Exhibit 4.2
HYCO INTERNATIONAL,
INC.
Stockholders’
Agreement
Stockholders’ Agreement, dated
as of June 5, 1998 (the “Agreement”), among those
individuals set forth on Exhibit A (“Management
Holders”), those individuals or entities set forth on
Schedule B (“Other Stockholders” and, together with
Management Holders, the “Minority Holders”), Hyco
International, Inc., a Delaware corporation (the
“Company”), Centre Partners Management LLC
(“Centre Management”) and Centre Capital Investors II,
L.P., a Delaware limited partnership, Centre Partners Coinvestment,
L.P., a Delaware limited partnership, Centre Capital Offshore
Investors II, L.P., a Bermuda limited partnership, Centre Capital
Tax-Exempt Investors II, L.P., a Delaware limited partnership,
Centre Parallel Management Partners, L.P., a Delaware limited
partnership, and The State Board of Administration of Florida (such
limited partnerships and other entities, collectively, the
“Centre Entities”). From time to time, additional
individuals who are directors, officers or employees of the Company
or its Subsidiaries may become a party to this Agreement as a
Management Holder and additional individuals or entities who are
not directors, officers or employees of the Company or its
Subsidiaries may become party to this Agreement as an Other
Stockholder, in each case with the consent of the Company and the
Centre Entities by execution of a counterpart hereof.
PRELIMINARY
STATEMENTS
The Company has offered to sell
Management Holders and Other Stockholders’ shares of its
Common Stock par value $.001 per share (the “Common
Stock”), to grant certain options to Management Holders to
acquire Common Stock and may make certain grants of Common Stock to
Management Holders from time to time, all subject to the terms and
conditions of this Agreement.
The Centre Entities, Other
Stockholders and the Management Holders have agreed to grant
certain rights and assume certain obligations as set forth herein
with respect to all Common Stock acquired by Management
Holders.
NOW, THEREFORE, in consideration of
the mutual agreements hereinafter set forth, the parties hereto
agree as follows:
1. Definitions. In this Agreement,
the following terms have the meanings specified or referred to in
this Section 1 and shall be equally applicable to both the
singular and plural forms.
“Affiliate” means, with
respect to any Person, (i) any Person that directly or
indirectly controls, is controlled by or is under common control
with, such Person or (ii) any director, officer or partner of
such Person or of any Person specified in clause (i).
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“Agreement” has the
meaning set forth on the first paragraph.
“Buy-Back Securities”
means (i) all shares of Common Stock held from time to time by
a Management Holder and (ii) all shares issuable to such
Holder upon exercise of options to purchase Common Stock which are
at the time of determination presently exercisable and subject to
no contingency.
“Centre Entities” has
the meaning set forth in the first paragraph of this
Agreement.
“Centre Investors” means
Centre Management, Centre Entities and their respective
Affiliates.
“Centre Registration Rights
Agreement” means the Registration Rights Agreement dated as
of the date hereof between the Company and the Centre Entities, as
amended, supplemented or otherwise modified from time to
time.
“Closing Price” means,
with respect to each share of any class of Securities as of any
date of determination, (i) the last reported sale price
regular way or, in case no such sale takes place on such day, the
average of the closing bid and asked prices regular way, in either
case as reported on the principal national securities exchange on
which such class or series of Securities is listed or admitted for
trading or (ii) if such class or series of Securities is not
listed or admitted for trading on any national securities exchange,
the last reported sale price or, in case no such sale takes place
on such day, the average of the highest reported bid and the lowest
reported asked quotation for such class or series of Securities, in
either case as reported on NASDAQ or a similar service if NASDAQ is
no longer reporting such information.
“Common Stock” has the
meaning specified in the Preliminary Statements.
“Company” has the
meaning specified in the first paragraph of this
Agreement.
