Exhibit 10.34
Execution
Version
MANAGEMENT UNIT SUBSCRIPTION
AGREEMENT
(Class A-2 Units, B-1 Units, B-2 Units and B-3
Units)
THIS MANAGEMENT UNIT SUBSCRIPTION
AGREEMENT (this “ Agreement ”) is made as of
July 13, 2009, by and between Peak Holdings LLC, a Delaware
limited liability company (the “ Company ”), and
the individual named on the signature page hereto (the “
Executive ”).
WHEREAS, on the terms and subject to
the conditions hereof, the Executive desires to subscribe for and
acquire from the Company, and the Company desires to issue and
provide to the Executive, the Company’s Class A-2 Units
(the “ Class A-2 Units ”), Class B-1 Units
(the “ Class B-1 Units ”), Class B-2 Units (the
“ Class B-2 Units ”) and Class B-3 Units (the
“ Class B-3 Units ” and, together with the
Class A-2 Units, Class B-1 Units and Class B-2 Units, the
“ Units ”), in each case in the amount set forth
on Schedule I, as hereinafter set forth; and
WHEREAS, this Agreement is one of
several agreements entered into by the Company with certain persons
who are or will be key employees of the Company or one or more
Subsidiaries (collectively with the Executive, the “
Management Investors ”) as part of a management equity
purchase plan designed to comply with Regulation D and/or Rule 701
promulgated under the Securities Act (as defined below);
NOW, THEREFORE, in order to
implement the foregoing and in consideration of the mutual
representations, warranties, covenants and agreements contained
herein, the parties hereto agree as follows:
1.1 Affiliate . An “
Affiliate ” of, or Person “ Affiliated
” with, a specified Person shall mean a Person that directly,
or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, the Person
specified.
1.2 Agreement. The term
“Agreement” shall have the meaning set forth in the
preface.
1.3 Blackstone. The term
“Blackstone” means Blackstone Capital Partners V L.P.
and its Affiliates.
1.4 Board. The
“Board” shall mean the Company’s Management
Committee.
1.5 Cause. The term
“Cause” used in connection with the termination of
employment of the Executive shall have the same meaning ascribed to
such term in any employment or severance agreement then in effect
between the Executive and the Company or one of its Subsidiaries
or, if no such agreement containing a definition of
“Cause” is then in effect, shall mean a termination of
employment of the Executive by the Company or any Subsidiary
thereof due to (A) the Executive’s continued failure
substantially to perform the Executive’s duties under the
Executive’s employment (other than as a result of total or
partial incapacity due to
physical or mental illness) following written
notice by the Company to the Executive of such failure;
(B) theft or embezzlement of Company property or dishonesty in
the performance of the Executive’s duties, (C) any act
on the part of the Executive that constitutes (x) a felony
under the laws of the United States or any state thereof or
(y) a crime involving moral turpitude, (D) the
Executive’s willful malfeasance or willful misconduct in
connection with the Executive’s duties to the Company or any
act or omission which is materially injurious to the financial
condition or business reputation of the Company or any of its
Subsidiaries or Affiliates, or (E) the Executive engages in
Competitive Activity or breaches the confidentiality provisions of
Section 6.
1.6 Change of Control. The
term “Change of Control” shall have the meaning set
forth in the Securityholders Agreement, except that transactions
with a Person or Persons that are a Subsidiary of the Sponsor shall
be excluded.
1.7 Closing. The term
“Closing” shall have the meaning set forth in
Section 2.2.
1.8 Closing Date. The term
“Closing Date” shall have the meaning set forth in
Schedule 1, Part 1.
1.9 Company. The term
“Company” shall have the meaning set forth in the
preface.
1.10 Constructive
Termination. The term “Constructive Termination”
shall have the same meaning ascribed to such term (or the term
“good reason”) in any employment or severance agreement
then in effect between the Executive and the Company or one of its
Subsidiaries.
1.11 Cost. The term
“Cost” shall mean the price per Unit paid by the
Executive as proportionately adjusted for all subsequent
distributions of Units and other recapitalizations and less the
amount of any tax distributions made with respect to the Units
pursuant to the LLC Agreement.
1.12 Disability. The term
“Disability” of the Executive shall have the same
meaning ascribed to such term in any employment or severance
agreement then in effect between the Executive and the Company or
one of its Subsidiaries or, if no such agreement containing a
definition of “Disability” is then in effect, shall
mean the inability of the Executive to perform the essential
functions of the Executive’s job, with or without reasonable
accommodation, by reason of a physical or mental infirmity, for a
period of nine (9) consecutive months or for an aggregate of
twelve (12) months in any eighteen (18) consecutive month
period. The period of nine (9) months shall be deemed
continuous unless the Executive returns to work for at least 30
consecutive business days during such period and performs during
such period at the level and competence that existed prior to the
beginning of the six-month period. The date of such Disability
shall be on the first day of such nine-month period.
