Exhibit 10.5
ROLLOVER AGREEMENT
ROLLOVER AGREEMENT dated as of November 13, 2000 (the "Agreement") between
New SAC, a limited company incorporated in the Cayman Islands (the "Company"),
Seagate Technology HDD Holdings, and the individual listed on Schedule I hereto
(the "Senior Manager").
WHEREAS, Seagate Technology, Inc. ("Seagate"), Seagate Software Holdings,
Inc. and Suez Acquisition Company (Cayman) Limited ("SAC") have entered into the
Stock Purchase Agreement dated as of March 29, 2000 (as amended, the "Stock
Purchase Agreement");
WHEREAS, prior to the consummation of the transactions pursuant to the
Stock Purchase Agreement, SAC has assigned or will assign all of its rights and
obligations under the Stock Purchase Agreement to the Company; and
WHEREAS, pursuant to the Stock Purchase Agreement, as of the Closing which
occurs on the Closing Date (each as defined in the Stock Purchase Agreement),
the Company will, subject to certain exclusions, acquire all of the shares of
various subsidiaries of Seagate and, indirectly, substantially all of the
operating assets of Seagate; and
WHEREAS, the Senior Manager and other members of Seagate management
(together with the Senior Manager, the "Seagate Management") currently hold
unvested options to acquire shares of Seagate common stock ("Seagate Options")
and/or unvested restricted shares of Seagate common stock ("Seagate Restricted
Shares") and have agreed that, as of the Closing Date, Seagate Options and
Seagate Restricted Shares with a Rollover Value (as defined below) of between
$150,000,000 and $250,000,000 (the "Commitment Amount") shall be converted into
(i) deferred compensation and (ii) restricted preferred shares, par value $.0001
per share, of the Company (the "Restricted Preferred Shares"), in an aggregate
amount equal to the Commitment Amount; and
WHEREAS, in respect of the Restricted Preferred Shares received by the
Senior Manager, the Senior Manager shall receive restricted ordinary shares, par
value $.0001, of the Company (the "Restricted Ordinary Shares"); and
WHEREAS, the Senior Manager also agrees to subscribe for vested restricted
preferred shares, par value $.0001 per share, of the Company (the "Restricted
Vested Preferred Shares") and vested restricted ordinary shares , par value
$.0001 per share, of the Company (the "Restricted Vested Ordinary Shares") as
set forth herein;
NOW THEREFORE, in consideration of the foregoing, and the covenants and
promises and representations set forth herein, and for other good and valuable
consideration the receipt and sufficiency of which is hereby acknowledged and
accepted, the parties hereto agree as follows:
1. The Senior Manager agrees to the conversion, at the time of
Closing, of unvested Seagate Options held by such Senior Manager and/or unvested
Seagate Restricted Shares held by such Senior Manager with an aggregate Rollover
Value (as defined below) equal to at least the Applicable Percentage (as defined
below) of the total Rollover Value represented
by all unvested Seagate Options and Seagate Restricted Shares held by such
Senior Manager as of the Closing, into (i) pursuant to the terms of the New SAC
Restricted Share Plan (substantially in the form attached hereto as Exhibit A)
(the "Restricted Share Plan"), the Restricted Share Agreement (substantially in
the form attached hereto as Exhibit B) (the "Restricted Share Agreement") and
the Management Shareholders Agreement (substantially in the form attached hereto
as Exhibit C (the "Management Shareholders Agreement," which reference shall
include the applicable provisions of the Shareholders Agreement (substantially
in the form attached hereto as Exhibit D (the "Investor Shareholders
Agreement")), Restricted Preferred Shares having an aggregate liquidation
preference equal to fifty percent of the Subscribed Value (as defined below) and
(ii) a deferred compensation account pursuant to a deferred compensation plan
(substantially in the form attached hereto as Exhibit E), which shall be subject
to all the terms (including the subordination terms) of such plan, equal to the
excess of the Converted Value over the aggregate liquidation preference of the
Restricted Preferred Shares (the "Deferred Value"). The Senior Manager further
agrees that any such conversion of his or her unvested Seagate Options and
Seagate Restricted Shares hereunder shall (if necessary) be adjusted upward so
that the resulting Converted Value shall be a whole multiple of Ten Thousand
Dollars ($10,000). For purposes of this Agreement, "Converted Value" shall equal
the Rollover Value of the unvested Seagate Options and/or unvested Seagate
Restricted Shares actually converted. For purposes of this Agreement,
"Applicable Percentage" shall mean, with respect to a Senior Manager who is a
Senior Vice President or higher, 50%, and with respect to any other Senior
Manager, 25%.
2. In addition, with respect to the Restricted Preferred Shares
received pursuant to the preceding paragraph, the Senior Manager shall receive,
pursuant to the terms of the Restricted Share Plan, the Restricted Share
Agreement and the Management Shareholders Agreement, a number of Restricted
Ordinary Shares sufficient to provide the Senior Manager, as of the Closing,
with a percentage ownership of the total outstanding Ordinary Shares of the
Company as of the Closing equal to the Converted Value divided by the sum of (i)
the aggregate Converted Value of Seagate Management and (ii) the balance of the
total equity investment in the Company as of the Closing Date (including all
amounts contributed by the Seagate Management for Restricted Vested Preferred
Shares (as defined below)). For purposes of this Agreement, "Rollover Value"
shall mean (i) with respect to Seagate Options, the excess of (x) the fair
market value per share of Seagate common stock (using the average of Seagate's
closing selling prices for the five consecutive trading days ending two trading
days immediately preceding the Closing (the "FMV") times the number of Seagate
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shares subject to the Seagate Option, over (y) the aggregate exercise price of
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the Seagate Option and (ii) with respect to Seagate Restricted Shares, the FMV
times the number of Seagate Restricted Shares.