“Fair Market Value”
means, with respect to any Buy-Back Securities as of the applicable
termination date, (i) the average of the daily Closing Prices
for the ten consecutive trading days immediately preceding the date
of determination or (ii) if on such date the Buy-Back
Securities are not listed or admitted for trading on any national
securities exchange and are not quoted on NASDAQ or any similar
service, the cash amount that a willing buyer would pay a willing
seller (neither acting under compulsion) in an arm’s-length
transaction without time constraints per share of such class 5(d)
series of Buy-Back Securities as of such date, viewing the Company
on a going concern basis, as determined in accordance with the
procedures set forth in Section 5(d). To the extent Buy-Back
Securities consist of options to purchase Common Stock, the market
value of such options shall be the market value as determined for
the underlying Common Stock had such options been exercised to the
fullest extent then exercisable, less the exercise price
thereof.
“Initial Public
Offering” means consummation of a public offering pursuant to
an effective registration statement under the Securities Act
covering the offering and sale of Common Stock by the Company to
the public and underwritten by an investment banking firm of
nationally recognized standing.
“Management Holder(s)”
has the meaning set forth in the first paragraph of this
Agreement.
“Minority Holders” has
the meaning set forth in the first paragraph of this
Agreement.
“Other Stockholder(s)”
has the meaning set forth in the first paragraph of this
Agreement.
“Permitted Transferee”
means, with respect to any Minority Holder, (a) the Company,
(b) the Centre Investors, (c) the guardian, conservator
or estate of such Minority Holder, or (d) any trust, all of
the beneficiaries of which are such Minority Holder or members of
his immediate family.
“Person” means any
individual, corporation, partnership, joint venture, limited
liability company, association, joint-stock company, trust,
unincorporated organization or governmental body.
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“Registration Rights
Agreement” means the Registration Rights Agreement, dated as
of the date hereof, among the Centre Entities and the
Company.
“Transfer” means any
sale, assignment, transfer, gift, pledge, hypothecation or other
disposition.
“Securities” means the
Common Stock and any options to acquire the Common Stock
beneficially owned by Minority Holders.
“Securities Act” means
the Securities Act of 1933, as amended.
2. Interpretation. As used in this
Agreement, the word “including” means without
limitation, the word “or” is not exclusive and the
words “herein”, “hereof”,
“hereby”, “hereto” and
“hereunder” refer to this Agreement as a whole. Unless
the context otherwise requires, references herein: (i) to
Sections and Exhibits mean the Sections of and the Exhibits
attached to this Agreement; (ii) to an agreement, instrument
or other document means such agreement, instrument or other
document as amended, supplemented and modified from time to time to
the extent permitted by the provisions thereof and by this
Agreement; and (iii) to a statute means such statute as
amended from time to time and includes any successor legislation
thereto. Titles to Sections are inserted for convenience of
reference only and shall not be deemed a part of or to affect the
meaning or interpretation of this Agreement. All references to the
masculine shall include the feminine.
3. Securities Laws and Related
Representations and Restrictions.
(a) In connection with his
acquisition of Securities, each Minority Holder hereby represents
that such Securities are being acquired by such Minority Holder for
his own account for investment purposes, and with no present
intention of selling or otherwise distributing the Securities
within the meaning of the Securities Act. Such Minority Holder is
an “accredited investor,” as such term is defined in
Regulation D promulgated under the Securities Act and/or has
sufficient knowledge and experience in financial and business
matters to enable him to evaluate the merits and risks of
investment in the Common Stock and options, including the risks of
owning shares in a closely-held corporation. Each Minority Holder
acknowledges that the Securities being acquired have not been
registered under the Securities Act or any state securities laws,
and are offered and sold pursuant to exemptions therefrom; and will
contain a prominent legend with respect to such restrictions. Each
Minority Holder has been supplied with, or had access to,
information to which a reasonably prudent investor would attach
significance in making investment decisions sufficient to enable
him to make his decision to purchase the Securities.
