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EXHIBIT 10.07
STOCKHOLDERS AGREEMENT
CTB HOLDINGS, INC.
STOCKHOLDERS AGREEMENT dated as of January 4, 1996 by and
among the persons who become Individual Stockholders (as defined below) and
execute this Agreement and CTB Holdings, Inc., a Delaware corporation (the
"Company").
WHEREAS, the Individual Stockholders desire to become owners
of certain shares of the Common Stock, par value $.01 per share ("Common
Stock"), and/or Preferred Stock, par value $.01 per share ("Preferred Stock"),
of the Company; and
WHEREAS, ASCP (as defined herein) and certain of the
Individual Stockholders have agreed to contribute to the capital of the Company
prior to the closing under the Stock Purchase Agreement (the "Closing") an
aggregate of $20,077,025.60 in exchange for shares of Common Stock and shares of
Preferred Stock as set forth on Annex I hereto (such contribution, the "Cash
Investment"); and
WHEREAS, certain of the Individual Stockholders also have
agreed to contribute to the capital of the Company simultaneously with the Cash
Investment and prior to the Closing an aggregate of 5,648.39 shares of common
stock of CTB, Inc. ("CTB Stock") in exchange for shares of Common Stock and
shares of Preferred Stock as set forth on Annex I hereto (such stock,
collectively, the "Parent Investment Stock"); and
WHEREAS, in addition, the Company will grant to certain of the
Individual Stockholders at the Closing options to purchase Common Stock at an
exercise price of $10 per share of Common Stock ("Options");
WHEREAS, the Individual Stockholders and the Company wish to
agree upon certain matters with respect to the shares of Common Stock and
Preferred Stock and the Options that may be owned from time to time by the
Individual Stockholders;
NOW, THEREFORE, it is agreed by and among the parties as
follows:
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ARTICLE 1
Definitions
As used in this Agreement, the following terms shall have the
following meanings:
"Affiliate", when used with reference to any Person, shall
mean any other Person that directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with, the
Person specified. For purposes of this definition, "control" shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise. "Affiliates" of ASCP
shall not include corporations conducting an active trade or business or their
parent corporations.
"Approved Sale" shall have the meaning specified in
Section 4.1 hereof.
"ASCP" shall mean (i) American Securities Capital Partners,
L.P., a Delaware limited partnership and/or (ii) any other general or limited
partnership, corporation or limited liability company having as a general
partner or controlling equity holder (whether directly or indirectly) a Person
who is a general or limited partner of American Securities Capital Partners,
L.P. or an Affiliate of any such Person.
"Authorization Date" shall have the meaning specified
in Section 3.5 hereof.
"Available Shares" shall have the meaning specified in
Section 5.1 hereof.
"Board of Directors" shall mean the Board of Directors
of the Company.
"Cause" shall mean action by an Individual Stockholder that
constitutes misconduct, dishonesty, the failure to comply with specific
directions of the Board of Directors or any senior executive officer of the
Company (after having been given a reasonably detailed written notice of, and a
period of 20 days to cure, such misconduct or failure), a deliberate and
premeditated act against the Company or its Affiliates or the commission of a
felony. Any voluntary termination of employment by an Individual Stockholder in
anticipation of an involuntary termination of such Individual Stockholder's
employment for Cause shall be deemed to be a termination for Cause.
"Commission" shall have the meaning specified in
Section 6.1.
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"Fair Value Per Share" shall mean, with respect to any Stock,
as of any date of determination, the fair value of one share of such Stock,
determined as provided herein (without regard in respect of such determination
for any discount for the fact that such share is held by a minority stockholder
of the Company but taking account of the fact that there is no public market for
such Stock nor ability to create a liquidity event through a merger, sale of
stock or assets or an initial public offering of the Company). At any time that
the Fair Value Per Share of any Stock shall be required to be determined
hereunder, the Board of Directors shall make a good faith determination (the
"Board's Determination") of the fair value of one share of such Stock and shall
provide to the Individual Stockholder with respect to whose Stock such
determination is being made a written notice thereof, which notice shall set
forth such supporting data in respect of such determination as the Board of
Directors feels appropriate under the circumstances (the "Determination
Notice"). Such Individual Stockholder shall have twenty (20) days following
receipt of the Determination Notice within which to deliver to the Company a
written notice (the "Objection Notice") of his or her objection, if any, to the
Board's Determination, which Objection Notice shall set forth such Individual
Stockholder's good faith determination (the "Stockholder's Determination") of
the fair value of a share of such Stock. The failure of such Individual
Stockholder to deliver the Objection Notice within such 20 day period shall
constitute such Individual Stockholder's acceptance of the Board's Determination
as conclusive. In the event of the timely delivery of an Objection Notice, the
Company and the Individual Stockholder shall attempt diligently and in good
faith to arrive at an agreement with respect to the Fair Value Per Share of the
Stock in question. If the Company and such Individual Stockholder are unable to
reach an agreement within 30 days after such Individual Stockholder delivers the
Objection Notice, the Fair Value Per Share shall be determined by a nationally
recognized accounting or other valuation firm (the "Valuer") reasonably
acceptable to the Company and such Individual Stockholder. The Company and such
Individual Stockholder will cooperate with each other in good faith to select
such Valuer. The Valuer shall determine the Fair Value Per Share and the
Valuer's decision will be furnished to the Company and such Individual
Stockholder in writing and shall be conclusive and binding upon the Company (for
purposes of such Individual Stockholder only) and upon such Individual
Stockholder. The fees and expenses of the Valuer shall be paid by the
non-prevailing party (i.e. the party whose submission of the Fair Value Per
Share is furthest from the Valuer's determination).
