Exhibit 2.4
THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
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| | x | | |
In re | | : | | |
| | : | | Chapter 11 |
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NEWPAGE CORPORATION,et al., | | : | | Case No. 11-12804 (KG) |
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Debtors.1 | | : | | Jointly Administered |
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| | x | | Re: Docket Nos. 2904, 2828, & 2909 |
SECOND AMENDED PLAN SUPPLEMENT TO THE DEBTORS’
MODIFIED FOURTH AMENDED JOINT CHAPTER 11 PLAN
NewPage corporation (“NewPage”) and those of its subsidiaries and affiliates that are debtors and debtors in possession (collectively with NewPage, the “Debtors”) in these jointly administered cases under chapter 11 of title 11 of the United States Code, hereby submit the Second Amended Plan Supplement (defined below) to the Debtors’ Modified Fourth AmendedJoint Chapter 11 Plan, dated December 12, 2012 [Docket No. 2904] (the “Plan”).
On December 5, 2012, the Debtors filed the Plan Supplement to the Debtors’Fourth Amended Joint Chapter 11 Plan [Docket No. 2828] (the “Plan Supplement”); thereafter on December 12, 2012, the Debtors filed the Amended Plan Supplement to the Plan [Docket No. 2909] (the “Amended Plan Supplement”).
The Debtors hereby further amend the Plan Supplement and Amended Plan Supplement with the attached modified documents (the “Second Amended Plan Supplement”).
1 | The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification number, as applicable, are, Chillicothe Paper Inc. (6154), Escanaba Paper Company (5598), Luke Paper Company (6265), NewPage Canadian Sales LLC (5384), NewPage Consolidated Papers Inc. (8330), NewPage Corporation (6156), NewPage Energy Services LLC (1838), NewPage Group Inc. (2465), NewPage Holding Corporation (6158), NewPage Port Hawkesbury Holding LLC (8330), NewPage Wisconsin System Inc. (3332), Rumford Paper Company (0427), Upland Resources, Inc. (2996), and Wickliffe Paper Company LLC (8293). The Debtors’ corporate headquarters is located at 8540 Gander Creek Drive, Miamisburg, OH 45342. |
The Second Amended Plan Supplement includes three documents that will replace and supersede the corresponding documents in the Plan Supplement and Amended Plan Supplement (as applicable): (i) Stockholders Agreement (Schedule 9.3B); (ii) NewPage Holding Inc. certificate of incorporation (Schedule 9.2A); and (iii) 2012 Long-Term Incentive Plan (Schedule 1.2.146). Other than the foregoing documents, all other documents previously included in the Plan Supplement and Amended Plan Supplement remain the same. The Debtors expressly reserve the right, at any time on or prior to the Effective Date, to supplement, modify, or amend the documents contained in the Plan Supplement, Amended Plan Supplement, or this Second Amended Plan Supplement.
INDEX OF SCHEDULES TO THE SECOND AMENDED PLAN SUPPLEMENT
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Schedule 1.2.95 | | Litigation Trust Agreement (no change) |
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Schedule 1.2.146 | | Reorganized NPC New Compensation Plans (revised 2012 Long-Term Incentive Plan attached) |
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Schedule 4.9 | | Retained Causes of Action (no change) |
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Schedule 8.1 | | Lists of Certain Executory Contracts Assumed and Rejected under the Plan (no change) |
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Schedule 8.5A | | Settlement Agreement and Mutual Release (no change) |
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Schedule 8.5B | | Union Agreements, Settlement Agreement and Release; Existing Compensation and Benefits Programs (no change) |
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Schedule 9.1 | | Members of Boards of Directors and Initial Officers of New HoldCo and Each Reorganized Debtor (no change) |
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Schedule 9.2A | | Form of Reorganized Debtors’ Certificate of Incorporation (revised NewPage Holding Inc. certificate of incorporation) |
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Schedule 9.2B | | Form of Reorganized Debtors’ Bylaws (no change) |
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Schedule 9.2C | | Form of Reorganized Debtors’ Limited Liability Company Agreements (no change) |
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Schedule 9.3A | | Notice Regarding New Holdco Stockholders Agreement (no change) |
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Schedule 9.3B | | Stockholders Agreement (revised Stockholders Agreement attached) |
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Schedule X | | Insiders to be Employed by Reorganized Debtors and Nature of Compensation of Insiders (no change) |
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Dated: December 20, 2012 | | PACHULSKI STANG ZIEHL & JONES LLP |
Wilmington, Delaware | | |
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| | /s/ Michael R. Seidl Laura Davis Jones (Bar No. 2436) |
| | Michael R. Seidl (Bar No. 3889) |
| | Timothy P. Cairns (Bar No. 4228) |
| | 919 N. Market Street, 17th Floor. |
| | P.O. Box 8705 |
| | Wilmington, Delaware 19899-8705 (Courier 19801) |
| | Telephone: 302.652.4100 |
| | Facsimile: 302.652.4400 |
| |
| | -and- |
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| | Martin J. Bienenstock |
| | Judy G.Z. Liu |
| | Philip M. Abelson |
| | PROSKAUER ROSE LLP |
| | Eleven Times Square |
| | (Eighth Avenue & 41st Street) |
| | New York, NY 10036-8299 |
| | Telephone: 212.969.3000 |
| | Facsimile: 212.969.2900 |
| |
| | Co-Attorneys for the Debtors and Debtors in Possession |
Schedule 1.2.95
Litigation Trust Agreement
The Litigation Trust Agreement, field on December 5, 2012, as Schedule 1.2.93 is now
referenced at Section 1.2.95 of the Plan.
NP CREDITOR LITIGATION TRUST AGREEMENT
The NP CREDITOR LITIGATION TRUST AGREEMENT, dated as of December 18, 2012 (the “Agreement”), by and among NewPage Corporation, on behalf of itself and those of its subsidiaries that are chapter 11 debtors (the “Debtors” or “Reorganized Debtors”) and PIRINATE Consulting Group LLC, as trustee of the Litigation Trust, to be established pursuant to Section 1.2 hereof (in such capacity, the “Litigation Trustee”) is executed to facilitate the implementation of the Debtors’ Fourth Amended Joint Chapter 11 Plan (including all exhibits attached thereto or referenced therein, as the same may be amended, modified or supplemented, the “Plan”) that provides for the establishment of the Litigation Trust created hereby. Capitalized terms used in this Agreement and not otherwise defined shall have the meanings assigned to such terms in the Plan.
Background
A. Each of the Debtors commenced voluntary cases for relief under chapter 11 of the Bankruptcy Code on September 7, 2011 in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) and, on September 8, 2011, the Bankruptcy Court consolidated the Debtors’ Chapter 11 cases for procedural purposes only.
B. On December 14, 2012, the Bankruptcy Court entered the Confirmation Order.
C. The Litigation Trust is being created pursuant to the Settlements embodied in the Plan and for the purposes set forth in Section 1.2 below.
D. The Litigation Trust is being created pursuant to this Agreement for the purposes of liquidating the Litigation Trust Assets and distributing or utilizing the proceeds thereof (the “Trust Proceeds” or “Litigation Trust Proceeds”) to or for the benefit of the Litigation Trust Beneficiaries, as described in Article V of the Plan. For the avoidance of doubt, the Trust Proceeds include the Settlement Cash.
Agreement
NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the Debtors and the Litigation Trustee agree as follows:
ARTICLE I
DECLARATION OF TRUST
1.1Creation of Trust. The Debtors and the Litigation Trustee, pursuant to the Plan and the Confirmation Order and in accordance with the applicable provisions of chapter 11 of the Bankruptcy Code, hereby constitute and create the “Creditor Litigation Trust” (the “Litigation Trust” or “Trust”). In connection with the exercise of the Litigation Trustee’s power hereunder, the Litigation Trustee may use this name or such variation thereof as the Litigation Trustee sees fit; provided, however, that in no circumstance shall the Litigation Trustee be the representative of any Reorganized Debtor and the Litigation Trustee shall use its best efforts to conspicuously show that the Litigation Trustee represents the Litigation Trust, which should not be confused with the Reorganized Debtors.
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1.2Purpose of Trust.
(a) On the Effective Date, the Litigation Trust shall be established pursuant to this Agreement for the purpose of: (i) administering the Litigation Trust Assets (including the prosecution of the Committee Litigation Claims for the benefit of the Litigation Trust Beneficiaries); (ii) evaluating and prosecuting (a) objections to Disputed General Unsecured Claims and (b) Committee Litigation Claims, provided that for the avoidance of doubt, the Litigation Trustee may object under section 502(d) of the Bankruptcy Code to any Claim of any Entity or transferee that is the subject of a Committee Litigation Claim other than a Releasee; and (iii) making all Distributions on account of Litigation Trust Interests and Settlement Cash, as provided for under this Agreement, the Plan, the Confirmation Order and Treasury Regulation Section 301.7701-4(d), with no objective to continue or engage in the conduct of a trade or business. The Litigation Trust will not hold itself out as an investment company and will not conduct a trade or business.
(b) Under no circumstance shall the Litigation Trustee be authorized or contend it is authorized to incur liability on behalf of the Debtors’ Estates or the Reorganized Debtors, and any and all liability incurred by the Litigation Trustee, whether for expenses of prosecution, payment of sanctions, or otherwise, shall be the exclusive liability of the Litigation Trust and not the liability of the Debtors’ Estates or the Reorganized Debtors.
1.3Transfer of Trust Assets.
(a) As of the Effective Date, and pursuant to and subject in all respects to the terms of the Plan and the Confirmation Order, the Debtors, in their respective capacities as debtors in possession on behalf of the Estates, shall transfer, assign, and deliver to the Litigation Trust, without recourse, all of their respective rights, title, and interests in and to the Litigation Trust Assets (including, subject to section 1.2.30(b) of the Plan, the Committee Litigation Claims) free and clear of liens, claims, encumbrances and interests (legal, beneficial or otherwise) of all other entities to the maximum extent contemplated by and permissible under Bankruptcy Code section 1141(c) (including all liens, claims, encumbrances and interests of any creditors that were subordinated for purposes of distributions under the Plan);provided,however, that certain of the Committee Litigation Claims, as set forth in Section 1.2.30of the Plan, shall vest in the Litigation Trust only if and when the conditions set forth therein occur. Nothing in this Agreement is intended to, or shall be construed to, effect a release, extinguishment or compromise of any Litigation Trust Asset (including, subject to section 1.2.30(b) of the Plan, any Committee Litigation Claim) transferred to the Litigation Trust pursuant to this Agreement. The Litigation Trust Assets are to be held and utilized or distributed, as applicable, by the Litigation Trustee in accordance with the terms of the Plan and hereof for the benefit of the Litigation Trust Beneficiaries, and of no other party, subject to the further covenants, conditions and terms hereinafter set forth.
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(b) Upon transfer of the Committee Litigation Claims and other Litigation Trust Assets to the Litigation Trust, the Debtors and the Reorganized Debtors shall have no interest in, or with respect to, the Litigation Trust Assets or the Litigation Trust Interests.
(c) The Debtors shall transfer all Litigation Trust Assets to the Trust. To the extent any assets of the Debtors (the “Assets”) (that are Litigation Trust Assets) cannot be transferred to the Trust because of a restriction on transferability under applicable nonbankruptcy law that is not superseded by Bankruptcy Code section 1123 or any other provision of the Bankruptcy Code, such Assets shall be retained by the applicable Debtors and Estates. The net proceeds of any such Asset retained by the Debtors and the Estates shall be allocated to the Trust pursuant to the Plan as if such transfer had not been restricted under applicable nonbankruptcy law;provided,however, that the Debtors and their Estates shall have no obligations to liquidate any Assets they retain and to the extent the Debtors elect, subject to the consent of the Litigation Trustee, to liquidate any retained Assets, the Debtors shall be entitled to reimbursement of their reasonable and documented costs and expenses (including, without limitation, attorneys’ and other professionals’ fees and expenses) from the proceeds of such Assets. The Litigation Trustee may commence an action in the Bankruptcy Court to resolve any dispute regarding the allocation of the proceeds of any Assets retained by the Debtors.
(d) All of the Trust Proceeds received by the Litigation Trust from the pursuit of any Committee Litigation Claims, net of amounts used by the Litigation Trustee to replenish the Expense Reserve described in paragraph 4.2(a), shall be added to the Litigation Trust Assets and held as a part thereof (and title thereto shall be vested in the Litigation Trust).
(e) For all federal, state and local income tax purposes, the holders of Allowed General Unsecured Claims, Allowed First Lien Note Deficiency Claims, Allowed Second Lien Note Claims and Allowed Senior Subordinated Unsecured Note Claims shall be treated as receiving on account of their Allowed Claims the Litigation Trust Assets (subject to any liabilities of the Debtors assumed by the Trust, and other than such Litigation Trust Assets allocable to Disputed Claims), and then transferring such Litigation Trust Assets (subject to such liabilities) to the Trust in exchange for the Litigation Trust Interests, and the holders shall be treated as the grantors and owners of the Litigation Trust.
(f) As set forth in Section 5.8.2 of the Plan, the Litigation Trustee, in reliance upon such professionals as the Litigation Trustee may retain (the “Litigation Trust Professionals”), will determine the fair market value of the Litigation Trust Assets as soon as possible after the Effective Date. The Litigation Trustee shall provide such valuation in writing to each Litigation Trust Beneficiary (which may include posting such valuation on a website established by the Trust). Such valuation shall be used consistently by the Litigation Trustee and the Litigation Trust Beneficiaries for federal income tax purposes, including for determining gain, loss or tax basis.
1.4Liquidation of Litigation Trust Assets. The Litigation Trustee shall, in an expeditious but orderly manner and subject to the provisions of the Plan, the Confirmation Order and this Agreement, liquidate and convert to cash the Litigation Trust Assets, make timely distributions in accordance with the terms of the Plan and hereof and not unduly prolong the existence of the Trust. The Litigation Trustee shall exercise reasonable business judgment and
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liquidate the Litigation Trust Assets to maximize net recoveries to the Litigation Trust Beneficiaries;providedthat the Litigation Trustee shall be entitled to take into consideration the risks, timing and costs of potential actions in making determinations as to the maximization of such recoveries. Such liquidations may be accomplished through the prosecution, compromise and settlement, abandonment or dismissal of any or all Committee Litigation Claims. The Litigation Trustee may incur any reasonable and necessary expenses in connection with the liquidation of the Litigation Trust Assets and distribution of the Trust Proceeds at the sole expense of the Litigation Trust. For the avoidance of doubt, all actions taken by the Litigation Trustee to liquidate the Litigation Trust Assets are subject to the other provisions hereof and the Plan.
1.5Prosecution of Committee Litigation Claims.
(a) Subject to the provisions set forth in thisSection 1.5, the Litigation Trust, acting through the Litigation Trustee, will be authorized to exercise and perform the rights, powers, and duties held by the Estates, including under section 1123(b)(3) of the Bankruptcy Code, with respect to the Litigation Trust Assets, and will be the sole party authorized to take control of, supervise, and manage the Litigation Trust Assets and prosecute or settle the Committee Litigation Claims. The Litigation Trustee shall be a party in interest in respect of the Committee Litigation Claims it prosecutes, and to the extent, if any, the Litigation Trustee attempts to appear in other matters, its standing and party-in-interest status shall be subject to determination by the Bankruptcy Court after hearing any and all objections, if any, from the Reorganized Debtors and other litigants. Nothing herein obligates or bars the Reorganized Debtors to take or not to take positions in litigation propounded by the Litigation Trustee, which positions support or oppose the Litigation Trustee’s position, and nothing herein precludes current and former officers, directors, and employees of the Debtors and Reorganized Debtors from providing testimony in such litigation regardless of the impact of such testimony.
(b) In no circumstance shall the Litigation Trustee be the representative of any Reorganized Debtor and the Litigation Trustee shall use best efforts to conspicuously show that the Litigation Trustee represents the Litigation Trust, which should not be confused with the Reorganized Debtors.
(c) The Plan and Confirmation Order provide that the Litigation Trust shall be established for the purpose of, among other things, (i) evaluating and prosecuting (a) objections to Disputed General Unsecured Claims and (b) Committee Litigation Claims. The Litigation Trust shall not pursue any claims or Causes of Action against any Entities other than those defendants to the claims, Causes of Action, and objections permitted under Section 1.2.30 of the Plan. The Litigation Trust shall not bring claims, Causes of Action, or objections against (i) any Releasee, including any party released under the SEO Settlement Agreement, (ii) any party listed on Exhibit 1.2.30 of the Plan, or (iii) any non-debtor counterparty to an executory contract (a) assumed prior to November 5, 2012 by order of the Bankruptcy Court, (b) which is the subject of any assumption motion filed with the Bankruptcy Court on November 6, 2012, or (c) to be assumed as of the Effective Date (whether “as is”, or as modified) pursuant to Article VIII of the Plan, which contracts are designated to be assumed on that certain list provided on November 5, 2012, by the Debtors to the Committee;provided,however, that (x) such list shall not be amended, modified or supplemented (nor shall any subsequent motions to assume executory
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contracts be filed) absent the express consent (which shall not be unreasonably withheld) of the Debtors, the First Lien Notes Steering Committee and the Committee (in consultation with the Second Lien Group) and (y) any non-debtor counter-party identified in sub-clause (ii) of this Section 5.6 shall qualify as a Protected Party if the executory contract to which it is party is assumed and only to the extent of preference claims arising from payments made under and pursuant to the assumed contracts.
(d) Pursuant to Article 5.7.3 of the Plan, the Litigation Trust, as of the Effective Date, shall be enjoined from asserting any and all claims against the Reorganized Debtors, any other Releasee, any other party released under the SEO Settlement Agreement, the Cerberus Entities, or claims against the respective properties (or interests in properties) of any of the foregoing parties.
1.6Objection to Disputed General Unsecured Claims.
(a) From and after the Effective Date, objections to Disputed General Unsecured Claims shall be filed and prosecuted by the Litigation Trustee, and the Litigation Trustee, shall have the sole authority to settle all pending or future objections to Disputed General Unsecured Claims. Notwithstanding anything to the contrary herein, the Reorganized Debtors and the Litigation Trustee will coordinate in good faith with respect to the prosecution or settlement of any Claims for which classification as a General Unsecured Claim or other type of Claim is in dispute. Further, nothing herein grants to the Litigation Trust any power to bind the Reorganized Debtors and/or their affiliates in any way whatsoever.
(b) The Litigation Trust will pay all fees, costs, and expenses incurred by the Litigation Trustee and the Litigation Trust Professionals in connection with filing and prosecuting objections to General Unsecured Claims. In addition, any and all costs, expenses, adverse judgments, sanctions, and other financial obligations imposed against the Litigation Trust shall be solely the liabilities of the Litigation Trust and not of the Reorganized Debtors or any other Entity, and the Litigation Trust will reimburse the Reorganized Debtors for reasonable fees, costs and expenses incurred in, among other things, facilitating the Litigation Trustee’s prosecution and/or settlement of General Unsecured Claims objections, such as the Reorganized Debtors’ costs and expenses incurred in providing copies of its books and records to the Litigation Trustee, legal fees and travel expenses attendant thereto.
(c) From and after the Effective Date, objections to General Unsecured Claims shall be filed and prosecuted by the Litigation Trustee and the Litigation Trustee shall have the sole authority to settle all pending or future objections to General Unsecured Claims;provided,however, that the Debtors shall retain the right to prosecute objections to the General Unsecured Claims identified on Annex C and to settle them, with the consent of the Litigation Trustee, not to be unreasonably withheld, and subject to Section 7.1 of the Plan. The Litigation Trustee shall be entitled to participate in any settlement discussions involving a Claim listed on Annex C.
1.7Appointment and Acceptance of Litigation Trustee. The Litigation Trustee shall be deemed to be appointed pursuant to Bankruptcy Code section 1123(b)(3)(B) as of the Effective Date. The Litigation Trustee accepts the Trust created by this Agreement and the
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grant, assignment, transfer, conveyance and delivery to the Litigation Trust, on behalf, and for the benefit, of the Litigation Trust Beneficiaries, by the Debtors of all of their respective right, title and interest in the Litigation Trust Assets, upon and subject to the terms and conditions set forth herein, in the Plan and in the Confirmation Order.
1.8No Reversion to Debtors. In no event shall any part of the Litigation Trust Assets revert to or be distributed to any of the Reorganized Debtors.
1.9Incidents of Ownership. The Litigation Trust Beneficiaries shall be the sole beneficiaries of the Trust and the Litigation Trust Assets, and the Litigation Trustee shall retain only such incidents of ownership as are necessary to undertake the actions and transactions authorized herein, in the Plan and in the Confirmation Order, including, but not limited to, those powers set forth inSection 6.1 hereof.
1.10Party in Interest. The Litigation Trustee shall be a party in interest in respect of the Committee Litigation Claims it prosecutes, and to the extent, if any, the Litigation Trustee attempts to appear in other matters, its standing and party-in-interest status shall be subject to determination by the Bankruptcy Court after hearing any and all objections, if any, from the Reorganized Debtors and other litigants.
ARTICLE II
LITIGATION TRUST BENEFICIARIES
2.1Conflicting Claims. If any conflicting claims or demands are made or asserted with respect to a Litigation Trust Interest, the Litigation Trustee shall be entitled, at its sole election, to make no payment or distribution with respect to the Litigation Trust Interest represented by the claims or demands involved, or any part thereof, and the Litigation Trustee shall refer such conflicting claims or demands to the Bankruptcy Court, which shall have exclusive jurisdiction over resolution of such conflicting claims or demands. In so doing, the Litigation Trustee shall not be or become liable to any party for its refusal to comply with any such conflicting claims or demands. The Litigation Trustee shall be entitled to refuse to act until either (a) the rights of the adverse claimants have been adjudicated by a Final Order of the Bankruptcy Court or (b) all differences have been resolved by a written agreement among all of such parties and the Litigation Trustee, which agreement shall include a complete release of the Trust and the Litigation Trustee with respect to the subject matter of the dispute (the occurrence of either (a) or (b) being referred to as a “Dispute Resolution” in thisSection 2.1). Until a Dispute Resolution is reached with respect to such conflicting claims or demands, the Litigation Trustee shall hold any payments or distributions from the Trust to be made with respect to the Litigation Trust Interest(s) at issue in a segregated interest-bearing account with a United States financial institution. Promptly after a Dispute Resolution is reached, the Litigation Trustee shall transfer the payments and distributions, if any, held in the segregated account, together with any interest and income generated thereon, in accordance with the terms of such Dispute Resolution.
2.2Rights of Litigation Trust Beneficiaries. Each Litigation Trust Beneficiary shall be entitled to the rights and benefits due to a Litigation Trust Beneficiary hereunder according to the terms of the Plan. Each Litigation Trust Beneficiary shall take and hold the same, subject to all the terms and conditions of this Agreement, the Plan and the Confirmation Order. The
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interest of a Litigation Trust Beneficiary is hereby declared and shall be in all respects personal property. Except as expressly provided hereunder, a Litigation Trust Beneficiary shall have no title to, right to, possession of, management of or control of the Trust or the Litigation Trust Assets.
2.3No Consultation or Approval Rights. No Litigation Trust Beneficiary shall have any consultation or approval rights whatsoever in respect of management and operation of the Litigation Trust.
2.4Interest Beneficial Only. The ownership of a Litigation Trust Interest shall not entitle any Litigation Trust Beneficiary to any title in or to the Litigation Trust Assets or to any right to call for a partition or division of such assets or to require an accounting, except as specifically provided herein.
2.5Evidence of Litigation Trust Interest. Ownership of a Litigation Trust Interest in the Trust shall not be evidenced by any certificate, security or receipt or in any other form or manner whatsoever, except as maintained on the books and records of the Trust by the Litigation Trustee (or any agent appointed by the Litigation Trustee for purposes of maintaining a record of the Litigation Trust Beneficiaries and their respective Litigation Trust Interests). The Litigation Trustee shall, upon written request of a holder of a Litigation Trust Interest, provide reasonably adequate documentary evidence of such holder’s Litigation Trust Interest, as indicated in the books and records of the Trust. The expense of providing such documentation shall be borne by the requesting Litigation Trust Beneficiary.
2.6Transfers of Litigation Trust Interests.
(a) The Litigation Trust Interests have not been registered pursuant to the Securities Act of 1934, as amended (the“Securities Act”), or any state securities law. If the Litigation Trust Interests constitute “securities,” the parties hereto intend that the exemption provisions of Bankruptcy Code section 1145 shall apply to the Litigation Trust Interests. The Litigation Trustee Interests shall be recorded in book-entry form only, shall not be certificated and, subject to Section 2.6(b) below, shall be transferable, subject to applicable law, provided that no transfer, assignment or other disposition of a Litigation Trust Interest may be effected if such transfer would require the Litigation Trust to comply with the registration and reporting requirements of the Securities Exchange Act of 1934, as amended, or the Investment Company Act of 1940, as amended. Any such transfer, assignment, pledge or hypothecation, however, will not be effective until and unless the Litigation Trustee receives written notice of such transfer, assignment, pledge or hypothecation, which notice must be executed by the transferor and the transferee and must clearly identify the Litigation Trust Interest being transferred, assigned, pledged or hypothecated. The Litigation Trustee is entitled to rely upon such notice as definitive evidence of such transfer, assignment, pledge or hypothecation without additional investigation. Transfers of record made in accordance with this Section 2.6 shall be indicated on the books and records of the Litigation Trustee maintained for such purpose. Any transfer, assignment, pledge or hypothecation of a Litigation Trust Interest or any part thereof in violation of this Section 2.6 shall be void ab initio.
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(b) The holder effecting a disposition of a Litigation Trust Interest or any part thereof shall pay, or reimburse the Trust for, all reasonable costs incurred by the Trust in connection with such disposition (including, without limitation, the reasonable legal fees incurred in connection with the legal opinions referred to inSection 2.6(b)) on or before the tenth business day after the receipt by that person of the Trust’s invoice for the amount due. If payment is not made by the date due, the person owing that amount shall pay interest on the unpaid amount from the date due until paid at a rate per annum equal to 10% plus any costs, including attorneys’ fees, incurred in the collection of such amount.
2.7Limited Liability. No provision of this Agreement, the Plan or the Confirmation Order, and no enumeration herein of the rights or privileges of any Litigation Trust Beneficiary, shall give rise to any liability of such Litigation Trust Beneficiary solely in its capacity as such, whether such liability is asserted by the Debtors, by creditors or employees of the Debtors, or by any other Person. As set forth in the Plan, Litigation Trust Beneficiaries are deemed to receive the Litigation Trust Assets in accordance with the provisions of this Agreement, the Plan and the Confirmation Order in exchange for their Allowed General Unsecured Claims, Allowed First Lien Note Deficiency Claims, Allowed Second Lien Note Claims, and Allowed Senior Subordinated Unsecured Note Claim Claims, as applicable, without further obligation or liability of any kind, but subject to the provisions of this Agreement, the Plan, and the Confirmation Order.
ARTICLE III
DURATION AND TERMINATION OF TRUST
3.1Duration. The Trust shall become effective upon the Effective Date and shall remain and continue in full force and effect until terminated as provided herein. The Trust shall terminate (the “Termination Date”) upon the occurrence of the earlier of (a) the full liquidation, administration and distribution of the Litigation Trust Assets in accordance with the Plan, the Confirmation Order and this Agreement and the full performance of all other duties and functions of the Litigation Trustee set forth in the Plan, the Confirmation Order and this Agreement or (b) the fifth anniversary of the Effective Date, unless the Bankruptcy Court, upon motion made within the six-month period prior to such fifth anniversary (and, in the event of further extension, at least six months prior to the end of the applicable extension), determines that a fixed period extension (together with any prior extensions, without a favorable letter ruling from the Internal Revenue Service that any further extension would not adversely affect the status of the Litigation Trust as a liquidating trust for federal income tax purposes) is necessary to facilitate or complete the recovery on and liquidation of the Litigation Trust Assets;provided that in no event shall the term of the Litigation Trust be extended beyond ten years. Notwithstanding anything to the contrary in this Agreement, in no event shall the Litigation Trustee unduly prolong the duration of the Trust, and the Litigation Trustee shall, in the exercise of its reasonable business judgment, in the interests of the Litigation Trust Beneficiaries, at all times prosecute the Committee Litigation Claims in a manner reasonably calculated to maximize net recoveries to the Litigation Trust Beneficiaries. Upon termination of the Trust, the Litigation Trustee shall provide a final distribution and final accounting to the Litigation Trust Beneficiaries.
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3.2Treatment of Cash and Committee Litigation Claims. Upon dissolution of the Litigation Trust, any remaining cash on hand and other assets, with the exception of Committee Litigation Claims, will be distributed to the Litigation Trust Beneficiaries in accordance with the terms of this Agreement. Upon the dissolution of the Litigation Trust, all remaining Committee Litigation Claims shall be deemed void and abandoned and no Litigation Trust Beneficiary shall have any right, title or interest in or to any such Committee Litigation Claims.
3.3Continuance of Trust for Winding Up. After the termination of the Trust and solely for the purpose of liquidating and winding up the affairs of the Trust, the Litigation Trustee shall continue to act as such until its duties have been fully performed. Upon distribution of all the Litigation Trust Assets, the Litigation Trustee shall retain the books, records and files that shall have been delivered to or created by the Litigation Trustee, other than the books and records and files obtained from any of the Debtors or Reorganized Debtors, which books and records shall be returned to the Entities from whom they were obtained. At the Litigation Trustee’s discretion, all such records and documents may be destroyed at any time following the date that is six years after the final distribution of the Litigation Trust Assets (unless such records and documents are necessary to fulfill the Litigation Trustee’s obligations pursuant toSections 4.8(a) and 6.1 hereof), subject to the terms of any joint prosecution and common interests agreement(s) to which the Litigation Trustee may be a party. Except as otherwise specifically provided herein, upon the final distribution of the Litigation Trust Assets, the Litigation Trustee shall be deemed discharged and have no further duties or obligations hereunder, except to account to the Litigation Trust Beneficiaries as provided inSection 4.5 hereof and as may be imposed on the Litigation Trustee by virtue ofSections 3.1 and 6.1 hereof, the Litigation Trust Interests shall be cancelled and the Trust will be deemed to have been dissolved. In the event that there arede minimis Litigation Trust Assets at termination, the Litigation Trustee may donate such Litigation Trust Assets to a charitable organization exempt from U.S. federal income tax under Tax Code section 501(c)(3) of the Litigation Trustee’s choice, other than a charitable organization that is related to any of the Debtors, the Litigation Trust, the Litigation Trustee or any insider of the Litigation Trustee.