1.13 Employee and Employment.
The term “ employee ” shall mean, without any
inference as to negate the Executive’s status as a member of
the Company for all purposes hereunder (subject to the terms
hereof) and for federal and other tax purposes, any employee (as
defined in accordance with the regulations and revenue rulings then
applicable under Section 3401(c) of the Internal Revenue Code
of 1986, as amended) of the Company or any of its Subsidiaries, and
the term “ employment ” shall include service as
a part- or full-time employee to the Company or any of its
Subsidiaries.
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1.14 Executive. The term
“Executive” shall have the meaning set forth in the
preface.
1.15 Executive’s Group.
The term “Executive’s Group” shall have the
meaning set forth in Section 4.1(a).
1.16 Fair Market Value.
Subject to Section 4.2(d), the term “Fair Market
Value” used in connection with the value of Units shall mean
(a) if there is a public market for the equity of the Company
on the applicable date, the value for the Units shall be implied by
the average of the high and low closing bid prices of such equity
on the stock exchange on which the equity is principally trading on
such date or (b) if there is no public market for the equity
on such date, the fair market value for the Units as shall be
determined in good faith by the Board (without regard to discounts
for lack of marketability of such equity or minority
status).
1.17 Financing Default. The
term “Financing Default” shall mean an event which
would constitute (or with notice or lapse of time or both would
constitute) an event of default under any of the financing
documents of the Company or its Affiliates from time to time
(collectively, the “ Financing Agreements ”) and
any restrictive financial covenants contained in the organizational
documents of the Company or its Affiliates.
1.18 Management Investors.
The term “Management Investors” shall have the meaning
set forth in the preface.
1.19 Permitted Transferee.
The term “Permitted Transferee” means any Person to
whom the Executive transfers Units in accordance with the
Securityholders Agreement (other than the Sponsor and the Company
and their respective Affiliates and except for transfers pursuant
to a Public Offering).
1.20 Person. The term
“Person” shall mean any individual, corporation,
partnership, limited liability company, trust, joint stock company,
business trust, unincorporated association, joint venture,
governmental authority or other entity of any nature
whatsoever.
1.21 Public Offering. The
term “Public Offering” shall have the meaning set forth
in the Securityholders Agreement.
1.22 Purchase Price. The term
“Purchase Price” shall have the meaning set forth in
Section 2.1.
1.23 Securities Act. The term
“Securities Act” shall mean the Securities Act of 1933,
as amended, and all rules and regulations promulgated thereunder,
as the same may be amended from time to time.
1.24 Securityholders
Agreement. The term “Securityholders Agreement”
shall mean the Securityholders Agreement, dated as of April 2,
2007, among the Sponsor, the Management Investors and the Company,
as it may be amended or supplemented thereafter from time to
time.
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1.25 Subsidiary. The term
“Subsidiary” shall have the meaning set forth in the
Securityholders Agreement.
1.26 Termination Date. The
term “Termination Date” means the date upon which
Executive’s employment with the Company and its Subsidiaries
is terminated.
1.27 Unvested Units. The term
“Unvested Units” means, with respect to
Executive’s Class B-1 Units, Class B-2 Units and Class B-3
Units, the number of such Units that are subject to any vesting,
forfeiture or similar arrangement under this Agreement.
1.28 Vested Units. The term
“Vested Units” shall mean, with respect to an
Executive’s Class B-1 Units, Class B-2 Units and Class B-3
Units, the number of such Units that are vested and nonforfeitable,
as determined in Schedule I.
1.29 Sponsor. The term
“Sponsor” means Blackstone.
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2.
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Subscription
for and Grant of Units.
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2.1 Purchase/Grant of Units.
Pursuant to the terms and subject to the conditions set forth in
this Agreement, (a) the Executive hereby subscribes for and
agrees to purchase, and the Company hereby agrees to issue and
award to the Executive on the Closing Date, the number of Class A-2
Units set forth in Part 1 of Schedule I attached hereto for the
cash amount (the “ Purchase Price ”) set forth
in Part 1 of Schedule I attached hereto and (b) the Executive
hereby subscribes for and agrees to acquire, and the Company hereby
agrees to issue and award to the Executive, on the Closing Date the
number of Class B-1 Units, Class B-2 Units and Class B-3 Units set
forth in Part 1 of Schedule I attached hereto in exchange for
services performed for the Company and its Subsidiaries.