"Individual Shares" shall mean all shares of Stock issued to,
or held by, any Individual Stockholder, including, without limitation, all
shares of Common Stock and/or Preferred Stock purchased by an Individual
Stockholder for cash or issued upon conversion of convertible securities, upon
exercise of stock options, by way of a stock dividend or stock split or in
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connection with any conversion, merger, consolidation or recapitalization or
other reorganization affecting the Common Stock or Preferred Stock. Individual
Shares will continue to be Individual Shares in the hands of any transferee
other than the Company or ASCP (or any partner therein).
"Individual Stockholders" shall mean (i) any individuals who
are or become holders of shares of Stock and who execute this Agreement and (ii)
any transferees of Individual Shares from any such Individual Stockholder (other
than the Company or ASCP or any partner therein).
"Person" shall mean any natural person or any corporation,
partnership, trust or other legal entity.
"Piggyback Notice" shall have the meaning specified in
Section 6.1 hereof.
"Proposed Transferee" shall have the meaning specified
in Section 3.5 hereof.
"Registration Statement" shall have the meaning
specified in Section 6.1.
"Related Person" shall mean, with respect to any natural
person, (i) such person's spouse or estate or (ii) such person's children or
(iii) any partnership, trust, corporation or other legal entity in which 100% of
the beneficial ownership or interest is directly or indirectly held by such
person or any other person described in clauses (i) or (ii) of this sentence.
"Repurchase Notice" shall have the meaning specified in
Section 5.1 hereof.
"Repurchase Option" shall have the meaning specified in
Section 5.1 hereof.
"Sale of the Company" shall mean (i) the sale of all, or
substantially all, of the Company's consolidated assets in any single
transaction or series or related transactions; (ii) the sale of a majority of
the outstanding shares of capital stock; or (iii) any merger or consolidation of
the Company with or into another corporation unless, after giving effect to such
merger or consolidation, the holders of the Company's voting securities (on a
fully-diluted basis) immediately prior to the merger or consolidation own voting
securities (on a fully-diluted basis) of the surviving or resulting corporation
representing a majority of the ordinary voting power to elect directors of the
surviving or resulting corporation.
"Sale Notice" shall have the meaning specified in
Section 3.5 hereof.
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"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Selling Holder" shall have the meaning specified in Section
3.5 hereof.
"Stock" shall mean the Common Stock and the Preferred Stock.
"Supplemental Repurchase Notice" shall have the meaning
specified in Section 5.1 hereof.
"Termination Date" shall have the meaning specified in Section
5.1 hereof.
"Third Party Transferee" shall mean any transferee of
Individual Shares (other than (i) any Related Person of the transferor, (ii)
ASCP or any partner therein or (iii) the Company).
"Transfer" shall mean any event constituting a sale, bequest,
exchange, distribution, assignment, gift, pledge, hypothecation, foreclosure
upon, or creation of any security interest in, lien upon, or other encumbrance
with respect to, or other disposition of, any Individual Shares held by any
Individual Stockholder, including, without limitation, any transfer by marital
property division and any other transfer or disposition of any kind, whether
voluntary or involuntary, or by operation of law, affecting record or beneficial
ownership in or possession of any Individual Shares held by any Individual
Stockholder.
ARTICLE 2
Contribution of CTB Stock and Issuance of Company Stock
SECTION 2.1 General. On the date of, and immediately prior to,
the Closing, the Company will deliver the shares of the Parent Investment Stock
to the Individual Stockholders identified on Annex I hereto and such Individual
Stockholders will deliver to the Company cash and the shares of CTB Stock, in
each case in such amounts and number as allocated among such Individual
Stockholders in accordance with Annex I.
ARTICLE 3
Transfer of Individual Shares by Individual Stockholders
SECTION 3.1 General. Until the termination of this Agreement
in accordance with Section 5.4 hereof, all Individual Shares at any time and
from time to time outstanding and held by any Individual Stockholder shall be
held subject to the terms,
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conditions and restrictions set forth in this Agreement, the provisions of which
shall apply equally to the Individual Stockholders and their respective
transferees (other than ASCP, any partner therein or the Company). Each
Individual Stockholder, by executing this Agreement or by accepting a stock
certificate or other evidence of ownership thereof from the Company, agrees with
the Company and the other Individual Stockholders to comply with all terms,
conditions and restrictions set forth herein.
SECTION 3.2 Restrictions on Transfer of Individual Shares by
Individual Stockholders. (a) No Individual Stockholder shall Transfer any
Individual Shares except (i) in a transaction permitted by Section 3.3, 3.4 or
3.5 of this Agreement and then only in full compliance with the requirements of
Section 3.6 of this Agreement or (ii) in accordance with Article 4 or 5 of this
Agreement.