ARTICLE IV
ADMINISTRATION OF TRUST
4.1Payment of Claims, Expenses and Liabilities. The Litigation Trustee shall expend the cash of the Trust: (a) to pay reasonable administrative expenses of the Trust that are incurred (including, but not limited to, any taxes imposed on the Trust or reasonable professional fees and expenses in connection with the administration and liquidation of the Litigation Trust Assets and preservation of books and records as provided inSection 3.3 hereof); (b) to satisfy obligations or other liabilities incurred or assumed by the Trust (or to which the Litigation Trust Assets are otherwise subject) in accordance with the Plan, the Confirmation Order, this Agreement and applicable law, including reasonable fees and costs incurred in connection with the protection, preservation, liquidation and distribution of the Litigation Trust Assets, the reasonable, documented out-of-pocket expenses of the Oversight Committee members, and the costs of investigating, prosecuting and resolving the Committee Litigation Claims and any objection to General Unsecured Claims; and (c) to satisfy any other obligations of the Trust expressly set forth in the Plan or this Agreement.
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4.2Funding of the Trust.
(a) The Debtors (on the Effective Date) and Cerberus (on the Settlement Effective Date, as defined in the Cerberus Settlement Agreement, annexed as Exhibit 1.2.21 of the Plan), will deposit the Litigation Trust Funding in cash in the Litigation Trust to fund the administrative fees and expenses of the Litigation Trust and for other purposes consistent with this Agreement. No further amounts shall be paid or payable by the Debtors, Cerberus, or any of the Reorganized Debtors to the Litigation Trust for any purpose whatsoever.
(b) The source of funds and repayment thereof for any additional contributions required by the Litigation Trust shall be determined by the Litigation Trustee.
4.3Distributions.
(a)Generally. The Trust Proceeds shall be distributed in accordance with the Plan.
(b)Timing and Amount of Distributions. The Litigation Trustee shall make distributions of the Litigation Trust Proceeds Available for Distribution (as defined below) on the Effective Date, and each June 30 and December 31 thereafter (or, if such date does not fall on a business day, the next business day thereafter) and on such additional dates that the Litigation Trustee determines are appropriate from time to time (any such date, a “Distribution Date”);provided,however, that the Litigation Trustee shall be entitled to defer any such distribution to the next Distribution Date if the Litigation Trustee determines that the amount of the Litigation Trust Proceeds Available for Distribution at such time is less than $500,000. Notwithstanding anything in this Agreement to the contrary and without limiting the Litigation Trustee’s right to make earlier distributions, after payment in full of all amounts due and owing under the Funding Loan, the Litigation Trustee shall make a distribution to the Litigation Trust Beneficiaries by the end of the year in which the Litigation Trust Proceeds Available for Distribution first equal or exceed $500,000. The Litigation Trustee shall establish a record date for any distributions of not less than ten days nor more than 60 days prior to the proposed date of such distribution (the “Record Date”) and shall provide each Litigation Trust Beneficiary reasonable prior written notice of same (which may be given by posting such Record Date on a website established by the Litigation Trustee). Notwithstanding the foregoing, unless the Litigation Trust Interests have been transferred in accordance with the terms ofSection 2.6 hereof, the Litigation Trustee will have no obligation to recognize any transfer of any Litigation Trust Interest occurring after the Distribution Record Date.
(c)Trust Proceeds Available for Distribution. “Trust Proceeds Available for Distribution” shall be determined by the Litigation Trustee in advance of each Distribution Date by subtracting the Expense Reserve (defined below in subsection 4.3(d)) from the then available Trust Proceeds.
(d)Expense Reserve. The Litigation Trustee shall establish and maintain a reserve (the “Expense Reserve”) for the purpose of making the payments set forth in Section 4.1 of this Agreement. The Expense Reserve will be funded initially with all or a portion of the Litigation Trust Funding (the “Initial Expense Reserve Amount”), and thereafter from any
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additional Litigation Trust proceeds that may be realized from the Committee Litigation Claims, as is reasonable, customary and appropriate. The Initial Expense Reserve Amount shall be maintained in a segregated account. The Litigation Trustee shall cause the Trust at all times to retain sufficient funds in the Expense Reserve as the Litigation Trustee shall determine are reasonably necessary for the Trust to: (i) meet contingent liabilities and maintain the value of the Litigation Trust Assets during liquidation; (ii) make the payments and satisfy the obligations and liabilities described in Section 4.1 as well as satisfy all obligations to remit amounts pursuant to applicable U.S. and non U.S. laws relating to taxes; and (iii) fund any other amounts as may be required under the Plan (if any) and fund the reasonable, documented out-of-pocket fees and expenses of the Litigation Trustee, the Litigation Trust Professionals and the Trust. Notwithstanding any other provision of this Agreement to the contrary, the Litigation Trustee shall not be required to take any action or enter into or maintain any claim, demand, action or proceeding relating to the Litigation Trust unless it shall have sufficient funds in the Expense Reserve for that purpose.
(e)Distribution of Trust Proceeds Upon Termination. Promptly following the termination of the Trust, the Litigation Trustee shall distribute any Litigation Trust Proceeds Available for Distribution not yet distributed to the Litigation Trust Beneficiaries in accordance with the terms of this Agreement, the Plan and the Confirmation Order. For the avoidance of doubt, the minimum Distribution limitation set forth inSection 4.3(b) above shall not apply with respect to the final Distributions of Litigation Trust Proceeds to be made to the Litigation Trust Beneficiaries.
(f)Location for Distributions; Notice of Change of Address. Distributions to the Litigation Trust Beneficiaries shall be made by the Litigation Trustee to the Litigation Trust Beneficiaries as of the applicable Record Date (i) at the addresses set forth on the proofs of claim filed by such Litigation Trust Beneficiaries (or at the last known addresses of such Litigation Trust Beneficiaries if no proof of claim is filed or if the Debtors have been notified in writing of a change of address), (ii) at the addresses set forth in any written notices of address changes delivered to the Litigation Trustee, or (iii) in the case of a holder of a Litigation Trust Interest whose Allowed Claims are governed by an agreement and administered by an indenture trustee, agent, servicer, or other authorized representative, at the address contained in the official records of such authorized representative. Each Litigation Trust Beneficiary or authorized representative shall be responsible for providing the Litigation Trustee with timely written notice of any change in address. The Litigation Trustee is not obligated to make any effort to determine the correct address of any Litigation Trust Beneficiary.
(g)Disputed Claim Reserve(s). The Litigation Trustee will establish one or more Disputed Claim Reserve(s) on account of Disputed Claims, the Holders of which would be entitled to a distribution of Litigation Trust Proceeds were such Disputed Claim ultimately Allowed. The Disputed Claim Reserve(s) shall be established and maintained in a segregated, interest bearing account (or accounts) into which the Litigation Trustee will deposit sufficient cash from the Litigation Trust Assets to make Distributions to all holders of Disputed Claims entitled to Distributions in accordance with the provisions of this Agreement and the Plan, to the extent such Disputed Claims become Allowed Claims, as described in Article VII of the Plan. The Disputed Claim Reserve(s) shall also include a ledger or ledgers maintained by the Litigation Trustee with respect to Litigation Trust Interests allocable to Disputed Claims.
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4.4Undeliverable Property.
(a) If any distribution of the Litigation Trust Proceeds to a Litigation Trust Beneficiary is returned to the Litigation Trustee as undeliverable, no further distribution to such Litigation Trust Beneficiary shall be made unless and until the Litigation Trustee is notified in writing of such Litigation Trust Beneficiary’s then-current address, at which time all missed distributions (subject toSection 4.4(b) below) shall be made to such Litigation Trust Beneficiary without interest, except as otherwise set forth herein. For purposes of this Agreement, undeliverable distributions shall include checks sent to a Litigation Trust Beneficiary which checks have not been cashed within ninety days following the date of issuance. Subject toSection 4.4(b) below, undeliverable distributions shall remain in the possession of the Litigation Trustee until the next Distribution Date after the applicable Distribution becomes deliverable, at which time it shall be distributed to the applicable Litigation Trust Beneficiary.
(b) If any Distribution to a Litigation Trust Beneficiary is undeliverable, then, at the expiration of one year from the applicable Distribution Date, provided that no change of address has been provided to the Litigation Trustee during such time, such undeliverable Distribution shall be deemed unclaimed property under section 347(b) of the Bankruptcy Code and shall vest in the Litigation Trust. Any entitlement of any Litigation Trust Beneficiary to those Distributions shall be extinguished and forever barred and such Distributions shall be reallocated to the other Litigation Trust Beneficiaries in accordance with the terms of this Agreement and the Plan.
4.5Reports. The Litigation Trustee shall deliver, or make available by posting on a website or otherwise, to all Litigation Trust Beneficiaries and Oversight Committee members reports no less than semi-annually, in such form and in such detail as the Litigation Trustee deems appropriate. Such reports shall specify in reasonable detail: (i) the status of the Committee Litigation Claims, including any settlements entered into by the Litigation Trust; (ii) the fees and expenses of the Trust, the Litigation Trustee and the Litigation Trust Professionals incurred and/or earned during the most recent calendar quarter; (iii) the aggregate fees and expenses of the Trust, the Litigation Trustee and the Litigation Trust Professionals incurred and/or earned since the Effective Date; (iv) the amount of the Litigation Trust Proceeds received by the Trust during the most recent calendar quarter; (v) the aggregate amount of the Litigation Trust Proceeds received by the Trust since the Effective Date; (vi) the calculation of the Litigation Trust Proceeds Available for Distribution for the next Distribution Date, including the amounts of available Trust Proceeds and the Expense Reserve; and (vii) the aggregate amount of distributions from the Litigation Trust to the Litigation Trust Beneficiaries since the Effective Date. The Litigation Trustee shall also timely prepare, file and distribute such additional statements, reports and submissions as may be necessary to cause the Trust and the Litigation Trustee to be in compliance with applicable law.
4.6Securities Law Matters. To the extent the interests in the Litigation Trust are deemed to be “securities,” the issuance of such interests under this Plan are exempt, pursuant to section 1145 of the Bankruptcy Code, from registration under the Securities Act of 1933, as amended, and any applicable state and local laws requiring registration for the offer or sale of securities.
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4.7Fiscal Year. Except for the first and last years of the Trust, the fiscal year of the Trust shall be the calendar year. For the first and last years of the Trust, the fiscal year of the Trust shall be such portion of the calendar year that the Trust is in existence.
4.8Books and Records.
(a) Prior to and after the Effective Date, the Debtors and Reorganized Debtors shall continue to provide the Committee and Litigation Trustee, as applicable, reasonable access to their books and records to prosecute the Committee Litigation Claims. To the extent, if any, that the Committee or Litigation Trustee contends the Debtors or Reorganized Debtors are not providing sufficient data, the Bankruptcy Court shall determine such dispute.
(b) The Debtors and the Reorganized Debtors shall be entitled to appropriate confidentiality protections for any and all proprietary data requested by the Committee or Litigation Trustee, as applicable.
(c) To the extent, if any, that the Committee or Litigation Trustee requests data consisting of privileged material or attorneys’ work product, such data will be produced to the Committee or Litigation Trustee, as applicable, unless the Debtors or Reorganized Debtors (i) assert that production of such data would impair an applicable privilege or (ii) disagree as to whether the privilege or work product protection may be waived by the Committee or Litigation Trustee, taking into account the policies underlying the privileges and work product doctrine. In the event of such dispute, either party may request that the Bankruptcy Court resolve such dispute.
(d) The Litigation Trustee shall have no power over the books and records of the Debtors or Reorganized Debtors beyond the rights granted herein.
(e) The Litigation Trustee shall maintain, in respect of the Trust and the holders of Litigation Trust Interests, books and records relating to the assets and the income of the Trust and the payment of expenses of the Trust and the Litigation Trustee, in such detail and for such period of time as may be necessary to enable it to make full and proper reports in respect thereof in accordance with the provisions of this Agreement, the Plan, and applicable provisions of law. Such books and records shall be maintained on modified cash or another comprehensive basis of accounting necessary to facilitate compliance with the tax reporting requirements of the Litigation Trust.
4.9Cash Payments. All Distributions required to be made by the Litigation Trustee to the Litigation Trust Beneficiaries shall be made in cash denominated in U.S. dollars by checks drawn on a United States domestic bank selected by the Litigation Trustee or, at the option of the Litigation Trustee, by wire transfer from a United States domestic bank selected by the Litigation Trustee;provided,however, that cash payments to foreign Litigation Trust Beneficiaries may be made, at the option of the Litigation Trustee, in such funds as and by such means as are necessary or customary in a particular foreign jurisdiction. All cash of the Trust shall be maintained in a United States financial institution.
4.10Insurance. The Trust shall maintain customary insurance coverage for the protection of the Litigation Trustee, and any such other Person serving as an administrator and overseer of the Trust on and after the Effective Date as the Litigation Trustee determines to be reasonably appropriate, at the sole expense of the Trust.
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ARTICLE V
TAX MATTERS
5.1Tax Treatment.
(a) The Debtors, the Litigation Trustee and the holders of Litigation Trust Interests will treat the Trust as a “liquidating trust” within the meaning of Treasury Regulation Section 301.7701-4(d) and any comparable provision of state or local law. The Trust shall be considered a “grantor” trust and is intended to comply with the requirements of a liquidating trust, which is a grantor trust, as set forth in Revenue Procedure 94-45, 1994-2 C.B. 684. Consistent with this treatment, and in conformity with Revenue Procedure 94-45, all parties (including, without limitation, the Debtors, the Litigation Trustee, and the Litigation Trust Beneficiaries) are required to treat, for U.S. federal income tax purposes, the Litigation Trust as a grantor trust of which the Litigation Trust Beneficiaries are the owners and grantors, in addition, all parties will report all tax items relating to the Litigation Trust in a manner entirely consistent with the Plan. Pursuant to the Plan and herein, the Litigation Trust Assets (other than Litigation Trust Assets allocable to a Disputed Claims Reserve) are treated, for U.S. federal income tax purposes, as having been transferred directly to the holders of the respective Claims in satisfaction of their Claims (with each holder receiving an undivided interest in such assets in accord with their economic interests in such assets), followed by the transfer by the Litigation Trust Beneficiaries to the Litigation Trust of such assets in exchange for Litigation Trust Interests. Accordingly, all parties must treat the Litigation Trust as a grantor trust of which the Litigation Trust Beneficiaries are the owners and grantors, and treat the Litigation Trust Beneficiaries as the direct owners of an undivided interest in the assets of the Litigation Trust, consistent with their economic interests therein, for all U.S. federal income tax purposes.
(b) In the alternative, if the Litigation Trust shall fail or cease to qualify as a liquidating trust in accordance with Treasury Regulations Section 301.7701-4(d), then this Agreement is intended to empower the Litigation Trustee to take such action as he shall deem appropriate to have the Litigation Trust classified as a partnership for federal tax purposes under Treasury Regulations Section 301.7701-3, including, if necessary, creating or converting it into a Delaware limited liability partnership or limited liability company that is so qualified.
(c) The Debtors, the Litigation Trustee and the Litigation Trust Beneficiaries will use consistent valuations of the Litigation Trust Assets (and liabilities) as of the Effective Date in accordance with Section 1.3(e) hereof. The Litigation Trustee shall be authorized to take any action necessary to maintain compliance with this Treasury Regulation or its successor that does not contradict the terms of this Agreement, the Plan or the Confirmation Order.
5.2Tax Reporting. The “taxable year” of the Trust shall be the “calendar year” as those terms are defined in Section 441 of the Tax Code. The Litigation Trustee shall file statements for the Trust as a grantor trust pursuant to Treasury Regulation Section 1.671-4(a). The Litigation Trustee shall annually, within 75 days after the end of each calendar year, send to each record holder of a Litigation Trust Interest a separate statement setting forth the holder’s
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share or items of income, gain, loss, deduction or credit for such year and will instruct all such beneficiaries to use such information in preparing their U.S. federal income tax returns or to forward the appropriate information to such beneficiary’s underlying beneficial holders with instructions to utilize such information in preparing their U.S. federal income tax returns. Such reporting shall also occur within 60 days of the dissolution of the Trust. The Trust’s taxable income, gain, loss, deduction or credit will be allocated (subject to provisions of the Plan relating to Disputed Claims and Section 5.4 hereof) to the Litigation Trust Beneficiaries in accordance with their relative Litigation Trust Interests in the Trust.
5.3Allocations of Taxable Income, Gain, Loss, Deduction or Credit. Subject to provisions of the Plan relating to Disputed Claims and Section 5.5 hereof, allocations of income of the Litigation Trust among the Litigation Trust Beneficiaries shall be determined by reference to the manner in which an amount of cash equal to such income would be distributed (were such cash permitted to be distributed at such time) if, immediately prior to such deemed distribution, the Litigation Trust had distributed all its assets to the Litigation Trust Beneficiaries (valued for this purpose at their tax book value), adjusted for prior income and loss and taking into account all prior and concurrent distributions from the Litigation Trust. Similarly, any loss of the Litigation Trust shall be allocated by reference to the manner in which an economic loss would be borne immediately after a liquidating distribution of the remaining assets of the Litigation Trust. The tax book value of the Litigation Trust Assets for this purpose shall equal their respective fair market values on the date they are deemed transferred to the Litigation Trust, adjusted in either case in accordance with tax accounting principles prescribed by the Tax Code, the regulations and other applicable administrative and judicial authorities and pronouncements. The above allocations of the Litigation Trust’s income and loss shall be adjusted by the Litigation Trustee to the extent, in the Litigation Trustee’s discretion, such adjustments are necessary or appropriate to more accurately reflect the economic interests of any or all of the Litigation Trust Beneficiaries in the Litigation Trust’s assets, or to more accurately reflect the effect of a Litigation Trust Beneficiary’s tax basis in its Litigation Trust Interests or the Litigation Trust Beneficiary’s tax basis in the Litigation Trust Beneficiary’s portion of the Litigation Trust’s assets underlying the Litigation Trust Beneficiary’s Litigation Trust Interests.
5.4Tax Withholdings. The Litigation Trustee may withhold and pay to the appropriate taxing authority all amounts required to be withheld pursuant to the Tax Code, or any provision of any foreign, state or local tax law with respect to any payment or distribution to the Litigation Trust Beneficiaries. All such amounts withheld, and paid to the appropriate taxing authority, shall be treated as amounts distributed to such Litigation Trust Beneficiaries for all purposes of this Agreement. The Litigation Trustee shall be authorized to collect such tax information from the Litigation Trust Beneficiaries (including, without limitation, social security numbers or other tax identification numbers) as it in its sole discretion deems necessary to effectuate the Plan, the Confirmation Order and this Agreement. The Litigation Trustee may require any of the holders of Allowed Claims to furnish to the Litigation Trustee (i) its, his or her employer or taxpayer identification number (“TIN”) as assigned by the IRS or (ii) in the case of Litigation Trust Beneficiaries that are not United States persons for federal income tax purposes, certification of foreign status on IRS Form W-8BEN or W-8ECI, and) as it in its sole discretion deems necessary to effectuate the Plan, the Confirmation Order and this Agreement. The Litigation Trustee may refuse to make a distribution to any Litigation Trust Beneficiary that fails to furnish such information in a timely fashion, until such information is delivered;provided,
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however, that upon the Litigation Trust Beneficiary’s delivery of such information, the Litigation Trustee shall make such distribution to which the Litigation Trust Beneficiary is entitled, together with any interest and income actually earned thereon.
5.5Disputed Claims Tax Matters.
(a) The Litigation Trustee will establish one or more Disputed Claim Reserves on account of Disputed Claims, the Holders of which would be entitled to Litigation Trust Interests or Settlement Cash were such Disputed Claim ultimately Allowed. The Litigation Trustee may, for U.S. Federal income tax purposes (and, to the extent permitted by law, for state and local income tax purposes), (i) make an election pursuant to Treasury Regulation section 1.468B-9 to treat the Disputed Claim Reserve as a “disputed ownership fund” within the meaning of that section, (ii) allocate taxable income or loss to the Disputed Claim Reserve, with respect to any given taxable year (but only for the portion of the taxable year with respect to which such Claims are Disputed Claims), and (iii) distribute assets from the Disputed Claim Reserve as, when, and to the extent, such Disputed Claims either become Allowed or are otherwise resolved, as more fully set out in Article VII of the Plan.
(b) Absent definitive guidance from the IRS or a contrary determination by a court of competent jurisdiction (including receipt by the Litigation Trust of a private letter ruling, if required, or the receipt of an adverse determination by the IRS upon audit if not contested), if pursuant toSection 5.4(a) of this Agreement, the Litigation Trustee elects to treat the Disputed Claims Reserve as a “disputed ownership fund,” the Disbursing Agent shall (i) treat the Disputed Claims Reserve as a disputed ownership fund for U.S. federal income tax purposes within the meaning of Treasury Regulations section 1.468B-9(b)(1) and (ii) to the extent permitted by applicable law, report consistently with the foregoing characterization for U.S. federal, state and local income tax purposes. Consistent therewith, all parties shall report, for income tax purposes, consistently with the foregoing.
(c) With respect to any Trust Proceeds and any other income or gain of the Trust allocable to Disputed Claims, the Litigation Trustee shall cause the Trust to pay any taxes imposed on the Trust by any U.S. federal, state or local, or any non-U.S. taxing authority. The amount of such taxes paid by the Trust with respect to a Disputed Claim, (i) will reduce the amount distributed with respect to such Disputed Claim to the extent it becomes an Allowed Claim, and (ii) to the extent such Disputed Claim does not become an Allowed Claim, will reduce distributions ratably to all holders in the same Class as such Disputed Claim;provided,however, that any taxes that reduce distributions pursuant to the foregoing clauses (i) and (ii) shall, for all purposes of this Agreement, be treated as amounts distributed to those holders of Claims whose distributions are so reduced.
5.6Expedited Determination. The Litigation Trustee may request an expedited determination of the taxes of the Litigation Trust, including any Disputed Claims Reserve, under Bankruptcy Code section 505(b) for all returns for, or on behalf of the Litigation Trust, for all taxable periods through the dissolution of the Litigation Trust.
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ARTICLE VI
POWERS OF AND LIMITATIONS ON THE LITIGATION TRUSTEE
6.1Powers of the Litigation Trustee. The Litigation Trustee shall have only such rights, powers and privileges expressly set forth in the Plan and this Agreement and as otherwise provided by applicable law. The Litigation Trustee shall be expressly authorized to undertake the following actions, in the Litigation Trustee’s good faith judgment, in the best interests of the Litigation Trust Beneficiaries and to maximize net recoveries thereto:
(a) prosecute, settle or otherwise compromise or abandon for the benefit of the Trust all Committee Litigation Claims, including, without limitation, take any action with respect to appeals, counterclaims and defenses of or with respect to such claims and causes of action;
(b) subject to section 5.6 of the Plan, file and prosecute objections to Disputed General Unsecured Claims and settle all pending or future objections with respect thereto;
(c) subject to Section 7.7 of the Plan, request that the Bankruptcy Court estimate for final Distribution purposes any contingent, unliquidated or Disputed General Unsecured Claim pursuant to section 502(c) of the Bankruptcy Code or other applicable law;
(d) establish one or more Disputed Claim Reserves;
(e) liquidate the Litigation Trust Assets;
(f) execute any documents and take any other actions related to, or in connection with, the liquidation of the Litigation Trust Assets and the exercise of the Litigation Trustee’s powers granted herein;
(g) hold legal title to any and all rights of the Litigation Trust Beneficiaries in, to or arising from the Litigation Trust Assets;
(h) protect and enforce the rights to the Litigation Trust Assets vested in the Litigation Trust by this Agreement by any method deemed reasonably appropriate, including, without limitation, by judicial proceedings or pursuant to any applicable bankruptcy, insolvency, moratorium or similar law and general principles of equity;
(i) make distributions of the Litigation Trust Proceeds to the appropriate Litigation Trust Beneficiaries in accordance with this Agreement, the Plan and the Confirmation Order;
(j) file, if necessary, any and all tax returns with respect to the Trust (and any Disputed Claims Reserve) and pay taxes properly payable by the Trust (and any Disputed Claims Reserve), if any;
(k) make all necessary filings in accordance with any applicable law, statute or regulation, including, but not limited to, the Securities Act;
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(l) determine and satisfy from the Litigation Trust Assets any and all taxes and ordinary course liabilities, including reasonable professional fees and expenses, created, incurred or assumed by the Trust;
(m) request any appropriate tax determination, including, without limitation, a determination pursuant to Bankruptcy Code section 505;
(n) retain and pay professionals, employees, contractors or other agents from the Litigation Trust Assets to carry out its duties and obligations hereunder;
(o) invest monies received by the Litigation Trust or Litigation Trustee or otherwise held by the Litigation Trust or Litigation Trustee in accordance withSection 6.4hereof and consistent with the Litigation Trust’s status as a liquidating trust within the meaning of Treasury Regulation Section 301.7701-4(d) and consistent with the requirements of Revenue Procedure 94-45, and which actions are merely incidental to its liquidation and dissolution
(p) in the event that the Litigation Trustee determines that the Litigation Trust Beneficiaries or the Trust may, will or have become subject to adverse tax consequences, take such actions that will, or are intended to, alleviate such adverse tax consequences, including taking any and all necessary actions as the Litigation Trustee shall deem appropriate to have the Litigation Trust classified as a partnership for federal tax purposes under Treasury Regulations Section 301.7701-3 (but not a publicly traded partnership under IRC Section 7704), including, if necessary, creating or converting it into a Delaware limited liability partnership or limited liability company that is so qualified;
(q) create sub-trusts or title vehicles of which the Trust or the Litigation Trust Beneficiaries hold the beneficial or ownership interests, as applicable;
(r) purchase customary insurance coverage in accordance withSection 4.10 hereof; and
(s) perform such functions and take such actions with respect to the Trust as are provided for or permitted in the Plan, the Confirmation Order, or this Agreement; and
(t) incur and satisfy obligations with respect to the Funding Loan as contemplated by the Plan and this Agreement, provided that such loan shall be non-recourse to the Trustee and the Litigation Trust Beneficiaries.
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6.2Establishment of the Oversight Committee.
(a) A committee shall be established (the “Oversight Committee”) solely for the limited purpose of overseeing matters related solely to the removal of the Litigation Trustee and/or appointment of a successor Litigation Trustee, as further set forth inSection 8 hereof. The Litigation Trustee shall provide the Oversight Committee with the reports set out inSection 4.5 hereof and such other information as may be reasonably requested from time to time by the Oversight Committee that the Oversight Committee deems necessary in order to fulfill its duties in connection therewith.
(b) The Oversight Committee shall have no more than five members;provided,however, that no initial or subsequent member of the Oversight Committee or any successor Litigation Trustee shall be a competitor of the Reorganized Debtors (or an affiliate, representative or agent of a competitor). The Oversight Committee shall be comprised of (i) two members selected by the Committee and (ii) three members who shall be selected by the then-current holders of the Second Lien Notes at such time that any event occurs that would require a decision by the Oversight Committee;provided,however, that the failure by the holders of the Second Lien Notes or the Committee to select its representative member(s) to the Oversight Committee shall not prevent the establishment of the Oversight Committee on the Effective Date or such Oversight Committee’s authority under this Agreement.
(c) Each Oversight Committee member shall designate (i) one or more representatives who shall attend any meetings and participate in other activities of the Oversight Committee and (ii) an alternate representative to attend any meetings and participate in other activities of the Oversight Committee when the representatives designated pursuant to clause (i) herein are unavailable to participate in such meetings and activities.
(d) A quorum for meetings of the Oversight Committee shall consist of a majority of the non-recused members of the Oversight Committee then serving;provided,however, that, for purposes of determining whether a quorum is present at such a meeting, a member of the Oversight Committee shall be deemed present if a representative of the member is attending in person, by telephone or by proxy.
(e) Except as expressly provided herein, the affirmative vote of a majority of the non-recused members of the Oversight Committee shall be the act of the Oversight Committee with respect to any matter that requires the determination, consent, approval or agreement of the Oversight Committee. In all matters submitted to a vote of the Oversight Committee, each Oversight Committee member shall be entitled to cast one vote, which vote shall be cast personally by such Oversight Committee member or by proxy. As set forth above, the actions of the Oversight Committee shall be limited to those set forth in Section 6.2(a) of this Agreement.
(f) An Oversight Committee member and its representative shall be recused from the Oversight Committee’s deliberations and votes on any matters as to which such member has a conflicting interest. If an Oversight Committee member or its representative does not recuse itself from any such matter, that Oversight Committee member and its representative may be recused from such matter by the majority vote of the remaining members of the
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Oversight Committee that are not recused from the matter. In such event, such recused member of the Oversight Committee can challenge such decision of the non-recused members of the Oversight Committee with the Bankruptcy Court which shall have jurisdiction under the Plan to adjudicate such matter.
(g) Oversight Committee members shall be reimbursed by the Trust for reasonable, documented out-of-pocket expenses, other than attorneys’ and other professionals’ fees and expenses, incurred in connection with their service on the Oversight Committee. Oversight Committee members shall not receive any other compensation from the Trust for their services as Oversight Committee members.
