Exhibit 10.6
STOCKHOLDER'S AGREEMENT, dated as of ___________ ___, 1999, between
Community Health Systems Holdings Corp., a Delaware corporation, and
_______________ (the "Employee").
WHEREAS, Forstmann Little & Co. Equity Partnership-V, L.P., a
Delaware limited partnership ("Equity-V"), and Forstmann Little & Co.
Subordinated Debt and Equity Management Buyout Partnership-VI, L.P., a Delaware
limited partnership ("MBO-VI"), have subscribed for and purchased shares of
Class A Common Stock;
WHEREAS, the Employee wishes to subscribe for and purchase and the
Company desires to issue and sell to the Employee authorized but unissued shares
of Class B Common Stock on the terms and subject to the conditions set forth
herein; and
WHEREAS, the Employee and the Company wish to provide for certain
arrangements with respect to the Employee's rights to hold and dispose of the
shares of Class B Common Stock acquired by the Employee hereunder.
NOW, THEREFORE, the parties hereto agree as follows:
1. DEFINITIONS
1.1 DEFINITIONS; RULES OF CONSTRUCTION.
(a) The following terms, as used herein, shall have the
following meanings:
"Act" shall mean the Securities Act of 1933, as amended.
"Affiliate" shall mean, with respect to any Person, any other
Person which, directly or indirectly, is in control of, is controlled by, or is
under common control with, such Person.
"Affiliate Securities" shall mean any securities issued
by an Affiliate of the Company.
"Aggregate Number of Acquired Shares" shall mean the aggregate
number of shares of Class B Common Stock acquired by the Employee pursuant
hereto (adjusted, where appropriate, to reflect any Capital Transaction).
"Aggregate Number of Shares Sold" shall mean, as at any date,
the aggregate number of shares sold by the Employee pursuant to Section 3.3, 3.4
or 3.5 hereof prior to such date, if any (adjusted, where appropriate, to
reflect any Capital Transaction effected after the date of any such sale).
"Agreement" shall mean this Stockholder's Agreement, as
amended, supplemented or modified from time to time.
"Book Value of the Company" shall mean the sum, as of the
Valuation Date, of (i) the total assets minus the total liabilities of the
Company on a consolidated basis, plus (ii) the amount of any reduction in
stockholders' equity of the Company resulting from the application of EITF Issue
Summary No. 88-16, Basis in Leveraged Buyout Transactions, plus (iii) the
aggregate amount of amortization from July 1, 1996 through the Valuation Date of
the goodwill recorded as of July 1, 1996 (as adjusted from time to time) in
connection with the acquisition of Community Health Systems, Inc. by the Company
(the "Acquisition Goodwill"), plus (iv) the amount of $146,960,000 (representing
the December 1998 impairment charge of $164,833,000 less the related tax benefit
of $17,873,000), less the aggregate amount of depreciation and amortization
(less the related tax benefit), other than amortization of the Acquisition
Goodwill, that would have been recorded from January 1, 1999 through the
Valuation Date had the impairment charge not been recorded in December 1998
(i.e., assuming there had been no impairment of the assets), plus (v) the amount
of $20,000,000 (representing the provision for excess reimbursement recorded in
1998) and the amount of any additional related provision for excess
reimbursement recorded in 1999, less any related tax benefit, to the extent
recorded in the Company's financial statements through the Valuation Date, plus
(vi) the aggregate principal amount outstanding at the Valuation Date of loans
made to employees to purchase Class B Common Stock, to the extent recorded as a
reduction of stockholders' equity of the Company. For purposes of calculating
the Book Value of the Company and the Book Value Per Share, (x) all options and
other rights to acquire equity interests in the Company outstanding immediately
prior to the Delivery Date or exercised between the Valuation Date and the
Delivery Date shall be deemed to have been exercised on the Valuation Date, and
(y) the number of outstanding shares on the Valuation Date shall be increased by
the number of shares subject to each such option or other right and the assets
of the Company shall be increased by the aggregate exercise price payable in
respect of the exercise of each such option or other right (with respect to
clauses (x) and (y), in the case of any such option or other right unless the
effect thereof would be to increase the Book Value Per Share).
"Book Value Per Share" shall mean (i) the amount which would
be payable on the Valuation Date in respect of one share of Class B Common Stock
in the event of a dissolution, liquidation or winding-up of the affairs of the
Company if the
amount of assets available for distribution in the event of such dissolution,
liquidation or winding-up with respect to all shares of capital stock of the
Company outstanding (or deemed to be outstanding, as set forth above in the
definition of "Book Value of the Company") on the Valuation Date were equal to
the Book Value of the Company, plus (ii) the excess, if any, of $400.00 over the
amount determined pursuant to clause (i), up to a maximum of $42.16 (the amounts
$400.00 and $42.16 being adjusted to reflect any Capital Transaction between the
date hereof and the Valuation Date). In the event there has been a Stock
Dividend after the Valuation Date and prior to the Election Date, the number of
shares outstanding for purposes of determining Book Value Per Share shall be the
number of shares that would have been outstanding immediately after the Stock
Dividend on the Valuation Date had the Stock Dividend occurred on the Valuation
Date.
"Call Shares" shall have the meaning ascribed to such term in
Section 3.2(d) hereof.
"Capital Transaction" shall mean any Stock Dividend,
recapitalization (including, without limitation, any special dividend or
distribution), reclassification, spin-off, partial liquidation or similar
capital adjustments (including, without limitation, through merger or
consolidation).
"Certificate of Incorporation" shall mean the Restated
Certificate of Incorporation of the Company, as in effect from time to time.
"CHS Hospital" shall have the meaning ascribed to such term in
the definition of Competitor.
"Class A Common Stock" shall mean the Class A Common Stock,
par value $0.01 per share, of the Company. There shall be included within the
term Class A Common Stock any Class A Common Stock now or hereafter authorized
to be issued, and any and all securities of any kind whatsoever of the Company
which may be issued after the date hereof in respect of, or in exchange for,
shares of Class A Common Stock pursuant to a Capital Transaction or otherwise.
"Class B Common Stock" shall mean the Class B Nonvoting Common
Stock, par value $0.01 per share, of the Company. There shall be included within
the term Class B Common Stock any Class B Common Stock now or hereafter
authorized to be issued, and any and all securities of any kind whatsoever of
the Company which may be issued after the date hereof in respect of, or in
exchange for, shares of Class B Common Stock pursuant to a Capital Transaction
or otherwise. Without limiting the generality of the foregoing, all references
herein to the Class B Common Stock shall include, and the provisions hereof
(including, without limitation,
Sections 3 and 4 hereof) shall also be applicable to, the Class A Common Stock
for which the Class B Common Stock shall be exchanged pursuant to the
Certificate of Incorporation.