(b) Notwithstanding any other provision of this Agreement, no
Transfer of Individual Shares by any Individual Stockholder may be made unless,
in the judgment of the Board of Directors, such Transfer is in accordance with
the Securities Act and other applicable federal and state securities laws.
(c) Any purported Transfer of any Individual Shares by an
Individual Stockholder in violation of this Section 3.2 shall be void and shall
not be recognized by the Company and the purported transferee shall not be
entitled to vote or receive any distributions with respect to such Individual
Shares. The Company is authorized to refuse to honor any Transfer of Individual
Shares unless and until it is satisfied that such Transfer is in compliance with
the provisions of this Agreement.
SECTION 3.3 Permitted Transfers of Individual Shares to
Related Persons. Subject to Section 3.2(b) hereof, an Individual Stockholder may
Transfer any Individual Shares to a Related Person of such Individual
Stockholder, so long as (i) at least 10 days prior to effecting such Transfer,
such Individual Stockholder delivers written notice to the Company identifying
the Related Person (specifying the Related Person's relationship to such
Individual Stockholder) and describing in reasonable detail the proposed
transfer, (ii) prior to such Transfer, the Related Person proposing to acquire
such Individual Shares executes and delivers to the Company a counterpart of
this Agreement, and (iii) such Transfer complies with the provisions of Section
3.6 hereof. From and after the settlement date for such Transfer, the transferor
Individual Stockholder shall cease to be an Individual Stockholder for purposes
of this Agreement with respect to the Individual Shares so transferred, and the
transferee Related Person shall be deemed to be an Individual Stockholder for
purposes of this Agreement with respect to such Individual Shares.
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SECTION 3.4 Permitted Transfers to the Company and ASCP. (a)
Subject to Section 3.2(b) hereof, Individual Shares held by an Individual
Stockholder may be Transferred to the Company (i) under the circumstances
described in Section 3.5 of this Agreement, (ii) in accordance with the terms of
Article 5 of this Agreement or (iii) in accordance with the terms of a written
agreement entered into by such Individual Stockholder and the Company with the
approval of a majority of the members of the Board of Directors (acting in their
sole discretion).
(b) Subject to Section 3.2(b) hereof, an Individual
Stockholder may Transfer any Individual Shares to ASCP (or any partner therein)
at any time (i) upon mutual agreement of such Individual Stockholder and ASCP
(or such partner) or (ii) in accordance with the terms of Article 5 of this
Agreement. Individual Shares transferred to ASCP (or any partner therein) shall
cease to be Individual Shares for purposes of this Agreement and such transferee
shall not be bound by the terms of this Agreement.
SECTION 3.5 Permitted Sales to Third Party Transferees. (a)
Subject to Section 3.2(b) hereof, an Individual Stockholder may sell any
Individual Shares to a Third Party Transferee (i) pursuant to a bona fide offer
from such Third Party Transferee, so long as such sale complies with the
provisions of this Section 3.5 and Section 3.6, or (ii) pursuant to Article 4 of
this Agreement.
(b) Subject to paragraph (e) below, after the seventh
anniversary of the date of this Agreement, in the event that any Individual
Stockholder (a "Selling Holder") proposes to sell any Individual Shares to a
Third Party Transferee (other than pursuant to a transfer in accordance with
Article 4 hereof), such Selling Holder shall deliver a written notice (a "Sale
Notice") to the Company and ASCP at least 30 days prior to making any such sale.
The Sale Notice shall specifically identify the proposed transferee(s) (the
"Proposed Transferee") and shall describe in reasonable detail such Proposed
Transferee and all material terms and conditions of the proposed sale. The
Selling Holder agrees not to consummate any such sale until 30 days after the
Sale Notice has been delivered to the Company and ASCP. (The last day of such
30-day period is referred to herein as the "Authorization Date").
(c) Upon receipt of a Sale Notice from the Selling Holder, the
Company may elect to purchase all (but not less than all) the Individual Shares
proposed to be sold, upon the same terms and conditions as those set forth in
the Sale Notice, by delivering written notice of such election to the Selling
Holder within 30 days after receipt of the Sale Notice by the Company; provided,
however, that the Company may exercise its purchase option for a portion of the
Individual Shares proposed to be sold if conditioned upon the purchase of the
remainder of such Individual Shares by ASCP (and/or one or more partners
therein)
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pursuant to the next sentence. If the Company does not elect to purchase all the
Individual Shares proposed to be sold, ASCP (together with one or more of the
partners therein, to the extent ASCP itself does not fully exercise such right)
may elect to purchase (or to designate one or more third parties who are
prepared to purchase) all (but not less than all) of the Individual Shares
proposed to be sold (or the portion of such Individual Shares which the Company
has declined to purchase pursuant to the preceding sentence), upon the same
terms and conditions as those set forth in the Sale Notice, by delivering
written notice of such election to the Selling Holder within 30 days after the
receipt of the Sale Notice by ASCP. If more than one of the partners in ASCP
elects to exercise such purchase option with respect to any Individual Shares
not purchased by the Company or ASCP, the electing partners shall be entitled to
purchase such Individual Shares in such proportion as they may agree between or
among themselves. Settlement of the purchase of Individual Shares from a Selling
Holder by the Company or ASCP (or partners therein) pursuant to this Section 3.5
shall take place on a date fixed by the Company within 10 days after the
Authorization Date.