6.3Limitations on Litigation Trustee. No part of the Litigation Trust Assets shall be used or disposed of by the Litigation Trustee in furtherance of any trade or business. The Litigation Trustee shall, on behalf of the Trust, hold the Trust out as a trust in the process of liquidation and not as an investment company. The Litigation Trustee shall not engage in any investments or activities inconsistent with the treatment of the Litigation Trust as a liquidating trust within the meaning of Treasury Regulation Section 301.7701-4(d) while the Litigation Trustee intend the Liquidating Trust to qualify as a liquidating trust;provided,however, that if the Litigation Trust (or a Delaware limited liability company or limited liability partnership into which it shall be converted) shall be classified as a partnership for federal tax purposes under Treasury Regulations Section 301.7701-3, these restrictions shall not apply. The Litigation Trustee shall not become a market-maker for the Litigation Trust Interests or otherwise attempt to create a secondary market for the Litigation Trust Interests. The Litigation Trustee shall be restricted to the liquidation of the Litigation Trust Assets on behalf, and for the benefit, of the Litigation Trust Beneficiaries and the distribution and application of Trust Assets for the purposes set forth in this Agreement, the Plan and the Confirmation Order, and the conservation and protection of the Litigation Trust Assets and the administration thereof in accordance with the provisions of this Agreement, the Plan and the Confirmation Order.
6.4Agents and Professionals; Employees.
(a) The Trust may, but shall not be required to, from time to time, enter into contracts with, consult with and retain, as deemed reasonably necessary by the Litigation Trustee, independent contractors, including attorneys, accountants, appraisers, disbursing agents or other parties deemed by the Litigation Trustee to have qualifications necessary or desirable to assist in the proper administration of the Trust, including any estate professionals retained during the bankruptcy cases as may be appropriate in the circumstances. The Litigation Trustee shall pay the reasonable fees and expenses of such persons out of the Litigation Trust Assets in the ordinary course of business without the need for approval of the Bankruptcy Court or the Oversight Committee. In addition, the Trust may enter into an agreement with the Reorganized Debtors to utilize the services of one or more employees of the Reorganized Debtors; provided, however, that under no circumstances shall the Trust solicit or approach any employee of the Debtors or Reorganized Debtors absent prior written consent of the Reorganized Debtors.
(b) Prior employment in any capacity in the Debtors’ bankruptcy cases on behalf of the Debtors, their estates, the Committee, or any creditors shall not preclude the Litigation Trust’s retention of such professionals. Notwithstanding the foregoing, the Reorganized Debtors shall not be deemed to have waived any conflict alleged to exist with any Litigation Trust Professional.
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6.5Investment of Trust Monies. The Litigation Trustee shall invest the Trust Proceeds received or otherwise held by the Litigation Trustee in highly-rated short-term investments of which the length of term shall be consistent with the obligations to pay costs, expenses and other obligations and make distributions underArticle IV of this Agreement, which investments shall consist of (i) short-term investments issued or guaranteed by the United States or by a department, agency or instrumentality of the United States, (ii) other short-term instruments of the highest credit rating available of two nationally recognized rating agencies, or (iii) other short-term investments that the Litigation Trustee deems appropriate.
ARTICLE VII
CONCERNING THE LITIGATION TRUSTEE
7.1Generally. The Litigation Trustee shall exercise such rights and powers vested in it by this Agreement, the Plan and the Confirmation Order, and use the same degree of care and skill in its exercise as a prudent person would exercise or use under the circumstances in the conduct of its own affairs. No provision of this Agreement, the Plan or the Confirmation Order shall be construed to relieve the Litigation Trustee from liability for its own gross negligence, waste, fraud or reckless, intentional or willful misconduct, except that the Litigation Trustee shall not be liable for any action taken in good faith in reliance upon the advice of the Litigation Trust Professionals.
7.2Reliance by Litigation Trustee. Except as otherwise provided in this Agreement, the Plan or the Confirmation Order:
(a) the Litigation Trustee may rely and shall be protected in acting upon any resolution, statement, instrument, opinion, report, notice, request, consent, order or other paper or document reasonably believed by the Litigation Trustee to be genuine and to have been signed or presented by the proper party or parties; and
(b) persons (including any Litigation Trust Professionals ) engaged in transactions with the Litigation Trustee shall look only to the Litigation Trust Assets to satisfy any liability incurred by the Litigation Trustee to such person in carrying out the terms of this Agreement, the Plan or the Confirmation Order, and the Litigation Trustee shall have no personal or individual obligation to satisfy any such liability, except for its own gross negligence, waste, fraud or reckless, intentional or willful misconduct.
7.3No Liability to Third Persons. Each of the Litigation Trustee, the agents of and professionals retained by the Litigation Trustee, and the members of the Oversight Committee shall not be subject to any personal liability whatsoever, in tort, contract or otherwise, to any Litigation Trust Beneficiary or to any other person in connection with the Litigation Trust Assets or the affairs of the Trust, except for its own gross negligence, waste, fraud or reckless, intentional or willful misconduct.
7.4Nonliability of Litigation Trustee for Acts of Others. Nothing contained in this Agreement, the Plan or the Confirmation Order shall be deemed to be an assumption by the
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Litigation Trustee of any of the liabilities, obligations or duties of the Debtors or Litigation Trust Beneficiaries and shall not be deemed to be or contain a covenant or agreement by the Litigation Trustee to assume or accept any such liability, obligation or duty. Any successor Litigation Trustee may accept and rely upon any accounting made by or on behalf of any predecessor Litigation Trustee hereunder, and any statement or representation made as to the assets comprising the Litigation Trust Assets or as to any other fact bearing upon the prior administration of the Trust, so long as it has a good faith basis to do so. The Litigation Trustee shall not be liable for having accepted and relied in good faith upon any such accounting, statement or representation if it is later proved to be incomplete, inaccurate or untrue. Any Litigation Trustee shall not be liable for any act or omission of any predecessor Litigation Trustee, nor have a duty to enforce any claims against any predecessor Litigation Trustee on account of any such act or omission.
7.5Indemnity. The Litigation Trustee and its respective agents, employees, officers, directors, professionals, attorneys, accountants, advisors, and representatives, each, solely in its capacity as such (collectively, the “Indemnified Parties”), shall be indemnified and held harmless by the Trust, to the fullest extent permitted by law, solely from the Litigation Trust Assets for any losses, claims, damages, liabilities and expenses, including, without limitation, reasonable attorneys’ fees, disbursements and related expenses which the Indemnified Parties may incur or to which the Indemnified Parties may become subject in connection with any action, suit, proceeding or investigation brought or threatened against one or more of the Indemnified Parties on account of the acts or omissions of the Litigation Trust or the other Indemnified Parties;provided,however, that the Trust shall not be liable to indemnify any Indemnified Party for any act or omission constituting gross negligence, fraud or reckless, intentional or willful misconduct. Notwithstanding any provision herein to the contrary, the Indemnified Parties shall be entitled to obtain advances from the Trust to cover their reasonable expenses of defending themselves in any action brought against them as a result of the acts or omissions, actual or alleged, of an Indemnified Party in its capacity as such;provided,however, that the Indemnified Parties receiving such advances shall repay the amounts so advanced to the Trust upon the entry of a Final Order finding that such Indemnified Parties were not entitled to any indemnity under the provisions of thisSection 7.5. The foregoing indemnity in respect of any Indemnified Party shall survive the termination of such Indemnified Party from the capacity for which they are indemnified.
7.6Compensation and Expenses. The Litigation Trustee shall receive fair and reasonable compensation for its services as set forth inAnnex B hereto, or as otherwise agreed from time to time with all members of the Oversight Committee. The Litigation Trustee shall be entitled to reimburse itself and the Litigation Trust Professionals from the Litigation Trust Assets on a monthly basis for all reasonable and necessary out-of-pocket expenses, actually incurred by it in the performance of its duties in accordance with this Agreement, and, when due, the Litigation Trust Professionals’ fees in accordance with the terms of such professionals’ retention.
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ARTICLE VIII
SUCCESSOR LITIGATION TRUSTEES
8.1Resignation. The Litigation Trustee may resign by giving at least 30 days prior written notice to each member of the Oversight Committee. Such resignation shall become effective on the later to occur of (a) the date specified in such written notice or (b) the effective date of the appointment of a successor Litigation Trustee in accordance withSection 8.4 hereof and such successor’s acceptance of such appointment in accordance withSection 8.5 hereof.
8.2Removal. The Litigation Trustee may be removed, with cause, by an affirmative vote of at least 75% of the members of the Oversight Committee. Such removal shall become effective on the date specified in such action by the Oversight Committee.
8.3Effect of Resignation or Removal. The resignation, removal, incompetency, bankruptcy or insolvency of the Litigation Trustee shall not operate to terminate the Trust or to revoke any existing agency created pursuant to the terms of this Agreement, the Plan or the Confirmation Order or invalidate any action theretofore taken by the Litigation Trustee. All reasonable fees and expenses incurred by the Litigation Trustee prior to the resignation, incompetency or removal of the Litigation Trustee shall be paid solely from the Litigation Trust Assets; provided that, if such fees and expenses are disputed by (a) the Oversight Committee or (b) the successor Litigation Trustee, in which case the Bankruptcy Court shall resolve the dispute and any disputed fees and expenses of the predecessor Litigation Trustee that are subsequently allowed by the Bankruptcy Court shall be paid solely from the Litigation Trust Assets. In the event of the resignation or removal of the Litigation Trustee, such Litigation Trustee shall: (i) promptly execute and deliver such documents, instruments and other writings as may be reasonably requested by the successor Litigation Trustee or directed by the Bankruptcy Court to effect the termination of such Litigation Trustee’s capacity under this Agreement; (ii) promptly deliver to the successor Litigation Trustee all documents, instruments, records and other writings related to the Trust as may be in the possession of such Litigation Trustee (subject to,inter alia, the provisions of Sections 5.2.2 and 5.2.3 of the Plan);provided,however, that such Litigation Trustee may retain one copy of each of such documents for its purposes, subject to the terms of any joint prosecution and common interest agreement to which the Litigation Trustee is a party; and (iii) otherwise assist and cooperate in effecting the assumption of its obligations and functions by such successor Litigation Trustee.
8.4Appointment of Successor. In the event of the resignation, removal, incompetency, bankruptcy or insolvency of the Litigation Trustee, a vacancy shall be deemed to exist and a successor shall be appointed by the affirmative vote of 75% of the Oversight Committee. In the event that a successor Litigation Trustee is not appointed within 30 days after the date of such vacancy, the Bankruptcy Court, upon its own motion, or the motion of a Litigation Trust Beneficiary or member of the Oversight Committee, shall appoint a successor Litigation Trustee.
8.5Acceptance of Appointment by Successor Litigation Trustee. Any successor Litigation Trustee appointed hereunder shall execute an instrument accepting its appointment and shall deliver one counterpart thereof to the Bankruptcy Court for filing and, in case of the Litigation Trustee’s resignation, to the resigning Litigation Trustee. Thereupon, such successor
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Litigation Trustee shall, without any further act, become vested with all the liabilities, duties, powers, rights, title, discretion and privileges of its predecessor in the Trust with like effect as if originally named Litigation Trustee and shall be deemed appointed pursuant to Bankruptcy Code section 1123(b)(3)(B). The resigning or removed Litigation Trustee shall duly assign, transfer and deliver to such successor Litigation Trustee all property and money held by such retiring Litigation Trustee hereunder and shall, as directed by the Bankruptcy Court or reasonably requested by such successor Litigation Trustee, execute and deliver an instrument or instruments conveying and transferring to such successor Litigation Trustee upon the Trust herein expressed, all the liabilities, duties, powers, rights, title, discretion and privileges of such resigning or removed Litigation Trustee.
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.1Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York (without reference to conflicts of law).
9.2Jurisdiction. Subject to the proviso below, the parties agree that the Bankruptcy Court shall have exclusive jurisdiction over the administration and activities of the Trust and the Litigation Trustee;provided,however, that notwithstanding the foregoing, the Litigation Trustee shall have power and authority to bring any action in any court of competent jurisdiction to prosecute any Committee Litigation Claim assigned to the Trust.
9.3Severability. In the event any provision of this Agreement or the application thereof to any person or circumstances shall be determined by Final Order to be invalid or unenforceable to any extent, the remainder of this Agreement or the application of such provision to persons or circumstances or in jurisdictions other than those as to or in which it is held invalid or unenforceable, shall not be affected thereby, and each provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.
9.4Notices. Any notice or other communication required or permitted to be made under this Agreement shall be in writing and shall be deemed to have been sufficiently given, for all purposes, if delivered personally or by telex, facsimile or other telegraphic means, sent by nationally recognized overnight delivery service or mailed by first-class mail:
(i) if to the Litigation Trustee, to:
Eugene Davis
PIRINATE Consulting Group, LLC
5 Canoe Brook Drive
Livingston, NJ 07039
Fax: 973-535-1843
With a copy to:
Joseph L. Steinfeld Jr, Esq.
ASK LLP
2600 Eagan Woods Drive, Suite 400
St. Paul, Minnesota 55121
Office: (651) 289-3850
Fax: 212.918.3427
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Robert E. Winter, Esq.
Paul Hastings LLP
875 15th Street, N.W.
Washington, DC 20005
Office: (202) 551-1700
Fax: (202) 551-1705
(ii) if to a member of the Oversight Committee, to the address set forth on Annex A, or such other address as may be provided to the Litigation Trustee by such member of the Oversight Committee.
(iii) if to any Litigation Trust Beneficiary, to the last known address of such Litigation Trust Beneficiary according to the Litigation Trustee’s records; and
(iv) if to the Debtors or Reorganized Debtors, to:
Proskauer Rose LLP
Eleven Times Square
New York, New York 10036
Attention: Martin J. Bienenstock
�� Judy G.Z. Liu
Philip M. Abelson
9.5Headings. The headings contained in this Agreement are solely for convenience of reference and shall not affect the meaning or interpretation of this Agreement or of any term or provision hereof.
9.6Plan. The terms of this Agreement are intended to supplement the terms provided by the Plan and the Confirmation Order. Accordingly, in the event of any direct conflict or inconsistency between any provision of this Agreement, on the one hand, and the provisions of the Plan and the Confirmation Order, on the other hand, the provisions of the Plan and the Confirmation Order, as applicable, shall govern and control.
9.7 [Intentionally omitted].
9.8Entire Agreement. Subject to 9.6 hereof, this Agreement and the Annexes attached hereto contain the entire agreement between the parties and supersede all prior and contemporaneous agreements or understandings between the parties with respect to the subject matter hereof.
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9.9Amendment. This Agreement may be amended by order of the Bankruptcy Court following the filing of a motion providing for a hearing on proper notice. Notwithstanding this Section 9.9, any amendments to this Agreement shall not be inconsistent with the purpose and intention of the Litigation Trust to liquidate in an orderly manner the Litigation Trust Assets (which will maximize the value of such assets) in accordance with Treasury Regulations Section 301.7701-4(d), or in the alternative, as allowed under Delaware law applicable to limited liability companies or limited liability partnerships. In the event that the Litigation Trust shall fail or cease to qualify as a liquidating trust in accordance with Treasury Regulations Section 301.7701-4(d), this Agreement may be amended by the Litigation Trustee to the extent necessary for the Litigation Trustee to take such action as it shall deem appropriate to have the Litigation Trust classified as a partnership for federal tax purposes under Treasury Regulations Section 301.7701-3 (but not a publicly traded partnership under IRC section 7704), including, if necessary, creating or converting it into a Delaware limited liability partnership or limited liability company that is so classified.
9.10Meanings of Other Terms. Except where the context otherwise requires, words importing the masculine gender include the feminine and the neuter, if appropriate, words importing the singular number shall include the plural number and vice versa and words importing persons shall include firms, associations, corporations and other entities. All references herein to Articles, Sections and other subdivisions, unless referring specifically to the Plan or provisions of the Bankruptcy Code, the Bankruptcy Rules, or other law, statute or regulation, refer to the corresponding Articles, Sections and other subdivisions of this Agreement, and the words herein and words of similar import refer to this Agreement as a whole and not to any particular Article, Section or subdivision of this Agreement. The term “including” shall mean “including, without limitation.”
9.11Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but such counterparts shall together constitute but one and the same instrument. A facsimile or electronic mail signature of any party shall be considered to have the same binding legal effect as an original signature.
[Remainder of Page Blank — Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement or caused this Agreement to be duly executed by their respective officers, representatives or agents, effective as of the date first above written.
NEWPAGE CORPORATION,
on its own behalf as a Debtor and
a Reorganized Entity and on behalf of
each other Debtor and Reorganized Entity
By:
Name:
Title:
PIRINATE Consulting Group LLC, as Litigation Trustee
By:
Name: Eugene Davis
Title:
Annex A
Oversight Committee Members
| | | | |
1. | | HSBC Bank USA, National Association | | (Committee) |
| | |
2. | | | | (Committee) |
| | |
3. | | | | (Second Lien Noteholders) |
| | |
4. | | | | (Second Lien Noteholders) |
| | |
5. | | | | (Second Lien Noteholders) |
Annex B
Litigation Trustee’s Compensation
Fees in connection with the Litigation Trustee’s engagement will consist of: $20,000 per month, plus two percent (2.0%) of net recoveries in excess of $15 million (in the aggregate) on account of Committee Litigation Claims.
The Litigation Trustee is not providing any assurance regarding the outcome of its work.
In addition to the fees outlined above, the Litigation Trustee will charge for reasonable, documented out-of-pocket expenses that are incurred on the Trust’s behalf during its services as Litigation Trustee, including, but not limited to, counsel fees, airfare, meals, hotel accommodations, telephone, industry research, duplicating and printing, etc. Further, if the Litigation Trustee and/or any of its employees are required to testify or provide evidence at or in connection with any judicial or administrative proceeding relating to its services as Litigation Trustee, the Litigation Trustee will be compensated by the Trust at its regular hourly rates and reimbursed for reasonable out of pocket expenses (including counsel fees) with respect thereto. Invoices for fees and expenses incurred in connection with services as Litigation Trustee will be billed monthly or quarterly, and are due within a reasonable period following receipt.
The Litigation Trustee shall not be required to seek or obtain approval of its compensation by the Bankruptcy Court. For the avoidance of doubt, the foregoing compensation shall constitute all of the compensation to be provided to the Litigation Trustee and all other members and employees of his firm other than specialists (e.g., tax specialists) that the Litigation Trustee would otherwise be required to engage from an outside firm in any event.
Annex C
General Unsecured Claims Retained By Debtors
| | | | |
Proof of Claim No. | | Claimant | | Debtor |
| | |
630 | | MeadWestvaco Corporation | | NewPage Corporation |
| | |
2221 | | MeadWestvaco Corporation | | NewPage Corporation1 |
| | |
2646 | | Federal Energy Regulatory Commission | | Rumford Paper Company2 |
| | |
2659 | | United States of America on Behalf of the U.S. Environmental Protection Agency and the Dept. of Interior | | NewPage Wisconsin System Inc. |
| | |
2668 | | United States of America on Behalf of the U.S. Environmental Protection Agency and the Dept. of Interior | | NewPage Wisconsin System Inc.3 |
| | |
2759 | | MeadWestvaco Corporation | | NewPage Corporation |
| | |
| | MeadWestvaco Corporation | | TBD4 |
1 | Proof of claim no. 2221 has been amended by proof of claim no. 2759. |
2 | This claim is only subject to the provisions of the Litigation Trust Agreement to the extent the agreement in principle between the Federal Energy Regulatory Commission and the Debtors is not approved by the Federal Energy Regulatory Commission and final order of the Bankruptcy Court. |
3 | The Debtors have already objected to proof of claim no. 2668 in theDebtors’ Twenty-Third Omnibus Objection, Pursuant to Sections 105 and 502 of the Bankruptcy Code, Bankruptcy Rule 3007, and Local Rule 3007-1, to Claims (Non-Substantive) [Docket No. 2706]. |
4 | The [TBD] notation is a placeholder for claims arising from the rejection of that certain Equity and Asset Purchase Agreement between Maple Acquisition LLC and MeadWestvaco Corporation, dated January 14, 2005, as amended (the “EAPA”). The Debtors filed a motion to reject the EAPA on August 23, 2012 [Docket No. 2196] (the “Rejection Motion”). As provided in the Confirmation Order, the Rejection Motion shall remain pending until finally adjudicated or settled. |
Schedule 1.2.146
Reorganized NPC New Compensation Plans
(2012 Long-Term Incentive Plan)
NEWPAGE HOLDINGS INC.
2012 LONG-TERM INCENTIVE PLAN
1.PURPOSE.The purpose of this NewPage Holdings Inc. 2012 Long-Term Incentive Plan is to enable NewPage to attract, motivate and retain talented key Employees and to attract, motivate and retain able Directors by providing additional incentive and reward opportunities designed to enhance the profitable growth of NewPage. Accordingly, this Plan provides for granting Incentive Stock Options, Options that are not Incentive Stock Options, Restricted Stock Awards, Restricted Stock Units, Performance Awards, Stock Appreciation Rights, and Phantom Stock Awards, as is best suited to the circumstances of the particular Participant.
2. DEFINITIONS.The following definitions will apply throughout this Plan unless otherwise indicated:
2.1“Award” means the award of an Option, a Restricted Stock Award, the award of a Restricted Stock Unit, a Performance Award, the award of a Stock Appreciation Right, or a Phantom Stock Award.
2.2“Award Agreement” means a written agreement between the Company and a Participant governing an Award.
2.3“Board” means the board of directors of the Company.
2.4“Cause” means, unless the applicable Award Agreement provides otherwise, (i) the definition of “Cause” to terminate a Participant’s employment or a similar defined term in any employment, severance, or other agreement between the Participant and a NewPage entity that is in effect at the time of termination, or (ii) in the absence of such a definition, any of the following: (1) the Participant’s conviction of (or plea of no contest or guilty to) a felony, (2) the Participant’s willful and continued failure to perform, in any material respect, the Participant’s duties to NewPage (other than any failure resulting from the Participant’s physical or mental injury, illness or incapacity, whether or not constituting a Disability), (3) the Participant’s willful failure to comply, in any material respect, with any lawful policy adopted by NewPage and communicated to the Participant in writing, or (4) the Participant’s willful misconduct in performing his or her duties to NewPage that is materially and demonstrably injurious to the financial condition, business or reputation of NewPage.
2.5“Change in Control” means the occurrence of any of the following events:
(1) Any “person” (as that term is used in Section 13(d) or 14(d) of the 1934 Act), other than one or more Permitted Holders, is or becomes the “beneficial owner” (within the meaning of Rule 13d-3 promulgated under the 1934 Act), directly or indirectly, of more than 50% of the aggregate combined voting power of the Voting Stock of the Company, but no Change in Control will be deemed to have occurred under
this clause (1) as a result of (i) an acquisition by the Company of its Voting Stock or (ii) a Business Combination (as defined below) that complies with clause (3)(ii) below;
(2) Upon and after the first public offering of common stock of the Company, the members of the Board immediately prior to the public offering (together with any new directors whose election or whose nomination for election by the stockholders of the Company was approved by a vote of a majority of the directors of the Company then still in office who were either directors of the Company immediately prior to the public offering or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board;
(3) The consummation of a reorganization, merger, consolidation or sale or other disposition, directly or indirectly, of all or substantially all of the assets of the Company (each, a“Business Combination”), in each case, unless, (i) the Person resulting from the Business Combination (including a Person that, as a result of the Business Combination, owns the Company or all or substantially all of the Company’s assets either directly or through one or more Subsidiaries) is a Permitted Holder or a Person controlled by one or more Permitted Holders or (ii) immediately following the Business Combination, (1) the beneficial owners of the Voting Stock of the Company immediately prior to the Business Combination beneficially own, directly or indirectly, more than 50% of the aggregate combined voting power of the Voting Stock of the Person resulting from the Business Combination (including, without limitation, a Person that, as a result of the Business Combination, owns the Company or all or substantially all of the Company’s assets either directly or through one or more Subsidiaries) in substantially the same proportions as their ownership immediately prior to the Business Combination, of the Voting Stock of the Company, as the case may be, and (2) at least a majority of the members of the board of directors of the Person resulting from the Business Combination (including, without limitation, a Person that, as a result of the Business Combination, owns the Company or all or substantially all of the Company’s assets either directly or through one or more Subsidiaries) were members of the Board at the time of the execution of the initial agreement or of the action of the Board providing for such Business Combination;
(4) The Company ceases for any reason to be the “beneficial owner” (within the meaning of Rule 13d-3 promulgated under the 1934 Act) of 100% of the outstanding Voting Stock of NewPage Corporation; or
(5) The Company or NewPage Corporation is liquidated or dissolved or a plan relating to the liquidation or dissolution of the Company or NewPage Corporation is adopted.
2.6“Chapter 11 Plan” means the Company’s Fourth Amended Joint Chapter 11 Plan dated as of November 7, 2012, as amended.
2.7“Code” means the Internal Revenue Code of 1986.
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2.8“Committee” means the compensation committee of the Board, or the full Board or such other committee that is selected by the Board to administer this Plan as provided in Section 4.1.
2.9“Common Stock” means the common stock, $0.001 par value per share, of the Company, or any security into which that common stock may be changed by reason of a transaction or event described in Section 13.
2.10“Company” means NewPage Holdings Inc., a Delaware corporation.
2.11“Director” means a member of the Board.
2.12“Disability” means (i) the definition of “Disability” or a similar defined term in any employment, severance, or other agreement between the Participant and a NewPage entity that is in effect at the time of the determination; and (ii) in the absence of such a definition, the meaning set forth in Code Section 22(e)(3), but in either case if the Award consists of deferred compensation subject to Code Section 409A, the definition of “Disability” will be deemed modified to the extent necessary to comply with Code Section 409A.
2.13“Effective Date” is as defined in the Chapter 11 Plan.
2.14“Employee” means an employee of a NewPage entity.
2.15“ERISA” means the Employee Retirement Income Security Act of 1974.
2.16“Fair Market Value” means, as of a particular date, the value of the Common Stock determined as follows: (i) if the Common Stock is listed on a national securities exchange or included in the NASDAQ Stock Market, then the Fair Market Value per share will be the last reported sale price thereof on the relevant date (or if no shares of Common Stock were traded on that date, the next preceding date on which the Common Stock was traded), and (ii) at any time at which the Common Stock is not listed on a national securities exchange or included in the NASDAQ Stock Market, the Fair Market Value per share will be as determined pursuant to a valuation made reasonably and in good faith by the Board as of the applicable reference date (without regard to any discount for minority interest and transfer restrictions imposed on the Common Stock), after consultation with the Chief Executive Officer and Chief Financial Officer of NewPage and after taking into account any recent arms’ length sale(s) of Company securities (including on “pink sheets” or other over-the-counter markets) and the most recent annual valuation obtained from an independent appraiser, if any, as updated by the Company in good faith for the most recently ended calendar quarter, in each case, taking into consideration subsequent circumstances, events or conditions and any distributions with respect to such Common Stock.
2.17“Incentive Stock Option” means an incentive stock option within the meaning of Code Section 422.
2.18“NewPage” means collectively the Company and its Subsidiaries.
2.19“1934 Act” means the Securities Exchange Act of 1934.
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2.20“Option” means an Award granted under Section 7 and includes both Incentive Stock Options to purchase Common Stock and Options to purchase Common Stock that do not constitute Incentive Stock Options.
2.21“Participant” means an Employee or Director who has been granted an Award.
2.22“Performance Award” means an Award granted under Section 12.
2.23“Performance Criteria”means the criterion or criteria the Committee selects for purposes of establishing Performance Goals for a Performance Award or restrictions on an Option, Restricted Stock Award, Restricted Stock Unit, Stock Appreciation Rights or Phantom Stock Award. Performance Criteria may be subject to adjustment by the Committee for extraordinary items or events, and may be absolute, relative to one or more other companies, or relative to one or more indices, and may be contingent upon future performance of NewPage as a whole or a particular NewPage entity, department or location.
2.24“Performance Goals” means the goals established in writing by the Committee for a Performance Period based upon the Performance Criteria. Depending on the Performance Criteria used, the Performance Goals may be expressed in terms of overall NewPage performance, the performance of a particular NewPage entity, department or location, or the performance of an individual. For any Award that incorporates Performance Goals, the Committee will establish the Performance Goals for each Performance Period prior to, or as soon as practicable after, the commencement of that Performance Period.
2.25“Performance Period” means the designated period during which one or more Performance Goals must be satisfied with respect to an Award (or the earning of an Award) to which those Performance Goals relate.
2.26“Permitted Holder” means each Person that, individually or together with one or more controlled affiliates of that Person, is the “beneficial owner” (within the meaning of Rule 13d-3 promulgated under the 1934 Act), directly or indirectly, of more than five percent (5%) of the aggregate combined voting power of the Voting Stock of the Company on the Effective Date.
2.27“Person” means an individual, partnership, corporation, association, joint stock company, limited liability company, trust, joint venture, unincorporated organization or governmental entity, or any department, agency or political subdivision of a governmental entity.
2.28“Phantom Stock Award” means an Award granted under Section 9.
2.29“Plan” means this NewPage Holdings Inc. 2012 Long-Term Incentive Plan, as amended from time to time.
2.30“Restricted Stock Award” means an Award granted under Section 8.
2.31“Restricted Stock Unit” is defined in Section 11.1.
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2.32“Stock Appreciation Right” is defined in Section 10.1.
2.33“Subsidiary” of a designated Person means any other Person a majority of whose outstanding Voting Stock is beneficially owned, directly or indirectly, by the designated Person.
2.34“Treasury Regulations” means the regulations promulgated by the United States Department of the Treasury pursuant to, and in respect of, provisions of the Code.
2.35“Voting Stock” of a Person means all classes of capital stock of that Person outstanding at the time of determination and normally entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees, as applicable, of that Person.