2.2 The Closing. The closing
(the “ Closing ”) of the grant of Units
hereunder shall take place on the Closing Date. At least two
business days prior to the Closing, the Executive shall deliver to
the Company the Purchase Price, payable by delivery of the amount
in cash set forth on Schedule I attached hereto, by delivery of a
cashier’s or certified check or by wire transfer in
immediately available funds.
2.3 Section 83(b)
Election. Within 10 days after the Closing, the Executive shall
provide the Company with a copy of a completed election under
Section 83(b) of the Internal Revenue Code of 1986, as
amended, and the regulations promulgated thereunder in the form of
Exhibit A attached hereto. The Executive shall timely file (via
certified mail, return receipt requested) such election with the
Internal Revenue Service (“ IRS ”) and shall
thereafter certify to the Company the Executive has made such
timely filing.
2.4 Closing Conditions.
Notwithstanding anything in this Agreement to the contrary, the
Company shall be under no obligation to issue and sell to the
Executive any Units unless (i) the Executive is an employee
of, or consultant to, the Company or one of its Subsidiaries on the
Closing Date; (ii) the representations of the Executive
contained in Section 3 hereof are true and correct in all
material respects as of the Closing Date and (iii) the
Executive is not in breach of any agreement, obligation or covenant
herein required to be performed or observed by the Executive on or
prior to the Closing Date.
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3.
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Investment
Representations and Covenants of the Executive.
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3.1 Units Unregistered. The
Executive acknowledges and represents that the Executive has been
advised by the Company that:
(a) the offer and sale of the Units
have not been registered under the Securities Act;
(b) the Units must be held in
accordance with the Securityholders Agreement and the Executive
must continue to bear the economic risk of the investment in the
Units unless the offer and sale of such Units are subsequently
registered under the Securities Act and all applicable state
securities laws or an exemption from such registration is
available;
(c) there is no established market
for the Units and it is not anticipated that there will be any
public market for the Units in the foreseeable future;
(d) a restrictive legend in the form
set forth below and the legends set forth in Section 8.2(a)
and (b) of the Securityholders Agreement shall be placed on
the certificates, if any, representing the Units:
“THE SECURITIES REPRESENTED BY
THIS CERTIFICATE ARE SUBJECT TO CERTAIN REPURCHASE OPTIONS AND
OTHER PROVISIONS SET FORTH IN A MANAGEMENT UNITS SUBSCRIPTION
AGREEMENT WITH THE ISSUER DATED AS OF JULY 13, 2009, AS AMENDED AND
MODIFIED FROM TIME TO TIME, A COPY OF WHICH MAY BE OBTAINED BY THE
HOLDER HEREOF AT THE ISSUER’S PRINCIPAL PLACE OF BUSINESS
WITHOUT CHARGE”; and
(e) a notation shall be made in the
appropriate records of the Company indicating that the Units are
subject to restrictions on transfer and, if the Company should at
some time in the future engage the services of a securities
transfer agent, appropriate stop-transfer instructions will be
issued to such transfer agent with respect to the Units.
3.2 Additional Investment
Representations. The Executive represents and warrants
that:
(a) the Executive’s financial
situation is such that the Executive can afford to bear the
economic risk of holding the Units for an indefinite period of
time, has adequate means for providing for the Executive’s
current needs and personal contingencies, and can afford to suffer
a complete loss of the Executive’s investment in the
Units;
(b) the Executive’s knowledge
and experience in financial and business matters are such that the
Executive is capable of evaluating the merits and risks of the
investment in the Units;
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(c) the Executive understands that
the Units are a speculative investment which involves a high degree
of risk of loss of the Executive’s investment therein, there
are substantial restrictions on the transferability of the Units
and, on the Closing Date and for an indefinite period following the
Closing, there will be no public market for the Units and,
accordingly, it may not be possible for the Executive to liquidate
the Executive’s investment in case of emergency, if at
all;
(d) the terms of this Agreement
provide that if the Executive ceases to be an employee of the
Company or its Subsidiaries, the Company and its Affiliates have
the right to repurchase the Units at a price which may, under
certain circumstances, be less than the Fair Market Value
thereof;
(e) the Executive understands and
has taken cognizance of all the risk factors related to the
purchase of the Units and, other than as set forth in this
Agreement, no representations or warranties have been made to the
Executive or the Executive’s representatives concerning the
Units or the Company or their prospects or other
matters;
(f) the Executive has been given the
opportunity to examine all documents and to ask questions of, and
to receive answers from, the Company and its representatives
concerning the Company and its Subsidiaries, the Securityholders
Agreement, the Company’s organizational documents and the
terms and conditions of the purchase of the Units and to obtain any
additional information which the Executive deems
necessary;
(g) all information which the
Executive has provided to the Company and the Company’s
representatives concerning the Executive and the Executive’s
financial position is complete and correct as of the date of this
Agreement; and
(h) the Executive is an
“accredited investor” within the meaning of Rule 501(a)
under the Securities Act.