(d) Subject to paragraph (e) of this Section 3.5, if the
Company and/or ASCP (or one or more of the partners therein), individually or
collectively, do not elect to purchase (or to designate one or more third
parties who are prepared to purchase) all the Individual Shares offered pursuant
to the Sale Notice, the Selling Holder may sell to the Proposed Transferee all
(but not less than all) the shares specified in the Sale Notice at any time
during the 30-day period immediately following the Authorization Date in a bona
fide transaction at a price and on other terms no more favorable to the Proposed
Transferee than those specified in the Sale Notice, so long as (i) the Company
and ASCP shall have notified the Selling Holder that such Proposed Transferee is
acceptable to the Company and ASCP, respectively, which notifications shall not
be unreasonably withheld (provided that, any such proposed transfer to a
Proposed Transferee who is already an Individual Stockholder shall be acceptable
to the Company and ASCP), and (ii) the provisions of Section 3.6 are complied
with. If all such Individual Shares are not sold to the Proposed Transferee
within such 30-day period, the sale of such Individual Shares shall thereupon
again become subject to compliance with this Section 3.5, and any future sale of
such Individual Shares pursuant to this Section 3.5 shall require delivery of a
new Sale Notice.
(e) Notwithstanding the foregoing provisions of this Section
3.5, each Individual Stockholder acknowledges that such Individual Stockholder
shall not be entitled to sell any Individual Shares to a Third Party Transferee
pursuant to this Section 3.5 until after the expiration of the 30-day period
following such Individual Stockholder's Termination Date.
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SECTION 3.6 Settlement. The settlement of any Transfer of
Individual Shares permitted by Section 3.3, 3.4 or 3.5 hereof shall take place
at the principal office of the Company at 10:00 A.M. on a date fixed by the
Company in accordance with any applicable requirements of such Section. At the
time of such settlement, (i) the transferor of such Individual Shares (or the
transferor's estate or legal representative, if applicable) shall deliver to the
transferee the certificate or certificates representing the Individual Shares to
be transferred, endorsed in blank, or accompanied by appropriate stock powers
endorsed in blank, together with funds for any required stock transfer tax
stamps, (ii) in the case of a Transfer for value, the transferee shall pay the
consideration for such Transfer, (iii) the transferor shall represent in writing
to the transferee (and to the Company, if the Company is not the transferee)
that such Individual Shares are owned of record and beneficially by such
transferor, free and clear of all liens, security interests, claims,
restrictions and encumbrances of any kind, (iv) if required by the Company, the
transferor shall deliver to the Company (x) a written representation from the
transferee that such transferee is acquiring such Individual Shares for such
transferee's own account, for investment only and not with a view towards the
resale or distribution thereof, and/or (y) a satisfactory opinion of counsel
which (to the Company's reasonable satisfaction) is experienced in securities
law matters to the effect that such Transfer is permitted by the Securities Act
and other applicable federal and state securities laws without registration
under the Securities Act, and (v) the transferee (if other than the Company,
ASCP or any partner therein) shall execute and deliver to the Company a
counterpart of this Agreement. Compliance with all applicable provisions of the
preceding sentence shall be a condition precedent to the consummation of such
Transfer.
ARTICLE 4
Sale of the Company
SECTION 4.1 Participation in Approved Sale. (a) If the Board
of Directors and the holder(s) of a majority of the Company's Common Stock then
outstanding approve a Sale of the Company to an independent third party or a
Sale of a majority of the Company's Common Stock in an initial public offering
(in either such case, an "Approved Sale"), Individual Stockholders -------------
who are holders of Individual Shares will consent to, and raise no objections
against, the Approved Sale, and if the Approved Sale is structured as a sale of
stock, Individual Stockholders who are holders of Individual Shares will agree
to sell all of their shares of Stock and rights or options to acquire shares of
Stock on the terms and conditions approved by the Board of Directors and the
holder(s) of a majority of the Common Stock then outstanding. The Individual
Stockholders will take all necessary and desirable actions in connection with
the
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consummation of the Approved Sale of the Company. For purposes of this Section
4.1, an "independent third party" is any person who does not own in excess of 5%
of the Company's Common Stock on a fully-diluted basis, who is not controlling,
controlled by or under common control with any such 5% owner of the Company's
Common Stock and who is not a Related Person or Affiliate of any such 5% owner
of the Company's Common Stock. In addition to the foregoing obligations,
Individual Stockholders shall have the right to participate in an Approved Sale
pro rata, on the same basis as the other holders of the Company's capital stock.