3.EFFECTIVE DATE, APPROVAL AND DURATION.This Plan will become effective on the Effective Date. Confirmation of the Chapter 11 Plan will constitute all necessary approval of this Plan by the stockholders of the Company, to the extent permitted under applicable law. No further Awards may be granted under this Plan after 10 years from the Effective Date. Subject to Section 14, this Plan will remain in effect until all Options have been exercised or expired; all Restricted Stock Awards, Restricted Stock Units, and Stock Appreciation Rights have vested, been forfeited, or expired; and all Performance Awards and Phantom Stock Awards have been satisfied or expired.
4.ADMINISTRATION.
4.1Composition of the Committee. This Plan will be administered by the Committee. To the extent required by applicable law or the listing requirements of the national securities exchange on which the Common Stock may be listed, or to the extent deemed desirable by the Board, the Committee will consist of not less than two Directors who qualify as “non-employee directors,” as defined in Rule 16b-3 promulgated under the 1934 Act, and who otherwise qualify as independent under applicable listing exchange requirements.
4.2Powers. Subject to the express provisions of this Plan, the Committee will have authority, in its discretion, to determine which Employees or Directors receive an Award, the time or times when Awards are made, the type of Award that is made, and the number of shares subject to or the value of each Award. The Committee will also have authority, in its discretion, to (i) construe this Plan and the Award Agreements, (ii) prescribe rules and regulations relating to this Plan, (iii) determine the terms, restrictions and provisions of each Award Agreement, including the exercise price, medium of payment and vesting provisions, as well as restrictions and provisions necessary in the Committee’s judgment to qualify designated Options as Incentive Stock Options, (iv) accelerate the vesting or exercisability of, payment for or lapse of restrictions on, Awards, and (v) make all other determinations and take all other actions that the Committee deems necessary or desirable for administering this Plan. The Committee may correct any defect, supply any omission or reconcile any inconsistency in this Plan or in any Award Agreement in the manner and to the extent it deems expedient to carry it into effect. Determinations of the Committee on the matters referred to in this Section 4.2 will be conclusive.
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4.3No Liability; Indemnification. No member of the Committee or any person acting as a delegate of the Committee with respect to the Plan will be liable for any losses resulting from any action, interpretation or construction made in good faith with respect to the Plan or any Award granted under the Plan. To the maximum extent permitted by applicable laws, each member of the Committee will be indemnified and held harmless by the Company against and from (i) any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken or failure to act under the Plan or any Award, and (ii) from any and all amounts paid by him or her in settlement thereof, with the Company’s approval, or paid by him or her in satisfaction of any judgment in any such claim, action, suit or proceeding against him or her, provided he or she gives the Company an opportunity, at its own expense, to handle and defend the matter before he or she undertakes to defend it on his or her own behalf. The foregoing right of indemnification will not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company’s charter documents, by contract, as a matter of law, or otherwise, or under any power that the Company may have to indemnify them or hold them harmless.
5.GRANT OF AWARDS.
5.1Shares Subject to this Plan. Subject to adjustment in the same manner as provided in Section 13 with respect to shares of Common Stock subject to Awards then outstanding, the aggregate number of shares of Common Stock that are available for the grant of Awards under this Plan will not exceed [•] shares,1 of which no more than [•] shares of Common Stock may be granted as Incentive Stock Options. Shares of Common Stock will be deemed to have been issued under this Plan only to the extent actually issued and delivered pursuant to an Award or to the extent an Award denominated in shares of Common Stock is settled in cash. Shares of Common Stock previously granted or issued in connection with an Award that are subsequently forfeited back to the Company or that are canceled on account of termination, expiration or lapse of an Award without payment to a Participant will be made available for issuance as Awards under this Plan. Shares of Common Stock withheld or tendered to pay the exercise price of an Option or other purchase price of an Award or withholding tax obligations with respect to an Award or shares of Common Stock repurchased on the open market with the proceeds of the Option exercise price will not be made available for issuance as Awards under this Plan.
5.2Award Limits. Notwithstanding any provision in this Plan to the contrary:
(1) The maximum number of shares of Common Stock that may be subject to Awards denominated in shares of Common Stock granted to any one individual during any calendar year may not exceed [•] shares or the equivalent of [•] shares of Common Stock (subject to adjustment in the same manner as provided in Section 13 with respect to shares of Common Stock subject to Awards then outstanding), and
1 | 10% of outstanding Common Stock upon emergence. |
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(2) The maximum amount of compensation that may be paid under all Performance Awards denominated in cash (including the Fair Market Value of any shares of Common Stock paid in satisfaction of cash Performance Awards) granted to any one individual during any calendar year may not exceed $[•] as of the date of grant, and any payment due with respect to a Performance Award must be paid no later than 10 years after its date of grant.
5.3Stock Offered. Subject to the limitations in Sections 5.1 and 5.2, the Common Stock to be offered pursuant to the grant of an Award may be authorized but unissued Common Stock or Common Stock previously issued and outstanding and reacquired by the Company. Any reacquired shares that remain unissued and that are not subject to outstanding Awards at the termination of this Plan will cease to be subject to this Plan but, until termination of this Plan, the Company will at all times make available a sufficient number of shares to meet the requirements of this Plan.
6.ELIGIBILITY.Awards may be granted only to individuals who, at the time of grant, are Employees or Directors. The Committee, in its sole discretion, shall determine those eligible individuals who shall receive an award under the Plan. An Award may be granted on more than one occasion to the same individual and, subject to the limitations set forth in this Plan, the Award may include an Incentive Stock Option, an Option that is not an Incentive Stock Option, a Restricted Stock Award, a Performance Award, a Phantom Stock Award, a Stock Appreciation Right, a Restricted Stock Unit, or any combination thereof.
7.STOCK OPTIONS.
7.1Grant of Options.The Committee may, subject to the limitations of this Plan and the availability of shares under Section 5.1, grant Options to eligible individuals upon such terms and conditions as the Committee may determine consistent with this Section 7.
7.2Term. The term of each Option will be as specified by the Committee at the date of grant, but in no event will an Option be exercisable after the expiration of 7 years from the date of grant.
7.3Special Limitations on Incentive Stock Options. An Incentive Stock Option may be granted only to an individual who is an Employee at the time the Option is granted. To the extent that the aggregate Fair Market Value (determined at the time each Incentive Stock Option is granted) of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by an individual during any calendar year under all incentive stock option plans of NewPage exceeds $100,000, the excess Incentive Stock Options will be treated as Options that are not Incentive Stock Options. The Committee will determine, in accordance with applicable provisions of the Code, Treasury Regulations and other administrative pronouncements, which of a Participant’s Incentive Stock Options will not constitute Incentive Stock Options because of the foregoing limitation and will so notify the Participant as soon as practicable. No Incentive Stock Option may be granted to an individual if, at the time the Option is granted, that individual owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company, within the meaning of Code
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Section 422(b)(6), unless (i) at the time the Option is granted the option price is at least 110% of the Fair Market Value of the Common Stock subject to the Option and (ii) the Option by its terms is not exercisable after the expiration of five years from the date of grant. An Incentive Stock Option may not be transferred otherwise than by will or the laws of descent and distribution, and may be exercised during the Participant’s lifetime only by the Participant or the Participant’s guardian or legal representative.
7.4Exercise and Purchase Price. An Option will be exercisable in whole or in such installments and at such times as determined by the Committee and stated in the Award Agreement. The price at which a share of Common Stock may be purchased upon exercise of an Option will be determined by the Committee in the Award Agreement but, subject to adjustment as provided in Section 13, the purchase price may not be less than the Fair Market Value of a share of Common Stock on the date the Option is granted. The Option or a portion of the Option may be exercised by delivery of an irrevocable notice of exercise to the Company, as specified by the Committee. The purchase price upon exercise of an Option must be paid in full in the manner prescribed by the Committee, subject to Section 7.7. Separate stock certificates will be issued by the Company for those shares acquired pursuant to the exercise of an Incentive Stock Option and for those shares acquired pursuant to the exercise of an Option that is not an Incentive Stock Option.
7.5Restrictions on Repricing. Except as provided in Sections 13 and 15.7, the terms of outstanding Options may not be amended to reduce the exercise price of outstanding Options or to cancel, exchange, substitute, buyout or surrender outstanding Options in exchange for cash, other Awards or Options with an exercise price that is less than the exercise price of the original Options without stockholder approval, to the extent that stockholder approval is required by applicable law or listing exchange requirement, or, except as the Committee may otherwise deem advisable, to the extent necessary to avoid adverse accounting treatment.
7.6Stockholder Rights and Privileges. A Participant will be entitled to all privileges and rights of a stockholder only with respect to such shares of Common Stock that have been purchased under the Option and for which certificates of stock have been registered in the Participant’s name.
7.7Option Award Agreements. Each Option will be evidenced by an Award Agreement consistent with the provisions of this Plan as the Committee from time to time may approve, including, as applicable, provisions to qualify an Incentive Stock Option under Code Section 422. Each Award Agreement will specify, as applicable, the effect of termination of employment or membership on the Board on the exercisability of the Option. The Award Agreement will provide for the payment of the option price, in whole or in part, by the delivery of a number of shares of Common Stock (plus cash if necessary) having a Fair Market Value equal to the option price. The Award Agreement will also provide for a “cashless exercise” of the Option at the election of the Participant, in which the number of shares of Common Stock to be issued on exercise of the Option will be reduced to cover the exercise price of the Option. The terms and conditions of each Award Agreement need not be identical. The Committee may, in its sole discretion, amend an outstanding Award Agreement from time to time in any manner that is consistent with Section 14 and other provisions of this Plan, including amendments that accelerate the time at which an Option, or a portion of an Option, may be exercisable.
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8.RESTRICTED STOCK AWARDS.
8.1Grant of Restricted Stock Awards.The Committee may, subject to the limitations of this Plan and the availability of shares under Section 5.1, grant Restricted Stock Awards to eligible individuals upon such terms and conditions as the Committee may determine consistent with this Section 8.
8.2Restrictions. Shares of Common Stock that are the subject of a Restricted Stock Award will be subject to restrictions, including restrictions on the Participant’s ability to sell, transfer, pledge, exchange, hypothecate or otherwise dispose of those shares, and an obligation of the Participant to forfeit and surrender those shares to the Company under circumstances specified in the Award Agreement. The restrictions will be determined by the Committee in its sole discretion and reflected in the Award Agreement, and the Committee may provide that the restrictions will lapse upon (i) the attainment of one or more Performance Goals, (ii) the Participant’s continued employment with the applicable NewPage entity or continued service as a Director for a specified period of time, (iii) the occurrence of any event or the satisfaction of any other condition specified by the Committee in its sole discretion, or (iv) a combination of any of the foregoing. Each Restricted Stock Award may have different restrictions, in the discretion of the Committee.
8.3Other Terms and Conditions. Common Stock awarded pursuant to a Restricted Stock Award will be represented by a stock certificate registered in the name of the Participant. Unless provided otherwise in an Award Agreement, the Participant will have the right to receive dividends and other distributions with respect to Common Stock subject to a Restricted Stock Award, to vote Common Stock subject the Award and to enjoy all other stockholder rights, except that (i) the Participant will not be entitled to delivery of the stock certificate until the restrictions have expired, (ii) the Company will retain custody of the Common Stock until the restrictions have expired, (iii) the Participant may not sell, transfer, pledge, exchange, hypothecate or otherwise dispose of the Common Stock until the restrictions have expired, and (iv) a breach of the terms and conditions established by the Committee pursuant to the Award Agreement will result in a forfeiture of the Restricted Stock Award. Notwithstanding anything in this Plan to the contrary, unless otherwise set forth in an Award Agreement, dividends and other distributions that are attributable to a particular share of Common Stock will be withheld by the Committee and will be distributed to the Participant only upon the release of the restrictions on that share and, if the share is forfeited, the Participant will have no right to those dividends or distributions.
8.4Payment for Common Stock. The Committee will determine and include in the Award Agreement the amount and form of any payment for Common Stock received pursuant to a Restricted Stock Award, but in the absence of such a determination, a Participant will not be required to make any payment for Common Stock received pursuant to a Restricted Stock Award, unless and to the extent otherwise required by law.
8.5Accelerated Vesting. The Committee may, in its discretion and as of a date or dates determined by the Committee, fully vest any or all Common Stock awarded to a Participant pursuant to a Restricted Stock Award and, upon vesting, except as provided by the Committee, all restrictions applicable to that Restricted Stock Award will terminate. Any action by the Committee pursuant to this Section 8.5 may vary among individual Participants and may vary among the Restricted Stock Awards held by any one Participant.
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8.6Restricted Stock Award Agreements. At the time any Restricted Stock Award is made under this Section 8, the Company and the Participant will enter into an Award Agreement setting forth the terms and conditions of the Award. The terms and conditions of each Award Agreement for Restricted Stock need not be identical. The Committee may, in its sole discretion, amend an outstanding Award Agreement from time to time in any manner that is consistent with Section 14 and the other provisions of this Plan.
8.7Legends on Common Stock. Any certificates representing Common Stock awarded to a Participant pursuant to a Restricted Stock Award will bear a legend as determined by the Committee, containing such information as the Committee deems appropriate until the lapse of all restrictions with respect to that Common Stock.
9.PHANTOM STOCK AWARDS.
9.1Grant of Phantom Stock Awards. The Committee may, subject to the limitations of this Plan and the availability of shares under Section 5.1, grant Phantom Stock Awards to eligible individuals upon such terms and conditions as the Committee may determine consistent with this Section 9. Phantom Stock Awards are rights to receive shares of Common Stock (or the equivalent Fair Market Value), or rights to receive an amount equal to any appreciation or increase in the Fair Market Value of Common Stock over a specified period of time, which vest over a period of time as established by the Committee, with or without satisfaction of any Performance Criteria or objectives, as determined by the Committee. The Committee may, in its discretion, require payment or other conditions of the Participant respecting any Phantom Stock Award.
9.2Payment. Following the end of the vesting period for a Phantom Stock Award (or at such other time as the applicable Award Agreement may provide), the holder of a Phantom Stock Award will be entitled to receive payment of an amount, not exceeding the maximum value of the Phantom Stock Award, based on the then vested value of the Award. Payment of a Phantom Stock Award may be made in cash, in Common Stock, or a combination of the two, as determined by the Committee. Payment will be made in a lump sum or in installments as prescribed by the Committee. Any payment to be made in cash will be based on the Fair Market Value of the Common Stock on the payment date. Cash dividend equivalents, to the extent provided for in an Award Agreement, may be paid during or after the vesting period with respect to a Phantom Stock Award, as determined by the Committee in the Award Agreement. If payment is not made at the time vesting occurs, the Award Agreement for the Phantom Stock Award must contain provisions that comply with the requirements of Code Section 409A.
9.3Other Terms and Conditions.The Committee will establish for each Phantom Stock Award the period over which the Award will vest. A Phantom Stock Award will terminate if the Participant does not remain continuously an Employee or a Director at all times during the applicable vesting period, except as may be otherwise determined by the Committee. The Committee may, in its sole discretion, prescribe in the Award Agreement additional terms, conditions or restrictions relating to the Phantom Stock Award, including rules pertaining to the termination of employment or service as a Director prior to expiration of the vesting period.
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9.4Phantom Stock Award Agreements. At the time any Phantom Stock Award is made under this Section 9, the Company and the Participant will enter into an Award Agreement setting forth the terms and conditions applicable to that Award. The terms and conditions of each Award Agreement for Phantom Stock Awards need not be identical. The Committee may, in its sole discretion, amend an outstanding Award Agreement from time to time in any manner that is consistent with Section 14 and the other provisions of this Plan.
10.STOCK APPRECIATION RIGHTS.
10.1Grant of Stock Appreciation Rights. The Committee may, subject to the limitations of this Plan and the availability of shares under Section 5.1, grant Stock Appreciation Rights to eligible individuals upon such terms and conditions as the Committee may determine consistent with this Section 10. A Stock Appreciation Right is an Award that may be granted separately or in tandem with an Option, and entitles the holder to receive an amount in cash and/or Common Stock (as provided in Section 10.3) equal to the difference between the exercise price and the Fair Market Value of a share of Common Stock at the time of exercise of the Stock Appreciation Right, subject to the applicable terms and conditions of any tandem Options and the following provisions of this Section 10.
10.2Term. The term of each Stock Appreciation Right will be as specified by the Committee at the date of grant, but in no event may a Stock Appreciation Right be exercisable after the expiration of 7 years from the date of grant, and if granted in tandem with an Option, the expiration of the term may not be later than the expiration date for the related Option. If neither the Stock Appreciation Right nor any related Option is exercised before the end of the day on which the Stock Appreciation Right ceases to be exercisable, the Stock Appreciation Right will be deemed to have been exercised as of that date and payment will be made to the holder in cash.
10.3Exercise. A Stock Appreciation Right entitles the Participant to receive upon exercise (i) shares of Common Stock (valued at their Fair Market Value at the time of exercise), (ii) cash, or (iii) a combination of cash and Common Stock, in the discretion of the Committee, in an amount equal in value to the excess of the Fair Market Value of the shares of Common Stock subject to the Stock Appreciation Right as of the date of exercise over the exercise price of the Stock Appreciation Right. If granted in tandem with an Option, the exercise of a Stock Appreciation Right will result in the surrender of the related Option and, unless otherwise provided by the Committee in its sole discretion, the exercise of an Option will result in the surrender of a related Stock Appreciation Right. Notwithstanding the foregoing or anything to the contrary in this Plan, the exercise price of a Stock Appreciation Right that is not granted in tandem with an Option (subject to adjustment as provided in Section 13) will not be less than the Fair Market Value of a share of Common Stock on the date the Stock Appreciation Right is granted. Further, except as provided in Section 13, the terms of outstanding Awards may not be amended to reduce the exercise price of outstanding Stock Appreciation Rights or to cancel, exchange, substitute, buyout or surrender outstanding Stock Appreciation Rights in
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exchange for cash, other Awards or Stock Appreciation Rights with an exercise price that is less than the exercise price of the original Stock Appreciation Rights without stockholder approval to the extent that stockholder approval is required by law or applicable exchange requirement, or, except as the Committee may otherwise deem advisable, to the extent necessary to avoid adverse accounting treatment.
10.4Other Terms and Conditions.The Committee will establish for each Award of Stock Appreciation Rights the period over which the Award will vest. An Award will terminate if the Participant does not remain continuously an Employee or a Director at all times during the applicable vesting period, except as may be otherwise determined by the Committee. The Committee may, in its sole discretion, prescribe in the Award Agreement additional terms, conditions or restrictions relating to the Award, including rules pertaining to the termination of employment or service as a Director prior to expiration of the vesting period.
10.5Stock Appreciation Right Award Agreements.At the time a Stock Appreciation Right Award is made under this Section 10, the Company and the Participant will enter into a Award Agreement setting forth the terms and conditions applicable to that Award. The terms and conditions of each Award Agreement for Stock Appreciation Right need not be identical. The Committee may, in its sole discretion, amend an outstanding Award Agreement from time to time in any manner that is consistent with Section 14 and the other provisions of this Plan.
11.RESTRICTED STOCK UNITS.
11.1Grant of Restricted Stock Units. The Committee may, subject to the limitations of this Plan and the availability of shares under Section 5.1, grant Restricted Stock Units to eligible individuals upon such terms and conditions as the Committee may determine consistent with this Section 11. The Award of a Restricted Stock Unit is the grant of a right to receive shares of Common Stock, cash or both in the future.
11.2Payment. Payment for Restricted Stock Units earned will be wholly in cash, wholly in Common Stock or in a combination of the two, in a lump sum or installments, and subject to vesting requirements and such other conditions as the Committee may determine. The Committee will determine the number of earned Restricted Stock Units to be paid in cash and the number to be paid in Common Stock. For Restricted Stock Units payable in shares of Common Stock, one share of Common Stock will be paid for each share earned, or cash will be paid for each share earned equal to either (i) the Fair Market Value of a share of Common Stock at the delivery date, as applicable, or (ii) the Fair Market Value of the Common Stock averaged for a number of days determined by the Committee. For Restricted Stock Units awarded in cash, the value of each share earned will be paid in its initial cash value, or shares of Common Stock will be distributed based on the cash value of the shares earned divided by (i) the Fair Market Value of a share of Common Stock at the delivery date or end of the Performance Period, as applicable, or (ii) the Fair Market Value of a share of Common Stock averaged for a number of days determined by the Committee. If payment is not made at the time vesting occurs, the Award Agreement for the Restricted Stock Unit will contain provisions that comply with the requirements of Code Section 409A.
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11.3Other Terms and Conditions. For each Participant, the Committee will determine and the Award Agreement will reflect (i) the timing of Awards, (ii) the number of Restricted Stock Units awarded, (iii) the value of Restricted Stock Units, stated either in cash or in shares of Common Stock, (iv) any Performance Goals used to determine whether the Restricted Stock Units are earned, (v) the number of earned Restricted Stock Units that will be paid in cash or shares of Common Stock, (vi) whether dividend equivalents will be paid on Restricted Stock Units, either currently or on a deferred basis, and (vii) any other matters the Committee determines appropriate. The Committee will also establish for each Award of a Restricted Stock Unit the period over which the Award will vest. An Award will terminate if the Participant does not remain continuously an Employee or a Director at all times during the applicable vesting period, except as may be otherwise determined by the Committee. The Committee may, in its sole discretion, prescribe in the Award Agreement additional terms, conditions or restrictions relating to the Restricted Stock Unit, including rules pertaining to the termination of employment or service as a Director prior to expiration of the vesting period.
11.4Restricted Stock Unit Award Agreements. At the time a Restricted Stock Unit Award is made under this Section 11, the Company and the Participant will enter into an Award Agreement setting forth the terms and conditions of the Award. The terms and conditions of each Award Agreement for Restricted Stock Units need not be identical. The Committee may, in its sole discretion, amend an outstanding Award Agreement from time to time in any manner that is consistent with Section 14 and the other provisions of this Plan.
12.PERFORMANCE AWARDS.
12.1Grant of Performance Awards.The Committee may, subject to the limitations of this Plan and the availability of shares under Section 5.1, grant Performance Awards to eligible individuals upon such terms and conditions as the Committee may determine consistent with this Section 12. Performance Awards are Restricted Stock Awards, Restricted Stock Units, Phantom Stock Awards, Options, Stock Appreciation Rights, or other Awards that are settled in cash or shares of Common Stock based on the satisfaction of Performance Criteria.
12.2Performance Measures and Performance Period. A Performance Award will be awarded to a Participant contingent upon future performance of the Company, one or more Subsidiaries, or a department or location during the Performance Period. The Committee will designate for each Performance Award (i) the Performance Criteria, (ii) the Performance Period, and (iii) the number of shares of Common Stock subject to, or the maximum value of, the Performance Award. The Committee, in its sole discretion, may provide for an adjustable Performance Award value based upon the level of achievement of the Performance Goals.
12.3Payment. Following the end of the Performance Period, the holder of a Performance Award will be entitled to receive payment of an amount not exceeding the number of shares of Common Stock subject to, or the maximum value of, the Performance Award, based on the achievement of the Performance Goals for that Performance Period, as determined and certified in writing by the Committee. Payment of a Performance Award may be made in a lump sum in cash, Common Stock, or a combination of cash and Common Stock, as determined by the Committee, and will be made no later than two and one-half months after the end of the
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Performance Period, or such other time as complies with Code Section 409A. If a Performance Award covering shares of Common Stock is to be paid in cash, the payment will be based on the Fair Market Value of the Common Stock on the payment date.
12.4Other Terms and Conditions.The Committee will establish for each Performance Award the period over which the Award will vest. A Performance Award will terminate if the Participant does not remain continuously an Employee or a Director at all times during the applicable vesting period, except as may be otherwise determined by the Committee. The Committee may, in its sole discretion, prescribe in the Award Agreement additional terms, conditions or restrictions relating to the Performance Award, including rules pertaining to the termination of employment or service as a Director prior to expiration of the vesting period.
12.5Performance Award Agreements. At the time a Performance Award is made under this Section 12, the Company and the Participant will enter into an Award Agreement setting forth the terms and conditions of the Award. The terms and conditions of the respective Award Agreements for Performance Awards need not be identical. The Committee may, in its sole discretion, amend an outstanding Award Agreement from time to time in any manner that is consistent with Section 14 and the other provisions of this Plan.
13.RECAPITALIZATION OR REORGANIZATION.
13.1No Effect on Corporate Rights or Powers. The existence of this Plan and the Awards granted under this Plan will not affect in any way the right or power of the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company’s or any of its Subsidiary’s capital structure or its business, any merger or consolidation of the Company or any of its Subsidiaries, any issue of debt or equity securities ahead of or affecting Common Stock or the rights of holders of Common Stock, the dissolution or liquidation of the Company or any of its Subsidiaries, or any sale, lease, exchange or other disposition of all or any part of its or their assets or business or any other corporate act or proceeding.
13.2Adjustment upon Changes in Capital Structure and Similar Events. The aggregate number of shares and class of shares as to which Awards may be granted under this Plan, the number and class or classes of shares covered by each outstanding Award, and the Option price or purchase price applicable to each Award will be proportionately adjusted in the event of a stock dividend, stock split, recapitalization or other change in the number or class of issued and outstanding equity securities of the Company resulting from a subdivision or consolidation of the Common Stock and/or a recapitalization, reorganization or other capital adjustment (not including the issuance of Common Stock on the conversion or exchange of other securities of the Company which are convertible into or exchangeable for Common Stock) affecting the Common Stock which is effected without receipt of consideration by the Company. The Committee will have authority to determine the adjustments to be made under and consistent with this Section 13.2, and any such determination by the Committee will be final, binding and conclusive.
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13.3Change in Control.
(a) Unless otherwise provided in an Award Agreement, immediately prior to the consummation of a Change in Control, all outstanding Awards will terminate and cease to be outstanding, except to the extent assumed by a successor entity (or its parent) or otherwise expressly continued in full force and effect pursuant to the terms of any agreement governing the Change in Control. If an Awards so terminates because it will not be assumed in connection with the Change in Control, the holder of that Award will receive the same consideration that stockholders receive upon the Change in Control as if the entire Award had vested immediately prior to the Change in Control, reduced by the purchase price that the Participant would have had to pay upon the exercise of his or her Options, if any, and any applicable withholding taxes. Options with an Option price equal to or in excess of the per share value of the consideration to be received by shareholders upon a Change in Control will be cancelled without payment of any consideration to the Participant.
(b) Prior to a Change in Control, the Committee may provide for full or partial vesting of any outstanding Award in the applicable Award Agreement or by unilateral amendment to the Award Agreement after the grant of the Award.
(c) Notwithstanding anything in this Section 13 to the contrary, unless otherwise provided in an Award Agreement, if Awards are assumed by a successor entity (or its parent) or otherwise expressly continued in full force and effect pursuant to the terms of any agreement governing the Change in Control, and within one year following the Change in Control a Participant’s employment is terminated by NewPage or its successor without Cause, all unvested Awards then held by that Participant will immediately vest in full upon the effective date of termination.
13.4No Adjustments.Except as otherwise expressly provided in this Plan or in an Award Agreement, the issuance by the Company of shares of stock of any class or securities convertible into shares of stock of any class, for cash, property, labor or services, upon direct sale, upon the exercise of rights or warrants to subscribe for stock or securities, or upon conversion of shares or obligations of the Company convertible into shares or other securities, and in any case whether or not for fair value, will not affect, and no adjustment by reason thereof will be made with respect to, the number of shares of Common Stock subject to Awards previously granted or the purchase price per share, if applicable.
13.5Code Section 409A Provisions Relating to Adjustments. Notwithstanding the anything in this Section 13 to the contrary, (i) any adjustments made pursuant to this Section 13 to Awards that are considered “deferred compensation” within the meaning of Code Section 409A will be made in compliance with Code Section 409A unless the Participant consents otherwise, (ii) any adjustments made to Awards that are not considered “deferred compensation” subject to Code Section 409A will be made in such a manner as to ensure that after the adjustments, the Awards either continue not to be subject to Code Section 409A or comply with Code Section 409A unless the Participant consents otherwise, and (iii) the Committee does not have the authority to make any adjustments under this Section 13 to the extent that the adjustments would cause an Award that is not intended to be subject to Code Section 409A to be subject to Code Section 409A.
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14.AMENDMENT AND TERMINATION.The Board may terminate this Plan at any time and, except as provided below, the Board may also alter or amend all or part of this Plan from time to time. The Board may not alter or amend this Plan in a manner that materially impairs the rights of any Participant with respect to a previously-granted Award without that Participant’s consent, except for an alteration or amendment necessary to comply with applicable law, tax rules, stock exchange rules or accounting rules, which may be made without a Participant’s written consent. The Board also may not, without approval of the stockholders of the Company, (i) amend this Plan to increase the maximum aggregate number of shares that may be issued under this Plan or change the class of individuals eligible to receive Awards under this Plan, or (ii) amend or delete Section 7.5. Subject to Section 7.5, the Committee may without the Participant’s consent alter or amend the terms of any Award previously granted, including the corresponding Award Agreement, retroactively or otherwise, as necessary for this Plan or the Award to comply with applicable law, tax rules, stock exchange rules or accounting rules. Any other alteration or amendment of an Award or Award Agreement may only be made with the Participant’s written consent.
15.MISCELLANEOUS.
15.1No Right To An Award. Neither the adoption of this Plan nor any action of the Board or of the Committee will be deemed to give any individual any right to be granted an Award or any other rights under this Plan except as may be evidenced by an Award Agreement duly executed on behalf of the Company, and then only to the extent and on the terms and conditions expressly set forth in that Award Agreement.
15.2No Rights to Continued Service. Nothing in this Plan will (i) confer upon any Employee any right to continued employment or other relationship with NewPage or (ii) interfere in any way with the right of NewPage to terminate his or her employment or other relationship at any time. Nothing in this Plan will confer upon any Director any right to continued membership on the Board.
