EXHIBIT 10.13
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (hereinafter "this Agreement") is made as of the
19th day of April, 2000 by and between Better Minerals & Aggregates Company, a
Delaware corporation, with offices at Xxxxx 000 Xxxxx, X.X. Xxx 000, Xxxxxxxx
Xxxxxxx, Xxxx Xxxxxxxx 00000, (hereinafter "the Company") and Xxx X. Xxxxxx, an
individual residing at 000 Xxxx Xxxxxx Xxxxx, Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000,
(hereinafter "the Executive").
WHEREAS, the Company and its wholly owned subsidiary Stone Materials
Company, L.L.C. ("Stone Materials"), are engaged in the business of mining,
processing and marketing aggregates and of producing and marketing hot mixed
asphalt and whereas, the Company is also involved in the business of mining,
processing and marketing industrial minerals, including silica, through its
wholly owned subsidiary, U.S. Silica Company, (collectively, "the Business");
WHEREAS, the Executive possesses certain qualifications and skills that
will enable him to perform the duties outlined below;
WHEREAS, the Company desires to employ the Executive as the President and
Chief Operating Officer of Stone Materials and the Executive desires to be so
employed by the Company, on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements herein set forth, the Company and the Executive hereby
agree as follows:
1. Employment. The Company hereby agrees to employ the Executive, and the
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Executive hereby agrees to serve, as President and Chief Operating Officer of
Stone Materials. The Executive agrees to perform such duties and services
customary to such office as shall from time to time be assigned to him by the
Company's Chief Executive Officer or its Board of Directors. Specifically, such
duties and services shall include managing Stone Material's budgeting process,
its employee compensation structure and all aspects of its business operations.
The Executive further agrees to use his best efforts to promote the interests of
the Company and to devote his full business time and energies to the business
and affairs of the Company.
2. Term of Employment.
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(a) The Executive's employment hereunder shall be for a term of three
(3) years commencing on April 1, 2000 (the "Effective Date") and ending on March
31, 2003 (the "Expiration Date"), unless terminated earlier pursuant to
Paragraph 4 of this Agreement (the "Term of Employment"). Beginning on each
anniversary of the Effective Date, (each, an "Anniversary Date"), this Agreement
shall automatically be renewed and the Term of Employment extended for an
additional term of one (1) year, unless such renewal is objected to by either
the Company or the Executive upon written notice delivered not less than ninety
(90) days prior to an Anniversary Date. The last day of each such extension
shall become the new Expiration Date.
(b) Notwithstanding the foregoing, if a "Change of Control" occurs,
the Term of Employment shall be reduced to eighteen (18) months commencing on
the date such Change
of Control becomes effective. The last day of such reduced term shall become the
new Expiration Date. "Change in Control" shall mean: (i) the acquisition by any
person (as defined in Section 13(d)(2) of the Securities Exchange Act of 1934,
as amended, and the regulations thereunder; or (ii) the approval of the
stockholders of the Company of (A) a plan of complete liquidation of the
Company; (B) an agreement for the sale or disposition of all or substantially
all of the Company's assets; or (C) a merger, consolidation, or reorganization
of the Company with or involving any other organization, other than a merger,
consolidation or reorganization that would result in the voting securities of
the Company outstanding immediately prior thereto continuing to represent at
least seventy-five (75) percent of the combined voting power of the voting
securities of the Company (or such surviving entity) outstanding immediately
after such merger, consolidation or reorganization.
3. Compensation and Other Related Matters.
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(a) Salary. As compensation for services rendered hereunder, the
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Executive shall receive an annual salary of four hundred thousand dollars
($400,000.00) (the "Annual Salary"), which salary shall be paid in accordance
with the Company's then prevailing payroll practices. This salary shall be
reviewed annually by the Compensation Committee of the Company's Board of
Directors.
(b) Signing Bonus. Concurrently with the execution of this Agreement,
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the Company shall pay the Executive a signing bonus equal to one hundred
thousand dollars ($100,000.00), net of any applicable tax withholdings.
(c) Bonus. During the Term of Employment, the Executive shall receive
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an annual bonus in an amount equal to fifty (50) percent of the Annual Salary
upon achievement of the Company's targets as approved from time to time by the
Board of Directors (the "Bonus Targets"), payable in accordance with, and
subject to the terms and conditions of, the Company's Annual Bonus Incentive
Program ("ABIP"), as such plan may exist from time to time, (the "Annual
Bonus"). Pursuant to the ABIP as in existence on the date hereof, a portion of
the Annual Bonus is payable beginning at the achievement of ninety (90) percent
of the Company's budget objectives and amounts in excess of fifty (50) percent
of the Annual Salary are payable in the event of achievement of in excess of one
hundred (100) percent of the Company's budget objectives. The Company agrees,
however, that under the terms of the ABIP, the percentage of Annual Salary that
the Executive is eligible to receive as an Annual Bonus upon attaining the Bonus
Targets shall not be less than fifty (50) percent of such salary. For fiscal
year 2000, the Executive's bonus shall be calculated and paid as if the Company
has employed the Executive as of January 1, 2000.
(d) Benefits. During the Term of Employment, the Executive shall be
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entitled to participate in the fringe benefits, perquisites and other benefits
of employment listed on Exhibit A to this Agreement that the Company currently
provides to other senior executives of the Company having rank similar to that
of Executive, as such benefits may exist from time to time, except the Executive
shall not receive the 401(k) Retirement Contribution described in Exhibit A. In
addition, if the Company sponsors additional fringe benefits, perquisites or
other benefits of employment, the Executive shall be entitled to participate in
such additional benefits
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to the same extent as other senior executives of the Company having rank similar
to that of the Executive.
(e) Retirement. The Company acknowledges that: (i) the Executive is
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currently a participant in a defined benefit plan sponsored by his former
employer (the "Defined Benefit Plan"); (ii) the Executive has vested in certain
benefits under the Defined Benefit Plan; and (iii) the Executive would continue
to vest in such benefits if he remained employed by his former employer.
Therefore, the Company agrees to create a supplemental retirement plan in which
the Executive shall be entitled to participate. The benefits payable to the
Executive under such plan as of the Expiration Date, shall, when combined with
his vested benefits payable under the Defined Benefit Plan, equal or exceed the
benefits the Executive would have received under the Defined Benefit Plan had he
remained employed with his former employer until the Expiration Date. The
Company agrees to create the supplemental retirement plan in a manner designed
not to cause the Executive to incur any tax liability for the Executive as a
result of such creation.