(b) The obligations of the Individual Stockholders under this
Section 4.1 with respect to an Approved Sale of the Company are subject to the
satisfaction of the following conditions: (i) upon the consummation of the
Approved Sale, all of the holders of Common Stock will receive the same form and
amount of consideration per share of Common Stock, or if any holders are given
an option as to the form and amount of consideration to be received, all holders
will be given the same option; (ii) upon the consummation of the Approved Sale,
all of the holders of Preferred Stock will receive the same form and amount of
consideration per share of Preferred Stock, or if any holders are given an
option as to the form and amount of consideration to be received, all holders
will be given the same option; and (iii) all holders of rights or options to
acquire Individual Shares which have vested prior to or will vest upon the
consummation of the Approved Sale will be given either (A) an opportunity to
exercise such rights or options prior to the consummation of the Approved Sale
and participate in such sale as holders of Common Stock or (B) subject to
approval by the Board of Directors in its sole and absolute discretion, an
opportunity to receive, upon the consummation of the Approved Sale, in exchange
for such rights or options, consideration equal to the amount determined by
multiplying (1) the same amount of consideration per share of Common Stock which
would have been received by the holders of Common Stock in connection with the
Approved Sale if all such rights or options had been exercised prior to the
Approved Sale less the exercise price (per share of Common Stock) of such rights
or options to acquire Individual Shares by (2) the number of Individual Shares
represented by such rights or options.
SECTION 4.2 Purchaser Representative. If the Company or the
holders of the Company's securities enter into any negotiation or transaction
for which Rule 506 under the Securities Act (or any similar rule then in effect)
promulgated by the Securities Exchange Commission may be available with respect
to such negotiation or transaction (including a merger, consolidation or other
reorganization), the Individual Stockholder will, at the request of the Company,
appoint a "purchaser representative" (as such term is defined in Rule 501 under
the Securities Act) reasonably acceptable to the Company. If any Individual
Stockholder appoints the purchaser representative designated by the Company, the
Company will pay
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the fees and expenses of such purchaser representative, but if any Individual
Stockholder declines to appoint the purchaser representative selected by the
Company, such Individual Stockholder will promptly appoint a purchaser
representative acceptable to the Company, and such Individual Stockholder will
be responsible for the fees and expenses of the purchaser representative so
appointed.
ARTICLE 5
Purchase of Individual Shares Upon Termination Date
SECTION 5.1 Purchase of Individual Shares Upon Termination of
Employment. (a) If the employment with the Company of any Individual Stockholder
(other than J. Xxxxxxxxxxx Xxxxxxx or Xxxxx Xxxxxxx, as to whom the "Repurchase
Option" defined below shall not apply) (or any officer of the Company who
Transferred such officer's Individual Shares to a Related Person who has become
an Individual Stockholder) shall terminate for any reason whatsoever, including
death, disability, resignation, or termination with or without cause (the date
on which such termination occurs being referred to as the "Termination Date"),
then the Company shall have the option (the "Repurchase Option") to repurchase
all, but not less than all, of the Individual Shares held by such Individual
Stockholder (and by any Individual Stockholder who acquired such shares as a
Related Person from an employee of the Company), at the price and on the other
terms specified in Section 5.2. The Company may exercise the Repurchase Option
by delivery of written notice (the "Repurchase Notice") to the holder or holders
of the Individual Shares within 30 days after the Termination Date. The
Repurchase Notice shall set forth the number of the Individual Shares to be
acquired from such holder(s), the aggregate consideration to be paid for such
shares and the time and place for the closing of the transaction.
(b) If for any reason the Company does not elect to purchase
all of the Individual Shares pursuant to the Repurchase Option, then ASCP (or
one or more of the partners therein) shall be entitled to exercise the Company's
Repurchase Option in the manner set forth in the preceding paragraph (a) for
all, but not less than all, of the Individual Shares (the "Available Shares").
As soon as practicable after the Company has determined that there will be
Available Shares, but in any event within 15 days after the Termination Date,
the Company shall deliver written notice (the "Option Notice") to ASCP setting
forth the number of Available Shares and the price for each Available Share.
ASCP (or one or more of the partners therein) may elect to purchase all of the
Available Shares by delivering written notice to the Company within 10 days
after receipt of the Option Notice by ASCP. As soon as practicable, and in any
event within 5 days after the expiration of such 10-day period, the Company
shall notify the holder(s) of Individual Shares as to the number of Individual
Shares being purchased from such holder by ASCP (or
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one or more of the partners therein). If more than one of the partners in ASCP
elects to exercise such purchase option with respect to the Individual Shares
not purchased by the Company or ASCP, the electing partners shall be entitled to
purchase such Individual Shares in such proportion as they may agree between or
among themselves.
(c) If for any reason neither the Company nor ASCP elects to
purchase all of the Individual Shares pursuant to Section 5.1(a) or (b), then J.
Xxxxxxxxxxx Xxxxxxx or Xxxxx Xxxxxxx (the "Chocolas") shall be entitled to
exercise the Company's Repurchase Option in the manner set forth in the
preceding paragraph (a) for all, but not less than all, of the Available Shares.
As soon as practicable after the Company has determined that ASCP will not elect
to purchase the Available Shares, the Company shall deliver written notice to
the Chocolas setting forth the number of Available Shares and the price for each
Available Share. The Chocolas may elect to purchase all of the Available Shares
by delivering written notice to the Company within 10 days after receipt of such
notice from the Company. As soon as practicable, and in any event within 5 days
after the expiration of such 10-day period, the Company shall notify the
holder(s) of Individual Shares as to the number of Individual Shares being
purchased from such holder by the Chocolas.
