Non-Bear Group Holder during such Non-Bear
Group
Holder's
lifetime to: (i) a guardian of the estate of such Non-Bear
Group
Holder; (ii) an
inter-vivos trust primarily for the benefit of such
Non-Bear Group
Holder; or (iii) an inter-vivos trust whose primary
beneficiary is
one or more of such Non-Bear Group Holder's lineal
descendants
(including lineal descendants by adoption);
(d) With the consent of the Company (which consent shall not be
unreasonably
withheld), by any Non-Bear Group Holder to a qualified
retirement plan
sponsored by the Non-Bear Group Holder;
(e) By any qualified retirement plan of the Company to
participants,
alternate payees
and beneficiaries to the extent required by law and the
provisions of
such plan;
(f) By any Non-Bear Group Holder which is a trust, to any
successor
trust or
successor trustee;
(g) By any Non-Bear Group Holder pursuant to Section 2; and
15
<PAGE>
(h) With the consent of the Company (which consent shall not be
unreasonably
withheld), by any Non-Bear Group Holder to other entities for
tax planning
purposes.
No Holder shall permit a transaction
involving a change of ownership interest or
voting power of such Holder which avoids
the restrictions on Dispositions
provided in this Section 3.1 to be
consummated; provided, however, that the
transfer of interests in a Holder that
holds substantial assets in addition to
equity interests in the Company and is not
a Management Holder will be deemed
not to be a Disposition which avoids the
restrictions on Dispositions provided
in this Section 3.1.
3.2 Additional Parties.
(a) As a condition to the Company's obligation to effect a
Disposition
of Common Stock
or Preferred Stock permitted by this Agreement on the books
and records of
the Company, any transferee (other than a Disposition to the
Company or in
accordance with Section 3.1(a) above) shall be required to
become a party
to this Agreement by executing (together with such Person's
spouse, if
applicable) an Adoption Agreement in substantially the form of
Exhibit A or in
such other form that is reasonably satisfactory to the
Company and upon
execution of such Adoption Agreement such transferee shall
have all the
rights and obligations of the Disposing Holder.
(b) In the event that any Person acquires shares of Common Stock
or
Preferred Stock
from (i) a Holder or any Affiliate or member of such
Holder's Group
or (ii) any direct or indirect transferee of a Holder, such
Person shall be
subject to any and all obligations and restrictions of the
Holder (for whom
the shares of Common Stock or Preferred Stock were
purchased)
hereunder, as if such Person was such Holder named herein.
Additionally,
whenever a Management Holder makes a Disposition of shares of
Common Stock or
Preferred Stock, such shares of Common Stock and/or
Preferred Stock
shall contain a legend so as to inform any transferee that
such shares of
Common Stock and/or Preferred Stock were held originally by
a Management
Holder and are subject to repurchase based on the employment
of, or events
relating to, such Management Holder. Such legend shall not be
placed on any
shares of Common Stock or Preferred Stock acquired from a
Non-Bear Group
Holder by the Company, the Bear Group or any of their
Affiliates.
Notwithstanding the foregoing, the requirements of this Section
3.2(b) shall not
apply in connection with any Disposition in accordance
with Section
3.1(a) above.
(c) The Company shall not, without the prior written consent of
the
Bear Group,
issue or sell any Capital Stock to any Person (other than
pursuant to a
Public Sale) unless such Person is already a party to this
Agreement or
first executes and delivers to the Company a counterpart to
this Agreement
(and such Person's spouse, if applicable, executes a Spousal
Acknowledgement
and Consent in substantially the form of Exhibit B or in
such other form
as is reasonably satisfactory to the Company), pursuant to
which such
Person will thereupon become a party to, and be bound by and
obligated to
comply with the terms and provisions of, this Agreement.
(d) Any shares of Common Stock or Preferred Stock acquired by
an
individual
retirement account ("IRA") on behalf of an employee of the
Company or
any
16
<PAGE>
of its
Subsidiaries (the "Subject Employee") shall be deemed to be a
Non-Bear Group
Holder. Additionally, such Subject Employee shall be deemed
to be a Non-Bear
Group Holder and his or her IRA shall be deemed to have
acquired all
shares of Common Stock and/or Preferred Stock it holds from
such Subject
Employee pursuant to a Disposition that is subject to Section
3.2(b)
above.
3.3 Securities Restrictions; Legends.
(a) No shares of Common Stock or Preferred Stock shall be
transferable
except upon the
conditions specified in this Section 3.3, which conditions
are intended to
insure compliance with the provisions of the Securities
Act.
(b) Each certificate representing shares of Common Stock and
Preferred
Stock shall
(unless otherwise permitted by the provisions of paragraph (d)
below) be
stamped or otherwise imprinted with a legend in substantially
the
following
form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF
1933, AS AMENDED, OR ANY STATE SECURITIES OR BLUE SKY LAWS.