(f) Stock Incentives. (i) Concurrently with the execution of this
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Agreement, the Executive shall purchase from USS Holdings, Inc. ("USS Holdings")
twenty-five thousand (25,000) shares of USS Holdings' Class C Common Stock at a
price of one cent ($.01) per share. In connection with such purchase, the
Executive agrees to execute a Manager Repurchase Agreement in the form attached
hereto as Exhibit B. The Executive acknowledges and agrees that such shares
shall be subject to the Manager Repurchase Agreement. In the event the Executive
makes an election under (S)83(b) of the Internal Revenue Code in connection with
such purchase (the "Election"), the Company agrees to pay the Executive an
amount sufficient to pay any tax liability the Executive incurs as a result of
the Election, regardless when such liability arises as a result of the Election.
In the event the Internal Revenue Service, or any other federal, state or local
taxing authority, challenges the Election, the Company, while assuming all
responsibility for any tax liability, shall have the right to advocate,
negotiate or otherwise communicate with such taxing authority concerning the
Executive's tax liability and the Executive agrees that he shall not take any
position contrary to the Company in such communications. In addition, in the
event any taxing authority challenges the Election in connection with an IRR
Event (as that term is defined in the USS Holdings' Stockholders Agreement), the
Company's obligation to reimburse the Executive for any increased income tax
liability arising from the Election shall be reduced by any corresponding
decrease in the Executive's capital gain liability. (ii) Concurrently with the
execution of this Agreement, the Executive shall purchase from USS Holdings
twenty-five thousand (25,000) shares of USS Holdings' Class A Common Stock at a
price of thirty-nine dollars and ninety cents ($39.90) per share. The Company
agrees to reimburse the Executive the cost of such purchase and further agrees
to increase such reimbursement by an amount sufficient to compensate the
Executive for any taxes incurred by him because of such reimbursement, payable
on or before the date on which the Executive is obligated to file tax returns
for the year in which he incurred the tax obligation. (iii) Concurrently with
the execution of this Agreement, the Executive shall purchase two thousand five
hundred (2,500) shares of USS Holdings' Class A Common Stock at a price of
thirty-nine dollars and ninety cents ($39.90) per share. The Executive may
borrow up to fifty (50) percent of such purchase price from USS Holdings by
signing a Promissory Note in the form attached hereto as Exhibit C. (iv) In
connection with the stock purchases described in this Paragraph, the Executive
shall become a party to USS Holdings' Stockholders Agreement (the
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"Stockholders Agreement") and its Registration Rights Agreement (both of which
the Company previously provided to the Executive) as a Manager Stockholder as
that term is defined in the Stockholders Agreement, by executing an Agreement of
Commitment in the form attached hereto as Exhibit D. (v) With respect to each
stock purchase described in this Paragraph 3(f), the Company and the Executive
agree to use their best efforts to minimize the Executive's tax liability and
agree to cooperate in order to do so, whether or not such stock purchase is
subject to reimbursement. The Company shall be entitled to offset against any
amounts owed to the Executive pursuant to this Paragraph 3(f) any withholding
tax the Company is required to pay in connection with any reimbursement payment
that is deemed additional compensation to the Executive.
(g) Expenses. The Company shall reimburse the Executive for all
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reasonable out-of-pocket expenses actually incurred by him in the furtherance of
his duties under this Agreement. Such expenses shall be reimbursed upon
submission to the Company of invoices containing original receipts for all such
expenditures, and upon review by the Company with respect to the reasonable
nature thereof. In addition, the Company will reimburse the Executive for the
costs associated with attending conferences and seminars that are beneficial to
both the Company and the Executive and for the costs associated with maintaining
or acquiring any reasonably necessary certifications or licenses.
(h) Relocation. The Executive acknowledges and agrees that the Company
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shall not reimburse him for the costs incurred by him in connection with his
relocation to Berkeley Springs, West Virginia or its surrounding environs from
Raleigh, North Carolina.
4. Termination.
(a) Disability. If, as a result of the incapacity of the Executive due to
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physical or mental illness, the Executive is unable to perform substantially and
continuously the duties assigned to him hereunder, with or without a reasonable
accommodation, for a period of one hundred eighty (180) days, whether or not
consecutive, out of any twelve (12) consecutive months during the Term of
Employment, the Company may terminate his employment for "Disability" upon
thirty (30) days prior written notice to the Executive.
(b) Death. The Executive's employment shall terminate immediately
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upon the Executive's death.
(c) Cause. The Company shall be entitled to terminate the Executive's
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employment for "Cause." Termination of the Executive's employment by the Company
for "Cause" shall mean: (i) the commission by the Executive of any felony; (ii)
the commission by the Executive of any other act that is a breach of his
fiduciary duty of loyalty to the Company; or (iii) the repeated failure of the
Executive to otherwise perform his duties to the Company as determined in good
faith by the Company's Board of Directors, unless the Executive cures such
failures within ten (10) days after the Executive receives from the Board of
Directors written notice of such failures.
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(d) Termination Without Cause. The Company shall have the right to
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terminate the Executive's employment without cause at any time upon thirty (30)
days prior written notice.
(e) Good Reason. The Executive shall have the right to resign his
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employment for "Good Reason" upon thirty (30) days prior written notice. "Good
Reason" shall mean, without the Executive's consent: (i) the Executive's duties
or level of responsibility are materially reduced; (ii) the Executive's level of
compensation is reduced unless substantially all of the Company's other
employees of similar rank and responsibility undergo similar reductions in
compensation; or (iii) the Executives' place of employment is relocated to a
location more than seventy-five (75) miles from his present place of employment.
(f) Change in Control. The Company shall have the right to terminate
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the Executive's employment within sixty (60) days following a "Change in
Control", as that term is defined in Paragraph 2(b) of this Agreement, upon
thirty (30) days prior written notice.
5. Compensation Upon Termination or During Disability.
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(a) Disability. During any period that the Executive fails to perform
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his full-time duties with the Company as a result of incapacity due to physical
or mental illness (the "Disability Period"), the Executive shall continue to
receive his Annual Salary at the rate set forth in Paragraph 3(a) of this
Agreement, less any compensation payable to the Executive under the applicable
disability insurance plan of the Company during such period, until this
Agreement is terminated pursuant to Paragraph 4(a) hereof. For a period of six
(6) months following the termination of the Executive's employment for
Disability, the Company shall continue to pay the Executive his Annual Salary
and the Executive shall continue to participate in the Company's employee
benefit plans on the same terms and conditions under which he participated in
such plans prior to the termination of his employment. Following such period,
the Executive's benefits shall be determined under the Company's insurance and
other compensation programs then in effect in accordance with the terms of such
programs and the Company shall have no further obligation to him under this
Agreement.
(b) Death. In the event of the Executive's death, the Executive's
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beneficiary shall be entitled to receive the Executive's Annual Salary at the
rate set forth in Paragraph 3(a) of this Agreement until the date of his death.