(d) Settlement of the purchase of Individual Shares pursuant
to this Section 5.1 will occur at the Company's principal office on a business
day to be fixed by the Company within 15 days after the expiration of the 30-day
period referred to in paragraph (a) above. At the time of such settlement, (i)
the purchaser or purchasers shall pay the purchase price in the manner specified
in Section 5.2, (ii) the holders of the Individual Shares being purchased shall
deliver the certificate or certificates representing such shares to the
purchaser or purchasers or their nominees, endorsed in blank, or accompanied by
appropriate stock powers executed in blank, together with funds for any required
stock transfer tax stamps, and (iii) the transferor shall represent in writing
to the transferee (and to the Company, if the Company is not the transferee)
that such Individual Shares are owned of record and beneficially by such
transferor, free and clear of all liens, security interests, claims,
restrictions and encumbrances of any kind.
(e) Each Individual Stockholder acknowledges that the
Individual Shares which the Company, ASCP (or any partner therein) or the
Chocolas may elect to purchase pursuant to the Repurchase Option include any
Individual Shares issued upon exercise of any stock option (regardless of
whether such option is exercised before or after the Termination Date).
SECTION 5.2 Purchase Price for Individual Shares. The purchase
price per share to be paid for any Individual Shares purchased by the Company,
ASCP (or any partner therein) and/or the Chocolas shall be equal to (i) if the
termination of
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employment giving rise to the Repurchase Option arose out of a termination for
Cause, the cost incurred by the terminated Individual Stockholder (or the
officer of the Company who Transferred such Individual Shares to such Individual
Stockholder) in connection with the issuance of the Individual Shares being
repurchased (it being agreed that in the case of shares acquired upon the
exercise of options to purchase Stock, the cost incurred shall be deemed to be
the exercise price); and (ii) if the termination of employment giving rise to
the Repurchase Option arose for any other reason, the Fair Value Per Share as of
the Termination Date. Such purchase price may be paid (a) in the case of a
purchase by the Company, at the option of the Company, either in cash or by
delivery of a subordinated promissory note having the terms described in the
next sentence, or in any combination thereof, with not less than 25% of the
purchase price to be paid in cash in any event, or (b) in the case of a purchase
by ASCP (or any partner therein) or the Chocolas, in cash. Any subordinated
promissory note issued by the Company in payment of all or a portion of such
purchase price shall (w) provide that 20% of the principal amount thereof shall
payable on each anniversary of the date thereof (until and including the fifth
anniversary), (x) bear interest at the rate of 8% per annum, payable
semi-annually and (y) be subordinated on terms and conditions satisfactory to
any holders of indebtedness for borrowed money of the Company and its
subsidiaries.
ARTICLE 6
Registration Rights
SECTION 6.1 Piggyback Registration. If the Company at any time
proposes to file with the Securities and Exchange Commission (the "Commission")
a registration statement under the Securities Act on any form for the general
registration of securities to be sold for cash (a "Registration Statement") with
respect to any shares of Common Stock owned by ASCP (or one or more of the
partners therein), it will give written notice (a "Piggyback Notice") to all
Individual Stockholders who are holders of shares of Common Stock at least 30
days before the initial filing of such Registration Statement, which notice
shall set forth the intended method of disposition of the securities proposed to
be registered. The notice shall offer to include in such filing such aggregate
number of shares of Common Stock held by the Individual Stockholders as the
Individual Stockholders may request. Each Individual Stockholder holding shares
of Common Stock and desiring to have such shares registered under this Section
6.1 shall advise the Company in writing within 10 days after the date of receipt
of such offer from the Company, setting forth the number of such Individual
Stockholder's shares of Common Stock for which registration is requested. The
Company shall thereupon include in such filing the aggregate number of shares of
Common Stock held by the Individual Stockholders for which registration is so
requested, subject to the next sentence.
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If the managing underwriter of a proposed public offering shall advise the
Company in writing that, in its opinion, the distribution of the shares of
Common Stock held by the Individual Stockholders which have been requested to be
included in the Registration Statement concurrently with the Common Stock being
registered for ASCP (or the partners therein) would adversely affect the
distribution of such securities, then the number of shares of Common Stock which
such Individual Stockholder and ASCP shall be permitted to include in the
Registration Statement shall be limited to the number of shares of Common Stock
held by each such Individual Stockholder and ASCP immediately prior to the
filing of the Registration Statement multiplied by a fraction, the numerator of
which is the total number of shares of Common Stock held by such Individual
Stockholders and ASCP which the managing underwriter shall advise the Company
can be included in the Registration Statement without adversely affecting the
sale of securities pursuant to the Registration Statement and the denominator of
which is the total number of shares of Common Stock held by such Individual
Stockholders and ASCP immediately prior to the filing of the Registration
Statement. In the event that any Individual Stockholder requests inclusion in a
Registration Statement of a number of shares of Common Stock which exceeds the
number of shares of Common Stock such holder is entitled to include in such
Registration Statement in accordance with the preceding sentence, such holder
will take all actions which the Company reasonably requires to withdraw such
holder's request to include such excess shares in the Registration Statement.
All expenses of such registration shall be borne by the Company.