"Closing" shall have the meaning ascribed to such term in
Section 3.2(d) hereof.
"Closing Date" shall have the meaning ascribed to such
term in Section 2.2. hereof.
"Company" shall mean Community Health Systems Holdings Corp.,
a Delaware corporation, and shall include any successor thereto by merger,
consolidation, acquisition of substantially all the assets thereof, or
otherwise.
"Competitive Activity" shall mean engaging in any of the
following activities: (i) serving as a director of any Competitor; (ii) directly
or indirectly (X) controlling any Competitor or (Y) owning any equity or debt
interests in any Competitor (other than equity or debt interests which are
publicly traded and do not exceed 2% of the particular class of interests then
outstanding) (it being understood that, if any such interests in any Competitor
are owned by an investment vehicle or other entity in which the Employee owns an
equity interest, a portion of the interests in such Competitor owned by such
entity shall be attributed to the Employee, such portion determined by applying
the percentage of the equity interest in such entity owned by the Employee to
the interests in such Competitor owned by such entity); (iii) directly or
indirectly soliciting, diverting, taking away, appropriating or otherwise
interfering with any of the customers or suppliers of the Company or any
Affiliate controlled by the Company; or (iv) employment by (including serving as
an officer of), or providing consulting services to, any Competitor; provided,
however, that if the Competitor has more than one discrete and readily
distinguishable part of its business, employment by or providing consulting
services to any Competitor shall be Competitive Activity only if (1) his or her
employment duties are at or involving the part of the Competitor's business that
competes with any of the businesses conducted by the Company or any of its
subsidiaries (the "Competing Operations"), including serving in a capacity where
any person at the Competing Operations reports to the Employee, or (2) the
consulting services are provided to or involve the Competing Operations. For
purposes of this definition, the term "control" means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of any Competitor, whether through the ownership of equity or debt
interests, by contract or otherwise. Notwithstanding the foregoing, the Employee
shall not be deemed to be engaged in a Competitive Activity so long as his or
her employment duties are not at or involving any general acute care hospital
located within a 50-mile radius of any CHS Hospital (a
"Competing Hospital"), including serving in a capacity where any person at the
Competing Hospital reports to the Employee. For purposes hereof, a person shall
be deemed to report to the Employee whether he or she reports directly to the
Employee or indirectly through one or more other persons.
"Competitor" shall mean any Person that is engaged in owning,
operating or acquiring directly or indirectly (through a corporation, trust,
partnership or other Person) one or more short-term, general acute care
hospitals located within a 50-mile radius of any hospital which, at the time the
Employee is Terminated, is owned or operated by the Company or any of its
subsidiaries or which the Company or any of its subsidiaries intend to own,
operate or acquire (which intention was disclosed to the Employee prior to or in
connection with his Termination) (a "CHS Hospital").
"Delivery Date" shall have the meaning ascribed to such term
in Section 3.2(b) hereof.
"Election Date" shall have the meaning ascribed to such term
in Section 3.2(a) hereof.
"Equity-V" shall have the meaning ascribed to such term in the
first "Whereas" clause hereof.
"Exchange Rate" shall have the meaning ascribed to such term
in Section 3.3 hereof.
"Expenses of Sale" shall mean all expenses incurred by the FL
& Co. Companies in connection with the sale of the shares of the selling
stockholders pursuant to Section 3.3, 3.4 or 3.5 hereof to the extent that such
expenses are not paid or reimbursed by the Company.
"FL & Co. Companies" shall mean the collective reference
to Equity-V and MBO-VI.
"Legal Representative" shall mean the guardian, executor,
administrator or other legal representative of the Employee. All references
herein to the Employee shall be deemed to include references to the Employee's
Legal Representative, if any, unless the context otherwise requires.
"Litigation" shall mean any actions, suits or proceedings
arising out of or relating to this Agreement and the transactions contemplated
hereby.
"MBO-VI" shall have the meaning ascribed to such term in the
first "Whereas" clause hereof.
"Permitted Transferee" shall have the meaning ascribed to such
term in Section 3.1 hereof.
"Person" shall mean an individual, a corporation, a
partnership, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"Prohibited Activity" shall have the meaning ascribed to such
term in Section 4.1 hereof.
"Promissory Note" shall mean any promissory note executed and
delivered by the Employee to evidence the Employee's loan from the Company to
finance in part the Employee's purchase of shares of Class B Common Stock
hereunder.
"Purchase Closing" shall have the meaning ascribed to such
term in Section 2.2 hereof.
"Purchase Price" shall have the meaning ascribed to such term
in Section 3.2(c) hereof.
"Purchase Price Certificate" shall have the meaning ascribed
to such term in Section 3.2(b) hereof.
"Quarter" shall mean a three-month period, with the first
Quarter ending on the three-month anniversary date of the Closing Date and each
subsequent Quarter ending on the three-month anniversary date of the preceding
Quarter.
"Release Date" shall mean the date on which the FL & Co.
Companies and their affiliates shall cease to own in the aggregate directly or
indirectly at least 25 percent of the then outstanding securities of the Company
having the power to vote in the election of directors of the Company.
"Representative" shall have the meaning ascribed to such
term in Section 6.13(b).
"Repurchase Notice" shall have the meaning ascribed to such
term in Section 4.2 hereof.
"Sale Obligations" shall mean any liabilities and obligations
(including liabilities and obligations for indemnification, amounts paid into
escrow and post-closing adjustments) incurred by the selling stockholders in
connection with the sale of their shares pursuant to Section 3.3, 3.4 or 3.5
hereof.
"Scheduled Closing Date" shall have the meaning ascribed to
such term in Section 3.2(d) hereof.
"Stock Dividend" shall mean any stock split, stock dividend,
reverse stock split or similar transaction which changes the number of
outstanding shares of capital stock of the Company.
"Stock Pledge Agreement" shall mean the stock pledge agreement
which the Employee is entering into with the Company in connection with the
financing in part of the Employee's purchase of shares of Class B Common Stock
hereunder.