For a period of six (6) months following the Executive's death, the Executive's
immediate family shall continue to participate in the Company's employee benefit
plans on the same terms and conditions under which they participated in such
plans prior to the Executive's death. Thereafter, the Company shall have no
further obligation to him or his beneficiary under this Agreement.
(c) Cause. If the Executive's employment shall be terminated by the
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Company for "Cause" as defined in Paragraph 4(c) of this Agreement, the Company
shall continue to pay the Executive his Annual Salary at the rate set forth in
Paragraph 3(a) of this Agreement through the date of termination of the
Executive's employment. Thereafter, the Company shall have no further
obligation to him under this Agreement.
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(d) Termination Without Cause. If the Company terminates the
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Executive's employment with the Company without Cause pursuant to Paragraph 4(d)
of this Agreement, the Company shall pay the Executive the product of (i) the
Annual Salary at the rate in effect at the date of such termination plus the
Annual Bonus for the year in which the Executive is terminated, such bonus
amount to be calculated assuming that the Executive would have achieved one
hundred (100) percent of the Bonus Targets; and (ii) the remaining Term of
Employment. Thereafter, the Company shall have no further obligation to Employee
under this Agreement.
(e) Resignation for Good Reason. If the Executive resigns his
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employment with the Company for Good Reason pursuant to Paragraph 4(e) of this
Agreement, the Company shall pay the Executive the product of (i) the Annual
Salary at the rate in effect at the date of such resignation plus the Annual
Bonus for the year in which the Executive is terminated, such bonus amount to be
calculated assuming that the Executive would have achieved one hundred (100)
percent of the Bonus Targets; and (ii) the remaining Term of Employment.
Thereafter, the Company shall have no further obligation to Employee under this
Agreement.
(f) Termination Following Change of Control. If the Company
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terminates the Executive's employment with the Company following a Change in
Control pursuant to Paragraph 4(f) of this Agreement, the Company shall pay the
Executive the product of (i) the Annual Salary at the rate in effect at the date
of such termination plus the Annual Bonus for the year in which the Executive is
terminated, such bonus amount to be calculated assuming that the Executive would
have achieved one hundred (100) percent of the Bonus Targets; and (ii) the
remaining Term of Employment. Thereafter, the Company shall have no further
obligation to Employee under this Agreement.
6. Confidentiality.
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(a) The Executive acknowledges that:
(i) the Business in which the Company is engaged is intensely
competitive and that his employment by the Company will require that he have
access to and knowledge of confidential information of the Company, including,
but not limited to, certain/all of the Company's plans for creation, acquisition
or disposition of products or publications, expansion plans, financial status
and plans, products, manufacturing processes and methods, improvements,
formulas, designs or styles, method of distribution, customer lists, product
development plans, rules and regulations, personnel information and trade
secrets of the Company, all of which are of vital importance to the success of
the Company's business (collectively, "Confidential Information");
(ii) the direct or indirect disclosure of any Confidential
Information would place the Company at a serious competitive disadvantage and
would do serious damage, financial and otherwise, to the Company's Business;
(iii) by his training, experience and expertise, the Executive's
services to the Company will be special and unique; and
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(iv) if the Executive leaves the Company's employ to work for a
competitive business in any capacity, it would cause the Company irreparable
harm.
(b) Covenant Against Disclosure. The Executive therefore covenants
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and agrees that all Confidential Information relating to the business, products
and services of the Company, any subsidiary, affiliate or customer shall be and
remain the sole property of the Company, free of any rights of the Executive.
The Executive further agrees not to make any use of any Confidential Information
except in the performance of his duties hereunder and not to disclose any
Confidential Information to third parties, without the prior written consent of
the Company.
(c) Return of Company Documents. The Executive agrees that, upon
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termination of his employment for any reason, all Confidential Information in
his possession, directly or indirectly, that is in written or other tangible
form (together with all duplicates thereof) will immediately be returned to the
Company and will not be retained by the Executive or furnished to any third
party, either by sample, facsimile, film, audio or video cassette, electronic or
magnetic data, verbal communication or any other means of communication.
(d) Non-competition. The Executive agrees that through the Expiration
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Date, whether the Executive remains employed with the Company for such period,
the Executive will not, directly or indirectly, own, manage, operate, control or
participate in the ownership, management or control of, or be connected as an
officer, executive, partner, director, or otherwise with, or have any financial
interest in, or aid or assist anyone else in the conduct of, any entity or
business which competes with the Business of the Company or any of its
subsidiaries or affiliates, within the United States of America, or within any
area in which the Company conducts its Business on the date the Executive's
employment terminates under this Agreement. Notwithstanding the foregoing, the
Executive's ownership of securities of a public company engaged in competition
with the Company not in excess of five (5) percent of any class of such
securities shall not be considered a breach of the covenants set forth in this
Paragraph 6.
(e) Further Covenant. The Executive agrees that through the
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Expiration Date, whether the Executive remains employed with the Company for
such period, the Executive will not, directly or indirectly, take any of the
following actions, and, to the extent that the Executive owns, manages,
operates, controls, is employed by or participates in the ownership, management,
operation or control of, or is connected in any manner with, any business of the
type and character engaged in and competitive with that conducted by the Company
or any of its subsidiaries or affiliates during the period of the Executive's
employment, the Executive will use his best efforts to ensure that such business
does not take any of the following actions:
(i) persuade or attempt to persuade any customer of the Company
to cease doing business with the Company or any of its subsidiaries or
affiliates, or to reduce the amount of business it does with the Company or any
of its subsidiaries or affiliates;
(ii) solicit for himself or any entity the business of any
customer of the Company or any of its subsidiaries or affiliates that was a
customer of the Company within six months prior to the termination of the
Executive's employment; or
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(iii) persuade or attempt to persuade any present employee of the
Company or any of its subsidiaries or affiliates or any individual who was its
employee of the Company or any of its subsidiaries or affiliates during the two
(2) years prior to the Executive's termination of employment, to leave the
employ of the Company or any of its subsidiaries or affiliates.
7. Intellectual Property. The Executive hereby agrees that any and all
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improvements, inventions, discoveries, formulae, processes, methods, know-how,
confidential data, trade secrets and other proprietary information made,
developed or created by the Executive (whether at the request or suggestion of
the Company or otherwise, whether alone or in conjunction with others, and
whether during regular working hours of work or otherwise) during the Term of
Employment, which may be directly or indirectly useful in, or relate to, the
business of or tests being carried out by the Company or any of its subsidiaries
or affiliates, shall be promptly and fully disclosed by the Executive to the
Board of Directors and shall be the Company's exclusive property as against the
Executive. On the Company's demand, the Executive shall promptly deliver to the
Company all papers, drawings, models, data (including all electronically or
magnetically stored data), software, source code and other material relating to
any invention made, developed or created by him as aforesaid.