15.3Registration. The Company will not be obligated to issue Common Stock pursuant to any Award at any time when the shares covered by that Award have not been registered under the Securities Act of 1933, as amended, and such other state and federal laws, rules and regulations as the Company or the Committee deems applicable and, in the opinion of legal counsel for the Company, there is no exemption from those registration requirements available for the issuance and sale of shares of Common Stock under this Plan. No fractional shares of Common Stock will be delivered, and any fractional share otherwise due will be rounded up to the next whole share.
15.4Tax Withholding.Whenever the Company proposes or is required to deliver or transfer shares in connection with the exercise of an Option or vesting or settlement of an Award, the Company may require that the Participant remit or otherwise make available to the Company an amount sufficient to satisfy applicable federal, state and local tax withholding requirements prior to the delivery or transfer of the shares, or take whatever other action the Company deems necessary to protect its interests with respect to tax liabilities. The Company’s obligation to deliver or transfer shares will be conditioned on the Participant’s compliance, to the Company’s satisfaction, with any applicable withholding requirement. Notwithstanding the
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foregoing or anything else in this Plan to the contrary, a Participant may satisfy tax withholding obligations either by authorizing the Company to withhold sufficient shares of Common Stock from the shares otherwise issuable to the Participant as a result of the exercise of the Option or vesting or settlement of an Award or by delivering to the Company other owned and unencumbered shares of Common Stock, in either case with a share value that does not exceed the minimum withholding amount, and the Company will remit the minimum withholding amount to the appropriate taxing authorities. For purposes of this Section 15.4, the “minimum withholding amount” means the amount of tax required to be withheld by law, calculated using the highest marginal rate of federal, state and local income taxation in the jurisdiction in which the Participant’s principal place of business or the Participant’s principal residence is located, whichever is higher.
15.5No Restriction on Corporate Action. Except as otherwise specifically provided in this Plan, nothing in this Plan will be construed to prevent NewPage from taking any action that NewPage deems appropriate or in its best interest, whether or not that action would have an adverse effect on this Plan or any Award. No Participant, beneficiary or other Person will have any claim against NewPage as a result of any such action.
15.6Restrictions on Transfer. An Award (other than an Incentive Stock Option, which will be subject to the transfer restrictions in Section 7.3) may not be transferred otherwise than (i) by will or the laws of descent and distribution, (ii) pursuant to a qualified domestic relations order as defined by the Code or Title I of ERISA, or the rules thereunder, or (iii) with the consent of the Committee.
15.7Government and Other Regulations.
(a) The Company’s obligation to settle Awards in Common Stock or other consideration will be subject to all applicable laws, rules, and regulations, and to any required approvals by governmental agencies. The Committee may provide that all certificates for Common Stock or other securities of the Company delivered under this Plan will be subject to such stop-transfer orders and other restrictions as the Committee may deem advisable under this Plan, the applicable Award Agreement, applicable securities laws, or the rules, regulations and requirements of the U.S. Securities and Exchange Commission or other similar regulatory authority, any securities exchange or inter-dealer quotation system upon which the shares or other securities are then listed or quoted and any other applicable federal, state, local or foreign laws, and, without limiting the generality of Section 8, the Committee may cause a legend or legends to be placed on certificates for shares of Common Stock to make appropriate reference to those restrictions. Notwithstanding any provision in this Plan to the contrary, the Committee reserves the right to add any additional terms or provisions to any Award that the Committee, in its sole discretion, deems necessary or advisable in order for the Award to comply with the legal requirements of any governmental entity to whose jurisdiction the Award is subject.
(b) The Committee may cancel all or any portion of an Award if it determines, in its sole discretion, that legal or contractual restrictions or blockage or other market considerations would make the Company’s acquisition of Common Stock from the public markets, the Company’s issuance of Common Stock to the Participant, the Participant’s acquisition of Common Stock from the Company or the Participant’s sale of Common Stock to
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the public markets illegal, impracticable or inadvisable, or if the vesting, exercisability or grant of the Award could result in an adverse tax, legal or regulatory consequence to the Company, any other NewPage entity or any of its or their equity holders. If the Committee determines to cancel all or any portion of an Award in accordance with the foregoing, the Company will pay to the Participant an amount equal to the excess of (i) the Fair Market Value of the Common Stock subject to the Award or portion of the Award canceled (determined as of the applicable exercise date or the date that the shares would have been vested or delivered, as applicable), over (ii) the aggregate exercise price or strike price (in the case of an Option or Stock Appreciation Right, as applicable) or any amount payable as a condition of delivery of Common Stock (in the case of any other Award). The Company will deliver the required payment to the Participant as soon as practicable following the Award cancellation, but in no event sooner than (1) the time permitted by applicable law, contract, market considerations, (2) the time at which payment to the Participant would not result in an adverse tax, legal or regulatory consequence to the Company, any other NewPage entity, or any of its or their equity holders, or (3) as permitted under Code Section 409A, if applicable. For the avoidance of doubt, if the aggregate Fair Market Value is less than or equal to the applicable aggregate exercise price or strike price, then the Committee may cancel the Award without payment of any consideration.
15.8Payments to Persons Other Than Participants.If the Committee finds that a Person to whom any amount is payable under this Plan is unable to care for his or her affairs because of illness or accident, or is a minor, or has died, then any payment due to that Person or his or her estate (unless a prior claim for payment has been made by a duly appointed legal representative) may, if the Committee so directs the Company, be paid to his or her spouse, child, relative, an institution maintaining or having custody of that Person, or any other Person deemed by the Committee to be a proper recipient on behalf of that Person. Any such payment will be a complete discharge of the liability of the Committee and the Company for the payment.
15.9Nonexclusivity. Adoption of this Plan does not create any limitation on the power of the Board to adopt such other incentive arrangements as it may deem desirable, including the granting of stock options or other equity-based awards otherwise than under this Plan.
15.10No Trust or Fund Created. This Plan will be unfunded and the Company will not be required to establish any special or separate fund or to make any other segregation of funds or assets to assure the performance of its obligations under any Award. Neither this Plan nor any Award will create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or other NewPage entity, on the one hand, and a Participant or other Person, on the other hand. No provision of this Plan or any Award will require the Company, for the purpose of satisfying any obligation under this Plan, to purchase assets or place any assets in a trust or other entity to which contributions are made or otherwise to segregate any assets, nor will the Company be required to maintain separate bank accounts, books, records or other evidence of the existence of a segregated or separately maintained or administered fund for those purposes. Participants will have no rights under this Plan other than as general unsecured creditors of the Company.
15.11Relationship to Other Benefits. No payment under this Plan will be considered in determining benefits under any pension, retirement, profit sharing, group insurance or other benefit plan of the Company, except as otherwise specifically provided in that other plan.
18
15.12Not an ERISA Plan. This Plan is not a qualified deferred compensation plan under Code Section 401(a), nor is it the type of plan that is subject to ERISA.
15.13Right of Offset. The Company will have the right to offset against its obligation to deliver shares of Common Stock, cash or other consideration under this Plan or any Award Agreement any outstanding amounts that the Participant then owes to NewPage (including travel and entertainment or advance account balances, loans, repayment obligations under any Awards, or amounts repayable to NewPage pursuant other employee programs) and any amounts the Committee otherwise deems appropriate pursuant to any tax equalization policy or agreement, but no such offset will be permitted if it would constitute an “acceleration” of a payment under this Plan within the meaning of Code Section 409A, and the Company will not have the right to offset any amount over $5,000 with respect to Awards subject to Code Section 409A. This right of offset will not be the Company’s exclusive remedy and the Company’s election not to exercise its right of offset with respect to any amount payable to a Participant will not constitute a waiver of this right of offset with respect to any other amount payable to the Participant or any other remedy.
15.14Code Section 409A. It is the intention of the Company that no Award will be “deferred compensation” subject to Code Section 409A unless and to the extent that the Committee specifically determines otherwise, and this Plan and the terms and conditions of all Awards will be interpreted accordingly. The terms and conditions governing any Awards that the Committee determines will be subject to Code Section 409A, including any rules for elective or mandatory deferral of the delivery of cash or shares of Common Stock, will be set forth in the applicable Award Agreement and will comply in all respects with Code Section 409A. Notwithstanding any provision in this Plan to the contrary, any Award that constitutes a deferral of compensation under a “nonqualified deferred compensation plan,” as defined under Code Section 409A(d)(1), and is not specifically designated as such by the Committee will be modified or cancelled to comply with the requirements of Code Section 409A, including any rules for elective or mandatory deferral of the delivery of cash or Shares. Unless expressly permitted by the Committee in an Award Agreement, a Participant does not have the right to make any election regarding the time or form of any payment pursuant to an Award. Notwithstanding that this Plan is intended to comply with or be exempt from Code Section 409A, neither the Company, nor other NewPage entities, nor the Board, nor the Committee nor any other Person guarantees compliance with or exemption from Code Section 409A and none of the foregoing will have any liability to any Participant if an Award intended to comply with or be exempt from Code Section 409A does not comply or is not exempt from Code Section 409A as intended.
15.15International Participants. The Committee may in its sole discretion amend the terms of this Plan (or adopt a sub-plan) or outstanding Award Agreements with respect to Participants who reside or work outside of the United States in order to conform to the requirements of local law or to obtain more favorable tax or other treatment for a Participant, the Company or its Subsidiaries.
19
15.16Severability. If any provision of this Plan or any Award or Award Agreement is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any Person or Award, or would disqualify this Plan or any Award under any law deemed applicable by the Committee, the provision will be construed or deemed amended to conform to the applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of this Plan or the Award, the provision will be construed or deemed stricken as to that jurisdiction, Person or Award and the remainder of this Plan and the Award will remain in full force and effect.
15.17Obligations Binding on Successors. The Company’s obligations under this Plan will be binding upon any successor corporation or organization resulting from the merger, amalgamation, consolidation or other reorganization of the Company, or upon any successor corporation or organization succeeding to substantially all of the assets and business of the Company.
15.18Other Agreements. Notwithstanding any other provision of this Plan, the Committee may require, as a condition to the grant or the receipt of Common Stock under an Award, that the Participant execute lock-up, shareholder or other agreements, as it may reasonably determine in its sole and absolute discretion.
15.19Expenses. The expenses of administering this Plan will be borne by NewPage.
15.20Rules of Construction.The titles and headings of the sections in this Plan are for convenience of reference only, and will not be used to construe this Plan. If any conflict arises between the provisions of this Plan and the provisions of any Award Agreement, the provisions of this Plan will govern. Reference to a particular statute in this Plan includes all amendments and successor provisions to that statute and all regulations and rules promulgated under that statute. Wherever used in this Plan, the term “including” means “including without limitation.”
15.21Governing Law. This Plan will be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to its conflicts of laws principles.
20
Schedule 4.9
Retained Causes of Action
THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
| | | | |
| | x | | |
In re | | : | | |
| | : | | Chapter 11 |
| | : | | |
NEWPAGE CORPORATION,et al., | | : | | Case No. 11-12804 (KG) |
| | : | | |
Debtors.1 | | : | | Jointly Administered |
| | : | | |
| | x | | Docket Nos. 2828 & 2909 |
NOTICE OF FURTHER AMENDED PLAN SUPPLEMENT TO THE DEBTORS’
MODIFIED FOURTH AMENDED JOINT CHAPTER 11 PLAN
PLEASE TAKE NOTICE THAT on December 12, 2012, the above-captioned debtors (the “Debtors”) filed theirAmended Plan Supplement to the Debtors’ Modified Fourth Amended Joint Chapter 11 Plan (the “Amended Plan Supplement”) [Docket No. 2909] amending thePlan Supplement to the Debtors’ Fourth Amended Joint Chapter 11 Plan [Docket No. 2828] (the “Plan Supplement”).
PLEASE TAKE FURTHER NOTICE THAT the Debtors hereby file a further amended Schedule 4.9 to the Plan Supplement.
PLEASE TAKE FURTHER NOTICE THAT the Debtors expressly reserve the right, at any time on or prior to the Confirmation Hearing, to supplement, modify, or amend the documents contained in the Plan Supplement or the Amended Plan Supplement or thisFurther Amended Plan Supplement to the Debtors’ Modified Fourth Amended Joint Chapter 11 Plan.
1 | The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification number, as applicable, are, Chillicothe Paper Inc. (6154), Escanaba Paper Company (5598), Luke Paper Company (6265), NewPage Canadian Sales LLC (5384), NewPage Consolidated Papers Inc. (8330), NewPage Corporation (6156), NewPage Energy Services LLC (1838), NewPage Group Inc. (2465), NewPage Holding Corporation (6158), NewPage Port Hawkesbury Holding LLC (8330), NewPage Wisconsin System Inc. (3332), Rumford Paper Company (0427), Upland Resources, Inc. (2996), and Wickliffe Paper Company LLC (8293). The Debtors’ corporate headquarters is located at 8540 Gander Creek Drive, Miamisburg, OH 45342. |
| | |
Dated: December 12, 2012 | | PACHULSKI STANG ZIEHL & JONES LLP |
Wilmington, Delaware | | |
| |
| | Laura Davis Jones (Bar No. 2436) |
| | Michael R. Seidl (Bar No. 3889) |
| | Timothy P. Cairns (Bar No. 4228) |
| | 919 N. Market Street, 17th Floor. |
| | P.O. Box 8705 |
| | Wilmington, Delaware 19899-8705 (Courier 19801) |
| | Telephone: 302.652.4100 |
| | Facsimile: 302.652.4400 |
| |
| | -and- |
| |
| | Martin J. Bienenstock |
| | Judy G.Z. Liu |
| | Philip M. Abelson |
| | PROSKAUER ROSE LLP |
| | Eleven Times Square |
| | (Eighth Avenue & 41st Street) |
| | New York, NY 10036-8299 |
| | Telephone: 212.969.3000 |
| | Facsimile: 212.969.2900 |
| |
| | Co-Attorneys for the Debtors and Debtors in Possession |
Outstanding litigation:
| | | | |
Case Name | | Case Number | | Court |
United States of America v.Westvaco Corporation | | Civil Action No. MJF-00-2602 | | U.S. District Court for the District of Maryland (Luke Paper Company is an Intervener is this action) |
| | |
Certain Coated Paper Suitable for High-quality print graphics using sheet-fed presses from China and Indonesia (Trade Cases) | | Investigation Nos. 701-TA-470-471 and 731-TA-1169-1170 | | U.S. International Trade Commission |
| | |
In Re: Western States Wholesale Natural Gas Antitrust Litigation;NewPage Wisconsin System Inc. v.CMS Energy Resources Management Co., et al. | | MDL No. 1566; Dist. Ct. No. 2:0-cv-1431-PMP-PAL No. 11-16880 | | U.S. Court of the Appeals for the Ninth Circuit On Appeal From the U.S. District Court For The District Of Nevada |
Potential Actions and Threatened Litigation:
| | | | |
Debtor | | Potential Defendant | | Issue in Dispute |
NewPage Wisconsin System Inc. | | Metso Paper USA | | Breach of contract, warranty and negligence re: machine rebuild in December 2005 |
| | |
NewPage Corporation | | Nova Scotia Power | | Nova Scotia Power’s draw on $15 million letter of credit related to biomass project at NewPage Port Hawkesbury Corp. (NewPage Corporation was guarantor and issuer of letter of credit) |
| | |
NewPage Corporation/NewPage Wisconsin System Inc. | | Port Hawkesbury Paper Company | | Potential trade case |
| | |
NewPage Wisconsin System Inc. | | City of Hamilton | | Disposition of cast coater equipment in Hamilton, Ohio, with estimated damages of $31,400 |
| | |
NewPage Wisconsin System Inc. | | Dresser Rand Company | | Breach of contract, warranty and negligence claim re: a Duluth, MN turbine failure in February 2010 |
| | |
Rumford Paper Company | | Central Maine Power Company | | Breach of contract and negligence due to a power outage at the Rumford Mill February 2012 |
| | |
Wickliffe Paper Company | | Mayfield Creek Forestry | | Negligent maintenance and tree-cutting that caused loss of power to the Wickliffe Mill, with estimated damages in the range of $300,000 |
Schedule 8.1
Lists of Certain Executory Contracts Assumed and Rejected under the Plan
AMENDMENTS TO SCHEDULES 8.1(A)-(C)
| | | | | | | | | | | | | | | | |
SCHEDULE | | ID | | DEBTOR | | TITLE AND DESCRIPTION OF CONTRACT | | COUNTERPARTY NAME AND ADDRESS | | DESCRIPTION OF MODIFICATION, IF APPLICABLE | | CURE AMOUNT | | | REASON FOR AMENDMENT |
8.1(A) | | 2858 | | NEWPAGE CORPORATION | | MOTOR CONTRACT CARRIER TRANSPORTATION AGREEMENT - PROVIDES FREIGHT SERVICE FOR OUTBOUND FINISHED GOODS | | CALDWELL TRANSPORT 54 MARR ROAD ROTHESAY, NB E2E 3K7 CANADA | | N/A | | $ | 0.00 | | | MOVED FROM SCHEDULE 8.1(B) TO SCHEDULE 8.1(A) |
8.1(A) | | 2862 | | NEWPAGE CORPORATION | | MASTER MOTOR CARRIER TRANSPORTATION AGREEMENT - PROVIDES FREIGHT SERVICE FOR OUTBOUND FINISHED GOODS | | CENTRAL MAINE TRANSPORT 78 RICE ST. BANGOR, ME 55068 | | N/A | | $ | 0.00 | | | MOVED FROM SCHEDULE 8.1(B) TO SCHEDULE 8.1(A) |
8.1(B) | | 1408 | | NEWPAGE CORPORATION | | STUMAGE AGREEMENT - WOOD PROCUREMENT | | CLYNELISH LLC 903 JERNIGAN ST PERRY, GA 31069 | | N/A | | $ | 5,026.98 | | | CORRECTED CURE AMOUNT |
8.1(A) | | 2892 | | NEWPAGE CORPORATION | | SHIPPER/BROKER INTERMODAL TRANSPORTATION AGREEMENT - PROVIDES FREIGHT SERVICE FOR OUTBOUND FINISHED GOODS | | EXEL TRANSPORTATION SERVICES INC 17330 PRESTON RD SUITE 200C DALLAS, TX 75252 | | N/A | | $ | 0.00 | | | MOVED FROM SCHEDULE 8.1(B) TO SCHEDULE 8.1(A) |
| | | | | | | | | | | | | | | | |
8.1(C) | | 1476 | | RUMFORD PAPER COMPANY | | CONTRACTOR SERVICES AGREEMENT - PURCHASE OF WOOD CHIPPING SERVICES | | FARMINGTON CHIPPING ENTERPRISES, INC. P.O. BOX 488 ROUTE 15 JACKMAN, ME 04945 | | PRICING ADJUSTMENTS | | $ | 98,282.53 | | | CORRECTED NAME OF DEBTOR COUNTERPARTY FROM NEWPAGE CORPORATION TO RUMFORD PAPER COMPANY |
8.1(C) | | 2797 | | RUMFORD PAPER COMPANY | | GROUND LEASE - GROUND LEASE FOR LOCATION OF FARMINGTON CHIPPING PLANT | | FARMINGTON CHIPPING ENTERPRISES, INC. P.O. BOX 488 ROUTE 15 JACKMAN, ME 04945 | | CLEAN-UP MODIFICATIONS | | $ | 0.00 | | | MOVED FROM SCHEDULE 8.1(B) TO SCHEDULE 8.1(C) CORRECTED NAME OF DEBTOR COUNTERPARTY FROM NEWPAGE CORPORATION TO RUMFORD PAPER COMPANY |
8.1(C) | | 2832 | | RUMFORD PAPER COMPANY | | TRUCKING AGREEMENT - TRUCKING SERVICES IN CONNECTION WITH CHIPPING PLANT | | FARMINGTON CHIPPING ENTERPRISES, INC. P.O. BOX 488 ROUTE 15 JACKMAN, ME 04945 | | CLEAN-UP MODIFICATIONS | | $ | 0.00 | | | MOVED FROM SCHEDULE 8.1(B) TO SCHEDULE 8.1(C) |
8.1(A) | | 2922 | | NEWPAGE CORPORATION | | MOTOR CONTRACT CARRIER TRANSPORTATION AGREEMENT - PROVIDES FREIGHT SERVICE FOR OUTBOUND FINISHED GOODS | | JOHN VERIHA TRUCKING 2830 CLEVELAND AVE. PO BOX 456 MARINETTE, WI 54143 | | N/A | | $ | 0.00 | | | MOVED FROM SCHEDULE 8.1(B) TO SCHEDULE 8.1(A) |
8.1(B) | | 10015 | | NEWPAGE CORPORATION | | PROCUREMENT AGREEMENT - PIPE & FITTINGS | | KENNEBEC SUPPLY 37 HEYWOOD ROAD WINSLOW, ME 04901 | | N/A | | $ | 30,006.19 | | | ADDED TO SCHEDULE 8.1(B) |
| | | | | | | | | | | | | | | | |
8.1(A) | | 2932 | | NEWPAGE CORPORATION | | MOTOR CONTRACT CARRIER TRANSPORTATION AGREEMENT - PROVIDES FREIGHT SERVICE FOR OUTBOUND FINISHED GOODS | | LAIDLAW CARRIERS VAN GP INC. 45 KERR CRESCENT RR #3 GUELPH, ON N1H 6H9 CANADA | | N/A | | $ | 0.00 | | | MOVED FROM SCHEDULE 8.1(B) TO SCHEDULE 8.1(A) |
8.1(C) | | 2798 | | RUMFORD PAPER COMPANY | | GROUND LEASE - GROUND LEASE FOR LOCATION OF WEST PARIS CHIPPING PLAN | | MIDWEST-PRICE COMPANY, LLC 218 MIDWAY ROUTE P.O. BOX 536 MONTICELLO, AR 71655 | | CLEAN-UP MODIFICATIONS | | $ | 0.00 | | | MOVED FROM SCHEDULE 8.1(B) TO SCHEDULE 8.1(C) CORRECTED NAME OF DEBTOR COUNTERPARTY FROM NEWPAGE CORPORATION TO RUMFORD PAPER COMPANY |
8.1(C) | | 2833 | | RUMFORD PAPER COMPANY | | TRUCKING AGREEMENT - TRUCKING SERVICES IN CONNECTION WITH CHIPPING PLANT | | MIDWEST-PRICE COMPANY, LLC 218 MIDWAY ROUTE PO BOX 536 MONTICELLO, AR 71655 | | CLEAN-UP MODIFICATIONS | | $ | 0.00 | | | MOVED FROM SCHEDULE 8.1(B) TO SCHEDULE 8.1(C) |
8.1(C) | | 1627 | | RUMFORD PAPER COMPANY | | CONTRACTOR SERVICES AGREEMENT - PURCHASE OF WOOD CHIPPING SERVICES | | MIDWEST-PRICE COMPANY, LLC 218 MIDWAY RTE PO BOX 536 MONTICELLO, AR 71655 | | PRICING ADJUSTMENTS | | $ | 123,519.40 | | | CORRECTED NAME OF DEBTOR COUNTERPARTY FROM NEWPAGE CORPORATION TO RUMFORD PAPER COMPANY |
| | | | | | | | | | | | | | | | |
8.1(C) | | 1087 | | NEWPAGE CORPORATION | | AGREEMENT OF LEASE - LEASE OF REAL PROPERTY IN MIAMISBURG, OHIO (CORPORATE HEADQUARTERS) | | PAPYRUS PROPERTIES LLC 3000 HENKLE DRIVE LEBANON, OH 45036 | | TERMS ADJUSTMENTS | | $ | 17,548.50 | | | CORRECTED NAME OF NON-DEBTOR COUNTERPARTY CORRECTED CURE AMOUNT |
8.1(C) | | 2799 | | RUMFORD PAPER COMPANY | | GROUND LEASE - GROUND LEASE FOR LOCATION OF SHELBURNE CHIPPING PLANT | | RJ CHIPPING ENTERPRISES, INC RFD 3 INDUSTRIAL PARK P.O. BOX 718 SKOWHEGAN, ME 04976 | | CLEAN-UP MODIFICATIONS | | $ | 0.00 | | | MOVED FROM SCHEDULE 8.1(B) TO SCHEDULE 8.1(C) |
8.1(C) | | 1696 | | RUMFORD PAPER COMPANY | | TRUCKING AGREEMENT - TRUCKING SERVICES IN CONNECTION WITH CHIPPING PLANT | | RJ CHIPPING ENTERPRISES, INC RFD 3 INDUSTRIAL PARK P.O. BOX 718 SKOWHEGAN, ME 04976 | | CLEAN-UP MODIFICATIONS | | $ | 0.00 | | | MOVED FROM SCHEDULE 8.1(B) TO SCHEDULE 8.1(C) |
8.1(A) | | 2995 | | NEWPAGE CORPORATION | | MOTOR CONTRACT CARRIER TRANSPORTATION AGREEMENT - PROVIDES FREIGHT SERVICE FOR OUTBOUND FINISHED GOODS | | TOM JOY & SONS TRUCKING LLC 970 FRONTAGE RD. PESHTIGO, WI 54157 | | N/A | | $ | 0.00 | | | MOVED FROM SCHEDULE 8.1(B) TO SCHEDULE 8.1(A) |
AMENDMENTS TO SCHEDULES 8.1(E)
| | | | | | | | | | | | | | |
ID | | DEBTOR | | TITLE AND DESCRIPTION OF CONTRACT | | COUNTERPARTY NAME AND ADDRESS | | RECOMMENDATION | | CURE AMOUNT | | DESCRIPTION OF MODIFICATION, IF APPLICABLE | | REASON FOR AMENDMENT |
| | | | | | | |
10004 | | NEWPAGE WISCONSIN SYSTEM INC. | | TAX INDEMNITY AGREEMENT — PM35 | | DAIMLER CAPITAL SERVICES LLC ATTENTION: AMANDA GILL 36455 CORPORATE DRIVE FARMINGTON HILLS, MI 48331 | | TERMINATE | | N/A | | TO BE TERMINATED AS PART OF PM35 SETTLEMENT | | CORRECTION TO DESCRIPTION OF MODIFICATION |
Schedule 8.5A
Settlement Agreement and Mutual Release
(Because no changes have been made to this schedule since the filing of the Plan
Supplement on December 5, 2012, this schedule will not be re-filed in this Amended Plan Supplement.)
Schedule 8.5B
Union Agreements, Settlement Agreement and Release;
Existing Compensation and Benefits Program
(Because no changes have been made to this schedule since the filing of the Plan
Supplement on December 5, 2012, this schedule will not be re-filed in this Amended Plan Supplement.)
Schedule 9.1
Members of Board of Directors and Initial Officers of NewHoldCo and Each Reorganized Debtor
Reorganized Debtors Directors and Officers
| | | | |
Entity | | Directors/Managers (LLCs) | | Officers |
| | |
NewPage Holdings Inc. | | Robert M. Amen Mark A. Angelson Robert J. Bass Lisa J. Donahue Paul E. Huck George F. Martin John F. McGovern Eric Muller | | George F. Martin |
| | |
NewPage Investment Company LLC | | George F. Martin | | |
| | |
NewPage Corporation Chillicothe Paper Inc. Escanaba Paper Company Escanaba Wood Supply Inc. Luke Paper Company NewPage Consolidated Papers Inc. NewPage Energy Services LLC NewPage Wisconsin System Inc. Rumford GIPOP Inc. Rumford Paper Company Upland Resources, Inc. Wickliffe Paper Company LLC | | The initial directors may be the same directors as NewPage Holdings Inc., the identity of the directors will be determined prior to Effective Date | | The initial officers will be the current officer in each of the Debtors. The identity of the officers will be determined by the new board prior to the Effective Date |
Schedule 9.2A
Form of Reorganized Debtors’ Certificate of Incorporation
(NewPage Holding Inc. – Certificate of Incorporation)
| | |
Delaware | | PAGE 1 |
The First State | | |
I, JEFFREY W. BULLOCK, SECRETARY OF STATE OF THE STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE COURT ORDERED RESTATED CERTIFICATE OF “NEWPAGE HOLDINGS INC.”, FILED IN THIS OFFICE ON THE TWENTIETH DAY OF DECEMBER, A.D. 2012, AT 5:04 O’CLOCK P.M.
A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE COUNTY RECORDER OF DEEDS.

State Of Delaware
Secretary Of State
Division Of Corporations
Delivered 05:17 PM 1212012012
FILED 05:04 PM 1212012012
CERTIFICATE OF
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
NEWPAGE HOLDINGS INC.
NewPage Holdings Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware (as amended, the “DGCL”), hereby certifies as follows:
I. The name of the corporation is NewPage Holdings Inc. (the “Corporation”).
2. The Corporation’s original Certificate of Incorporation was med with the Secretary of State of the State of Delaware on December 5, 2012, and the Corporation’s Amended and Restated Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on December 19, 2012.
3. This Second Amended and Restated Certificate of Incorporation of the Corporation is made and filed pursuant to the order of the United States Bankruptcy Court for the District of Delaware, dated December 14, 2012 (the “Confirmation Order”), confirming the Corporation’s Modified Fourth Amended Joint Chapter I I Plan, in In re NewPage Corporation et al., Case No.: ll-12804, under Chapter I I of Title I I of the United States Code, and in accordance with the provisions of Sections 245 and 303 of the DGCL.
4. Pursuant to Sections 242, 245 and 303 of the DGCL, this Amended and Restated Certificate of Incorporation restates the Certificate of Incorporation to read in its entirety as set forth in full onExhibit A attached hereto.
IN WITNESS WHEREOF, the Corporation has caused this Amended and Restated Certificate of Incorporation to be executed by the following authorized officer of the Corporation this 20 day of December 2012.
| | |
NEWPAGE HOLDINGS INC. |
|
 |
EXHIBIT A
SECOND AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
NEWPAGE HOLDINGS INC.
ARTICLE I NAME
The name of the corporation is NewPage Holdings Inc. (the “Corporation”).
ARTICLE II
REGISTERED OFFICE
The address of the Corporation’s registered office in the State of Delaware is 1209 Orange Street, County of New Castle, City of Wilmington, Delaware 19801. The name of its registered agent at such address is The Corporation Trust Company.