THESE
SECURITIES MAY NOT BE SOLD, ASSIGNED, PLEDGED, HYPOTHECATED,
DISPOSED
OF OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION
THEREFROM UNDER SAID ACT OR LAWS. THE SECURITIES REPRESENTED BY
THIS
CERTIFICATE ARE ALSO SUBJECT TO A STOCKHOLDERS' AGREEMENT DATED AS
OF
APRIL __, 2004 AMONG THE ISSUER OF SUCH SECURITIES (THE
"COMPANY"),
AND THE OTHER PARTIES NAMED THEREIN. THE TERMS OF SUCH
STOCKHOLDERS'
AGREEMENT INCLUDE, AMONG OTHER THINGS, RESTRICTIONS ON TRANSFER.
A
COPY OF SUCH AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE
COMPANY
TO THE HOLDER HEREOF UPON WRITTEN REQUEST."
(c) The Holder of any shares of Common Stock and/or Preferred Stock
by
acceptance
thereof agrees, prior to any Disposition of any such shares, to
give written
notice to the Company of such Holder's intention to effect
such Disposition
and to comply in all other respects with the provisions of
this Section.
Each such notice shall describe the manner and circumstances
of the proposed
Disposition. Upon request by the Company, the Holder
delivering such
notice shall deliver a written opinion, addressed to the
Company, of
counsel for the Holder of such shares, stating that in the
opinion of such
counsel (which opinion and counsel shall be reasonably
satisfactory to
the Company) such proposed Disposition does not involve a
transaction
requiring registration or qualification of such shares under
the Securities
Act. Such Holder of such shares shall be
17
<PAGE>
entitled to
Dispose of such shares in accordance with the terms of the
notice delivered
to the Company, if the Company does not reasonably object
to such
Disposition and request such opinion within fifteen (15) days
after
delivery of such
notice, or, if it requests such opinion, does not
reasonably
object to such Disposition within fifteen (15) days after
delivery of such
opinion. Each certificate or other instrument evidencing
the securities
issued upon the Disposition of any shares of Common Stock or
Preferred Stock
shall bear the legend set forth in paragraph (b) above
unless (i) in
such opinion of counsel to the Holder of such shares (each of
which opinion
and counsel shall be reasonably acceptable to the Company)
registration of
any future Disposition is not required by the applicable
provisions of
the Securities Act or (ii) the Company shall have waived the
requirement of
such legends.
(d) Notwithstanding the foregoing provisions of this Section 3,
the
restrictions
imposed by this Section upon the transferability of any shares
of Common Stock
or Preferred Stock shall cease and terminate (i) when any
such shares are
sold or otherwise disposed of (A) pursuant to an effective
registration
statement under the Securities Act or (B) in a transaction
contemplated by
paragraph (c) above which does not require that the shares
so transferred
bear the legend set forth in paragraph (b) hereof, (ii) when
the Holder of
such shares has met the requirements for Disposition of such
shares under
Rule 144(k) under the Securities Act (subject to the delivery
of opinions as
set forth above) or (iii) upon the expiration of the period
of time in which
the Bear Group has agreed not to sell publicly, make any
short sale of,
grant any option for the purchase of, or otherwise dispose
publicly of, any
Capital Stock of the Company following the consummation of
a Qualified
Public Offering; provided, however, that the period of time in
the preceding
clause (iii) shall not exceed 180 days unless a longer period
of time has
become market practice at the time of the registration of
securities
related thereto. Whenever the restrictions imposed by this
Section shall
terminate, the Holder of any shares as to which such
restrictions
have terminated shall be entitled to receive from the Company,
without expense,
a new certificate not bearing the restrictive legend set
forth in
paragraph (b) above and not containing any other reference to
the
restrictions
imposed by this Section.
Section 4.
Registration Rights.
(a) Demand Registration.
(i) Right to Demand; Demand Notices. Subject to the provisions
of
this Section 4(a) at any time and from time to time after the
date
hereof, the Bear Group may make up to six written requests to
the
Company for registration under and in accordance with the
provisions
of the Securities Act of all or part of their shares of Common
Stock
or Preferred Stock. All requests made pursuant to this Section
will
specify the aggregate amount of Registrable Securities to be
registered and will also specify the intended methods of
disposition
thereof (a "Demand Notice"). Subject to Section 4(a)(ii),
promptly
upon receipt of any such Demand Notice, the Company will notify
each
Non-Bear Group Holder of its intent to register the Registrable
Securities and the Company shall use its commercially reasonable
best
efforts to effect within 180 days such registration under the
Securities Act of the Registrable Securities which the Company
has
been so requested to register. Subject to the provisions of
this
18
<PAGE>
Section 4(a), each Non-Bear Group Holder shall be permitted to
participate in any Demand Registration initiated by the Bear Group
by
delivery of written notice to the Company within 30 days of
receiving
notice from the Company of the Demand Notice specifying the
aggregate
number of Registrable Securities such Non-Bear Group Holder desires
to
have registered. Each Non-Bear Group Holder seeking registration
of
any Registrable Securities shall be treated on a pari passu basis
with
the Bear Group.