SECTION 6.2 Indemnification. (a) Each Individual Stockholder
holding any shares of Common Stock included in any registration pursuant to
Section 6.1, by such participation, agrees to indemnify and hold harmless the
Company, its directors and officers, each other Person, if any, who controls the
Company within the meaning of the Securities Act, each other Person (including
each underwriter) who participated in the offering of such securities and each
other Person, if any, who controls such participating Person against any losses,
claims, damages or liabilities, joint or several, to which the Company or any
such director or officer or any such Person may become subject under the
Securities Act or any other statute or at common law, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon information in writing provided to the Company by such Individual
Stockholder specifically for use in any Registration Statement under which such
shares of Common Stock were registered under the Securities Act at the request
of such holder, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereto. Notwithstanding the foregoing,
in no event shall any Individual Stockholder's liability hereunder exceed the
net proceeds received by such holder in respect of the sale of Common Stock
pursuant to such registration.
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(b) The Company agrees to indemnify and hold harmless each
Individual Stockholder holding any shares of Common Stock included in any
registration pursuant to Section 6.1 against any losses, claims, damages or
liabilities, joint or several, to which any such Individual Stockholder may
become subject under the Securities Act or any other statute or at common law,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided, however, that the Company will not be liable in any such case to the
extent that such loss, claim, damage or liability arises out of or is based upon
written information provided to the Company by such Individual Stockholder
specifically for use in any Registration Statement under which such shares of
Common Stock were registered under the Securities Act at the request of such
holder, any preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereto.
(c) Each Individual Stockholder holding shares of Common Stock
included in any registration pursuant to Section 6.1 shall, if requested by the
Company, enter into an underwriting agreement or similar agreement containing
customary indemnification provisions substantially similar to those in this
Section 6.2.
SECTION 6.3 Holdback. Except as expressly permitted by this
Article 6, no holder of Individual Shares may effect any public sale or
distribution of any Individual Shares during the period commencing upon the
earlier of (i) the receipt of a Piggyback Notice relating to an underwritten
offering of shares of Common Stock owned by ASCP (or one or more of the partners
therein) or (ii) the filing of a Registration Statement with the Commission
relating to an underwritten offering for the account of the Company of any of
the Company's equity securities and ending on the earliest of (x) 180 days after
receipt of such Piggyback Notice, (y) 90 days after the effective date of the
Registration Statement relating to such offering, or (z) the date, if any, on
which such Registration Statement is withdrawn, unless the underwriters managing
such offering shall otherwise consent thereto, or unless ASCP and its partners
are not similarly bound.
ARTICLE 7
Legend on Certificates
SECTION 7.1 Legend. All certificates representing Individual
Shares held by Individual Stockholders shall have endorsed thereon a conspicuous
legend as follows:
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"The shares representing this certificate are subject to
the terms and conditions of a certain Individual Stockholders
Agreement dated as of January 4, 1996, by and among various
individuals signatory thereto and the Company, a copy of which
is available at the principal office of the Company. The sale,
transfer or other disposition of such shares by the holder
thereof is subject to the terms of such Individual
Stockholders Agreement, which also provides that under certain
circumstances the Company and certain other persons have the
right to purchase such shares from the holder thereof."
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or
under any state securities laws, and may not be sold or
transferred in the absence of an effective registration
statement under the Securities Act of 1933, as amended, and
applicable state securities laws or an exemption from
registration thereunder."
Each Individual Stockholder consents to the placement of such legend on the
certificate or certificates representing the Individual Shares owned by such
Individual Stockholder.
ARTICLE 8
Miscellaneous
SECTION 8.1 After-Acquired Individual Shares. All of the
provisions of this Agreement shall apply to all Individual Shares held by an
Individual Stockholder on the date hereof, and all Individual Shares which may
at any time be issued by the Company to an Individual Stockholder after the date
hereof (including, without limitation, upon exercise of an option or warrant) or
which may be acquired by an Individual Stockholder in any other manner (all of
which shall be deemed "Individual Shares" hereunder).
SECTION 8.2 Other Capital Stock. Each of the Individual
Stockholders understands that, in addition to the Common Stock and the Preferred
Stock, the Company may, from time to time, have shares of one or more other
classes of capital stock outstanding. Any reference to "Common Stock, in Article
6 or elsewhere in this Agreement shall be deemed to refer only to the Common
Stock (as defined herein) and shall not be read to include shares of Preferred
Stock or any other class of capital stock. Any reference to "Stock" in this
Agreement shall be deemed to refer only to the Common Stock and the Preferred
Stock (each as defined herein) and shall not be read to include shares of any
other class of capital stock.
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SECTION 8.3 Disclosure of this Agreement. Each of the
Individual Stockholders shall ensure that each person or entity that proposes to
acquire Individual Shares from such Individual Stockholder is furnished with a
copy of this Agreement prior to such acquisition of Individual Shares. The
Company shall cause a copy of this Agreement to be attached to, and filed with,
the Bylaws of the Company and to be made available for examination at the
Company's principal office.