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4.
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Certain
Sales and Forfeitures Upon Termination of
Employment.
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4.1 Put Option.
(a) If the Executive’s
employment with the Company and its Subsidiaries terminates due to
the Disability or death of the Executive prior to the earlier of
(i) an initial Public Offering or (ii) a Change of
Control, the Executive and the Executive’s Permitted
Transferees (hereinafter sometimes collectively referred to as the
“ Executive’s Group ”) shall have the
right, subject to the provisions of Section 5 hereof, for 180
days (the “ Put Option Period ”) following the
date that is six (6) months after the date of such termination
of employment of the Executive, to sell to the Company, and the
Company shall be required to purchase (subject to the provisions of
Section 5 hereof), on one occasion from each member of the
Executive’s Group, all (but not less than all) of the number
of Units then held by the Executive’s Group that equals the
sum of (i) all Class A-2 Units collectively held by the
Executive’s Group and (ii) all Vested Units collectively
held by the Executive’s Group, at a price per Unit equal to
the Fair Market Value of each Class of such Units (measured as of
the date of death or such termination; provided , that,
respecting any Units that have vested less than six months and one
day prior to the date of such termination, such Fair Market Value
shall be measured as of the date that is one day following the date
that is six months after the date such Units had vested);
provided , further, that in any case the Board shall have
the right, in its sole
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discretion, to increase the
foregoing purchase price. In order to exercise its rights with
respect to the Units pursuant to this Section 4.1(a), the
Executive’s Group shall also be required to simultaneously
exercise any similar rights it may have with respect to any other
units of the Company held by the Executive’s Group in
accordance with the terms of the agreements pursuant to which such
other units were purchased from the Company.
(b) If the Executive’s Group
desires to exercise its option to require the Company to repurchase
Units pursuant to Section 4.1(a), the members of the
Executive’s Group shall send one written notice to the
Company setting forth such members’ intention to collectively
sell all of their Units pursuant to Section 4.1(a), which
notice shall include the signature of each member of the
Executive’s Group. Subject to the provisions of
Section 5.1, the closing of the purchase shall take place at
the principal office of the Company on a date specified by the
Company no later than the 60th day after the giving of such
notice.
(c) Notwithstanding anything herein
to the contrary, the rights of the Executive’s Group as set
forth in this Section 4.1 shall not in any way be affected by
the rights (whether or not exercised) of the Company or the Sponsor
as set forth in Section 4.2 below.
4.2 Call Options;
Forfeitures.
(a) If the Executive’s
employment with the Company and its Subsidiaries terminates for any
reason, or if the Executive engages in “Competitive
Activity” (as defined in Section 6.1 of this Agreement),
the Company shall have the right and option to purchase for a
period of 210 days following the Termination Date or the discovery
of the Competitive Activity (except that the Company shall not
exercise such right or option to purchase any Units that have
vested less than six months and one day prior to the Termination
Date, at any time on or prior to the date that is one day following
the date that is six months after the date such Units had vested
(“ Risk Period ”), and each member of the
Executive’s Group shall be required to sell to the Company,
any or all of such Units (other than, in the case of a termination
described in clause (ii) below, the Class A-2 Units, although
such Class A-2 Units remain subject to repurchase if the
Executive engages in “Competitive Activity” as
described above) then held by such member of the Executive’s
Group (it being understood that if Units of any class subject to
repurchase hereunder may be repurchased at different prices, the
Company may elect to repurchase only the portion of the Units of
such class subject to repurchase hereunder at the lower price), at
a price per unit equal to the applicable purchase price determined
as follows:
(i) Death or Disability . If
the Executive’s employment with the Company and its
Subsidiaries is terminated due to the Disability or death of the
Executive:
(A) for all Class A-2 Units and
Vested Units, the purchase price per Unit will be the Fair Market
Value (measured as of the Termination Date except respecting any
Units subject to the Risk Period, the first day after the Risk
Period), and
(B) all Unvested Units will be
forfeited without consideration therefor;
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(ii) Termination Without Cause;
Constructive Termination . If the Executive’s employment
with the Company and its Subsidiaries is terminated by the Company
and its Subsidiaries without Cause or by the Executive as a result
of a Constructive Termination:
(A) with respect to Class A-2
Units and Vested Units, the purchase price per Unit will be the
Fair Market Value (measured as of the Termination Date except
respecting any Units subject to the Risk Period, the first day
after the Risk Period); and
(B) all Unvested Units will be
forfeited without consideration therefor;
(iii) Termination for Cause .