The Executive shall, upon the Company's request and without any payment
therefor, execute any documents necessary or advisable in the opinion of the
Company's counsel to direct issuance of patents or copyrights of the Company
with respect to such inventions as are to be in the Company's exclusive property
as against the Executive under this Paragraph 7 or to vest in the Company title
to such inventions as against the Executive, the expense of securing any such
patent or copyright, to be borne by the Company.
8. Disputes. In the event of any dispute between the parties hereto
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arising out of or relating to this Agreement or the employment relationship,
including, without limitation, any claims of discrimination, between the Company
and the Executive (except any dispute arising out of Paragraphs 6 and 7 as set
forth below), such dispute shall be settled by arbitration in Washington, D.C.
in accordance with the National Rules for the Resolution of Employment Disputes
then in effect of the American Arbitration Association. Judgment upon the award
rendered may be entered in any court having jurisdiction thereof.
Notwithstanding anything herein to the contrary, a breach by the Executive
of his obligations under Paragraph 6 or 7 of this Agreement would cause the
Company irreparable harm and no adequate remedy at law would be available in
respect thereof. Accordingly, if any dispute arises between the parties under
Paragraphs 6 or 7, the Company shall not be required to arbitrate such dispute
or claim but shall have the right to institute judicial proceedings in any court
of competent jurisdiction with respect to such dispute or claim and shall be
entitled to relief enjoining such acts without the need to post a bond. If such
judicial proceedings are instituted, the parties agree that such proceedings
shall not be stayed or delayed pending the outcome of any arbitration proceeding
hereunder. Moreover, the Executive consents to the jurisdiction of the United
States District Court for the District of Columbia for this purpose.
9. Miscellaneous.
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(a) Successors; Binding Agreement. This Agreement and the obligations
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of the Company hereunder and all rights of the Executive hereunder shall inure
to the benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns, provided, however, that the duties of
the Executive hereunder are personal to the Executive and may not be delegated
or assigned by him. The Executive specifically agrees that the Company may
assign this Agreement to any successor, provided that such successor agrees to
assume the terms and conditions of this Agreement.
(b) Notice. All notices of termination and other communications
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provided for in this Agreement shall be in writing and shall be deemed to have
been duly given when delivered by hand or mailed by United States registered
mail, return receipt requested, addressed as follows:
If to the Company:
Better Minerals & Aggregates Company
Xxxxx 000 Xxxxx
X.X. Xxx 000
Xxxxxxxx Xxxxxxx, Xxxx Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx, President and Chief Executive Officer
With a Copy to:
D. Xxxxxx Xxxxxx & Associates, L.L.C.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxxxxx
If to the Executive:
Xxx X. Xxxxxx
000 Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
or to such other address as either party may designate by notice to the other,
which notice shall be deemed to have been given upon receipt.
(c) Governing Law. This Agreement shall be governed by and construed
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in accordance with the laws of the State of West Virginia without regard to the
conflict of law rules thereof.
(d) Waivers. The waiver of either party hereto of any right
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hereunder or of any failure to perform or breach by the other party hereto shall
not be deemed a waiver of any other right hereunder or of any other failure or
breach by the other party hereto, whether of the same or a similar nature or
otherwise. No waiver shall be deemed to have occurred unless set forth in
writing executed by or on behalf of the waiving party. No such written waiver
shall be deemed a continuing waiver unless specifically stated therein, and each
such waiver shall operate
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only as to the specific term or condition waived and shall not constitute a
waiver of such term or condition for the future or as to any act other than that
specifically waived.
(e) Validity. The invalidity or unenforceability of any provision of
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this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall otherwise remain in full force and
effect. Moreover, if any one or more of the provisions contained in this
Agreement is held to be excessively broad as to duration, scope or activity,
such provisions shall be construed by limiting and reducing them so as to be
enforceable to the maximum extent compatible with applicable law.
(f) Survival. The parties agree that the obligation and rights set
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forth in Paragraphs 6, 7 and 8 shall survive the termination of this Agreement
for any reason.
(g) Counterparts. This Agreement may be executed in several
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counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
(h) Entire Agreement. This Agreement sets forth the entire agreement
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and understanding of the parties in respect of the subject matter contained
herein, and supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, Executive or representative of either party in respect of said subject
matter.
(i) Headings Descriptive. The headings of the several paragraphs of
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this Agreement are inserted for convenience only and shall not in any way affect
the meaning or construction of any of this Agreement.
(j) Capacity. The Executive represents and warrants that he is not a
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party to any agreement that would prohibit him from entering into this Agreement
or performing fully his obligations hereunder.
[signature page follows]
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IN WITNESS WHEREOF, the Company and the Executive have executed this
Agreement as of the date first written above.
BETTER MINERALS & AGGREGATES COMPANY
/s/ Xxxxxxx X. Xxxxxxx
By: _______________________________________
Xxxxxxx X. Xxxxxxx
President and Chief Executive Officer
XXX X. XXXXXX
/s/ Xxx X. Xxxxxx
_________________________________________
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EXHIBIT A
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Better Minerals & Aggregates Co. (BMAC)
And U.S. Silica
SALARIED BENEFITS DETAIL
Company-provided Life insurance: 2 times your annual salary
Capped at $300,000
Optional Life insurance During the Term of Employment, the Company
will reimburse the Executive up to $8,250
per year for the cost of a $2,000,000 20-
year term life insurance policy.
Company-provided AD&D insurance 2 times your annual salary
Capped at $300,000
Optional AD&D insurance You can purchase up to the cap of $300,000
You can purchase Employee Only or Employee
Plus Family Employee Only Cost = $.36 per
$10,000 Employee + Family Cost = $.55 per
$10,000
Dependent Life Insurance You can purchase optional Spouse Life =
$4,000 Each Child = $1,000 under the age of
19 Cost = $1.23 monthly
Long Term Disability You can purchase Long Term Disability This
benefit pays 60% of your income after you
are off from work for 6 months. Maximum
Benefit = $10,000 monthly Approximate Cost =
$60 monthly
Health Care Employee Only: $38.25 monthly Employee Plus
One: $92.65 monthly Employee Plus Two or
More: $127.50 mo. Pre-tax contributions
Eligible on the first day of the month
following hire date
Salaried Benefits continued
Page 2
401(k) Eligible on the first day of the month
following hire date
Employee contributes pre-tax or after-tax
up to 15% of salary 2000 Pre-tax Cap =
$10,500 2000 Annual Cap = $30,000
Match = $.25 per $1.00 up to 8% of salary
Vesting = 5 year schedule 2000 Cap = $3400
[Because the Executive will participate in the supplemental retirement plan
described in Paragraph 3(e) of this Agreement, the Executive shall not receive
the 401(k) Retirement Contribution described below]
401(k) Retirement Contribution Company pays 4% monthly to 401(k) 2000 Cap
= $6800 Vesting = 1 year schedule
Profit Sharing = $0.00 to $0.75 per $1.00
paid annually based on company
profitability and the employee's
contribution up to 8%
Executive Deferred Comp Plan - Allows you
to collect match, profit sharing and 4%
based on entire salary - not capped at the
2000 max of $170,000. Non-qualified plan.