ARTICLE III
CORPORATE PURPOSE
The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (as amended or modified from time to time, the “DGCL”).
ARTICLE IV
AUTHORIZED CAPITAL STOCK
Section 4.01.Authorized Shares. The total number of shares of all classes of capital stock which the Corporation shall have the authority to issue is 16,100,000 shares, consisting of 16,000,000 shares of common stock, par value $0.001 per share (“Common Stock”) and 100,000 shares of preferred stock, par value $0.001 per share (the “Preferred Stock”). All or any portion of the authorized shares of Common Stock and Preferred Stock may be issued by the Corporation from time to time and for such consideration as the Board of Directors of the Corporation (the “Board of Directors”) may determiner. All such shares, if and when issued, and upon receipt of such consideration by the Corporation, shall be fully paid and non-assessable.
Section 4.02.Common Stock. All issued and outstanding shares of Common Stock shall be identical and shall entitle the holders thereof to the same rights and powers. The powers, designations, preferences and other special rights (and the qualifications, limitations or restrictions thereof) of the Common Stock are as follows:
(a)Voting Rights.Each holder of Common Stock shall be entitled, with respect to each outstanding share of Common Stock held by such holder on the books of the Corporation as of the applicable record date, to one vote per share on all matters on which stockholders of the Corporation are entitled to vote;provided,however, that, except as otherwise required by law, holders of Common Stock shall not be entitled to vote on any amendment to this Certificate of Incorporation (including any certificate of designations relating to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together as a class with the holders of one or more other such series, to vote thereon pursuant to this Certificate of Incorporation (including any certificate of designations relating to any series of Preferred Stock).
(b)Dividends and Distributions.The holders of the outstanding shares of Common Stock shall, subject to the rights of the holders of Preferred Stock, be entitled to receive such dividends and other distributions in cash, property or shares of stock of the Corporation as may be declared thereon by the Board of Directors from time to time out of assets or funds of the Corporation legally available therefore.
(c)Liquidation Rights.In the event of any dissolution, liquidation or winding-up of the affairs of the Corporation, whether voluntary or involuntary, after payment or provision for payment of the debts and other liabilities of the Corporation, the remaining assets and funds of the Corporation, if any, shall, subject to the rights of the holders of Preferred Stock, be divided among and paid ratably to the holders of the Common Stock then outstanding in proportion to the number of shares held by them.
Section 4.03.Preferred Stock. The Board of Directors is expressly authorized to provide for the issuance of shares of the Preferred Stock in one or more series, and to fix the number of shares and to determine or alter, for each such series, such voting rights (if any) and such designations, preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof as shall be stated and expressed in the resolution or resolutions adopted by the Board of Directors providing for the issuance of such shares and as may be permitted by the DGCL. The Board of Directors is also expressly authorized to increase or decrease (but not below the number of shares of such series then outstanding) the number of authorized shares of any series of Preferred Stock subsequent to the issuance of shares of such series. In case the number of authorized shares of any such series shall be so decreased, the shares constituting such decrease shall resume the status that they had prior to full adoption of the resolution originally fixing the number of shares of such series. Irrespective of the provisions of Section 242(b)(2) of the DGCL, the number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority in voting power of the stock of the Corporation entitled to vote thereon, without the separate vote of the holders of the Preferred Stock as a class.
Section 4.04.Legend on Certificates. For so long as the Stockholders Agreement by and among the Corporation and the other parties signatory thereto (as may be amended, modified or supplemented from time to time in accordance with the terms thereof, the “Stockholders Agreement”) remains in effect, each outstanding certificate, if any, representing
shares of any Common Stock shall, except as otherwise provided in the Stockholders Agreement, bear the following legend (or one to substantially similar effect), together with any other endorsements that the Board of Directors deems necessary or appropriate:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE (THE “SECURITIES”) WERE ORIGINALLY ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENT OF SECTION 5 OF THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), PROVIDED BY SECTION I 145 OF THE UNITED STATES BANKRUPTCY CODE. THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE ACT OR ANY STATE SECURITIES LAW, AND TO THE EXTENT THE HOLDER OF THE SECURITIES LS AN “UNDERWRITER,” AS DEFINED IN SECTION I 145(B)(1) OF THE BANKRUPTCY CODE, THE SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN EXEMPTION FROM REGISTRATION THEREUNDER.
THE SALE, ASSIGNMENT, PLEDGE, ENCUMBRANCE OR OTHER TRANSFER OF THE SECURITIES IS RESTRICTED BY THE TERMS OF, AND THE HOLDER HEREOF IS SUBJECT TO CERTAIN OTHER OBLIGATIONS PURSUANT TO, THE PROVISIONS OF A STOCKHOLDERS AGREEMENT, DATED AS OF DECEMBER [21], 2012, AS MAY BE AMENDED FROM TIME TO TIME IN ACCORDANCE WITH ITS TERMS, AMONG THE CORPORATION AND HOLDERS OF ITS COMMON STOCK. THE VOTING RIGHTS OF ANY HOLDER HEREOF THAT IS A “COMPETITOR” OF THE COMPANY ARE SUBJECT TO THE LIMITATIONS SET FORTH IN THE COMPANY’S CERTIFICATE OF INCORPORATION. COPIES OF SUCH STOCKHOLDER AGREEMENT AND THE CERTIFICATE OF INCORPORATION ARE ON FILE AT THE PRINCIPAL EXECUTIVE OFFICE OF THE CORPORATION.
Section 4.05.Section 1123. The Corporation shall not issue any non-voting equity securities to the extent prohibited by Section 1123 of Title 1 I of the United States Code (the “Bankruptcy Code”) as in effect on the date of filing of this Certificate of Incorporation with the Secretary of State of the State of Delaware;provided,however, that thisSection 4.05(a) shall have no further force and effect beyond that required under Section 1123 of the Bankruptcy Code, (b) shall have such force and effect, if any, only for so long as such section of the Bankruptcy Code is in effect and applicable to the Corporation, and (c) in all events may be amended or eliminated in accordance with applicable law as from time to time may be in effect.
Section 4.06.Competitor Limitation.
(a) In the event that any Person (as defined inSection 10.06) that is a Competitor (as defined below) is or becomes the record or beneficial owner of shares of Common Stock, the Corporation shall have the alright, in its sole discretion and at any time, by notice to the record owner of such shares at such holder’s address as set forth in the stock register
of the Corporation, to require that for so long as such Person (or any other Person that is a Competitor) is the record or beneficial owner of such shares, all such shares shall be voted (including, as applicable, pursuant to any stockholder action by written consent in lieu of a meeting) in the same manner as a majority of the other outstanding shares of Common Stock, in all matters with respect to which the holders of Common Stock are entitled to vote;provided,however, that (i) this provision shall not apply to any such shares that were issued to such Person (but for the avoidance of doubt shall apply to any other shares with respect to which such Person becomes the record or beneficial owner, and shall also apply to any other record or beneficial owner of such shares) as a distribution under the Corporation’s Modified Fourth Amended Joint Chapter I I Plan, dated December 12, 2012 and (ii) the Corporation by action taken by the Board of Directors shall have the right, in its sole discretion and at any time or from time to time, on a case-by-case basis with respect to any Person, to waive or refrain from exercising its rights under this provision.
(b) As used herein, “competitor” means any Person engaged (whether directly or indirectly) (i) in the business of owning or operating paper mills or producing coated paper, supercalendered paper, or specialty paper or (ii) in any other business in which the Corporation is, at any time in question, engaged and which accounts for twenty percent (20%) or more of the consolidated revenues or EBITDA of the Corporation for the twelve (12) month period ended immediately prior to such time, or any Affiliate (as defined inSection 10.06) of any such Person;provided, that no Person shall be deemed to be a Competitor solely on account of the ownership of twenty-five percent (25%) or less of (A) the outstanding shares of any class of equity securities traded on any national securities exchange and/or (B) the outstanding principal amount of any (x) loans under any credit facility of any such entity and/or (y) debt securities issued by any such entity.
ARTICLE V
CORPORATE GOVERNANCE
Section 5.01.Board of Directors. The business, property and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. The number of directors which shall constitute the whole Board of Directors shall by fixed by, or in a manner provided in, the Bylaws of the Corporation (as may be amended, modified or supplemented from time to time in accordance with the terms thereof, the “Bylaws”). Elections of directors need not be by written ballot unless the Bylaws so provide.
Section 5.02.Bylaws. The Board of Directors shall have the power to adopt, amend or repeal the Bylaws, except to the extent expressly provided otherwise in the Bylaws, without the consent or vote of the stockholders of the Corporation.
ARTICLE VI
AMENDMENTS
The Corporation reserves the right to amend or repeal any provision contained in this Certificate of Incorporation in the manner prescribed by the laws of the State of Delaware and all rights conferred herein upon stockholders of the Corporation are granted subject to this reservation.
ARTICLE VII
LIMITATION ON DIRECTOR LIABILITY
No director of the Corporation shall be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent such exculpation is not permitted under the DGCL. If the DGCL is hereafter amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of the directors of the Corporation shall be eliminated or limited to the fullest extent permitted under the DGCL, as so amended. Any amendment, modification or repeal of this Article shall not adversely affect any right or protection of a director of the Corporation existing at the time of, or increase the liability of any director of the Corporation with respect to any acts or omissions of such director occurring prior to, such amendment, modification or repeal.
ARTICLE VIII
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 8.01.General. To the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, and as may be set forth more fully in the Bylaws, the Corporation shall indemnify and hold harmless, and shall advance expenses to, any person who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director or officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or nonprofit entity, including service with respect to employee benefit plans maintained or sponsored by the Corporation, against all liability and loss suffered and expenses (including attorneys’ fees) reasonably incurred by such person, and such right to indemnification shall continue as to any person who has ceased to be a director or officer of the Corporation and shall inure to the benefit of his or her heirs, executors and personal and legal representatives. For the avoidance of doubt, nothing contained in this Article or otherwise contained in this Certificate of Incorporation or in the Bylaws shall require the Corporation to indemnify or hold harmless any person with respect to any act, omission or event that occurred prior to the date the Corporation was formed.
Section 8.02.Rights not Exclusive. The rights to indemnification and to the advancement of expenses conferred in this Article shall not be exclusive of any other right which any person may have or hereafter acquire under this Certificate of Incorporation, the Bylaws of the Corporation, any statute, agreement, vote of stockholders or disinterested directors or otherwise.
Section 8.03.Amendments to this Article. Any repeal or modification of this Article shall not adversely affect any rights to indemnification and to the advancement of expenses of a director or officer of the Corporation existing at the time of such repeal or modification with respect to any acts or omissions occurring prior to such repeal or modification.
ARTICLE IX
SECTION 203 OF THE DGCL
The Corporation expressly elects not to be governed by Section 203 of the DGCL.
ARTICLE X
CORPORATE OPPORTUNITIES
Section 10.01.Purpose. In recognition and anticipation that (a) certain holders of Common Stock may have the right to designate one or more members of the Board of Directors pursuant to the Stockholders Agreement (collectively, the “Designating Stockholders”), (b) the Designating Stockholders and their respective Affiliates (as defined below) may now engage and may continue to engage in the same or similar activities or related lines of business as those in which the Corporation, directly or indirectly, may engage and/or other business activities that overlap with or compete with those in which the Corporation, directly or indirectly, may engage, and (c) members of the Board of Directors who are not employees of the Corporation (“Non-Employee Directors”) and their respective Affiliates may now engage and may continue to engage in the same or similar activities or related lines of business as those in which the Corporation, directly or indirectly, may engage and/or other business activities that overlap with or compete with those in which the Corporation, directly or indirectly, may engage, the provisions of this Article X are set forth to regulate and define the conduct of certain affairs of the Corporation with respect to certain classes or categories of business opportunities as they may involve the Designating Stockholders, the Non-Employee Directors or their respective Affiliates and the powers, rights, duties and liabilities of the Corporation and its directors, officers and stockholders in connection therewith.
Section 10.02.General. None of (a) the Designating Stockholders or any of their Affiliates or (b) the Non-Employee Directors (including any Non-Employee Director who serves as an officer of the Corporation in both his director and officer capacities) or any of their Affiliates (each Person (as denned below) that falls within such clause (a) and/or (b), an “Identified Person”) shall have any duty to refrain from directly or indirectly (i) engaging in a corporate opportunity in the same or similar business activities or lines of business in which the Corporation or any of its Affiliates now engages or proposes to engage or (ii) otherwise competing with the Corporation, and, to the tallest extent permitted by the DGCL, no Identified Person shall be liable to the Corporation or its stockholders for breach of any fiduciary duty solely by reason of the fact that such Identified Person engages in any such activities. The Corporation hereby renounces any interest or expectancy in, or in being offered an opportunity to participate in, any business opportunity which may be a corporate opportunity for an Identified Person and the Corporation or any of its Affiliates, except as provided inSection 10.03. In the event that any Identified Person acquires knowledge of a potential transaction or other business opportunity which may be a corporate opportunity for such Identified Person and the Corporation or any of its Affiliates, such Identified Person shall have no duty to communicate or
offer such transaction or other business opportunity to the Corporation or any of its Affiliates and, to the fullest extent permitted by the DGCL, shall not be liable to the Corporation or its stockholders for breach of any fiduciary duty as a stockholder, director or officer of the Corporation solely by reason of the fact that such Identified Person pursues or acquires such corporate opportunity or offers or directs such corporate opportunity to another Person.
Section 10.03.Opportunities in which the Company Retains an Interest. The Corporation does not renounce its interest in any corporate opportunity offered to any Non-Employee Director (including any Non-Employee Director who serves as an officer of this Corporation) if such opportunity is expressly offered to such Person solely in his or her capacity as a director or officer of the Corporation and the provisions ofSection 10.02 shall not apply to any such corporate opportunity.
Section 10.04.Opportunities that the Company is Unable to Undertake. In addition to and notwithstanding the foregoing provisions of this Article, a corporate opportunity shall not be deemed to be a potential corporate opportunity for the Corporation if it is a business opportunity that the Corporation is not financially able or contractually permitted or legally able to undertake, or that is, from its nature, not in the line of the Corporation’s business or is of no practical advantage to it or that is one in which the Corporation has no interest or reasonable expectancy.
Section 10.05.Consent; Amendments to this Article. Any Person purchasing or otherwise acquiring any interest in shares of the capital stock of the Corporation shall be deemed to have notice of and to have consented to the provisions of this Article. Neither the alteration, amendment or repeal of this Article (or any provision thereof) nor the adoption of any provision of this Certificate of Incorporation inconsistent with this Article shall eliminate or reduce the effect of this Article in respect of any matter occurring, or any cause of action, suit or claim that, but for this Article, would accrue or arise, prior to such alteration, amendment, repeal or adoption.
Section 10.06.Certain Definitions. For purposes of this Article:
“Affiliate” means (a) in respect of a Designating Stockholder, any Person that, directly or indirectly, is controlled by such Designating Stockholder, controls such Designating Stockholder or is under common control with such Designating Stockholder and shall include any principal, member, director, partner, shareholder, officer, employee or other representative of any of the foregoing (other than the Corporation and any entity that is controlled by the Corporation), (b) in respect of a Non-Employee Director, any Person that, directly or indirectly, is controlled by such Non-Employee Director (other than the Corporation and any entity that is controlled by the Corporation) and (c) in respect of the Corporation, any Person that, directly or indirectly, is controlled by the Corporation.
“Person” means any individual, corporation, trust, partnership, joint venture, association, joint-stock company, unincorporated organization, government or any agency or political subdivision thereof or any other entity.
ARTICLE XI
FORUM
Unless the Corporation expressly consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (a) any derivative action or proceeding brought on behalf of the Corporation, (b) any action asserting a claim for breach of a fiduciary duty owed by any director, officer, employee or agent of the Corporation to the Corporation or the Corporation’s stockholders, (c) any action asserting a claim arising pursuant to any provision of the DGCL, this Certificate of Incorporation or the Bylaws or (d) any action asserting a claim governed by the internal affairs doctrine, in each case subject to said Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein.
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Schedule 9.2B
Form of Reorganized Debtors’ Bylaws
BYLAWS
OF
NEWPAGE HOLDINGS INC.
Adopted , 2012
TABLE OF CONTENTS
| | | | |
SECTION 1 DEFINITIONS | | | 1 | |
| |
1.01 Definitions | | | 1 | |
1.02 Rules of Construction | | | 1 | |
| |
SECTION 2 MEETINGSOF STOCKHOLDERS | | | 1 | |
| |
2.01 Place of Meetings | | | 1 | |
2.02 Annual Meeting | | | 1 | |
2.03 Special Meetings | | | 2 | |
2.04 Record Date | | | 2 | |
2.05 Notice to Stockholders | | | 3 | |
2.06 Quorum and Adjournments | | | 3 | |
2.07 Voting | | | 3 | |
2.08 Proxies | | | 4 | |
2.09 List of Stockholders | | | 4 | |
2.10 Conduct of Meetings | | | 4 | |
2.11 Written Consents | | | 4 | |
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SECTION 3 DIRECTORS | | | 5 | |
| |
3.01 General Powers | | | 5 | |
3.02 Number, Tenure and Qualifications | | | 5 | |
3.03 Election | | | 5 | |
3.04 Removal | | | 6 | |
3.05 Resignations | | | 6 | |
3.06 Vacancies | | | 6 | |
3.07 Place of Meeting | | | 6 | |
3.08 Compensation | | | 6 | |
3.09 Regular Meetings | | | 6 | |
3.10 Special Meetings | | | 6 | |
3.11 Notice of Meetings | | | 6 | |
3.12 Quorum | | | 7 | |
3.13 Conduct of Meetings | | | 7 | |
3.14 Committees | | | 7 | |
3.15 Written Consents | | | 7 | |
3.16 Conference Call Meetings | | | 8 | |
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SECTION 4 OFFICERS | | | 8 | |
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4.01 Generally | | | 8 | |
4.02 Elected Officers | | | 8 | |
4.03 Appointed Officers | | | 8 | |
4.04 Compensation | | | 8 | |
4.05 Term and Removal | | | 8 | |
4.06 Resignations | | | 8 | |
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| | | | |
4.07 Vacancies | | | 9 | |
4.08 Duties | | | 9 | |
| |
SECTION 5 INDEMNIFICATION | | | 10 | |
| |
5.01 Right to Indemnification | | | 10 | |
5.02 Right to Advancement of Expenses | | | 10 | |
5.03 Right of Covered Person to Bring Suit | | | 11 | |
5.04 Non-Exclusivity of Rights | | | 11 | |
5.05 Insurance | | | 11 | |
5.06 Indemnification of Employees and Agents of the Company | | | 11 | |
5.07 Nature of Rights | | | 12 | |
5.08 Primary Indemnification | | | 12 | |
5.09 Limitation on Indemnification and Advancement of Expenses | | | 12 | |
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SECTION 6 CAPITAL STOCK | | | 13 | |
| |
6.01 Certificates | | | 13 | |
6.02 Transfer | | | 13 | |
6.03 Rights of Holders | | | 13 | |
6.04 Lost Certificates | | | 13 | |
| |
SECTION 7 GENERAL PROVISIONS | | | 13 | |
| |
7.01 Fiscal Year | | | 13 | |
7.02 Dividends | | | 14 | |
7.03 Corporate Seal | | | 14 | |
7.04 Form of Records | | | 14 | |
7.05 Registered Office and Registered Agent | | | 14 | |
7.06 Amendments | | | 14 | |
7.07 Voting Shares in Other Corporations | | | 14 | |
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SECTION 1DEFINITIONS.
1.01Definitions. As used in these Bylaws, the following terms have the meanings indicated.
“Board” means the Board of Directors of the Company.
“Bylaws” means these Bylaws of the Company, as amended from time to time.
“Business Day” means a day other than Saturday, Sunday or any day on which banks located in New York, New York are authorized or obligated to close.
“Certificate of Incorporation” means the Certificate of Incorporation of the Company, as may be amended or supplemented from time to time in accordance with the terms thereof.
“Company” means NewPage Holdings Inc., a Delaware corporation.
“Covered Person” is defined inSection 5.01.
“Delaware Law” means the Delaware General Corporation Law or other applicable statutes of the State of Delaware, as amended from time to time.
“Director” means a member of the Board.
“Stockholder” means a holder of capital stock of the Company.
“Stockholders Agreement” means the Stockholders Agreement, dated as of December __, 2012, by and among the Company and certain Stockholders, as may be amended or supplemented from time to time in accordance with its terms.
1.02Rules of Construction. As used in these Bylaws, “including” means “including without limitation.” References to a particular officer means the referenced officer of the Company duly elected or appointed pursuant to these Bylaws. References to any particular “Section” are, except as expressly provided otherwise, to the designated Sections of this Agreement.
SECTION 2MEETINGSOF STOCKHOLDERS.
2.01Place of Meetings. Except as other-wise provided in these Bylaws, the Board may designate any place within or outside the State of Delaware as the place of meeting for any annual or special meeting of Stockholders. In lieu of holding a Stockholders meeting at a designated place, the Board may in its sole discretion determine that the meeting be held solely by means of remote communication, as authorized by Delaware Law.
2.02Annual Meeting. The annual meeting of Stockholders for the election of Directors and the transaction of any other proper business that may be brought before the meeting will be held on the date and time after the close of the Company’s fiscal year that the Board may from time to time determine. Except as otherwise provided in the Stockholders
Agreement, any Stockholder wishing to propose a nominee for Director or other business to be brought before an annual meeting must give timely notice of the nomination or other business in writing to the Secretary, and the other business must otherwise be a proper matter for Stockholder action as determined by the Board. To be timely, a Stockholder notice must be delivered to the Secretary at the principal executive offices of the Company no earlier than 120 days before and no later than 90 before the first anniversary of the preceding year’s annual meeting, but if the date of the annual meeting date is more than 30 days before or more than 70 days after the anniversary date, the Stockholder notice must be delivered no earlier than 120 days before the annual meeting date and no later than 10 days following the day on which public announcement of the annual meeting date is first made by the Company. The public announcement of an adjournment or postponement of an annual meeting of Stockholders will not commence a new time period (or extend any existing time period) for the giving of a Stockholder’s notice as described above.
2.03Special Meetings. Special meetings of the Stockholders for any purpose or purposes may only be called by the Board or by the written request of one or more Stockholders holding, in the aggregate, shares of the Company’s capital stock entitled to cast not less than twenty-five percent (25%) of the votes at such meeting. Any such written request shall specify the time of such meeting and the general nature of the business proposed to be transacted and shall be delivered personally or sent by registered mail or by facsimile transmission to the Secretary, and upon receipt of any such request, the Secretary shall cause notice of the special meeting to be promptly given, in accordance with these Bylaws, to the Stockholders entitled to vote at such meeting.
2.04Record Date.The Board may fix a record date for determining the Stockholders entitled to notice of or to vote at any meeting of Stockholders or any adjournment of a meeting, the Stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights, or the Stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action. The record date may not precede the date upon which the resolution fixing the record date is adopted by the Board. Unless otherwise required by Delaware Law, the record date fixed by the Board (1) for determining Stockholders entitled to vote at a meeting of Stockholders or adjournment of a meeting must be not be more than 60 nor less than 10 days before the date of the meeting, and (2) for determining any other action must be not more than 60 days before that other action. If no record date is fixed by the Board, the record date (i) for determining Stockholders entitled to notice of or to vote at a meeting of Stockholders will be at the close of business on the day next preceding the day on which notice is given or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held, and (ii) for determining Stockholders for any other purpose will be at the close of business on the day on which the Board adopts the related resolution. A determination of Stockholders of record entitled to notice of or to vote at a meeting of Stockholders will apply to any adjournment of that meeting, unless the Board fixes a new record date for the adjourned meeting.
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2.05Notice to Stockholders. Except as otherwise provided in the Certificate of Incorporation or these Bylaws or as otherwise required by Delaware Law:
(a)Notice of Meetings. Whenever Stockholders are required or permitted to take any action at an annual or special meeting, a notice of the meeting must be given that states the place (if any), date and time of the meeting. Notice of a special meeting must also include a description of the purpose or purposes for which the meeting is being called.
(b)Manner of Notice. Notices to a Stockholder must be in writing and delivered personally or mailed to the Stockholder at the address appearing on the books of the Company. The notice of any meeting must be given not less than 10 nor more than 60 days before the date of the meeting to each Stockholder entitled to vote at that meeting. If mailed, the notice will be deemed to be given when deposited in the United States mail, postage prepaid, directed to the Stockholder at the Stockholder’s address as it appears on the records of the Company.
(c)Waiver of Notice. Any waiver of notice given by the person entitled to notice, whether before or after the time stated in the notice, will be deemed equivalent to notice. Attendance of a person at a meeting in person or by proxy will constitute a waiver of notice of that meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting was not lawfully called or convened. Neither the business to be transacted at nor the purpose of any annual or special meeting of Stockholders need be specified in a waiver of notice.
2.06Quorum and Adjournments. Except as otherwise provided by Delaware Law, the Certificate of Incorporation or the Stockholders Agreement, at all meetings of Stockholders the holders of a majority of the shares of the Company’s capital stock entitled to vote, present in person or represented by proxy, will constitute a quorum for the transaction of business. If a quorum is not present or represented at a meeting of Stockholders, the Stockholders entitled to vote at that meeting who are present in person or represented by proxy may, by a majority vote of the voting shares held by those Stockholders, adjourn the meeting from time to time without notice of the adjourned meeting if the time and place for the meeting to reconvene are announced at the meeting at which the adjournment is taken, until a quorum is present or represented. Even if a quorum is present or represented at a meeting of Stockholders, the Stockholders who are entitled to vote at that meeting, present in person or represented by proxy may, by a majority vote of the voting shares held by those Stockholders, adjourn the meeting from time to time without notice of the adjourned meeting if the time and place for the meeting to reconvene are announced at the meeting at which the adjournment is taken (except as otherwise provided in these Bylaws), until a date that is not more than 30 days after the date of the adjournment. At any adjourned meeting at which a quorum is present in person or represented by proxy, any business may be transacted that might have been transacted at the meeting as originally called. If the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, notice of the adjourned meeting must be given, in accordance withSection 2.05, to each Stockholder of record entitled to vote at the meeting.
2.07Voting. Except as otherwise provided by Delaware Law or by the Certificate of Incorporation, at any meeting of Stockholders each Stockholder of record having the right to vote will be entitled to one vote for every share of stock standing in the Stockholder’s name as of the record date. Except as otherwise provided by Delaware Law, the Certificate of Incorporation or the Stockholders Agreement, any corporate action to be taken by a vote of the Stockholders,
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other than the election of Directors (which is governed bySection 3.03), must be authorized by the affirmative vote of a majority of the shares present or represented by proxy at the meeting and entitled to vote on the subject matter. Written ballots are not required for voting on any matter unless ordered by the chairperson of the meeting.
2.08Proxies. Each Stockholder entitled to vote at a meeting of Stockholders may authorize another person or persons to act for that Stockholder by proxy, but no proxy may be voted or acted upon after three years from its date unless the proxy provides for a longer period. Each proxy must be executed in writing by the Stockholder or by the Stockholder’s authorized representative, or otherwise as provided by Delaware Law. A proxy will be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient under Delaware Law or other applicable law to support an irrevocable proxy. A Stockholder may revoke any proxy that is not irrevocable by attending the meeting and voting in person or by delivering to the Secretary (or an agent of the Company appointed to receive and tabulate proxies) a revocation of the proxy or a new proxy bearing a later date.
2.09List of Stockholders. At least 10 days before each meeting of Stockholders, the Secretary will compile a complete list of the Stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing their addresses and the number of shares registered in their names as of the record date. The list of Stockholders will be open to the examination of any Stockholder for any purpose germane to the meeting for a period of at least 10 days prior to the meeting, (i) on a reasonably accessible electronic network, provided that the information required to gain access to the list is provided with the notice of the meeting, or (ii) during ordinary business hours, at the principal place of business of the Company. The list of Stockholders will also be produced and kept at the time and place of the meeting throughout the entire meeting, and may be inspected by any Stockholder who is present.
2.10Conduct of Meetings. At each meeting of Stockholders, the Chairperson, or in his or her absence the Chief Executive Officer (or in the absence of the Chairperson and the Chief Executive Officer, an individual selected by the Board), will act as chairperson of the meeting. The Secretary, or in his or her absence an Assistant Secretary or any other person appointed by the chairperson of the meeting, will act as secretary of the meeting and will keep the minutes of the meeting. The order of business at each meeting of the Stockholders will be as determined by the chairperson of that meeting.
2.11Written Consents.
(a)Generally. Subject to thisSection 2.11 and unless otherwise provided in the Certificate of Incorporation, any action required or permitted to be taken by Stockholders at an annual or special meeting of Stockholders may be taken without a meeting and without a vote, if a consent in writing setting forth the action to be taken is signed by the holders of the outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take that action at a meeting at which all shares entitled to vote were present and voted.
(b)Request for Record Date. The record date for determining Stockholders entitled to express consent to corporate action in writing without a meeting will be as fixed by
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the Board or as otherwise established under thisSection 2.11. Any person seeking to have Stockholders authorize or take corporate action by written consent without a meeting must request that a record date be fixed for that purpose by written notice addressed to the Secretary, delivered to the Company, signed by a Stockholder of record, and describing the action that the Stockholder proposes to take by consent. The Board will have ten days following receipt of the notice to adopt a resolution fixing the record date for that purpose, which record date may be no sooner than the date the resolution is adopted and later than ten days after the date the resolution is adopted. If the Board fails to timely fix a record date, the record date will be the day on which the first written consent is delivered to the Company, unless Delaware Law requires prior action by the Board, in which case the record date will be at the close of business on the day on which the Board takes the required prior action.