SECTION 8.4 Specific Performance. The parties hereto
acknowledge that irreparable damage would result if this Agreement is not
specifically enforced and that, therefore, the rights and obligations of the
parties under this Agreement may be enforced by a decree of specific performance
issued by a court of competent jurisdiction, and appropriate injunctive relief
may be applied for and granted in connection therewith. Such remedies shall be
cumulative and not exclusive and shall be in addition to any other remedies
which any party may have under this Agreement or otherwise.
SECTION 8.5 Term of Agreement. The rights and obligations of
each Individual Stockholder under this Agreement shall become effective on the
date hereof and shall terminate upon the earliest to occur of (i) the
liquidation and dissolution of the Company and (ii) the twelfth anniversary of
the date hereof.
SECTION 8.6 Successors and Assigns. All of the terms and
provisions of this Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective successors and assigns (except as
otherwise expressly provided in Section 3.4(b) hereof); provided, however, that
no Individual Stockholder may assign this Agreement or its rights or obligations
hereunder except in connection with a permitted Transfer of Individual Shares
pursuant to the provisions hereof.
SECTION 8.7 Entire Agreement. This Agreement constitutes the
complete understanding and agreement among the parties hereto with respect to
the subject matter hereof.
SECTION 8.8 Amendments. This Agreement may be amended,
supplemented or changed, and any provision hereof can be waived, only by a
written instrument making specific reference to this Agreement executed by the
Company and the holders of at least 66 2/3% of the Individual Shares then owned
by all Individual Stockholders and consented to by ASCP.
SECTION 8.9 Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including telecopy,
telex or similar writing) and shall be given:
(i) if to the Company or to ASCP, to each of
them at the following address:
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c/o American Securities Capital Partners, L.P.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx
(ii) if to an Individual Stockholder, at such
Individual Stockholder's address as most recently supplied to
the Company and set forth in the Company's records;
or such other address or telecopy number as such party may hereafter specify for
the purposes by notice to the other parties hereto. Each such notice, request or
other communication shall be deemed to have been duly given when delivered
personally or three days after being mailed by certified or registered mail,
return receipt requested, postage prepaid, or if given by telex or telecopy,
when received by the recipient.
SECTION 8.10 Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of Delaware applicable
to agreements made and to be performed in Delaware.
SECTION 8.11 Third Party Beneficiary. The Company and the
Individual Stockholders acknowledge that ASCP and the partners therein are
third-party beneficiaries under this Agreement and will have the right to seek
specific performance hereof, as well as all other remedies available at law or
in equity.
SECTION 8.12 Severability. If any provision of this Agreement
or the application of any such provision to any person or circumstances shall be
held invalid by a court of competent jurisdiction, the remainder of this
Agreement, including the portion of such provision not held to be invalid, or
the application of such provision to persons or circumstances other than those
as to which it is held invalid, shall not be affected thereby.
SECTION 8.13 Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed to be an original, but
all or which together shall constitute one and the same instrument.
SECTION 8.14 Headings. All section headings herein are for
convenience of reference only and are not part of this Agreement, and no
construction or inference shall be derived therefrom.
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IN WITNESS WHEREOF, the parties hereto have hereunto set their
hands as of the date first set forth above.
CTB HOLDINGS, INC.
By: /s/Xxxxxxx X. Xxxxx
--------------------------
Title:
Individual Stockholders:
/s/J. Xxxxxxxxxxx Xxxxxxx
--------------------------
Name: J. Xxxxxxxxxxx Xxxxxxx
/s/Xxxxx Xxxxxxx
--------------------------
Name: Xxxxx Xxxxxxx
/s/Xxxx X. Xxxxx, Xx.
--------------------------
Name: Xxxx X. Xxxxx, Xx.
/s/Xxxxxxx X. Xxxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxxx
/s/Xxxx X. Xxxxx
--------------------------
Name: Xxxx X. Xxxxx
/s/Xxxxxx X. Xxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxx
/s/Xxxxx X. Xxxxx
--------------------------
Name: Xxxxx X. Xxxxx
/s/Xxx X. Xxxxxxxxxxx
--------------------------
Name: Xxx X. Xxxxxxxxxxx
/s/Xxxxx X. Xxxxxx
--------------------------
Name: Xxxxx X. Xxxxxx
/s/Xxxxx Xxxxx
--------------------------
Name: Xxxxx Xxxxx
/s/Xxxx X. Xxxxxxxxxx
--------------------------
Name: Xxxx X. Xxxxxxxxxx
/s/Xxxxx X. Xxxxxxxx
--------------------------
Name: Xxxxx X. Xxxxxxxx
/s/Xxxxxxx X. XxxXxxxxxxx
--------------------------
Name: Xxxxxxx X. XxxXxxxxxxx
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Annex I
Investment in the Company at Closing
Shares of Shares of
--------- ---------
Shares of Common Preferred
--------- ------ ---------
Name Cash CTB Stock Stock Stock
---- ---- --------- ----- -----
J. Xxxxxxxxxxx Xxxxxxx
Xxxxx Xxxxxxx
Xxxx X. Xxxxx, Xx.
Xxxxxxx X. Xxxxxxx
Xxxx X. Xxxxx
Xxxxxx X. Xxxxxxx
Xxxxx X. Xxxxx
Xxx X. Xxxxxxxxxxx