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Exhibit B
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MANAGER REPURCHASE AGREEMENT dated as of __________, 2000, between USS
HOLDINGS, INC., a Delaware corporation (the "Corporation") and Xxx X. Xxxxxx
(the "Restricted Manager Stockholder").
In consideration of the mutual covenants and agreements contained in this
Agreement, the parties agree as follows:
1. Definitions; Rules of Construction.
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(a) Unless otherwise defined herein, capitalized terms used in this
Agreement shall have the meanings ascribed to them in the Stockholders
Agreement.
(b) The following capitalized terms have the meanings ascribed to them
below:
"Class A Share" means one share of Class A Common Stock of the Corporation.
-------------
"Corporation" has the meaning ascribed to it in the Preamble.
-----------
"Fair Market Value" for any Marketable Securities shall mean the average of
-----------------
the closing prices of sales of Marketable Securities on all national domestic
exchanges on the date in question, or, if there shall have been no sales on any
such exchange on any such day, the average of the bid and asked prices at the
end of such day on such exchange or, if such Marketable Securities are not
listed on any national domestic exchange, the average of the high and low bid
prices on such day as quoted in the NASDAQ system, in each case averaged over a
period of 20 consecutive business days prior to the date as of which "Fair
Market Value" is being determined.
"Fair Value" means, with respect to any Non-Cash Proceeds, the value of
----------
such Non-Cash Proceeds, as determined jointly by the Majority of the
Institutional Stockholders and the Majority of the DGHA Stockholders. If such
parties are unable to reach agreement within 30 days, such Fair Value shall be
determined by an independent nationally recognized investment bank experienced
in valuing companies or assets jointly selected by the Majority of the
Institutional Stockholders and the Majority of the DGHA Stockholders. If the
parties cannot agree on the selection of an investment bank, within 30 days, the
investment bank will be selected by an independent arbitrator appointed in
accordance with the rules of the American Arbitration Association. The
determination of such investment bank shall be final and binding upon the
parties, and the Corporation shall pay the fees and expenses of such investment
bank.
"Initial Public Offering" means the initial Public Offering of equity
-----------------------
securities of the Corporation.
"Marketable Securities" means securities which (i) are listed for trading
---------------------
on a national domestic securities exchange or quoted in the NASDAQ system, (ii)
may be sold free from restrictions under the Securities Act or otherwise and
---
(iii) are not subject to forfeiture or return by the holder thereof, provided
that no securities will be Marketable Securities unless securities
of the same class with a Fair Market Value of at least $10 million are held by
Persons other than Affiliates of the issuer of such securities.
"Measurement Date" means October 14, 1998.
----------------
"Non-Cash Proceeds" means any property, notes, stock or other securities
-----------------
other than cash and Marketable Securities.
"Stockholders Agreement" means the Amended and Restated Stockholders
----------------------
Agreement as of October 6, 1998 between the Corporation and the parties named
therein as amended or modified from time to time.
(c) The use in this Agreement of the term "including" means "including,
without limitation." The words "herein," "hereof," "hereunder" and other words
of similar import refer to this Agreement as a whole, including the schedules
and exhibits, as the same may from time to time be amended or supplemented, and
not to any particular section, subsection, paragraph, subparagraph or clause
contained in this Agreement. All references to sections, schedules and exhibits
mean the sections of this Agreement and the schedules and exhibits attached to
this Agreement.
(d) The title of and the section and paragraph headings in this Agreement
are for convenience of reference only and shall not govern the interpretation of
any of the terms or provisions of this Agreement.
(e) The use herein of the masculine, feminine or neuter forms shall also
denote the other forms, as in each case the context may require.
(f) Where specific language is used to clarify by example a general
statement contained herein, such specific language shall not be deemed to
modify, limit or restrict in any manner the construction of the general
statement to which it relates. The language used in this Agreement has been
chosen by the parties to express their mutual intent, and no rule of strict
construction shall be applied against any party.
2. Sale of Manager Restricted Shares; Corporation Obligation to
------------------------------------------------------------
Purchase Manager Restricted Shares; Dividends on Manager Restricted Shares.
--------------------------------------------------------------------------
(a) The Corporation hereby agrees to sell to the Restricted Manager
Stockholder and the Restricted Manager Stockholder hereby agrees to purchase
from the Corporation 25,000 Manager Restricted Shares at a purchase price of
$0.01 per share.
(b) Notwithstanding subparagraphs 2(c) and (d) below, if, upon the
consummation of an IRR Event, the Fair Value of a Class A Share is less than
$59.85, then the Corporation shall purchase from the Manager Stockholders
hereunder and under the other Manager Repurchase Agreements, and from the DGHA
Stockholders under the DGHA Repurchase Agreement, all of the Manager Restricted
Shares and DGHA Restricted Shares, if any.
(c) If, upon the consummation of an IRR Event, the IRR realized on a
Class A Share is less than 25%, then the Corporation shall purchase from the
Manager Stockholders hereunder and under the other Manager Repurchase
Agreements, and from the DGHA Stockholders under
2
the DGHA Repurchase Agreement, that number of Manager Restricted Shares and DGHA
Restricted Shares, if any (purchased from the holders thereof pro rata based
upon the number of such shares held) as shall be required to cause the IRR on a
Class A Share deemed to have been purchased on the Measurement Date at $39.90
and held through the date of such IRR Event to equal 25%.
(d) If, upon the consummation of an IRR Event, the IRR realized on a
Class A Share is less than 30% but greater than 25%, then the Corporation shall
purchase from the Manager Stockholders hereunder and under the other Manager
Repurchase Agreements, and from the DGHA Stockholders under the DGHA Repurchase
Agreement, that number of Manager Restricted Shares and DGHA Restricted Shares,
if any (purchased from the holders thereof pro rata based upon the number of
such shares held), up to a maximum of 50% of the aggregate number of Manager
Restricted Shares and DGHA Restricted Shares outstanding on the date of the
consummation of an IRR Event, as shall be required to cause the IRR on a Class A
Share deemed to have been purchased on the Measurement Date at $39.90 and held
through the date of such IRR Event to equal 30%.