"Termination" or "Terminated" shall mean that the Employee's
employment on a full-time basis by the Company and its subsidiaries shall have
ceased for any reason whatsoever (including by reason of death, permanent
disability or adjudicated incompetency).
"Third Party" shall mean any Person other than any FL &
Co. Company or an Affiliate or a partner of any of the FL & Co. Companies
or an Affiliate of such partner.
"Transaction" shall mean any sale pursuant to
Section 3.3, 3.4 or 3.5 hereof.
"Unvested Shares" shall mean, as at any date, all shares of
Class B Common Stock owned by the Employee which are not Vested Shares as of
such date.
"Valuation Date" shall mean the last day of the fiscal quarter
of the Company immediately preceding the fiscal quarter in which the Employee's
employment is Terminated, unless the Employee's shares of Class B Common Stock
are being repurchased (i) pursuant to Section 3.2 hereof by reason of the
Employee's having voluntarily Terminated his employment or (ii) pursuant to
Section 4.2 hereof, in either of which events "Valuation Date" shall mean the
last day of the fiscal year of the Company immediately preceding the fiscal year
in which the Employee's employment is Terminated.
"Vested Shares" shall mean the number of shares of Class B
Common Stock determined as follows: (i) if the Employee is Terminated on or
before the first anniversary of the Closing Date, zero; and (ii) if the Employee
is Terminated after the first anniversary of the Closing Date, then by (A)
multiplying (x) the number of full Quarters that have elapsed from the Closing
Date to the date of Termination (but in no event exceeding 20 Quarters) by (y)
5% of the Aggregate Number of Acquired Shares, and subtracting therefrom (B) the
Aggregate Number of Shares Sold. The Employee shall be considered as having been
employed for a full Quarter only if the Employee is employed through the
applicable Quarterly anniversary date. For example, if the Employee is
Terminated on the second anniversary of the Closing Date, the Employee would
have been employed for seven full Quarters and his Vested Shares would equal (A)
35% of the Aggregate Number of Acquired Shares minus (B) the Aggregate Number of
Shares Sold, and if the Employee is Terminated on the day after the second
anniversary of the Closing Date, the Employee would have been employed for eight
full Quarters and his Vested Shares would equal (A) 40% of the Aggregate Number
of Acquired Shares minus (B) the Aggregate Number of Shares Sold.
(b) In this Agreement, unless the context otherwise requires,
words in the singular number or in the plural number shall each include the
singular number and the plural number.
2. PURCHASE AND SALE OF CLASS B COMMON STOCK.
2.1 SUBSCRIPTION OF CLASS B COMMON STOCK. The Employee hereby
subscribes for the number of shares of Class B Common Stock set forth opposite
the Employee's name on Annex A hereto, at a price of $400.00 per share in cash.
2.2 CLOSING OF THE PURCHASE AND SALE. The closing of the
transactions contemplated hereby (the "Purchase Closing") shall take place at
the offices of Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, Xxx Xxx Xxxx Xxxxx, Xxx
Xxxx, Xxx Xxxx, 00000, at such time as the Company shall designate on the date
hereof (the "Closing Date"). At the Purchase Closing, the Company shall deliver
to the Employee a duly executed certificate representing the number of shares of
Class B Common Stock being purchased by the Employee and shall enter the
Employee's name on the books of the Company as the stockholder of record of such
shares of Class B Common Stock as of the Closing Date. At or prior to the
Purchase Closing, the Employee shall deliver to the Company an amount equal to
the aggregate purchase price for such shares, by wire transfer or other
immediately available funds to the account of the Company at Chase Manhattan
Bank (ABA Number 021 000 021), 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000, account
number 323-054439 and by an executed Promissory Note, together with an executed
Stock Pledge Agreement, in the respective amounts set forth on Annex A.
3. RIGHTS AND RESTRICTIONS ON CLASS B COMMON STOCK.
3.1 NO SALE OR TRANSFER.
(a) The Employee shall not sell, transfer, assign, exchange,
pledge, encumber or otherwise dispose of any shares of Class B Common Stock
acquired hereunder or grant any option or right to purchase such shares or any
legal or beneficial interest therein, except in accordance with the provisions
of this Agreement and the Stock Pledge Agreement.
(b) The Employee may transfer any shares of Class B Common Stock
acquired hereunder by will, but only to:
(i) any spouse, parent, child (whether natural or adopted),
grandchild, brother or sister of the Employee, or
(ii) a trust solely for the benefit of any spouse, parent,
child (whether natural or adopted), grandchild, brother or sister of
the Employee, or
(iii) any corporation or partnership which is controlled by
any spouse, parent, child (whether natural or adopted), grandchild,
brother or sister of the Employee
(the person or persons to which shares of Class B Common Stock are transferred
in accordance with this Section 3.1(b) being herein referred to as the
"Permitted Transferee"); provided, that, for any transfer to the Permitted
Transferee to be effective hereunder, the Permitted Transferee (which, in the
case of a trust, shall include each person having authority to sell or dispose
of such shares of Class B Common Stock proposed to be transferred to the trust)
shall agree in writing to be bound by all the terms of this Agreement applicable
to the Employee (including, without limitation, Sections 4 and 6.13(b) hereof)
and the Promissory Note and the Stock Pledge Agreement as if the Permitted
Transferee originally had been a party hereto and thereto; and provided,
further, that all of the stockholders of any Permitted Transferee that is a
corporation and all of the partners of any Permitted Transferee that is a
partnership shall agree in writing not to transfer any shares they then own or
may hereafter acquire in the corporate Permitted Transferee or any partnership
interests they then own or may hereafter acquire in the partnership Permitted
Transferee except to a person described in paragraph (i), (ii) or (iii) above
that has made the same agreement in writing to the Company, so long as the
corporate or partnership Permitted Transferee shall own any shares of Class B
Common Stock. Any reference herein to the Employee shall be to the Permitted
Transferee from and after the date the transfer is effected in accordance with
this Section 3.1(b). Without limiting the generality of the foregoing, the
provisions of Section 4.2 hereof shall be likewise applicable to any Permitted
Transferee, commencing upon the date that such person becomes a Permitted
Transferee, for the respective periods they would have applied to the Employee.
3.2 EMPLOYMENT TERMINATION.
(a) If the Employee shall be Terminated, irrespective of
whether the Employee receives, in connection with such Termination, any
severance or other payment from the Company or any of its Affiliates under any
employment agreement or otherwise, the Company shall have the right, at its
option, exercisable by delivery of written notice to the Employee within 90 days
following the date of Termination (the date of delivery of such written notice
being referred to herein as the "Election Date"), to purchase all or any portion
of the Unvested Shares held by the Employee as of the date of such Termination.