(b) In connection with any offering
of any securities covered by a registration statement filed by the
Company, whether or not a Minority Holder’s Securities are
included therein, each Minority Holder, if so requested by the
managing underwriter or other agent in connection with such
registration shall not effect any public sale or distribution of
shares of Common Stock or any securities convertible into or
exchangeable or exercisable for shares of Common Stock, including a
sale pursuant to Rule 144 under the Securities Act (except as part
of such underwritten or agented registration), during the 15-day
period prior to, and during the 180-day period beginning on, the
date such registration statement is declared effective under the
Securities Act by the Securities Exchange Commission, provided,
that such Minority Holder is timely notified of such effective date
in writing by the Company or such underwriter or agent.
(c) After an Initial Public
Offering, such Minority Holder understands that the Company with
the approval of its Board of Directors may adopt
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reasonable guidelines for the
disposition of Common Stock by members of management and agrees to
observe such restrictions.
4. General Restrictions on Transfer.
As long as this Agreement shall remain in force, no Minority Holder
may Transfer any of the Securities unless:
(a) prior to an Initial Public
Offering, the Person in whose favor such Transfer is made (other
than the Company or the Centre Investors) (x) is a Permitted
Transferee or is being Transferred Securities pursuant to Sections
7(c), 8 or 9 hereof and (y) delivers to the Company a written
acknowledgment that the Securities to be Transferred are subject to
this Agreement, and that such Person and such Person’s
successors in interest are bound hereby and thereby; or
(ii) after an Initial Public Offering, such Transfer is made
(x) pursuant to an effective registration under the Securities
Act, or an exemption from the registration requirements thereof,
and (y) in accordance with applicable state securities laws
and the other terms of this Agreement; and
(b) prior to any such Transfer
described in clause (a), the Minority Holder proposing to make such
Transfer shall give the Company and Centre Management on behalf of
the Centre Entities (i) notice describing the manner and
circumstances of the proposed Transfer and (ii) if reasonably
requested by the Company, a written opinion in form and substance
reasonably satisfactory to the Company of legal counsel reasonably
satisfactory to the Company to the effect that the proposed
Transfer may be effected without registration under the Securities
Act or any applicable state law.
Any attempted Transfer other than in
accordance with this Agreement shall be void, and the Company shall
refuse to recognize such Transfer and shall not reflect on its
records any change in record ownership of the Securities pursuant
to such Transfer.
5. Repurchase of Shares by the
Company.
(a) Repurchase by Company of
Buy-Back Securities. Prior to the Initial Public Offering, each of
the Company and the Centre Investors shall have the option (the
“Buy-Back Option”), but shall not be required, to
purchase all or any portion of the Buy-Back Securities of a
Management Holder at the Fair Market Value thereof (the
“Buy-Back Price”)(1) if the employment of such
Management Holder is terminated for any reason whether due to
death, disability, retirement, resignation or removal;
(2) such Management Holder files a bankruptcy petition or is
adjudicated bankrupt; or (3) any of the Buy-Back Securities of
such Management Holder are Transferred or encumbered in any other
way except as permitted by this Agreement.
(b) Buy-Back Procedures. Promptly
following the date on which the Company first determines that an
event entitling the Company to purchase the Buy-Back Securities
pursuant to the Buy-Back Option has occurred, it shall deliver
written notice thereof to the applicable Management Holder(s) and
Centre Management. During the 90-day period commencing on the date
such notice is given (the “First Period”), if the
Company wishes to exercise the Buy-Back Option, the Company shall
deliver to such Management Holder (with a copy to Centre
Management) a written notice of intention to exercise (a
“Buy-Back Notice”) with respect to the Buy-Back
Securities described therein. If the Company fails to send a
Buy-Back Notice during the First Period, or exercises the Buy-Back
Option with respect to less than all of the Buy-Back Securities,
and the Centre Investors wish to exercise the Buy-Back Option,
Centre Management shall deliver a Buy-Back Notice on behalf of the
specified Centre Investors to such Management Holder within the
90-day period com