(c)Effectiveness of Consent. Each written consent purporting to take or authorize the taking of corporate action must bear the date of signature of each Stockholder who signs the consent, and no consent will be effective unless consents signed by a sufficient number of Stockholders are received by the Company within 60 days after the earliest consent is received by the Company. Each written consent must be delivered to the Company, to the attention of the Secretary, at the Company’s principal place of business. No action by written consent will be effective until the Secretary or his or her designee certifies to the Company that the consents delivered to the Company represent at least the minimum number of votes that would be necessary to take the corporate action in accordance with Delaware Law, the Stockholders Agreement and the Certificate of Incorporation. The Company, the Board or any Stockholder will be entitled to contest the validity of any written consent or related revocation, whether before or after certification by the Secretary or his or her designee.
SECTION 3DIRECTORS.
3.01General Powers. All corporate powers of the Company will be exercised by or under the authority of, and the business and affairs of the Company will be managed under the direction of, the Board, subject to any limitation in the Certificate of Incorporation.
3.02Number, Tenure and Qualifications. Except as otherwise provided by the Certificate of Incorporation or the Stockholders Agreement, the Board will consist of one or more Directors, with the precise number of Directors constituting the entire Board to be fixed from time to time by resolution of the Board. At the time of adoption of these Bylaws, the Board will consist of seven Directors. Except as otherwise provided by the Certificate of Incorporation or the Stockholders Agreement, the number of Directors may be reduced or increased from time to time by action of the whole Board, but no decrease may shorten the term of an incumbent Director. Except as provided in the Stockholders Agreement, each Director will hold office until the next annual meeting of Stockholders held after his or her election and until his or her successor has been elected and has qualified or until his or her earlier resignation, removal from office, or death. Directors need not be Stockholders.
3.03Election. Except as otherwise provided by Delaware Law, the Certificate of Incorporation, the Stockholders Agreement or these Bylaws, the Directors will be elected at the annual meeting of the Stockholders and the persons receiving a plurality of the votes cast will be so elected. Subject toSections 3.04 and3.05, each Director will hold office until his or her successor has been elected and qualified or until his or her earlier resignation, removal from office, or death.
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3.04Removal. Unless otherwise provided by the Certificate of Incorporation, these Bylaws, the Stockholders Agreement or any other contract or agreement to which the Company is a party, a Director may be removed at any time, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of Directors.
3.05Resignations. Any Director may resign at any time by giving written notice of his or her resignation to the Secretary. A resignation will take effect at the time specified in the resignation or, if the effective time is not specified, immediately upon its receipt. Unless otherwise specified in the resignation, the acceptance of a resignation is not necessary to make it effective.
3.06Vacancies. Unless otherwise provided by Delaware Law or the Certificate of Incorporation, any newly created directorship or any vacancy occurring in the Board may be filled by a majority of the remaining members of the Board, although that majority may be less than a quorum. Each Director so elected will hold office until the expiration of the term of office of the Director who he or she has replaced or until his or her successor is elected and qualified or until his or her earlier resignation, removal from office, or death.
3.07Place of Meeting. The Board may hold its meetings at any place or places within or without the State of Delaware as it may from time to time determine.
3.08Compensation. Directors may be allowed such compensation for attendance at regular or special meetings of the Board and of any special or standing committees of the Board as may from time to time be determined by resolution of the Board.
3.09Regular Meetings. Regular meetings of the Board will be held on such dates and at such times and places as the Board determines from time to time. Notice of regular meetings need not be given, except as otherwise required by these Bylaws or by Delaware Law.
3.10Special Meetings. Special meetings of the Board, for any purpose or purposes, may be called by the Chairperson or the Secretary and will be called by the Chairperson or the Secretary upon the written request of a majority of the Directors stating the date, time, place and purpose or purposes of the proposed special meeting.
3.11Notice of Meetings. Notice of each special meeting of the Board must be given before the meeting is scheduled to commence by the Chairperson or by the Secretary, and must state the place, date and time of the meeting. Notice of each meeting will be given to each Director and will be effective when (a) given in a writing delivered by hand or courier, effective when actually received, (b) given orally, either by telephone or in person, effective when given, (c) mailed to the Director’s residence or usual place of business, effective when deposited in the United States mail, first class postage prepaid, or (d) sent by facsimile transmission to the Director’s residence or usual place of business, effective when transmitted with transmission confirmed, or (e) sent by e-mail to an electronic address at which the Director has consented to receive notice, effective when transmitted with transmission confirmed. Notice by first class mail may not be used if notice of less than five Business Days is being given. Notice of any
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meeting need not be given to any Director who submits, either before or after the time stated in the notice, a signed waiver of notice or who attends the meeting other than for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. Notice of an adjourned meeting, including the place, date and time of the reconvened meeting, will be given to all Directors not present at the time of the adjournment and will also be given to the other Directors unless the place, date and time of the reconvened meeting are announced at the meeting when the adjournment is taken.
3.12Quorum. At all meetings of the Board, unless otherwise provided in the Certificate of Incorporation or these Bylaws, the presence of a majority of the Directors will constitute a quorum for the transaction of business. In the absence of a quorum, a majority of the Directors present at any meeting may adjourn the meeting from time to time until a quorum is present. Notice of any adjourned meeting will be given in accordance withSection 3.11.
3.13Conduct of Meetings. At each meeting of the Board, the Chairperson or, in his or her absence, the Chief Executive Officer (or, in the absence of the Chairperson and the Chief Executive Officer, a Director selected by a majority of the Directors present) will act as chairperson of the meeting. The Secretary or, in his or her absence, an Assistant Secretary or any other person appointed by the chairperson of the meeting will act as secretary of the meeting and will keep the minutes of the meeting. The order of business at all meetings of the Board will be as determined by the chairperson of the meeting.
3.14Committees.
(a)Designation and Membership. The Board may designate one or more committees, each consisting of one or more of the Directors. The Board may designate one or more Directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. If no alternate member is available or has been designated by the Board, the members of the committee present at any meeting and not disqualified from voting, whether or not he, she or they constitute a quorum, may, subject to the Stockholders Agreement, unanimously appoint another qualified Director to act at the meeting in place of the absent or disqualified member.
(b)Power and Authority. For each committee, the Board will adopt a charter setting forth the powers and authority of the committee. To the extent permitted by Delaware Law, each committee will have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Company as set forth in the committee charter or other resolutions adopted by the Board, and may authorize the seal of the Company to be affixed to all papers that may require it. Unless the Board otherwise provides, each committee may make, alter and repeal rules for the conduct of its business consistent with the committee charter. In the absence of those rules, a committee will conduct its business in the same manner as the Board conducts its business pursuant to thisSection 3.
3.15Written Consents.Except as expressly otherwise provided in the Certificate of Incorporation, any action required or permitted to be taken at any meeting of the Board or of any committee of the Board may be taken without a meeting if all members of the Board or of the committee, as the case may be, consent to the action in writing or by electronic transmission (which may take the form of one or more counterparts), and the writings or electronic transmissions are filed with the minutes of the proceedings of the Board or committee.
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3.16Conference Call Meetings. Members of the Board or any committee of the Board may participate in a meeting of the Board or committee by means of conference telephone or other communications equipment whereby all persons participating in the meeting can simultaneously hear each other during the meeting, and participation in a meeting pursuant to thisSection 3.16 will constitute presence in person at that meeting.
SECTION 4OFFICERS.
4.01Generally. The officers of the Company will be as elected by the Board pursuant toSection 4.02 and as appointed by the Chief Executive Officer pursuant toSection 4.03. Any person may hold two or more offices simultaneously, and no officer need be a Stockholder. Unless otherwise indicated in these Bylaws, reference to an “officer” includes both elected and appointed officers.
4.02Elected Officers. The Board will, at a minimum, elect a Chief Executive Officer, a Chief Financial Officer and a Secretary (or officers with different titles who perform the function of a Chief Executive Officer, a Chief Financial Officer and a Secretary). The Board may from time to time elect such other officers as it deems necessary or appropriate for the management and operation of the Company, including a President, a Treasurer, one or more Vice Presidents, one or more Assistant Secretaries and one or more Assistant Treasurers. Elected officers will exercise the powers and perform the duties that are specified in these Bylaws or in a resolution of the Board or as directed by the Chief Executive Officer or his or her designee.
4.03Appointed Officers. Unless otherwise restricted by a resolution adopted by the Board, the Chief Executive Officer may appoint in a writing delivered to the Secretary or one or more officers or assistant officers, each of whom will exercise the powers and perform the duties specified by the Chief Executive Officer. At each regular meeting of the Board, the Secretary will report to the Board the names and titles of any officers appointed by the Chief Executive Officer since the previous regular meeting of the Board.
4.04Compensation. The salaries of elected officers of the Company will be fixed by the Board, except that the Board may delegate to any elected officer the power to fix the compensation of one or more other elected officers. The salaries of appointed officers of the Company will, unless otherwise restricted by a resolution adopted by the Board, be fixed by the Chief Executive Officer or his or her designee.
4.05Term and Removal. Each officer will hold his or her office until his or her successor has been elected or appointed or until his or her earlier death, resignation or removal. Any elected officer may be removed by the Board at any time, with or without cause. Any appointed officer may be removed by the Chief Executive Officer or by the Board at any time, with or without cause.
4.06Resignations. Any officer may resign at any time by giving written notice of his or her resignation to the Secretary. A resignation will take effect at the time specified in the notice or, if the effective time is not specified in the notice, immediately upon its receipt. Unless otherwise specified in the notice, the acceptance of a resignation is not necessary to make it effective.
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4.07Vacancies. A vacancy in any elected office because of resignation, removal or death may be filled by the Board or, if so provided by resolution of the Board, by an officer of the Company to whom the Board has delegated the authority to appoint a successor. A vacancy in any appointed office because of resignation, removal or death may be filled by the Chief Executive Officer.
4.08Duties.
(a)Chief Executive Officer. The Chief Executive Officer will be the principal executive officer of the Company. Subject to the control of the Board, the Chief Executive Officer will in general manage, supervise and control all of the business and affairs of the Company and will perform all duties incident to the office of the Chief Executive Officer of the Company and any other duties that may be prescribed by the Board from time to time. The Chief Executive Officer will have authority to conduct all ordinary business on behalf of the Company and may execute and deliver on behalf of the Company any contract, conveyance or similar document, excluding agreements that expressly require approval of the Board or the Stockholders pursuant to these Bylaws, the Stockholders Agreement or Delaware Law and excluding any authority reserved to the Board by resolution of the Board.
(b)Chief Financial Officer. The Chief Financial Officer will be the chief financial officer of the Company and, unless a separate person is so elected or appointed, the chief accounting officer of the Company. The Chief Financial Officer will assure that the books of account and other accounting records of the Company are maintained in proper form and in general perform all the duties incident to the office of the chief financial officer of a corporation, as well as any other duties that may be assigned to the Chief Financial Officer by the Board or the Chief Executive Officer.
(c)Secretary. The Secretary will have the duties of the officer denominated as the “Secretary” under the Delaware Law. The Secretary will (1) attend and keep the minutes of the meetings of Stockholders, of the Board, and of committees of the Board in one or more books provided for that purpose, (2) assure that all notices are duly given in accordance with these Bylaws or as otherwise required by Delaware Law or the Certificate of Incorporation, (3) be custodian of the corporate records and of the seal of the Company and see that the seal of the Company is affixed only to documents that have been authorized for execution on behalf of the Company, (4) maintain, or cause an agent designated by the Board to maintain, a record of the Stockholders, (5) have general charge of the stock transfer books of the Company or responsibility for supervision, on behalf of the Company, of any agent to which stock transfer responsibility has been delegated by the Board, (6) have responsibility for the custody, maintenance and preservation of those corporate records that the Company is required by the Delaware Law or otherwise to create, maintain or preserve, and (7) any other duties that may from time to time be assigned by the Board or the Chief Executive Officer.
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(d)Other Principal Officers. The Board may elect and the Chief Executive Officer may appoint one or more other principal officers of the Company whose duties will be as prescribed by the Board or the Chief Executive Officer, as applicable, from time to time.
(e)Assistant Officers. The Board may elect and the Chief Executive Officer may appoint one or more officers to serve as assistants to principal officers of the Company whose duties will be as delegated by the Board or the Chief Executive Officer, as applicable, or by the principal officers they assist, including the authority to perform such functions of those principal officers in the place of and with full authority of those principal officers as may be designated by the Board or the Chief Executive Officer, as applicable, or by those principal officers.
SECTION 5INDEMNIFICATION.
5.01Right to Indemnification. Each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (“Proceeding”), by reason of the fact that he or she is or was a Director or an officer of the Company or, while a Director or an officer of the Company is or was serving at the request of the Company as a director, officer, employee or agent of any other corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to any employee benefit plan (each, a “Covered Person”), whether the basis of such Proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless by the Company to the fullest extent authorized by Delaware Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Company to provide broader indemnification rights than such law permitted the Company to provide prior to such amendment), against all expense, liability and loss (including attorneys’ fees, judgments, fines, excise taxes or penalties under the Employee Retirement Income Security Act of 1974, as amended, and amounts paid or to be paid in settlement) reasonably incurred or suffered by such Covered Person in connection therewith;provided,however, that except as provided inSection 5.03 with respect to Proceedings seeking to enforce rights to indemnification, the Company shall indemnify a Covered Person seeking indemnification in connection with a Proceeding (or part thereof) initiated by such Covered Person only if such Proceeding (or part thereof) was authorized by the Board.
5.02Right to Advancement of Expenses. The right to indemnification conferred in Section 5.01 shall include the right to be paid by the Company the expenses (including attorneys’ fees) incurred in defending any such Proceeding in advance of its final disposition (“Advancement of Expenses”);provided,however, that, if Delaware Law so requires, an Advancement of Expenses incurred by a Covered Person in his or her capacity as a Director or officer of the Company (and not in any other capacity in which service was or is rendered by such Covered Person, including service to an employee benefit plan) shall be made only upon delivery to the Company of an undertaking, by or on behalf of such Covered Person, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (“Final Adjudication”) that such Covered Person is not entitled to be indemnified for such expenses under thisSection 5.02 or otherwise (“Undertaking”). No Director or officer will be required to post any bond or provide any other security with respect to any such Undertaking.
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5.03Right of Covered Person to Bring Suit. Any claim underSection 5.01 orSection 5.02 must be made in writing. If any written claim for Advancement of Expenses is not paid in full by the Company within twenty (20) days after such claim has been received by the Company, or if any other written claim underSection 5.01 orSection 5.02 is not paid in full by the Company within thirty (30) days after such claim has been received by the Company, the Covered Person may at any time thereafter bring suit against the Company to recover the unpaid amount of such claim. To the fullest extent permitted by Delaware Law, if successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Covered Person shall be entitled to be paid also the expense of prosecuting or defending such suit. In (i) any suit brought by a Covered Person to enforce a right to indemnification hereunder (but not in a suit brought by the Covered Person to enforce a right to an Advancement of Expenses) it shall be a defense that, and (ii) in any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that the Covered Person has not met any applicable standard for indemnification under Delaware Law. Neither the failure of the Company (including its Directors who are not parties to such action, a committee of such Directors, independent legal counsel or Stockholders) to have made a determination prior to the commencement of such action that indemnification of the Covered Person is proper in the circumstances because the Covered Person has met the applicable standard of conduct under Delaware Law, nor an actual determination by the Company (including its Directors who are not parties to such action, a committee of such Directors, independent legal counsel or Stockholders) that the Covered Person has not met such applicable standard of conduct, shall create a presumption that the Covered Person has not met the applicable standard of conduct or, in the case of such a suit brought by the Covered Person, be a defense to such suit. In any suit brought by the Covered Person to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall have the burden of proving that the Covered Person is not entitled to be indemnified, or to such Advancement of Expenses, under thisSection 5 or otherwise.
5.04Non-Exclusivity of Rights. The right to indemnification and the Advancement of Expenses conferred in thisSection 5 shall not be exclusive of any other right which any person may have or subsequently acquire under any statute, provision of the Certificate of Incorporation, provision of these Bylaws, agreement, vote of Stockholders or Directors or otherwise.
5.05Insurance. The Company may maintain insurance, at its expense, to protect itself and any Director, officer, employee or agent of the Company or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such person against such expense, liability or loss under Delaware Law.
5.06Indemnification of Employees and Agents of the Company. The Company may, to the extent authorized from time to time by the Board in its sole discretion, grant rights to indemnification and rights to the Advancement of Expenses to any employee or agent of the Company to the fullest extent of the provisions of thisSection 5 with respect to the indemnification and Advancement of Expenses of Directors and officers of the Company.
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5.07Nature of Rights. The rights to indemnification and to the Advancement of Expenses conferred inSection 5.01 andSection 5.02 are contract rights and such rights shall continue as to a Covered Person who has ceased to be a Director or officer of the Company and shall inure to the benefit of the Covered Person’s heirs, executors and administrators. Any amendment, alteration or repeal of this Section 5 that adversely affects any right of a Covered Person or its successors shall be prospective only and shall not limit, eliminate, or impair any such right with respect to any Proceeding involving any occurrence or alleged occurrence of any action or omission to act that took place prior to such amendment or repeal.
5.08Primary Indemnification. The Company acknowledges that (a) certain persons employed by, otherwise affiliated with, or appointed by, Stockholders or their affiliates or funds managed or advised by such Stockholders or their affiliates (a “Designating Party”) may serve on the Board, or, at the request of the Company, on the board of directors or other governing body of another entity, and (b) such directors may be entitled to, or may be provided, indemnification by such Designating Party for certain expenses and liabilities for which such directors may also be entitled to seek indemnification from the Company pursuant to these Bylaws, pursuant to Section 145 of the Delaware General Corporation Law, as amended, or pursuant to indemnification agreements or other agreements between the Company and such directors (the “Company Indemnified Expenses”). The Company acknowledges and agrees that, as between the Company and its subsidiaries, on the one hand, and such Designating Party (other than the Company and its subsidiaries), on the other hand, the Company shall be primarily liable to such directors with respect to any Company Indemnified Expenses and any liability of such Designating Party to such directors shall be secondary liability. In recognition of the primary liability of the Company, the Company agrees that, in the event that such Designating Party pays any Company Indemnified Expenses to or on behalf of any such director, reimburses any such director for any Company Indemnified Expenses paid by such director or advances amounts to any such director (including by way of any loan) for the payment of Company Indemnified Expenses, then (i) the Company shall pay to such Designating Party amounts so paid, reimbursed or advanced, to the extent that any such director would have been entitled to indemnification of such Company Indemnified Expenses and (ii) such Designating Party shall be subrogated to all of the rights of such director with respect to any claim that such director could have brought against the Company or any subsidiary with respect to any Company Indemnified Expenses that have been paid, reimbursed or advanced to or on behalf of such director. All such payments to a Designating Party shall be made within five (5) Business Days of the receipt by the Company of written notice from such Designating Party of such payment, reimbursement or advance, accompanied by documentation showing, in reasonable detail, the Company Indemnified Expenses so paid, reimbursed or advanced by such Designating Party. The Company shall also reimburse such Designating Party for all expenses, including legal expenses, incurred in enforcing thisSection 5.08.
5.09Limitation on Indemnification and Advancement of Expenses. For the avoidance of doubt, notwithstanding any provision contained in these Bylaws, including thisSection 5, the Company shall not have any liability or obligation to indemnify or hold harmless, or provide
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Advancement of Expenses to, any person who was or is made a party or is threatened to be made a party to or is otherwise involved in any Proceeding, by reason of the fact that he or she is or was a director or an officer of any entity that is, as of the date these Bylaws were adopted, a predecessor-in-interest of the Company or, while a director or an officer of any such entity is or was serving at the request of any such entity as a director, officer, employee or agent of any other corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to any employee benefit plan.
SECTION 6CAPITAL STOCK.
6.01Certificates. The shares of capital stock of the Company may be in certificated or uncertificated form at the discretion of the Board. Any holder of shares of capital stock of the Company will be entitled to have a certificate certifying the number of shares owned by such holder and signed by or in the name of the Company by the Chairperson, the Vice Chairperson, the President or a Vice President, if any, and by the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer. The signatures on the certificate may be a facsimile. If an officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate is no longer serving in that capacity when the certificate is issued, it may be issued by the Company with the same effect as if that person were still serving in that capacity at the time of issue.
6.02Transfer. Transfers of stock may be made on the books of the Company only by the person named in the certificate or, in the case of shares not represented by certificates, by the person named in the Company’s stock transfer records as the owner of those shares of stock or, in either case, by an attorney lawfully constituted in writing. In addition, with respect to shares represented by certificates, transfers may be made only upon surrender of the share certificate, or in the case of a certificate alleged to have been lost, stolen or destroyed, upon compliance with the provisions ofSection 6.04.
6.03Rights of Holders. The Company may treat the holder of record of any share of the Company as the person entitled to vote that share (to the extent the share is entitled to vote), to receive any distribution with respect to that share, and for all other purposes. Accordingly, the Company is not bound to recognize any equitable or other claim to or interest in any share on the part of any person other than the holder of record, whether or not it has notice of the interest, except as otherwise provided by Delaware Law.
6.04Lost Certificates. Any person claiming that a certificate of stock has been lost, stolen or destroyed must make an affidavit or affirmation of that fact in such manner as the Board may require and must, if the Board so requires, give the Company a bond of indemnity in the form and amount and with one or more sureties satisfactory to the Board, whereupon an appropriate new certificate may be issued in lieu of the one alleged to have been lost, stolen or destroyed.
SECTION 7GENERAL PROVISIONS.
7.01Fiscal Year. The fiscal year of the Company will be a calendar year unless and until a different fiscal year is established by resolution adopted by the Board.
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7.02Dividends. To the extent permitted by Delaware Law, the Board will have full power and discretion, subject to the Certificate of Incorporation and the Stockholders Agreement, to determine what, if any, dividends or distributions will be declared and paid or made.
7.03Corporate Seal. The corporate seal will be in the form specified in the minutes of the organizational meeting of the Company or as the Board may subsequently from time to time determine.
7.04Form of Records. Any records maintained by the Company in the regular course of its business, including its stock ledger, books of account and minute books, may be kept on or by means of, or be in the form of, any information storage device or method, provided that the records so kept can be converted into clearly legible paper form within a reasonable time. Upon the request of any person entitled to inspect records, the Company will so convert those records.
7.05Registered Office and Registered Agent. The address of the registered office of the Company is 1209 Orange Street, County of New Castle, City of Wilmington, Delaware 19801 and the name of the registered agent is The Corporation Trust Company. The Company may have other offices at such places within or without the State of Delaware as the Board may from time to time designate or the business of the Company may require or make desirable.
7.06Amendments. Subject to the Stockholders Agreement, these Bylaws may be adopted, amended or repealed by the Board or by the Stockholders.
7.07Voting Shares in Other Corporations. Unless otherwise directed by the Board, shares in other corporations that are held by the Company will be represented and voted only by an elected officer or by a proxy or proxies appointed by an elected officer.
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BYLAWS
OF
NEWPAGE CORPORATION
Adopted , 2012
TABLE OF CONTENTS
| | | | | | |
SECTION 1 | | DEFINITIONS | | | 1 | |
| | |
1.01 | | Definitions | | | 1 | |
1.02 | | Rules of Construction | | | 1 | |
| | |
SECTION 2 | | MEETINGSOF STOCKHOLDERS | | | 1 | |
| | |
2.01 | | Place of Meetings | | | 1 | |
2.02 | | Annual Meeting | | | 1 | |
2.03 | | Special Meetings | | | 2 | |
2.04 | | Record Date | | | 2 | |
2.05 | | Quorum and Adjournments | | | 2 | |
2.06 | | Voting | | | 2 | |
2.07 | | Conduct of Meetings | | | 2 | |
2.08 | | Written Consents | | | 3 | |
| | |
SECTION 3 | | DIRECTORS | | | 3 | |
| | |
3.01 | | General Powers | | | 3 | |
3.02 | | Number, Tenure and Qualifications | | | 3 | |
3.03 | | Election | | | 3 | |
3.04 | | Removal | | | 3 | |
3.05 | | Resignations | | | 3 | |
3.06 | | Vacancies | | | 3 | |
3.07 | | Place of Meeting | | | 4 | |
3.08 | | Compensation | | | 4 | |
3.09 | | Regular Meetings | | | 4 | |
3.10 | | Special Meetings | | | 4 | |
3.11 | | Notice of Meetings | | | 4 | |
3.12 | | Quorum | | | 4 | |
3.13 | | Conduct of Meetings | | | 5 | |
3.14 | | Committees | | | 5 | |
3.15 | | Written Consents | | | 5 | |
3.16 | | Conference Call Meetings | | | 5 | |
| | |
SECTION 4 | | OFFICERS | | | 5 | |
| | |
4.01 | | Generally | | | 5 | |
4.02 | | Elected Officers | | | 6 | |
4.03 | | Appointed Officers | | | 6 | |
4.04 | | Compensation | | | 6 | |
4.05 | | Term and Removal | | | 6 | |
4.06 | | Resignations | | | 6 | |
4.07 | | Vacancies | | | 6 | |
4.08 | | Duties | | | 6 | |
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| | | | | | |
SECTION 5 | | INDEMNIFICATION | | | 7 | |
| | |
5.01 | | Right to Indemnification | | | 7 | |
5.02 | | Right to Advancement of Expenses | | | 8 | |
5.03 | | Right of Covered Person to Bring Suit | | | 8 | |
5.04 | | Non-Exclusivity of Rights | | | 9 | |
5.05 | | Insurance | | | 9 | |
5.06 | | Indemnification of Employees and Agents of the Company | | | 9 | |
5.07 | | Nature of Rights | | | 9 | |
5.08 | | Primary Indemnification | | | 9 | |
5.09 | | Limitation on Indemnification and Advancement of Expenses | | | 10 | |
| | |
SECTION 6 | | CAPITAL STOCK | | | 10 | |
| | |
6.01 | | Certificates | | | 10 | |
6.02 | | Transfer | | | 11 | |
6.03 | | Rights of Holders | | | 11 | |
6.04 | | Lost Certificates | | | 11 | |
| | |
SECTION 7 | | GENERAL PROVISIONS | | | 11 | |
| | |
7.01 | | Fiscal Year | | | 11 | |
7.02 | | Dividends | | | 11 | |
7.03 | | Corporate Seal | | | 11 | |
7.04 | | Form of Records | | | 11 | |
7.05 | | Registered Office and Registered Agent | | | 11 | |
7.06 | | Amendments | | | 12 | |
7.07 | | Voting Shares in Other Corporations | | | 12 | |
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SECTION 1DEFINITIONS.
1.01Definitions. As used in these Bylaws, the following terms have the meanings indicated.
“Board” means the Board of Directors of the Company.
“Bylaws” means these Bylaws of the Company, as amended from time to time.
“Business Day” means a day other than Saturday, Sunday or any day on which banks located in New York, New York are authorized or obligated to close.
“Certificate of Incorporation” means the Amended and Restated Certificate of Incorporation of the Company, as may be amended or supplemented from time to time in accordance with the terms thereof.
“Company” means NewPage Corporation, a Delaware corporation.
“Covered Person” is defined inSection 5.01.
“Delaware Law” means the Delaware General Corporation Law or other applicable statutes of the State of Delaware, as amended from time to time.
“Director” means a member of the Board.
“Holdings” means NewPage Holdings Inc., a Delaware corporation.
“Holdings Stockholder” means a holder of capital stock of Holdings.
“Stockholder” means a holder of capital stock of the Company.
1.02Rules of Construction. As used in these Bylaws, “including” means “including without limitation.” References to a particular officer means the referenced officer of the Company duly elected or appointed pursuant to these Bylaws. References to any particular “Section” are, except as expressly provided otherwise, to the designated Sections of this Agreement.
SECTION 2MEETINGS OF STOCKHOLDERS.
2.01Place of Meetings. Except as otherwise provided in these Bylaws, the Board may designate any place within or outside the State of Delaware as the place of meeting for any annual or special meeting of Stockholders. In lieu of holding a Stockholders meeting at a designated place, the Board may in its sole discretion determine that the meeting be held solely by means of remote communication, as authorized by Delaware Law.
2.02Annual Meeting. The annual meeting of Stockholders for the election of Directors and the transaction of any other proper business that may be brought before the meeting will be held on the date and time after the close of the Company’s fiscal year that the Board may from time to time determine.
2.03Special Meetings. Special meetings of the Stockholders for any purpose or purposes may only be called by the Board or by one or more Stockholders holding, in the aggregate, shares of the Company’s capital stock entitled to cast a majority of the votes at such meeting.
2.04Record Date. The Board may fix a record date for determining the Stockholders entitled to notice of or to vote at any meeting of Stockholders or any adjournment of a meeting, the Stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights, or the Stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action. The record date may not precede the date upon which the resolution fixing the record date is adopted by the Board. Unless otherwise required by Delaware Law, the record date fixed by the Board (1) for determining Stockholders entitled to vote at a meeting of Stockholders or adjournment of a meeting must be not be more than 60 nor less than 10 days before the date of the meeting, and (2) for determining any other action must be not more than 60 days before that other action. If no record date is fixed by the Board, the record date (i) for determining Stockholders entitled to notice of or to vote at a meeting of Stockholders will be at the close of business on the day next preceding the day on which notice is given or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held, and (ii) for determining Stockholders for any other purpose will be at the close of business on the day on which the Board adopts the related resolution. A determination of Stockholders of record entitled to notice of or to vote at a meeting of Stockholders will apply to any adjournment of that meeting, unless the Board fixes a new record date for the adjourned meeting.
2.05Quorum and Adjournments. Except as otherwise provided by Delaware Law or the Certificate of Incorporation, at all meetings of Stockholders the holders of a majority of the shares of the Company’s capital stock entitled to vote, present in person or represented by proxy, will constitute a quorum for the transaction of business. If a quorum is not present or represented at a meeting of Stockholders, the Stockholders entitled to vote at that meeting who are present in person or represented by proxy may, by a majority vote of the voting shares held by those Stockholders, adjourn the meeting from time to time without notice of the adjourned meeting if the time and place for the meeting to reconvene are announced at the meeting at which the adjournment is taken, until a quorum is present or represented.