Any Vested Shares and any Unvested Shares that the Company does not elect to
repurchase pursuant to the provisions of this Section 3.2(a) shall continue to
be subject to the provisions of this Agreement (including, without limitation,
Sections 3.3, 3.4, 3.5 and 4 hereof) other than this Section 3.2.
(b) If the Company exercises its purchase right pursuant to
Section 3.2(a) hereof, then, within 15 days following the later of the Election
Date or the date the financial statements referred to below are available (such
date of delivery being referred to herein as the "Delivery Date"), the Company
shall deliver to the Terminated Employee a certificate of the chief financial
officer of the Company setting forth the Purchase Price and the calculation
thereof and the Book Value of the Company and stating that a copy of the
Company's financial statements as of the Valuation Date are available for review
at the principal office of the Company (the "Purchase Price Certificate"), and
shall make available to the Employee, for review at the principal office of the
Company, a copy of the Company's financial statements as of the Valuation Date.
The Purchase Price Certificate shall be accompanied by a report from the
Company's independent public accountants to the effect that they have performed
certain procedures, which procedures have agreed the amounts shown on the
Purchase Price Certificate to the relevant financial statements and information
and have verified the mathematical accuracy of the calculations set forth in the
Purchase Price Certificate. The calculations as set forth on the Purchase Price
Certificate shall be final and binding on the Company and the Employee for
purposes of this Agreement. The Employee shall keep the Purchase Price
Certificate, the accountants' report, the financial statements and any other
documentation provided in connection therewith confidential, shall not use any
such material or any information contained therein for any purpose other than to
verify the amounts due the Employee in respect of any shares owned by the
Employee being purchased by the Company, and shall not disclose any such
material or any information contained therein to anyone other than the
Employee's legal or financial advisers who have agreed in writing to the
equivalent confidentiality, non-use and non-disclosure provisions contained in
this paragraph.
(c) The purchase price per share of the shares of Class B
Common Stock purchased pursuant to Section 3.2(a) hereof (the "Purchase Price")
shall be equal to the Book Value Per Share, adjusted to reflect any Capital
Transaction between the Valuation Date and the Election Date, as if such event
had occurred as of the Valuation Date.
(d) Subject to Section 3.2(e) hereof, the closing (the
"Closing") of any purchase of shares of Class B Common Stock which the Company
has elected to purchase pursuant to Section 3.2(a) hereof (the "Call Shares")
shall take place at the principal office of the Company on the later of (i) 10
days after the Delivery Date (or, in the case of a First-Year Termination, 10
days after the Election Date) and (ii) (if applicable) 10 days after the
appointment of a Legal Representative (such later date, the "Scheduled Closing
Date"). At the Closing, the Employee shall sell, convey, transfer, assign and
deliver to the Company all right, title and interest in and to the Call Shares,
which shall constitute (and, at the Closing, the Employee shall certify the same
to the Company in writing) good and unencumbered title to such shares, free and
clear of all liens, security interests, encumbrances and adverse claims of any
kind and nature (other than those in favor of the Company and the FL & Co.
Companies pursuant to this Agreement), and shall deliver to the Company a
certificate representing the shares duly endorsed for transfer, or accompanied
by appropriate stock transfer powers duly executed, and with all necessary
transfer tax stamps affixed thereto at the expense of the Employee, and the
Company shall deliver to the Employee, in full payment of the purchase price for
the Call Shares, either a wire transfer to an account designated by the Employee
or a cashier's, certified or official bank check payable to the order of the
Employee (the method of payment to be at the option of the Company), in the
amount equal to the Purchase Price multiplied by the number of Call Shares.
Notwithstanding anything herein to the contrary, from and after the Election
Date, the Employee shall not have any rights with respect to any of the Call
Shares (including any rights pursuant to Sections 3.3 and 3.4 hereof), except to
receive the Purchase Price therefor.
(e) Notwithstanding the provisions of Section 3.2(d) hereof,
if the Company exercises its option to purchase Unvested Shares pursuant to
Section 3.2(a) hereof, but is prohibited from effecting the Closing on the
Scheduled Closing Date by any contractual obligation of the Company or any of
its Affiliates or by applicable law, then the Closing shall take place on the
first practicable date on which the Company is
permitted to purchase such shares, and, at the Closing, the Company shall pay to
the Employee interest on the unpaid Purchase Price from and including the
Scheduled Closing Date to, but not including, the date of the Closing, at the
rate (as of the Scheduled Closing Date) for a six-month certificate of deposit
at Chase Manhattan Bank or any successor bank thereto. If at any time the
prohibition shall cease to be applicable to any portion of the shares not
repurchased, then the Company shall purchase such portion on the first
practicable date on which the Company is permitted to do so. The Company shall
not declare or pay any dividend of cash or cash equivalents, or repurchase any
shares of Class A Common Stock or Class B Common Stock for cash or cash
equivalents, until the purchase price for all of the Call Shares has been paid
in full.
3.3 PARTICIPATION IN SALE OF CLASS A COMMON STOCK. The Employee, at
the Employee's option, may participate proportionately (and the FL & Co.
Companies shall allow the Employee to participate proportionately) in any sale
(other than a public offering, which shall be governed by Section 3.4 hereof) of
all or a portion of the shares of Class A Common Stock owned by either of the FL
& Co. Companies to any Third Party by (a) exchanging the same percentage of the
Employee's shares of Class B Common Stock as the FL & Co. Companies propose to
sell of their shares to the Third Party (determined on the basis of the
aggregate number of such shares of Class A Common Stock owned, and the aggregate
number of such shares being sold, by the FL & Co. Companies) for shares of Class
A Common Stock in accordance with the Exchange Rate, as defined in Subsection
4(d) of Section A of Article Fourth of the Certificate of Incorporation (the
"Exchange Rate"), and (b) selling the Class A Common Stock received in such
exchange to the Third Party. The Company shall notify the Employee in writing of
the FL & Co. Companies' intention to effect such a sale to a Third Party, the
identity of the Third Party and the nature and per share amount of consideration
to be paid by the Third Party, and shall set forth its calculation of the
Exchange Rate, at least 10 days, or such shorter time as the Company deems
practicable, before the closing of any such proposed sale of shares of Class A
Common Stock. Schedule I hereto sets forth an example illustrating the
calculation of the Exchange Rate. Any sale of shares of Class A Common Stock by
the Employee pursuant to this Section 3.3 shall be for the same consideration
per share, on the same terms and subject to the same conditions as the sale of
shares of Class A Common Stock owned by the FL & Co. Companies. The Company
shall, immediately prior to, and contingent upon, the consummation of such sale,
exchange such shares of Class B Common Stock for Class A Common Stock in
accordance with the Exchange Rate. If the Employee sells any shares pursuant to
this Section 3.3, the Employee shall pay and be responsible for the Employee's
proportionate share of the Expenses of Sale and the Sale Obligations.