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3. The Senior Manager agrees to convert additional Seagate Options
and/or Seagate Restricted Shares such that the total Converted Value shall equal
the maximum percentage, as set forth on Schedule I hereto, of the total Rollover
Value represented by all unvested Seagate Options and Seagate Restricted Shares
held by such Senior Manager as of the Closing (such total value, the "Committed
Value"). In the event that the total Committed Value of the Seagate Management
exceeds $213,750,000 (or such lesser amount, but not below $180,500,000, as
determined by Silver Lake Partners, L.P.) such total Committed Value shall be
allocated pro rata among the Seagate Management, based, first, on the Applicable
Percentage of
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each member of Seagate management (including the Senior Manager) and then on the
respective Committed Values of the Seagate Management in excess of the
Applicable Percentage.
4. In consideration for the establishment of the deferred
compensation account and the Restricted Preferred Shares, the Senior Manager
agrees to the cancellation and/or the forfeiture of a number of Seagate Options
and/or Seagate Restricted Shares equal to the Converted Value and the Senior
Manager unconditionally releases Seagate Technology, Inc., VERITAS Software
Corporation, Victory Merger Sub, Inc., and their respective successors, assigns,
affiliates, officers, directors, employees and agents from any and all claims,
liabilities and obligations with respect to such Seagate Options and/or Seagate
Restricted Shares. The Seagate Options and/or Seagate Restricted Shares shall be
cancelled and/or forfeited in a manner determined in the sole discretion of the
Executive Vice President and Chief Administrator Officer of Seagate so as to
minimize any potential excise tax liability of the Senior Manager under Section
280G of the Internal Revenue Code of 1986, as amended.
5. The Senior Manager agrees to subscribe for a number of Restricted
Vested Preferred Shares having an aggregate liquidation preference equal to
5.264% of the Converted Value (the "Subscribed Value"), for which the Senior
Manager will make a cash payment at Closing in the per share amount equal to the
same as is paid by the Investors (as defined in the Management Shareholders
Agreement) for the Preferred Shares of the Company purchased by the Investors.
The Senior Manager will receive at Closing, in respect of each Restricted Vested
Preferred Share paid for by the Senior Manager, one Restricted Vested Ordinary
Share subject to the terms of the Management Shareholders Agreement. In addition
to the cash payment required to pay for the Restricted Vested Preferred Shares
set forth above, the Senior Manager agrees to pay cash at Closing for the
Restricted Vested Ordinary Shares equal to $.0001 times the total number of such
Restricted Vested Ordinary Shares.
6. With respect to Senior Managers who are party to the Management
Participation Agreement dated as of March 29, 2000 (the "Management
Participation Agreement") among Seagate Technology, Inc. ("Seller"), SAC and
certain management employees of Seller listed on the signature page thereof. The
parties hereto hereby agree and acknowledge that:
(a) All references to "Purchaser" and the "Company" in the operative
provisions of the Management Participation Agreement shall be deemed to
constitute references to Seagate Technology HDD Holdings;
(b) The references in Section 2(c) of the Management Participation
Agreement to Rollover Options and Purchaser Restricted Shares shall be deemed to
constitute references to Restricted Preferred Shares and Restricted Ordinary
Shares; and
(c) The transactions contemplated by this Agreement shall be in
satisfaction of the parties' obligation under Section 3 of the Management
Participation Agreement regarding Rollover Equity.
7. In the case of Senior Managers who are Vice Presidents, the
Company reserves the right to advance the cash subscription price payable
pursuant to this Agreement on
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behalf of such Vice Presidents in the event the wire transfer of such funds by
such Vice Presidents is not completed on a timely basis. Any funds so advances
by the Company will be required to be repaid within 30 days of the advance, with
interest at the prime rate on the Closing Date.
8. The Senior Manager warrants and represents that he or she is an
"accredited investor," as such term is defined under Regulation D of the
Securities Act of 1933, as amended.
9. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, regardless of the laws that might
otherwise govern under applicable principles of conflicts of laws thereof.
10. This Agreement may be executed in counterparts, all of which
shall be considered one and the same agreement, it being understood that all
parties need not sign the same counterpart.
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Schedule I
Name of Senior Manager: _____________________________
Address of Senior Manager: ____________________________
_____________________________
Maximum percentage of total Rollover Value with respect to the Senior
Manager which the Senior Manager agrees to convert: ___________%
By executing this Schedule, the undersigned Senior Manager
accepts and agrees to be bound by and subject to the terms and conditions of,
and makes the representations, warranties and agreements set forth in (i) this
Agreement, (ii) the Management Shareholders Agreement, (iii) the Restricted
Share Agreement between the Company and the undersigned Senior Manager. By
signing and returning this Schedule, the undersigned Senior Manager also accepts
and agrees to be bound by and subject to the terms and conditions set out in the
relevant sections of the Investor Shareholders Agreement. The parties to each
such agreement shall treat the execution and delivery hereof by the undersigned
Senior Manager as the execution and delivery of such agreement by the
undersigned Senior Manager, and, upon receipt and acceptance of this Schedule by
such parties, the signature of the undersigned Senior Manager set forth below
shall constitute a counterpart to the signature page of each such agreement.
NEW SAC
_____________________________
Senior Manager
By: ___________________________
Name:
Title:
SEAGATE TECHNOLOGY HDD HOLDINGS
By: ___________________________
Name:
Title:
Dated: November 13, 2000
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