(ii) Company's Right to Defer Registration. If the Company is
requested to effect a Demand Registration and the Company furnishes
to
the Bear Group a copy of a resolution of the Board certified by
the
secretary of the Company stating that in the good faith judgment
of
the Board it would be materially adverse to the Company for
such
Registration Statement to be filed on or before the date such
filing
would otherwise be required hereunder, the Company shall have
the
right to defer such filing for a period of not more than ninety
(90)
days after receipt of the request for such registration from the
Bear
Group. If the Company shall so postpone the filing of a
Registration
Statement and if the Bear Group within thirty (30) days after
receipt
of the notice of postponement advises the Company in writing that
it
has determined to withdraw such request for registration, then
such
Demand Registration shall be deemed to be withdrawn, with respect
to
any Registrable
Securities of the Bear Group and any participating
Non-Bear Group Holders.
(iii) Registration Statement Form. Registrations under this
Section 4 shall be on such appropriate registration form of the
Commission (i) as shall be selected by the Company and as shall
be
reasonably acceptable to the Bear Group and (ii) as shall permit
the
disposition of such Registrable Securities in accordance with
the
intended method or methods of disposition specified in the Bear
Group's Demand Notice. If, in connection with any registration
under
this Section 4 which is proposed by the Company to be on Form S-3
or
any successor form, the managing underwriter, if any, shall advise
the
Company in writing that in its opinion the use of another
permitted
form is of material importance to the success of the offering,
then
such registration shall be on such other permitted form.
(iv) Effective Registration Statement. The Company shall be
deemed to have effected a Demand Registration if (a) the
Registration
Statement relating to such Demand Registration is declared
effective
by the Commission; provided, however, that no Demand
Registration
shall be deemed to have been effected if (i) such registration,
after
it has become effective, is interfered with by any stop order,
injunction or other order or requirement of the Commission or
other
governmental agency or court by reason of an act or omission by
the
Company and such interference is not cured within twenty (20)
business
days, or (ii) the conditions to closing specified in the
purchase
agreement or underwriting agreement entered into in connection
with
such registration are not satisfied because of an act or omission
by
the Company (other than a failure of the Company or any of its
representatives to execute or deliver any closing certificate
19
<PAGE>
by reason of facts or circumstances not within the control of
the
Company or such representatives), or (b) at any time after the
Bear
Group delivers a Demand Notice to the Company and prior to the
effectiveness of the Registration Statement, the preparation of
such
Registration Statement is discontinued or such Registration
Statement
is withdrawn or abandoned at the request of the Bear Group (other
than
as contemplated by Section 4(a)(ii)) unless the Bear Group has
elected
to pay and has paid to the Company in full the Registration
Expenses
in connection with such Registration Statement.
(v) Underwriter's Cutback. If the managing underwriter informs
the Company in writing that the inclusion of all such
Registrable
Securities proposed to be included in such Demand Registration
would
adversely affect the successful marketing (including pricing,
timing
and distribution) of the Registrable Securities to be offered
thereby,
then the number of Registrable Securities proposed to be included
in
such registration shall be allocated among the Company, the Bear
Group
and all selling Non-Bear Group Holders of the Company
proportionately,
such that the number of Registrable Securities that each such
Person
shall be entitled to sell in the Public Offering shall be included
in
the following order:
(A) first, the Registrable Securities held by the Persons
requesting their Registrable Securities be included in such
registration pursuant to the terms of this Section 4(a), pro
rata
based upon the number of Registrable Securities owned by each
such
Person at the time of such registration; and
(B) second, the Registrable Securities to be issued and sold
by the Company in such registration.
Notwithstanding anything to the contrary
set forth in this Section 4(a)(v), if
the managing underwriter for an
Underwritten Offering informs the Company in
writing that the inclusion of all
Registrable Securities proposed to be included
in any registration by any particular
Management Holder would adversely affect
the successful marketing (including
pricing, timing and distribution) of the
Registrable Securities to be offered
thereby, then the number of Registrable
Securities proposed to be included in such
registration by such Management
Holder shall be reduced to the lower of the
number of Registrable Securities
that the managing underwriter advises that
such Management Holder may sell in
the Underwritten Offering and the number of
Registrable Securities calculated
pursuant to the foregoing.
(vi) Selection of Underwriters. Notwithstanding any other
provision herein, the Bear Group shall have sole discretion to
select
any and all underwriters that may participate in any
Underwritten
Offering pursuant to this Section 4(a)(vi).
(b) Piggyback Registration.
(i) If the Company at any time proposes for any reason to
register shares of Common Stock or P