3.4 PARTICIPATION IN PUBLIC OFFERING OF CLASS A COMMON STOCK.
(a) If the FL & Co. Companies propose to sell all or any
portion of the shares of Class A Common Stock owned by the FL & Co. Companies in
a public offering, the Employee shall be entitled and required to participate in
such public offering by selling in the public offering the same percentage of
the Employee's shares of Class A Common Stock (such Class A Common Stock having
been or being received by him pursuant to the Certificate of Incorporation,
which provides that, upon the initial public offering of shares of Class A
Common Stock, immediately prior to, and contingent upon, the consummation of the
offering, all outstanding shares of Class B Common Stock shall be exchanged for
shares of Class A Common Stock in accordance with the Exchange Rate) as the FL &
Co. Companies propose to sell of their shares in the public offering (determined
on the basis of the aggregate number of shares of Class A Common Stock owned,
and the aggregate number of such shares being sold, by the FL & Co. Companies).
The Company shall notify the Employee in writing of the FL & Co. Companies'
intention to effect such public offering at least 10 days, or such shorter time
as the Company deems practicable, before the filing with the Securities and
Exchange Commission of the registration statement relating to such public
offering and shall cause the Employee's shares to be sold in such public
offering to be included therein. If the Employee sells any shares pursuant to
this Section 3.4, the Employee shall pay and be responsible for the Employee's
proportionate share of the Expenses of Sale and the Sale Obligations, including,
without limitation, indemnifying the underwriters of such public offering, on a
proportionate basis, to the same extent as the FL & Co. Companies are required
to indemnify such underwriters.
(b) In connection with any proposed public offering of
securities of the Company, whether by any of the FL & Co. Companies or the
Company or otherwise, the Employee agrees (i) to supply any information
reasonably requested by the Company in connection with the preparation of a
registration statement and/or any other documents relating to such public
offering, and (ii) to execute and deliver any agreements and instruments
reasonably requested by the Company to effectuate such public offering,
including, without limitation, an underwriting agreement, a custody agreement
and a "hold back" agreement pursuant to which the Employee will agree not to
sell or purchase any securities of the Company (whether or not such securities
are otherwise governed by this Agreement) for the same period of time following
the public offering as is agreed to by the FL & Co. Companies with respect to
themselves. If the Company requests that the Employee take any of the actions
referred to in clause (i) or (ii) of the previous sentence, the Employee shall
take such action promptly but in any event within five days following the date
of such request.
3.5 REQUIRED PARTICIPATION IN SALE OF CLASS A COMMON STOCK BY THE FL
& CO. COMPANIES. Notwithstanding any other provision of this Agreement to the
contrary, if the FL & Co. Companies shall propose to sell (including by
exchange, in a
business combination or otherwise) all or any portion of their shares of Class A
Common Stock in a bona fide arm's-length transaction, the FL & Co. Companies, at
their option, may require that (x) the Employee exchange the same percentage of
the Employee's shares of Class B Common Stock as the FL & Co. Companies propose
to sell of their shares in the transaction (determined on the basis of the
aggregate number of shares of Class A Common Stock owned, and the aggregate
number of such shares being sold, by the FL & Co. Companies) for shares of Class
A Common Stock in accordance with the Exchange Rate, and (y) sell all the Class
A Common Stock received in such exchange for the same consideration per share,
on the same terms and subject to the same conditions in the same transaction
and, if stockholder approval of the transaction is required and the Employee is
entitled to vote thereon, that the Employee vote the Employee's shares in favor
thereof. The Company shall calculate the Exchange Rate and shall, immediately
prior to, and contingent upon, the consummation of the transaction exchange such
shares of Class B Common Stock for Class A Common Stock in accordance with the
Exchange Rate. If the Employee sells any shares pursuant to this Section 3.5,
the Employee shall pay and be responsible for the Employee's proportionate share
of the Expenses of Sale and the Sale Obligations.
3.6 TERMINATION OF RESTRICTIONS AND RIGHTS. Notwithstanding any
other provision of this Agreement to the contrary, but subject to the
restrictions of all applicable federal and state securities laws, including the
restrictions in this Agreement relating thereto, from and after the Release Date
any and all shares of Class B Common Stock owned by the Employee (a) may be
sold, transferred, assigned, exchanged, pledged, encumbered or otherwise
disposed of (and the Employee may grant any option or right to purchase such
shares or any legal or beneficial interest therein, or may continue to hold such
shares), free of the restrictions contained in this Agreement and (b) shall no
longer be entitled to any of the rights contained in this Agreement. Without
limiting the generality of the foregoing, from and after the Release Date, the
provisions of Articles 3 and 4 hereof (other than this Section 3.6 and Section
4.1 hereof) shall terminate and have no further force or effect.
4. PROHIBITED ACTIVITIES.
4.1 PROHIBITION AGAINST CERTAIN ACTIVITIES. The Employee agrees that
(a) the Employee will not at any time during the Employee's employment (other
than in the course of such employment) with the Company or any Affiliate
thereof, or after a Termination, directly or indirectly disclose or furnish to
any other Person or use for the Employee's own or any other Person's account any
confidential or proprietary knowledge or information or any other information
which is not a matter of public knowledge and which was obtained in the course
of the Employee's employment with, or other performance of services for, the
Company or any Affiliate thereof or any
predecessor of any of the foregoing, no matter from where or in what manner the
Employee may have acquired such knowledge or information, and the Employee shall
retain all such knowledge and information in trust for the benefit of the
Company, its Affiliates and the successors and assigns of any of them, (b) if
the Employee is Terminated, the Employee will not for 18 months following such
Termination directly or indirectly solicit for employment, including without
limitation recommending to any subsequent employer the solicitation for
employment of, any employee of the Company (other than such Employee's secretary
or administrative assistant), (c) the Employee will not at any time during the
Employee's employment with the Company or any Affiliate thereof or after a
Termination publish any statement or make any statement (under circumstances
reasonably likely to become public or that the Employee might reasonably expect
to become public) critical of the Company or any Affiliate of the Company, or in
any way adversely affecting or otherwise maligning the business or reputation of
any of the foregoing entities, and (d) the Employee will not breach the
provisions of Section 3.1 hereof (any activity prohibited by clause (a), (b),
(c) or (d) of this Section 4.1 being referred to as a "Prohibited Activity").