If the Executive’s employment with the Company and its
Subsidiaries is terminated by the Company or any of its
Subsidiaries for Cause or if Executive engages in a
“Competitive Activity,”
(A) with respect to Class A-2
Units, the purchase price per Unit will be the lesser of
(x) Fair Market Value (measured as of the Termination Date)
and (y) Cost, and
(B) all Vested Units and Unvested
Units will be forfeited without consideration therefor;
(iv) Voluntary Termination
(Before or After the Third Anniversary) . If the
Executive’s employment with the Company and its Subsidiaries
is terminated by the Executive for any other reason not set forth
in Section 4.2(a)(i) or (ii) or (iii):
(A) if the employment terminates on
or after the third anniversary of the Closing Date:
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(1)
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with respect to
Class A-2 Units and Vested Units, , the purchase price per
Unit will be the Fair Market Value (measured as of the Termination
Date except respecting any Units subject to the Risk Period, the
first day after the Risk Period); and
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(2)
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all Unvested
Units will be forfeited without consideration therefor;
or
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(B) if the employment terminates
prior to the third anniversary of the Closing Date:
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(1)
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with respect to
Class A-2 Units, the purchase price per Unit will be the
lesser of (A) Fair Market Value (measured as of the
Termination Date) and (B) Cost; and
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(2)
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all Vested
Units and Unvested Units will be forfeited without consideration
therefor;
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provided that in any case the Board shall have the right,
in its sole discretion, to increase any purchase price set forth
above.
(b) If the Company desires to
exercise one of its options to purchase Units pursuant to this
Section 4.2, the Company shall, not later than 210 days after
the Termination Date or the discovery of the Competitive Activity,
send written notice to each member of the Executive’s Group
of its intention to purchase Units, specifying the number of Units
to be purchased (the “ Call Notice ”). Subject
to the provisions of Section 5, the closing of the purchase
shall take place at the principal office of the Company on a date
specified by the Company no later than the 30th day after the
giving of the Call Notice.
(c) Notwithstanding the foregoing,
if the Company elects not to exercise one of its options to
purchase Units pursuant to this Section 4.2, the Sponsor may
elect to purchase such Units on the same terms and conditions set
forth in this section 4.2 by providing written notice to each
member of the Executive’s Group of its intention to purchase
Units within 30 days after the expiration of the Company’s
210 day call window following the Termination Date.
(d) If there is no public market for
the Units on the applicable determination date, (i) unless the
Company and the Executive otherwise agree at the time of a
repurchase of Units by the Company pursuant to Section 4.1 or
Section 4.2 hereof, if within 180 days of a termination date
in which the Company has exercised its right to repurchase Units
(or within 180 days of the commencement of a Put Option Period in
which the Executive’s Group has exercised its right to have
the Units repurchased by the Company), either (A) the Company
enters into a binding agreement that, when consummated would be a
Change of Control, and such Change of Control actually thereafter
occurs, or (B) a Public Offering occurs, Fair Market Value
shall be the price obtained in such Change of Control or Public
Offering (and the Company or the Executive, as applicable, shall
promptly pay the other the difference between Fair Market Value
used for purposes of such call and the Fair Market Value as
determined pursuant to this proviso)); and (ii) subject to
proviso (i), if the Executive believes that the amount
determined by the Board to be the Fair Market Value of the Units is
less than the amount that the Executive believes to be the Fair
Market Value of such Units and the amount in dispute exceeds
$50,000, the Executive may elect to direct the Company to obtain an
appraisal of the Fair Market Value of such Units, which appraisal
shall be prepared by a qualified independent appraiser, mutually
selected by the Company and the Executive. If the Company and the
Executive are unable to agree on such appraiser, they shall each
select a qualified independent appraiser and the two appraisers
shall select a third appraiser, which third appraiser shall prepare
the appraisal of Fair Market Value. In all events, the appraiser
shall not, in the past 12 months, have been, or then be, engaged to
provide any services to the Company or a Subsidiary of the Company
or to the Executive. Such election shall be in writing and given to
the Company within fifteen (15) days after receipt by the
Executive of the Board’s determination of F