(e) The IRR on the Class A Share shall be calculated assuming such Class A
Share was purchased by a single holder on the Measurement Date at a price of
$39.90 and held by such Person until the time of an IRR Event and the "IRR" on
such Class A Share shall mean the pre-tax, compounded annual internal rate of
return realized thereon, calculated on a pro forma basis, using the following
assumptions: (i) any Non-Cash Proceeds received with respect to such Share in
connection with an IRR Event will be deemed for purposes of this definition to
have a value equal to the Fair Value of such Non-Cash Proceeds, (ii) any cash
proceeds or dividends received with respect to such Class A Share prior to the
consummation of the IRR Event but after the Measurement Date will be included in
the calculation of the IRR as of the date of receipt, (iii) upon the
consummation of an Initial Public Offering, the holder of such Share will be
deemed to have sold all Common Equivalents issued in respect of such Class A
Share in such offering at a price per Common Equivalent equal to (A) 85% of the
issue price in the Initial Public Offering if such Initial Public Offering was
not initiated by the Institutional Investors pursuant to Section 2 of the
Registration Rights Agreement and the Institutional Investors shall not have
sold more than 50% of the Common Equivalents then held by them in such Initial
Public Offering pursuant to Section 3 of the Registration Rights Agreement, or
(B) 100% of the issue price if such initial Public Offering was initiated by the
Institutional Investors pursuant to Section 2 of the Registration Rights
Agreement or the Institutional Investors shall have sold more than 50% of the
Common Equivalents then held by them in such Initial Public Offering pursuant to
Section 3 of the Registration Rights Agreement and (iv) the holder of such Class
A Share will be deemed to have received cash in an amount equal to the Fair
Market Value of Marketable Securities received with respect to such Class A
Share (which cash proceeds will be deemed to have been received on the date on
which the securities constituting Marketable Securities are actually received by
the holders of such Class A Share, or, if later, on the date such securities
first meet all of the requirements of Marketable Securities contained in the
definition thereof).
(f) For the avoidance of doubt, the Corporation acknowledges that if, upon
the consummation of an IRR Event, the IRR realized on a Class A Share is less
than 25% after giving effect to the provisions of this Section 2, the
obligations of the Restricted Manager
3
Stockholder with respect thereto shall be limited solely to the sale of the
Manager Restricted Shares described in subparagraph (c) above.
(g) All the Manager Restricted Shares to be purchased pursuant to
subparagraphs (b), (c) or (d) above will be purchased by the Corporation for
$.01 per share immediately prior to the occurrence of an IRR Event. The Manager
Restricted Shares to be purchased by the Corporation shall be purchased from the
Manager Stockholders pro rata based upon the number of Manager Restricted Shares
owned. Each Manager Stockholder shall cause the transfer of the shares
representing the Manager Restricted Shares to the Corporation to be consummated
automatically without any action by the Corporation and the Corporation will pay
the purchase price therefor within 30 days after written demand therefor.
(h) Any and all dividends declared and paid, if any, with respect to the
Manager Restricted Shares shall be held by an escrow agent to be appointed
pursuant to the terms of an escrow agreement in a form to be agreed in good
faith by the parties hereto.
(i) Notwithstanding anything else set forth in this Section 2, if an IRR
Event occurs on or prior to October 14, 2000, the Corporation shall not purchase
more than 50% of the aggregate number of DGHA Restricted Shares and Manager
Restricted Shares pursuant to Sections 2(b), (c) and (d) of this Agreement, any
other Manager Repurchase Agreement or the DGHA Repurchase Agreement.
3. Repurchase of Manager Restricted Shares From Terminating
--------------------------------------------------------
Stockholders. (a) In the event of a Termination Event described in Section
------------
14(d)(i)(1),(2), (3) or (4) of the Stockholders Agreement with respect to the
Restricted Manager Stockholder prior to the date of the occurrence of an IRR
Event, unless such Termination Event occurs on or after the third anniversary of
the later of (i) the Measurement Date and (ii) the date of the Restricted
Manager Stockholder's initial employment with the Corporation or any Subsidiary
thereof, the Corporation shall purchase from the Restricted Manager Stockholder
hereunder all of the Manager Restricted Shares held by the Restricted Manager
Stockholder.
(b) In the event of a Termination Event described in Section
14(d)(i)(5) with respect to the Restricted Manager Stockholder prior to the date
of the occurrence of an IRR Event, the Corporation shall purchase from the
Restricted Manager Stockholder hereunder all of the Manager Restricted Shares
held by the Restricted Manager Stockholder.
(c) Any Manager Restricted Shares repurchased by the Corporation
pursuant to Section 3(a) or (b) shall be repurchased at a price of $0.01 per
share and may be reissued by the Corporation to other Manager Stockholders as
directed by the Chairman of the Board in accordance with the Stockholders
Agreement.
4. Withholding Tax Obligations.
----------------------------
Each Restricted Manager Stockholder shall pay to the Corporation, at
the time and in the amount required by law, funds sufficient to satisfy any and
all applicable tax withholding obligations incurred by the Corporation (or any
affiliate) in respect of the Manager Restricted Shares.
4
5. Duration of Agreement and Legend. (a) The rights and
--------------------------------
obligations of each of the parties hereto under this Agreement shall terminate
after the occurrence of an IRR Event and, if applicable, the repurchase of
Manager Restricted Shares as contemplated herein.
(b) The form of stock certificate issued by the Corporation with respect
to the Manager Restricted Shares shall be stamped or otherwise imprinted with a
legend which shall state, inter alia, that the Manager Restricted Shares are
subject to the restrictions contained in this Agreement.
6. Severability. Whenever possible, each provision of this
------------
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, and such invalid, void or
otherwise unenforceable provisions shall be null and void. It is the intent of
the parties, however, that any invalid, void or otherwise unenforceable
provisions be automatically replaced by other provisions which are as similar as
possible in terms to such invalid, void or otherwise unenforceable provisions
but are valid and enforceable to the fullest extent permitted by law.
7. Entire Agreement. This document embodies the complete
----------------
agreement and understanding among the parties hereto with respect to the subject
matter hereof and supersedes and preempts any prior understandings, agreements
or representations by or among the parties, written or oral, which may have
related to the subject matter hereof in any way.