4.2 RIGHT TO PURCHASE SHARES. The Employee understands and agrees
that the Company has granted to the Employee the right to purchase shares of
Class B Common Stock to reward the Employee for the Employee's future efforts
and loyalty to the Company and its Affiliates by giving the Employee the
opportunity to participate in the potential future appreciation of the Company.
Accordingly, (a) if the Employee engages in any Prohibited Activity, or (b) if,
at any time during the Employee's employment with the Company or any of its
Affiliates or during the 18 months following a Termination, the Employee engages
in any Competitive Activity, or (c) if, at any time (whether during the
Employee's employment or after any Termination thereof), the Employee is
convicted of a crime against the Company or any of its Affiliates, then, in
addition to any other rights and remedies available to the Company, the Company
shall be entitled, at its option, exercisable by written notice (the "Repurchase
Notice") to the Employee, to purchase all of the shares of Class B Common Stock
then held by the Employee.
4.3 PURCHASE PRICE; CLOSING. The purchase price per share of the
shares of Class B Common Stock purchased pursuant to this Article 4 shall be
equal to the lesser of (a) $357.84 (adjusted to reflect any Capital Transaction
effected after the Closing Date and prior to the date of the Repurchase Notice)
and (b) the Book Value Per Share (except that any reference to the Delivery Date
or Election Date shall instead be a reference to the date of the Repurchase
Notice). If such purchase price is determined pursuant to clause (b) of the
preceding sentence, then the Company shall, within 15 days following the later
of receipt of the Employee's written request therefor (which request must be
made within eight days of the date of the Repurchase Notice) and the date the
relevant financial statements are available, provide the Employee with the same
purchase price certificate and report of the Company's independent public
accountants as are referred to in Section 3.2(b) hereof, and the Employee hereby
agrees to the same confidentiality, non-use and non-disclosure provisions with
respect thereto as are contained in Section 3.2(b) hereof. The calculations as
set forth on such certificate shall be final and binding on the Company and the
Employee for purposes of this Agreement. The closing of such purchase shall take
place at the principal office of the Company 10 days following the date of the
Repurchase Notice or, if a written request therefor was timely made, 10 days
following the date of delivery of the aforesaid certificate and report, except
that if the Company is prohibited from repurchasing any shares of Class B Common
Stock pursuant to this Article 4 by any contractual obligation of the Company or
any of its Affiliates or by applicable law, the closing of such purchase shall
take place on the first practicable date on which the Company is permitted to
purchase such shares (and the provisions of the last two sentences of Section
3.2(e) shall likewise apply to repurchases pursuant to this Article 4). At such
closing, the Employee shall sell, convey, transfer, assign and deliver to the
Company all right, title and interest in and to the shares of Class B Common
Stock being purchased by the Company, which shall constitute (and, at the
closing, the Employee shall certify the same to the Company in writing) good and
unencumbered title to such shares, free and clear of all liens, security
interests, encumbrances and adverse claims of any kind and nature (other than
those in favor of the Company and the FL & Co. Companies pursuant to this
Agreement), and shall deliver to the Company a certificate representing the
shares duly endorsed for transfer, or accompanied by appropriate stock transfer
powers duly executed, and with all necessary transfer tax stamps affixed thereto
at the expense of the Employee, and the Company shall deliver to the Employee,
in full payment of the purchase price payable pursuant to this Section 4.3 for
the shares of Class B Common Stock purchased, a check payable to the order of
the Employee, in the amount of the aggregate purchase price for the shares
purchased. Notwithstanding anything herein to the contrary, from and after the
date of the Repurchase Notice, the Employee shall not have any rights with
respect to any shares of Class B Common Stock which the Employee is required to
sell to the Company pursuant to this Article 4 (including any rights pursuant to
Section 3.3 or 3.4 hereof), except to receive the purchase price therefor.
4.4 Notwithstanding anything to the contrary set forth in Sections
3.3, 3.4 or 3.5 hereof, if at the time of a Transaction in which the Employee is
participating, the Company is entitled to purchase the Employee's shares of
Class B Common Stock pursuant to this Article 4, and if the purchase price per
share for a purchase pursuant to this Article 4 would be less than the proceeds
per share to the Employee from such Transaction, then the Employee shall be
entitled to receive only the aggregate purchase price payable under this Article
4, with the balance of the proceeds of sale in the Transaction being remitted to
the other stockholders of the Company participating in
such Transaction pro rata in accordance with their respective participation in
such Transaction.
5. STOCK CERTIFICATE LEGEND AND INVESTMENT REPRESENTATIONS; OTHER
REPRESENTATIONS.
5.1 LEGEND. All certificates representing shares of Class B Common
Stock acquired hereunder or hereafter by the Employee (unless registered under
the Act) shall bear the following legend:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or any
securities regulatory authority of any state, and may not be sold,
transferred, assigned, exchanged, pledged, encumbered or otherwise
disposed of except in compliance with all applicable securities laws
and except in accordance with the provisions of a Stockholder's
Agreement with the Company, a copy of which is available for
inspection at the offices of the Company."
5.2 REPRESENTATIONS OF THE EMPLOYEE. The Employee represents and
warrants that: (a) the Employee understands that (i) the offer and sale of
shares of Class B Common Stock in accordance with this Agreement have not been
and will not be registered under the Act, and it is the intention of the parties
hereto that the offer and sale of the securities be exempt from registration
under the Act and the rules promulgated thereunder by the Securities and
Exchange Commission; (ii) the shares of Class B Common Stock being acquired
hereunder cannot be sold, transferred, assigned, exchanged, pledged, encumbered
or otherwise disposed of unless they are registered under the Act or an
exemption from registration is available; and (iii) the purchase of Class B
Common Stock hereunder does not entitle the Employee to participate in any other
equity program of the Company, whether now existing or hereafter established;
(b) the Employee is acquiring the shares of Class B Common Stock being acquired
hereunder for investment for the Employee's own account and not with a view to
the distribution thereof; (c) the Employee will not, directly or indirectly,
sell, transfer, assign, exchange, pledge, encumber or otherwise dispose of any
shares of Class B Common Stock being acquired hereunder except in accordance
with this Agreement and the Stock Pledge Agreement; (d) the Employee has, or the
Employee together with his advisers, if any, have, such knowledge and experience
in financial and business matters that the Employee is, or the Employee together
with the Employee's advisers, if any, are, and will be capable of evaluating the
merits and risks relating to the Employee's purchase of shares of Class B Common
Stock under this Agreement; (e) the Employee has been given the opportunity to
obtain information and
documents relating to the Company and to ask questions of and receive answers
from representatives of the Company concerning the Company and the Employee's
investment in the Class B Common Stock; (f) the Employee's decision to invest in
the Company has been based upon independent investigations made by the Employee
and his advisers, if any; (g) the Employee is able to bear the economic risk of
a total loss of the Employee's investment in the Company; and (h) the Employee
has adequate means of providing for the Employee's current needs and foreseeable
personal contingencies and has no need for the Employee's investment in the
Class B Common Stock to be liquid.
6. MISCELLANEOUS.
6.1 DISTRIBUTIONS. In the event of any dividend, distribution or
exchange paid or made in respect of the Class B Common Stock consisting of
Affiliate Securities, (a) the restrictions and rights with respect to the Class
B Common Stock that are contained in this Agreement shall be applicable to the
Affiliate Securities without further action of the parties (with the references
to Class B Common Stock being deemed references to the Affiliate Securities and
the references to the Company being deemed references to the Affiliate), and (b)
as a condition precedent to the receipt of the Affiliate Securities by the
Employee, the Employee shall enter into a stockholders agreement containing
substantially equivalent terms with respect to the Affiliate Securities (but
reflecting the economics of the dividend, distribution or exchange and the
capitalization of the Affiliate) as are contained in Sections 3.2 and 4.3
hereof. The Board of Directors of the Company, in good faith, shall determine
such economics and its determination shall be final and binding on the Employee.
6.2 FURTHER ASSURANCES. Each party hereto shall do and perform or
cause to be done and performed all further acts and things and shall execute and
deliver all other agreements, certificates, instruments, and documents as any
other party hereto reasonably may request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
6.3 GOVERNING LAW. This Agreement and the rights and obligations of
the parties hereto shall be governed by, and construed and enforced in
accordance with, the laws of the State of New York, without giving effect to the
principles of conflicts of law thereof.
6.4 SPECIFIC PERFORMANCE. The parties hereto acknowledge that there
will be no adequate remedy at law for a violation of any of the provisions of
this Agreement and that, in addition to any other remedies which may be
available, all of the
provisions of this Agreement shall be specifically enforceable in accordance
with their respective terms.
6.5 INVALIDITY OF PROVISION. The invalidity or unenforceability of
any provision of this Agreement in any jurisdiction shall not affect the
validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of this Agreement, including that
provision, in any other jurisdiction. If any provision of this Agreement is held
unlawful or unenforceable in any respect, such provision shall be revised or
applied in a manner that renders it lawful and enforceable to the fullest extent
possible.
6.6 NOTICE. All notices and other communications hereunder shall be
in writing and, unless otherwise provided herein, shall be deemed to have been
given when received by the party to whom such notice is to be given at its
address set forth below, or such other address for the party as shall be
specified by notice given pursuant hereto:
(a) If to the Company, to:
Community Health Systems Holdings Corp.
000 Xxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxx, XX 00000-0000
Attention: President
with a copy to:
Forstmann Little & Co. Equity Partnership-V, L.P.
c/o Forstmann Little & Co.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxxx
(b) If to the Employee, to the address set forth below the
Employee's signature, and if to the Legal Representative, to
such Person at the address of which the Company is notified in
accordance with this Section 6.6.
6.7 BINDING EFFECT. This Agreement shall inure to the benefit of and
shall be binding upon the parties hereto and their respective heirs, legal
representatives,
successors and assigns. In addition, each of the FL & Co. Companies shall be a
third party beneficiary of this Agreement and shall be entitled to enforce this
Agreement.
6.8 AMENDMENT AND MODIFICATION. This Agreement may be amended,
modified or supplemented only by written agreement of the party against whom
enforcement of such amendment, modification or supplement is sought.
6.9 HEADINGS; EXECUTION IN COUNTERPARTS. The headings and captions
contained herein are for convenience only and shall not control or affect the
meaning or construction of any provision hereof. This Agreement may be executed
in any number of counterparts, each of which shall be deemed to be an original
and which together shall constitute one and the same instrument.
6.10 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement, and supersedes all prior agreements and understandings, oral and
written, between the parties hereto with respect to the subject matter hereof.
6.11 WITHHOLDING. The Company shall have the right to deduct from
the amount payable under this Agreement any taxes or other amounts required by
applicable law to be withheld. The Employee agrees to indemnify the Company
against any Federal, state and local withholding taxes (but not penalties or
interest) for which the Company may be liable in connection with the Employee's
acquisition, ownership or disposition of any Class B Common Stock.
6.12 NO RIGHT TO CONTINUED EMPLOYMENT. This Agreement shall not
confer upon the Employee any right with respect to continuance of employment by
the Company or any Affiliate thereof, nor shall it interfere in any way with the
right of the Company or any Affiliate thereof to terminate the Employee's
employment at any time.
6.13 POSSESSION OF CERTIFICATES; POWER OF ATTORNEY.
(a) In order to provide for the safekeeping of the
certificates representing the shares of Class B Common Stock purchased by the
Employee pursuant hereto and to facilitate the enforcement of the terms and
conditions hereof, at the Purchase Closing (i) the Employee shall redeliver to
the Company, and the Company shall retain physical possession of, all
certificates representing shares of Class B Common Stock acquired by the
Employee pursuant hereto and (ii) the Employee shall deliver to the Company an
undated stock power, duly executed in blank, for each such certificate. The
Employee shall be relieved of any obligation otherwise imposed by this Agreement
to deliver certificates representing shares of Class B Common Stock if the same
are in the custody of the Company.
(b) The Employee hereby irrevocably appoints the FL & Co.