8. Successors and Assigns. Except as otherwise provided herein,
----------------------
this Agreement will bind and inure to the benefit of and be enforceable by the
Corporation and its successors and assigns, and the Restricted Manager
Stockholder and any subsequent holders of Manager Restricted Shares and the
respective successors and permitted assigns of each of them (including a
Permitted Transferee pursuant to the Stockholders Agreement and any executor,
administrator, legatee or distributee of the estate of the deceased Restricted
Manager Stockholder), so long as they hold Manager Restricted Shares. None of
the provisions hereof shall create, or be construed or deemed to create, any
right to employment in favor of any Person by the Corporation or any of its
subsidiaries. This Agreement is not intended to create any third party
beneficiaries.
9. Counterparts. This Agreement may be executed simultaneously
------------
in two or more counterparts, any one of which need not contain the signatures of
more than one party, but all such counterparts taken together will constitute
one and the same agreement. It shall not be necessary in making proof of this
Agreement to produce or account for more than one such counterpart.
10. Remedies. It is acknowledged that it will be impossible to
--------
measure in money the damages that would be suffered if the parties fail to
comply with any of the obligations herein imposed on them and that in the event
of any such failure, an aggrieved Person will be irreparably damaged and will
not have an adequate remedy at law. Any such person shall, therefore, be
entitled to injunctive relief, including specific performance, to enforce such
obligations, and if any action should be brought in equity to enforce any of the
provisions of
5
this Agreement, none of the parties hereto shall raise the defense that there is
an adequate remedy at law.
11. Notices. All notices, demands or other communications to be
-------
given or delivered under or by reason of the provisions of this Agreement shall
be in writing and shall be deemed to have been given (a) when delivered
personally to the recipient, (b) one business day after being sent by reputable
overnight courier (charges prepaid) (regardless of whether the recipient refuses
to accept delivery), (c) five business days after being sent to the recipient by
certified or registered mail, return receipt requested and postage prepaid
(regardless of whether the recipient refuses to accept delivery) or (d) when
sent to the recipient by facsimile (followed promptly by personal, courier or
certified or registered mail delivery).
If to the Corporation, to:
USS Holdings, Inc.
c/o D. Xxxxxx Xxxxxx & Associates, Inc.
000 Xxxx Xxxxxx 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000)000-0000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxxx
With a copy to:
Winthrop, Stimson, Xxxxxx & Xxxxxxx
Xxx Xxxxxxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
If to the Restricted Manager Stockholder, to:
Xxx X. Xxxxxx
000 Xxxx Xxxxxx Xxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
12. Governing Law. All questions concerning the construction,
-------------
interpretation and validity of this Agreement shall be governed by and construed
in accordance with the domestic laws of the State of New York without giving
effect to any choice or conflict of law provision or rule (whether in the State
of New York or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of New York.
13. Further Assurances. Each party hereto shall do and perform or
------------------
cause to be done and performed all such further acts and things and shall
execute and deliver all such
6
other agreements, certificates, instruments, and documents as any other party
hereto reasonably may request in order to carry out the provisions of this
Agreement and the consummation of the transactions contemplated hereby.
14. Amendment. The provisions of this Agreement may only be
---------
amended or waived with the prior written consent of the Corporation, a Majority
of the Institutional Stockholders and the Restricted Manager Stockholder.
15. Jurisdiction; Venue; Process. The parties to this Agreement
----------------------------
agree that jurisdiction and venue in any action brought by any party hereto
pursuant to this Agreement shall properly (but not exclusively) lie in any
federal or state court located in the State of New York. By execution and
delivery of this Agreement, the parties hereto irrevocably submit to the
jurisdiction of such courts for himself and in respect of his property with
respect to such action. The parties hereto irrevocably agree that venue would be
proper in such court, and hereby waive any objection that such court is an
improper or inconvenient forum for the resolution of such action. The parties
further agree that the mailing by certified or registered mail, return receipt
requested, of any process required by any such court shall constitute valid and
lawful service of process against them, without necessity for service by any
other means provided by statute or rule of court.
16. Mutual Waiver of Jury Trial. BECAUSE DISPUTES ARISING IN
---------------------------
CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY
RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE
STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES
DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS.
THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL
SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY
IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHTS OR
REMEDIES UNDER THIS AGREEMENT OR ANY DOCUMENTS RELATED HERETO.
7
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as of
the date first written above.
USS HOLDINGS, INC.
By:
-------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Vice President
-------------------------------------
Xxx X. Xxxxxx
8
EXHIBIT C
---------
SECURED PROMISSORY NOTE
$49,875.00 ________, 2000
FOR VALUE RECEIVED, Xxx X. Xxxxxx ("Maker") hereby promises to pay to USS
HOLDINGS, INC., a Delaware corporation, or a party designated in writing and
delivered to Maker by USS Holdings, Inc., ("Payee"), on April 1, 2005, to the
extent not sooner paid in accordance with the provisions hereof, the principal
sum of Forty-Nine Thousand Eight Hundred Seventy-Five Dollars ($49,875.00) in
legal tender of the United States of America, together with interest thereon as
herein provided, at the office of Payee at 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, or any other place that may be specified in writing by the
holder of this Note.
1. The unpaid principal of this Note shall bear interest at the rate of
nine percent (9%) per annum and shall be calculated based upon a year of 365
days (or 366 in the case of any leap year) and the actual number of days
elapsed. Accrued interest on the unpaid principal amount of this Note shall be
payable, in arrears, on each Interest Payment Date (as defined below).
2. The unpaid principal of this Note shall be payable on each Principal
Payment Date (as defined below) in an amount equal to fifty percent (50%) of
Maker's Bonus (as defined below) received on such Principal Payment Date.
3. If Maker fails to make any payment of principal or interest when due
(whether at maturity, upon acceleration or otherwise), unless otherwise required
by law, interest shall accrue on all unpaid principal and such overdue amount at
the rate of eleven percent (11%) per annum from five (5) days after the due date
until payments are current.
4. Maker shall have the right to prepay the unpaid principal of this
Note in whole or in part, together with interest accrued on the amount repaid,
at any time without premium or penalty.