Companies, and each of them (individually and collectively, the
"Representative"), the Employee's true and lawful agent and attorney-in-fact,
with full powers of substitution, to act in the Employee's name, place and
stead, to do or refrain from doing all such acts and things, and to execute and
deliver all such documents, as the Representative shall deem necessary or
appropriate in connection with a public offering of securities of the Company or
a sale pursuant to Section 3.3, 3.5 or 4.2 hereof, including, without in any way
limiting the generality of the foregoing, in the case of a sale pursuant to
Section 3.3 or 3.5 hereof, to execute and deliver on behalf of the Employee a
purchase and sale agreement and any other agreements and documents that the
Representative deems necessary in connection with any such sale, and in the case
of a public offering, to execute and deliver on behalf of the Employee an
underwriting agreement, a "holdback" agreement, a custody agreement, and any
other agreements and documents that the Representative deems necessary in
connection with any such public offering, and in the case of any sale pursuant
to Section 3.3 or 3.5 hereof and any public offering pursuant to Section 3.4(a)
hereof, to receive on behalf of the Employee the proceeds of the sale or public
offering of the Employee's shares, to hold back from any such proceeds any
amount that the Representative deems necessary to reserve against the Employee's
share of any Expenses of Sale and Sale Obligations and to pay such Expenses of
Sale and Sale Obligations. The Employee hereby ratifies and confirms all that
the Representative shall do or cause to be done by virtue of its appointment as
the Employee's agent and attorney-in-fact. In acting for the Employee pursuant
to the appointment set forth in this Section 6.13(b), the Representative shall
not be responsible to the Employee for any loss or damage the Employee may
suffer by reason of the performance by the Representative of its duties under
this Agreement, except for loss or damage arising from willful violation of law
or gross negligence by the Representative in the performance of its duties
hereunder. The appointment of the Representative shall be deemed coupled with an
interest and as such shall be irrevocable and shall survive the death,
incompetency, mental illness or insanity of the Employee, and any person dealing
with the Representative may conclusively and absolutely rely, without inquiry,
upon any act of the Representative as the act of the Employee in all matters
referred to in this Section 6.13(b). The Representative shall advise the
Employee in writing of any Sale Obligations imposed on the Employee in any
document executed by the Representative as the Employee's attorney-in-fact
pursuant to this Section 6.13(b).
6.14 CONSENT TO JURISDICTION. Each party hereby irrevocably and
unconditionally consents to submit to the exclusive jurisdiction of the courts
of the State of New York and of the United States of America, in each case
located in the County of New York, for any Litigation (and agrees not to
commence any Litigation except in any such court), and further agrees that
service of process, summons, notice or document by
U.S. registered mail to its respective address set forth in Section 6.6 hereof
shall be effective service of process for any Litigation brought against it in
any such court. Each party hereby irrevocably and unconditionally waives any
objection to the laying of venue of any Litigation in the courts of the State of
New York or of the United States of America, in each case located in the County
of New York, and hereby further irrevocably and unconditionally waives and
agrees not to plead or claim in any such court that any Litigation brought in
any such court has been brought in an inconvenient forum.
IN WITNESS WHEREOF, this Agreement has been signed by or on behalf
of each of the parties hereto, all as of the date first above written.
COMMUNITY HEALTH SYSTEMS
HOLDINGS CORP.
By: ______________________________
EMPLOYEE
__________________________________
Name:
Address:
The undersigned hereby agree to be bound by the provisions of Sections 3.3 and
3.4 of the foregoing Stockholder's Agreement.
FORSTMANN LITTLE & CO. EQUITY PARTNERSHIP-V,
L.P.
By: FLC XXX Partnership,
its general partner
By: ______________________________
a general partner
FORSTMANN LITTLE & CO. SUBORDINATED DEBT AND
EQUITY MANAGEMENT BUYOUT PARTNERSHIP-VI, L.P.
By: FLC XXIX Partnership, L.P.
its general partner
By: ______________________________
a general partner
The undersigned acknowledges that the undersigned has read the
foregoing Agreement between Community Health Systems Holdings Corp. and the
undersigned's spouse, understands that the undersigned's spouse has purchased
shares of Class B Common Stock as reflected in such Agreement and agrees to be
bound by the foregoing Agreement.
______________________________
Employee's Spouse
SCHEDULE I
Assume: 1) Aggregate amount of assets available for distribution is
$2,200,000,000. THERE IS NO ASSURANCE THAT THE ACTUAL AMOUNT
OF ASSETS AVAILABLE FOR DISTRIBUTION WILL REACH THIS LEVEL.
2) 449,123 shares of Class A Common Stock and 39,600 shares of
Class B Common Stock outstanding, and options granted to
acquire 9,000 shares of Class C Common Stock and 1,600 shares
of Class A Common Stock, all at the time of distribution.
STEP 1
------
To To To
CLASS A CLASS B CLASS C
------- ------- -------
First to A: $1,073.52 x 450,723 = $483,860,155
Second to B: 357.84 x 39,600 = $14,170,464
Third to C: 587.50 x 9,000 = $5,287,500
Fourth to A: 279.17 x 450,723 = 125,828,340
and to C: 279.17 x 9,000 = 2,512,530
Fifth to A 3,140.93* x 450,723 =
and to B: 3,140.93* x 39,600 = 1,415,691,577 124,381,020 28,268,414
------------- ----------- ----------
and to C: 3,140.93* x 9,000 =
Total $2,025,380,072 $138,551,484 $36,068,444
============== ============ ===========
STEP 2 PER SHARE PROCEEDS COST OF SHARES NET GAIN
------ ------------------ -------------- --------
x = $ total for Class A divided by 450,723 = $4,493.62 ($1,073.52) $3,420.10
STEP 3
------
y = $ total for Class B divided by 39,600 = $3,498.77 ($357.84) $3,140.93
STEP 4
------
z = $ total for Class C divided by 9,000 = $4,007.60 ($587.50) $3,420.10
Class B Exchange Rate = y/x or 0.779 of a share of Class A Common Stock for each
share of Class B Common Stock.
Class C Exchange Rate = z/x or 0.892 of a share of Class A Common Stock for each
share of Class C Common Stock.
---------------
* Equals $2,200,000,000 less the payments from the first, second, third and
fourth steps ($631,658,989) divided by 499,323 (449,123 plus 39,600 plus
9,000 plus 1,600), rounded for presentation purposes.
ANNEX A
Employee Number of Shares
-------- ----------------
--------------------- --
Cash Amount: $___________
Note Amount: $___________