5. Upon the occurrence of any Event of Default (as hereinafter defined)
hereunder, and following the failure of Maker to cure such Event of Default
within ten (10) days of receiving written notice of such Event of Default from
Payee, Payee may, at its option, declare the entire unpaid principal balance of
this Note, together with interest accrued thereon, to be immediately due and
payable, without presentation, demand or notice of any kind, all of which Maker
and all other parties who may at any time be liable on this Note in any capacity
hereby expressly waive. The following are Events of Default:
(a) Default shall occur in the payment of the principal of, or interest
on, this Note when due (whether at maturity, upon acceleration or otherwise),
and, following notice of such delinquency to Maker, such default shall continue
unremedied for sixty (60) days; or
(b) Maker shall (i) solely in any bankruptcy proceeding, apply for or
consent to the appointment of a receiver, trustee or liquidator for any
substantial part of his property, (ii) admit in writing his inability to pay his
debts as they mature, (iii) make a general assignment for the benefit of
creditors, (iv) be the subject of any involuntary petition seeking relief under
the Bankruptcy Code, which petition is not dismissed within thirty (30) days, or
Maker does not within the first five (5) days of such period interpose valid and
good-faith defenses to the grant of relief under such petition, or with respect
to which petition an order for relief is entered, or (v) file a voluntary
petition in bankruptcy, or a petition or an answer seeking reorganization or
seeking to take advantage of any bankruptcy, reorganization or insolvency
statute, or any answer admitting the material allegations of a petition filed
against it in any proceeding under any such law; or
(c) A Termination Event specified in Section 14 (d)(i)(5) of the
Stockholders Agreement (as defined below) shall have occurred with respect to
Maker; or
(d) Other than a transfer to a Permitted Transferee (as defined in the
Stockholders Agreement) made with the prior approval of Payee's Board of
Directors, Maker shall have sold or otherwise transferred any of his
shareholdings in Payee or its successor in interest which constitute Pledged
Collateral (as hereinafter defined) hereunder.
The foregoing remedy of acceleration shall not be exclusive of any other right,
power or remedy available to Payee by law.
6. No delay or omission on the part of Payee in exercising any right,
power or remedy hereunder shall operate as a waiver of such right or any other
right under this Note, nor shall any single or partial exercise of any such
right, power or remedy by Payee preclude any other or further exercise thereof
or the exercise of any other right, power or remedy. A waiver on any one
occasion shall not be construed as a bar to or waiver of any such right, power
or remedy on any future occasion. All remedies hereunder are cumulative and are
not exclusive of any other remedies provided by law.
7. As security for the due and punctual payment of Maker's obligations
under this Note, Maker hereby delivers, pledges and hypothecates to Payee, and
grants to Payee a security interest in, all (A) shares of Series D Redeemable
Preferred Stock, par value $.01 per share, of Payee (B) warrants to purchase
shares of Class B Common Stock, par value $.01 per share, of Payee (C) warrants
to purchase shares of Class C Common Stock, par value $.01 per share, of Payee
and (D) shares of its Class A Common Stock, par value $.01 per share, in the
case of each of (A), (B), (C) and (D) above, owned by Maker, whether now or
hereafter acquired, and together with any dividends, distributions (whether in
the form of cash, securities or other assets) or other proceeds in respect
thereof (including shares of any class of common stock of Payee issued to Maker
upon the exercise or conversion thereof), all certificates representing such
shares and all stock powers attached thereto executed in blank and all warrant
agreements representing such warrants (collectively, the "Pledged Collateral").
Maker hereby agrees that physical possession
2
of the Pledged Collateral shall at all times remain in the Payee until the
unpaid principal and interest accrued thereon of this Note have been fully and
finally paid to the Payee.
8. (a) As long as an Event of Default has not occurred under this
Note, Maker shall be entitled to exercise any and all voting and/or consensual
rights relating to or pertaining to the Pledged Collateral.
(b) If any Event of Default under this Note shall occur and be
continuing, the rights of Maker to exercise voting and /or consensual rights
with respect to the Pledged Collateral shall cease, and all such rights shall
become vested in Payee.
9. If an Event of Default under this Note shall occur and be
continuing, then Payee shall be entitled to exercise the rights and remedies of
a secured party under the Uniform Commercial Code of the State of New York.
10. Any notice under or in connection with this Note shall be in writing
and addressed to Maker at 000 Xxxxxx Xxxxx, Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000,
and to Payee at USS Holdings, Inc., c/o D. Xxxxxx Xxxxxx & Associates, Inc., 000
Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 or at such other address
specified by notice given in accordance herewith.
11. Upon the payment of this Note, Payee shall reassign and redeliver to
Maker or his designee, by appropriate instruments of reassignment and release
reasonably satisfactory to such Maker, such of the Pledged Collateral as has not
been sold or otherwise applied by Payee pursuant to this Note.
12. Maker agrees to pay all costs and expenses of enforcement of this
Note, including, but not limited to, attorneys' fees and court costs.
13. For purposes of this Note, the following terms shall have the
following meanings:
"Bonus" means the amount of (a) any bonus from the Payee or any of
its subsidiaries paid pursuant to a bonus plan approved by the Payee's Board of
Directors minus (b) any and all taxes estimated to be payable (assuming in each
case the highest applicable marginal tax rate) with respect to any such bonus
described in the foregoing clause (a).
"Interest Payment Date" means the last business day of each March,
June, September and December.
"Principal Payment Date" means any day on which the Maker shall
receive any Bonus from the Payee or any subsidiary thereof on or after (or with
respect to the year ending) December 31, 1999.
"Stockholders Agreement" means the Stockholders Agreement dated as
of February 9, 1996 between Payee and the stockholders thereof, as the same may
be amended, modified or supplemented from time to time in accordance with the
terms thereof.
14. This Note, and the terms, covenants and conditions hereof, shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors, assigns, estates and
3
heirs, except that Maker shall not be permitted to assign this Note or any
interest herein or in the Pledged Collateral (except, with respect to the
Pledged Collateral, to a Permitted Transferee made with the prior approval of
Payee's Board of Directors, in which case the terms, covenants and conditions
hereof, including without limitation the pledge of the Pledged Collateral, shall
be, and shall be deemed to be, binding upon the Permitted Transferee in respect
of such transfer), or otherwise pledge or encumber the Pledged Collateral, or
any part thereof.
15. Neither this Note nor any provisions hereof may be amended,
modified, waived, discharged or terminated orally nor may any of the Pledged
Collateral be released or the pledge or the security interest created hereby
extended, except by an instrument in writing duly signed by or on behalf of
Payee.
16. This Note shall be construed and enforced in accordance with the
laws of the State of New York without regard to principles of choice or conflict
of law.
IN WITNESS WHEREOF, this Note has been executed and delivered by Maker
as of the date first set forth above.
--------------------------------
Xxx X. Xxxxxx
4
EXHIBIT D
---------
Agreement of Commitment to the
------------------------------
Stockholders Agreement and Registration Rights Agreement
--------------------------------------------------------
________, 2000
The undersigned agrees to be subject to the terms of the Stockholders
Agreement dated as of February 9, 1996 as amended by Amendment No. 2 dated as of
October 6, 1998 and the Registration Rights Agreement dated as of February 9,
1996, as amended by Amendment No. 1 dated as of October 6, 1998, in each case
among USS Holdings, Inc. and the stockholders of USS Holdings, Inc., in each
case as amended from time to time in accordance with the terms thereof.
XXX X. XXXXXX
By: ___________________________________