2.06Voting. Except as otherwise provided by Delaware Law or by the Certificate of Incorporation, at any meeting of Stockholders each Stockholder of record having the right to vote will be entitled to one vote for every share of stock standing in the Stockholder’s name as of the record date. Except as otherwise provided by Delaware Law or the Certificate of Incorporation, any corporate action to be taken by a vote of the Stockholders, other than the election of Directors (which is governed bySection 3.03), must be authorized by the affirmative vote of a majority of the shares present or represented by proxy at the meeting and entitled to vote on the subject matter. Written ballots are not required for voting on any matter unless ordered by the chairperson of the meeting.
2.07Conduct of Meetings. At each meeting of Stockholders, the Chairperson, or in his or her absence the Chief Executive Officer (or, in the absence of the Chairperson and the Chief Executive Officer, an individual selected by the Board), will act as chairperson of the meeting.
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The Secretary, or in his or her absence an Assistant Secretary or any other person appointed by the chairperson of the meeting, will act as secretary of the meeting and will keep the minutes of the meeting. The order of business at each meeting of the Stockholders will be as determined by the chairperson of that meeting.
2.08Written Consents. Unless otherwise provided in the Certificate of Incorporation, any action required or permitted to be taken by Stockholders at an annual or special meeting of Stockholders may be taken without a meeting and without a vote, if a consent in writing setting forth the action to be taken is signed by the holders of the outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take that action at a meeting at which all shares entitled to vote were present and voted.
SECTION 3DIRECTORS.
3.01General Powers. All corporate powers of the Company will be exercised by or under the authority of, and the business and affairs of the Company will be managed under the direction of, the Board, subject to any limitation in the Certificate of Incorporation.
3.02Number, Tenure and Qualifications. Except as otherwise provided by the Certificate of Incorporation, the Board will consist of one or more Directors, with the precise number of Directors constituting the entire Board to be fixed from time to time by resolution of the Board. At the time of adoption of these Bylaws, the Board will consist of seven Directors. Except as otherwise provided by the Certificate of Incorporation, the number of Directors may be reduced or increased from time to time by action of the whole Board, but no decrease may shorten the term of an incumbent Director. Each Director will hold office until the next annual meeting of Stockholders held after his or her election and until his or her successor has been elected and has qualified or until his or her earlier resignation, removal from office, or death. Directors need not be Stockholders.
3.03Election.Except as otherwise provided by Delaware Law, the Certificate of Incorporation, or these Bylaws, the Directors will be elected at the annual meeting of the Stockholders and the persons receiving a plurality of the votes cast will be so elected. Subject toSections 3.04 and3.05, each Director will hold office until his or her successor has been elected and qualified or until his or her earlier resignation, removal from office, or death.
3.04Removal. Unless otherwise provided by the Certificate of Incorporation, these Bylaws or any other contract or agreement to which the Company is a party, a Director may be removed at any time, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of Directors.
3.05Resignations. Any Director may resign at any time by giving written notice of his or her resignation to the Secretary. A resignation will take effect at the time specified in the resignation or, if the effective time is not specified, immediately upon its receipt. Unless otherwise specified in the resignation, the acceptance of a resignation is not necessary to make it effective.
3.06Vacancies. Unless otherwise provided by Delaware Law or the Certificate of Incorporation, any newly created directorship or any vacancy occurring in the Board may be
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filled by a majority of the remaining members of the Board, although that majority may be less than a quorum. Each Director so elected will hold office until the expiration of the term of office of the Director who he or she has replaced or until his or her successor is elected and qualified or until his or her earlier resignation, removal from office, or death.
3.07Place of Meeting. The Board may hold its meetings at any place or places within or without the State of Delaware as it may from time to time determine.
3.08Compensation. Directors may be allowed such compensation, including for attendance at regular or special meetings of the Board and of any special or standing committees of the Board as may from time to time be determined by resolution of the Board.
3.09Regular Meetings. Regular meetings of the Board will be held on such dates and at such times and places as the Board determines from time to time.
3.10Special Meetings. Special meetings of the Board, for any purpose or purposes, may be called by the Chairperson or the Secretary and will be called by the Chairperson or the Secretary upon the written request of a majority of the Directors stating the date, time, place and purpose or purposes of the proposed special meeting.
3.11Notice of Meetings. Notice of each regular and special meeting of the Board must be given at least twenty-four (24) hours before the meeting is scheduled to commence by the Chairperson or by the Secretary, and must state the place, date and time of the meeting. Notice of each meeting will be given to each Director and will be effective when (a) given in a writing delivered by hand or courier, effective when actually received, (b) given orally, either by telephone or in person, effective when given, (c) mailed to the Director’s residence or usual place of business, effective when deposited in the United States mail, first class postage prepaid, or (d) sent by facsimile transmission to the Director’s residence or usual place of business, effective when transmitted with transmission confirmed, or (e) sent by e-mail to an electronic address at which the Director has consented to receive notice, effective when transmitted with transmission confirmed. Notice by first class mail may not be used if notice of less than five Business Days is being given. Notice of any meeting need not be given to any Director who submits, either before or after the time stated in the notice, a signed waiver of notice or who attends the meeting other than for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. Notice of an adjourned meeting, including the place, date and time of the reconvened meeting, will be given to all Directors not present at the time of the adjournment and will also be given to the other Directors unless the place, date and time of the reconvened meeting are announced at the meeting when the adjournment is taken.
3.12Quorum. At all meetings of the Board, unless otherwise provided in the Certificate of Incorporation or these Bylaws, the presence of a majority of the Directors will constitute a quorum for the transaction of business. In the absence of a quorum, a majority of the Directors present at any meeting may adjourn the meeting from time to time until a quorum is present. Notice of any adjourned meeting will be given in accordance withSection 3.11.
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3.13Conduct of Meetings. At each meeting of the Board, the Chairperson or, in his or her absence, the Chief Executive Officer (or, in the absence of the Chairperson and the Chief Executive Officer, a Director selected by a majority of the Directors present) will act as chairperson of the meeting. The Secretary or, in his or her absence, an Assistant Secretary or any other person appointed by the chairperson of the meeting will act as secretary of the meeting and will keep the minutes of the meeting. The order of business at all meetings of the Board will be as determined by the chairperson of the meeting.
3.14Committees.
(a)Designation and Membership. The Board may designate one or more committees, each consisting of one or more of the Directors. The Board may designate one or more Directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. If no alternate member is available or has been designated by the Board, the members of the committee present at any meeting and not disqualified from voting, whether or not he, she or they constitute a quorum, may unanimously appoint another qualified Director to act at the meeting in place of the absent or disqualified member.
(b)Power and Authority. For each committee, the Board will adopt a charter setting forth the powers and authority of the committee. To the extent permitted by Delaware Law, each committee will have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Company as set forth in the committee charter or other resolutions adopted by the Board, and may authorize the seal of the Company to be affixed to all papers that may require it. Unless the Board otherwise provides, each committee may make, alter and repeal rules for the conduct of its business consistent with the committee charter. In the absence of those rules, a committee will conduct its business in the same manner as the Board conducts its business pursuant to thisSection 3.
3.15Written Consents. Except as expressly otherwise provided in the Certificate of Incorporation, any action required or permitted to be taken at any meeting of the Board or of any committee of the Board may be taken without a meeting if all members of the Board or of the committee, as the case may be, consent to the action in writing or by electronic transmission (which may take the form of one or more counterparts), and the writings or electronic transmissions are filed with the minutes of the proceedings of the Board or committee.
3.16Conference Call Meetings. Members of the Board or any committee of the Board may participate in a meeting of the Board or committee by means of conference telephone or other communications equipment whereby all persons participating in the meeting can simultaneously hear each other during the meeting, and participation in a meeting pursuant to thisSection 3.16 will constitute presence in person at that meeting.
SECTION 4OFFICERS.
4.01Generally. The officers of the Company will be as elected by the Board pursuant toSection 4.02 and as appointed by the Chief Executive Officer pursuant toSection 4.03. Any person may hold two or more offices simultaneously, and no officer need be a Stockholder. Unless otherwise indicated in these Bylaws, reference to an “officer” includes both elected and appointed officers.
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4.02Elected Officers. The Board will, at a minimum, elect a Chief Executive Officer, a Chief Financial Officer and a Secretary (or officers with different titles who perform the function of a Chief Executive Officer, a Chief Financial Officer and a Secretary). The Board may from time to time elect such other officers as it deems necessary or appropriate for the management and operation of the Company, including a President, a Treasurer, one or more Vice Presidents, one or more Assistant Secretaries and one or more Assistant Treasurers. Elected officers will exercise the powers and perform the duties that are specified in these Bylaws or in a resolution of the Board or as directed by the Chief Executive Officer or his or her designee.
4.03Appointed Officers. Unless otherwise restricted by a resolution adopted by the Board, the Chief Executive Officer may appoint in a writing delivered to the Secretary or one or more officers or assistant officers, each of whom will exercise the powers and perform the duties specified by the Chief Executive Officer. At each regular meeting of the Board, the Secretary will report to the Board the names and titles of any officers appointed by the Chief Executive Officer since the previous regular meeting of the Board.
4.04Compensation. The salaries of elected officers of the Company will be fixed by the Board, except that the Board may delegate to any elected officer the power to fix the compensation of one or more other elected officers. The salaries of appointed officers of the Company will, unless otherwise restricted by a resolution adopted by the Board, be fixed by the Chief Executive Officer or his or her designee.
4.05Term and Removal. Each officer will hold his or her office until his or her successor has been elected or appointed or until his or her earlier death, resignation or removal. Any elected officer may be removed by the Board at any time, with or without cause. Any appointed officer may be removed by the Chief Executive Officer or by the Board at any time, with or without cause.
4.06Resignations. Any officer may resign at any time by giving written notice of his or her resignation to the Secretary. A resignation will take effect at the time specified in the notice or, if the effective time is not specified in the notice, immediately upon its receipt. Unless otherwise specified in the notice, the acceptance of a resignation is not necessary to make it effective.
4.07Vacancies. A vacancy in any elected office because of resignation, removal or death may be filled by the Board or, if so provided by resolution of the Board, by an officer of the Company to whom the Board has delegated the authority to appoint a successor. A vacancy in any appointed office because of resignation, removal or death may be filled by the Chief Executive Officer.
4.08Duties.
(a)Chief Executive Officer. The Chief Executive Officer will be the principal executive officer of the Company. Subject to the control of the Board, the Chief Executive Officer will in general manage, supervise and control all of the business and affairs of the
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Company and will perform all duties incident to the office of the Chief Executive Officer of the Company and any other duties that may be prescribed by the Board from time to time. The Chief Executive Officer will have authority to conduct all ordinary business on behalf of the Company and may execute and deliver on behalf of the Company any contract, conveyance or similar document, excluding agreements that expressly require approval of the Board or the Stockholders pursuant to these Bylaws or Delaware Law and excluding any authority reserved to the Board by resolution of the Board.
(b)Chief Financial Officer. The Chief Financial Officer will be the chief financial officer of the Company and, unless a separate person is so elected or appointed, the chief accounting officer of the Company. The Chief Financial Officer will assure that the books of account and other accounting records of the Company are maintained in proper form and in general perform all the duties incident to the office of the chief financial officer of a corporation, as well as any other duties that may be assigned to the Chief Financial Officer by the Board or the Chief Executive Officer.
(c)Secretary. The Secretary will have the duties of the officer denominated as the “Secretary” under the Delaware Law. The Secretary will (1) attend and keep the minutes of the meetings of Stockholders, of the Board, and of committees of the Board in one or more books provided for that purpose, (2) assure that all notices are duly given in accordance with these Bylaws or as otherwise required by Delaware Law or the Certificate of Incorporation, (3) be custodian of the corporate records and of the seal of the Company and see that the seal of the Company is affixed only to documents that have been authorized for execution on behalf of the Company, (4) maintain, or cause an agent designated by the Board to maintain, a record of the Stockholders, (5) have general charge of the stock transfer books of the Company or responsibility for supervision, on behalf of the Company, of any agent to which stock transfer responsibility has been delegated by the Board, (6) have responsibility for the custody, maintenance and preservation of those corporate records that the Company is required by the Delaware Law or otherwise to create, maintain or preserve, and (7) any other duties that may from time to time be assigned by the Board or the Chief Executive Officer.
(d)Other Principal Officers. The Board may elect and the Chief Executive Officer may appoint one or more other principal officers of the Company whose duties will be as prescribed by the Board or the Chief Executive Officer, as applicable, from time to time.
(e)Assistant Officers. The Board may elect and the Chief Executive Officer may appoint one or more officers to serve as assistants to principal officers of the Company whose duties will be as delegated by the Board or the Chief Executive Officer, as applicable, or by the principal officers they assist, including the authority to perform such functions of those principal officers in the place of and with full authority of those principal officers as may be designated by the Board or the Chief Executive Officer, as applicable, or by those principal officers.
SECTION 5INDEMNIFICATION.
5.01Right to Indemnification. Each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding,
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whether civil, criminal, administrative or investigative (“Proceeding”), by reason of the fact that he or she is or was a Director or an officer of the Company or, while a Director or an officer of the Company is or was serving at the request of the Company as a director, officer, employee or agent of any other corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to any employee benefit plan (each, a “Covered Person”), whether the basis of such Proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, shall, subject toSection 5.09, be indemnified and held harmless by the Company to the fullest extent authorized by Delaware Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Company to provide broader indemnification rights than such law permitted the Company to provide prior to such amendment), against all expense, liability and loss (including attorneys’ fees, judgments, fines, excise taxes or penalties under the Employee Retirement Income Security Act of 1974, as amended, and amounts paid or to be paid in settlement) reasonably incurred or suffered by such Covered Person in connection therewith; provided, however, that except as provided inSection 5.03 with respect to Proceedings seeking to enforce rights to indemnification, the Company shall indemnify a Covered Person seeking indemnification in connection with a Proceeding (or part thereof) initiated by such Covered Person only if such Proceeding (or part thereof) was authorized by the Board.
5.02Right to Advancement of Expenses. The right to indemnification conferred in Section 5.01 shall include the right to be paid by the Company, subject toSection 5.09, the expenses (including attorneys’ fees) incurred in defending any such Proceeding in advance of its final disposition (“Advancement of Expenses”);provided,however, that, if Delaware Law requires, an Advancement of Expenses incurred by a Covered Person in his or her capacity as a Director or officer of the Company (and not in any other capacity in which service was or is rendered by such Covered Person, including service to an employee benefit plan) shall be made only upon delivery to the Company of an undertaking, by or on behalf of such Covered Person, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (“Final Adjudication”) that such Covered Person is not entitled to be indemnified for such expenses under thisSection 5.02 or otherwise (“Undertaking”). No Director or officer shall be required to post any bond or provide any other security with respect to any such Undertaking.
5.03Right of Covered Person to Bring Suit. Any claim underSection 5.01 orSection 5.02 must be made in writing. If any written claim for Advancement of Expenses is not paid in full by the Company within twenty (20) days after such claim has been received by the Company, or if any other written claim underSection 5.01 orSection 5.02 is not paid in full by the Company within thirty (30) days after such claim has been received by the Company, the Covered Person may at any time thereafter bring suit against the Company to recover the unpaid amount of such claim. To the fullest extent permitted by Delaware Law, if successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Covered Person shall be entitled to be paid also the expense of prosecuting or defending such suit. In (i) any suit brought by a Covered Person to enforce a right to indemnification hereunder (but not in a suit brought by the Covered Person to enforce a right to an Advancement of Expenses) it shall be a defense that, and (ii) in any suit brought by the Company to recover an Advancement of Expenses pursuant to the terms
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of an Undertaking, the Company shall be entitled to recover such expenses upon a Final Adjudication that, the Covered Person has not met any applicable standard for indemnification under Delaware Law. Neither the failure of the Company (including its Directors who are not parties to such action, a committee of such Directors, independent legal counsel or Stockholders) to have made a determination prior to the commencement of such action that indemnification of the Covered Person is proper in the circumstances because the Covered Person has met the applicable standard of conduct under Delaware Law, nor an actual determination by the Company (including its Directors who are not parties to such action, a committee of such Directors, independent legal counsel or Stockholders) that the Covered Person has not met such applicable standard of conduct, shall create a presumption that the Covered Person has not met the applicable standard of conduct or, in the case of such a suit brought by the Covered Person, be a defense to such suit. In any suit brought by the Covered Person to enforce a right to indemnification or to an Advancement of Expenses hereunder, or brought by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the Company shall have the burden of proving that the Covered Person is not entitled to be indemnified, or to such Advancement of Expenses, under thisSection 5 or otherwise.
5.04Non-Exclusivity of Rights. The right to indemnification and the Advancement of Expenses conferred in thisSection 5 shall not be exclusive of any other right which any person may have or subsequently acquire under any statute, provision of the Certificate of Incorporation, provision of these Bylaws, agreement, vote of Stockholders or Directors or otherwise.
5.05Insurance. The Company may maintain insurance, at its expense, to protect itself and any Director, officer, employee or agent of the Company or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such person against such expense, liability or loss under Delaware Law.
5.06Indemnification of Employees and Agents of the Company. The Company may, to the extent authorized from time to time by the Board in its sole discretion, grant rights to indemnification and rights to the Advancement of Expenses to any employee or agent of the Company to the fullest extent of the provisions of thisSection 5 with respect to the indemnification and Advancement of Expenses of Directors and officers of the Company.
5.07Nature of Rights. The rights to indemnification and to the Advancement of Expenses conferred inSection 5.01 andSection 5.02 are contract rights and such rights shall continue as to a Covered Person who has ceased to be a Director or officer of the Company and shall inure to the benefit of the Covered Person’s heirs, executors and administrators. Any amendment, alteration or repeal of this Section 5 that adversely affects any right of a Covered Person or its successors shall be prospective only and shall not limit, eliminate, or impair any such right with respect to any Proceeding involving any occurrence or alleged occurrence of any action or omission to act that took place prior to such amendment or repeal.
5.08Primary Indemnification. The Company acknowledges that (a) certain persons employed by, otherwise affiliated with, or appointed by, Holdings Stockholders or their affiliates or funds managed or advised by such Holdings Stockholders or their affiliates (a “Designating
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Party”) may serve on the Board, or, at the request of the Company, on the board of directors or other governing body of another entity, and (b) such directors may be entitled to, or may be provided, indemnification by such Designating Party for certain expenses and liabilities for which such directors may also be entitled to seek indemnification from the Company pursuant to these Bylaws, pursuant to Section 145 of the Delaware General Corporation Law, as amended, or pursuant to indemnification agreements or other agreements between the Company and such directors (the “Company Indemnified Expenses”). The Company acknowledges and agrees that, as between the Company and its subsidiaries, on the one hand, and such Designating Party (other than the Company and its subsidiaries), on the other hand, the Company shall be primarily liable to such directors with respect to any Company Indemnified Expenses and any liability of such Designating Party to such directors shall be secondary liability. In recognition of the primary liability of the Company, the Company agrees that, in the event that such Designating Party pays any Company Indemnified Expenses to or on behalf of any such director, reimburses any such director for any Company Indemnified Expenses paid by such director or advances amounts to any such director (including by way of any loan) for the payment of Company Indemnified Expenses, then (i) the Company shall pay to such Designating Party amounts so paid, reimbursed or advanced, to the extent that any such director would have been entitled to indemnification of such Company Indemnified Expenses and (ii) such Designating Party shall be subrogated to all of the rights of such director with respect to any claim that such director could have brought against the Company or any subsidiary with respect to any Company Indemnified Expenses that have been paid, reimbursed or advanced to or on behalf of such director. All such payments to a Designating Party shall be made within five (5) Business Days of the receipt by the Company of written notice from such Designating Party of such payment, reimbursement or advance, accompanied by documentation showing, in reasonable detail, the Company Indemnified Expenses so paid, reimbursed or advanced by such Designating Party. The Company shall also reimburse such Designating Party for all expenses, including legal expenses, incurred in enforcing thisSection 5.08.
5.09Limitation on Indemnification and Advancement of Expenses. Notwithstanding the provisions of thisSection 5 or any other provision contained in these Bylaws, the Company shall not have any liability or obligation hereunder or thereunder to indemnify, hold harmless or provide Advancement of Expenses to, any person who was an officer, director, employee or agent of the Corporation prior to September 7, 2011, with respect to any expense, liability and loss related to or arising from any act, omission, event that occurred prior to such date, except to the extent that such amounts are covered by, and fully paid pursuant to, any policies of insurance maintained by the Company pursuant toSection 5.05.
SECTION 6CAPITAL STOCK.
6.01Certificates. Each holder of stock will be entitled to have a certificate certifying the number of shares in the Company owned by that holder and signed by or in the name of the Company by the Chairperson, the Vice Chairperson, the President or a Vice President, if any, and by the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer. The signatures on the certificate may be a facsimile. If an officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate is no longer serving in that capacity when the certificate is issued, it may be issued by the Company with the same effect as if that person were still serving in that capacity at the time of issue.
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6.02Transfer. Transfers of stock may be made on the books of the Company only by the person named in the certificate or, in the case of shares not represented by certificates, by the person named in the Company’s stock transfer records as the owner of those shares of stock or, in either case, by an attorney lawfully constituted in writing. In addition, with respect to shares represented by certificates, transfers may be made only upon surrender of the share certificate, or in the case of a certificate alleged to have been lost, stolen or destroyed, upon compliance with the provisions ofSection 6.04.
6.03Rights of Holders. The Company may treat the holder of record of any share of the Company as the person entitled to vote that share (to the extent the share is entitled to vote), to receive any distribution with respect to that share, and for all other purposes. Accordingly, the Company is not bound to recognize any equitable or other claim to or interest in any share on the part of any person other than the holder of record, whether or not it has notice of the interest, except as otherwise provided by Delaware Law.
6.04Lost Certificates. Any person claiming that a certificate of stock has been lost, stolen or destroyed must make an affidavit or affirmation of that fact in such manner as the Board may require and must, if the Board so requires, give the Company a bond of indemnity in the form and amount and with one or more sureties satisfactory to the Board, whereupon an appropriate new certificate may be issued in lieu of the one alleged to have been lost, stolen or destroyed.
SECTION 7GENERAL PROVISIONS.
7.01Fiscal Year. The fiscal year of the Company will be a calendar year unless and until a different fiscal year is established by resolution adopted by the Board.
7.02Dividends. To the extent permitted by Delaware Law, the Board will have full power and discretion, subject to the Certificate of Incorporation, to determine what, if any, dividends or distributions will be declared and paid or made.
7.03Corporate Seal. The corporate seal will be in the form specified in the minutes of the organizational meeting of the Company or as the Board may subsequently from time to time determine.
7.04Form of Records. Any records maintained by the Company in the regular course of its business, including its stock ledger, books of account and minute books, may be kept on or by means of, or be in the form of, any information storage device or method, provided that the records so kept can be converted into clearly legible paper form within a reasonable time. Upon the request of any person entitled to inspect records, the Company will so convert those records.
7.05Registered Office and Registered Agent. The address of the registered office of the Company is 1209 Orange Street, County of New Castle, City of Wilmington, Delaware 19801 and the name of the registered agent is The Corporation Trust Company. The Company may have other offices at such places within or without the State of Delaware as the Board may from time to time designate or the business of the Company may require or make desirable.
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7.06Amendments. These Bylaws may be adopted, amended or repealed by the Board or by the Stockholders.
7.07Voting Shares in Other Corporations. Unless otherwise directed by the Board, shares in other corporations that are held by the Company will be represented and voted only by an elected officer or by a proxy or proxies appointed by an elected officer.
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Schedule 9.2C
Form of Reorganized Debtors’ Limited Liability Company Agreements
WICKLIFFE PAPER COMPANY LLC
CERTIFICATE OF
AMENDED AND RESTATED
CERTIFICATE OF FORMATION
Wickliffe Paper Company LLC, a limited liability company organized and existing under the Limited Liability Company Act of the State of Delaware (as amended, the “Act”), hereby certifies as follows:
1. The name of the limited liability company is Wickliffe Paper Company LLC (the “LLC”).
2. The LLC’s original Certificate of Formation was filed with the Secretary of State of the State of Delaware on November 14, 2006.
3. This Amended and Restated Certificate of Formation of the LLC is made and filed pursuant to the order of the United States Bankruptcy Court for the District of Delaware, dated [—] (the “Confirmation Order”), confirming the LLC’s parent company’s [Fourth] Amended Joint Chapter 11 Plan, in In re NewPage Corporation et al., Case No.: 11-12804, under Chapter 11 of Title 11 of the United States Code.
4. Pursuant to Sections 208 of the Act, this Amended and Restated Certificate of Formation restates the Certificate of Formation to read in its entirety as set forth in full onExhibit A attached hereto.
IN WITNESS WHEREOF, the LLC has caused this Amended and Restated Certificate of Formation to be executed by the following authorized officer of the LLC this [—] day of [—].
| | |
WICKLIFFE PAPER COMPANY LLC |
| |
By: | | |
| | Name: |
| | Title: |
AMENDED AND RESTATED CERTIFICATE OF FORMATION
OF
WICKLIFFE PAPER COMPANY LLC
(a Delaware limited liability company)
FIRST: The name of the limited liability company is Wickliffe Paper Company LLC (the “LLC”).
SECOND: The address of the Corporation’s registered office in the State of Delaware is 1209 Orange Street, County of New Castle, City of Wilmington, Delaware 19801. The name of its registered agent at such address is The Corporation Trust Company.
THIRD: The LLC shall not issue any non-voting equity securities to the extent prohibited by Section 1123 of Title 11 of the United States Code (the “Bankruptcy Code”) as in effect on the date of filing of this Certificate of Incorporation with the Secretary of State of the State of Delaware;provided,however, that such restriction (a) shall have no further force and effect beyond that required under Section 1123 of the Bankruptcy Code, (b) shall have such force and effect, if any, only for so long as such section of the Bankruptcy Code is in effect and applicable to the LLC, and (c) in all events may be amended or eliminated in accordance with applicable law as from time to time may be in effect.
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AMENDED AND RESTATED
OPERATING AGREEMENT
OF
WICKLIFFE PAPER COMPANY LLC
(A DELAWARE LIMITED LIABILITY COMPANY)
DATED AS OF DECEMBER , 2012
AMENDED AND RESTATED OPERATING AGREEMENT
OF
WICKLIFFE PAPER COMPANY LLC
THIS AMENDED AND RESTATED OPERATING AGREEMENT (“Agreement”) of Wickliffe Paper Company LLC (“Company”), dated as of December , 2012, amending and restated that certain Operating Agreement of the Company dated November 14, 2006, by and among NewPage Corporation, as the sole member of the Company set forth on Schedule I to this Agreement (the “Member”).
WHEREAS, the Company was formed on November 14, 2006 pursuant to the Delaware Limited Liability Company Act, 6 Del. C. §§ 18-101,et seq., as amended from time to time (the “Delaware Act”); and
WHEREAS, the Company and the sole Member desire to enter into this Agreement in order to set forth the operating procedures of the Company.
NOW, THEREFORE, the agreement governing the Company is as follows:
1.Name. The name of the Company is “Wickliffe Paper Company LLC”.
2.Purpose. The Company is organized for the purpose of engaging in any and all activities permitted under applicable law, including without limitation engaging in the manufacture, sale, and distribution of paper products and engaging in any related business, including entering into any partnership, limited liability company, joint venture or other similar arrangement or owning interests in any entity engaged in any of the foregoing activities. The Company will have the power to engage in all actions, proceedings, activities, and transactions that the Management Board may deem necessary or advisable in connection with the foregoing purposes.
3.Registered Office and Registered Agent. The registered office of the Company in the State of Delaware is The Corporation Trust Company, 1209 Orange Street, Wilmington, DE 19801. The name and address of the registered agent of the Company for service of process on the Company in the State of Delaware is The Corporation Trust Company, 1209 Orange Street, Wilmington, DE 19801.
4.Management Board.
4.1Formation. The Company hereby establishes a management board for the Company (“Management Board”), which will manage the business and affairs of the Company and have all of the powers of a board of directors of a Delaware corporation. The Management Board is, to the extent of its rights and powers set forth in this Agreement, an agent of the Company and the actions of the Company by and through the Management Board taken in accordance with those rights and powers will bind the Company. Except as authorized by the
Management Board or as set forth in this Agreement, the Member may not participate in the management and control of the Company nor may the Member act on behalf of the Company in connection with any matter in connection with the Company. The Management Board will initially consist, as of the date of this Agreement, of the following members: Douglas K. Cooper, Daniel A. Clark, and George F. Martin. By signing this Agreement, the Member will be deemed to have voted for the election of each of the foregoing persons to serve as a Management Board member. Any vacancy created by the death, resignation or removal of any member of the Management Board (each, a “Manager”), or any increase in the size of the Management Board, shall be filled exclusively by the Member. Any Manager or Managers may be removed at any time with or without cause, by action taken in writing by the Member. The names and mailing addresses of the Managers will be set forth in the books and records of the Company. The number of Managers that constitutes the entire Management Board will be fixed as established by the Management Board from time to time and may be no fewer than two nor more than ten.
4.2Meetings. Meetings of the Management Board may be called by the President, the Chairman of the Management Board or by a majority of the members of the Management Board on at least two business days’ prior written notice to each member of the Management Board, which notice will contain the time and place of the meeting. A majority of the Managers will constitute a quorum for the transaction of business by the Management Board. All actions of the Management Board will require the affirmative vote of a majority of the Managers. Decisions made by the Management Board at any meeting, however convened, will be as valid as though held after due notice if, either before or after the meeting, each member of the Management Board signs a written waiver of notice or a consent to the holding of the meeting or written approval of the minutes of the meeting.
4.3Telephone Meetings and Unanimous Written Consent. Meetings of the Management Board may be held by telephone conference or similar communications equipment by means of which all persons participating in the meeting can hear each other and participate in the conversation. Any action required or permitted to be taken by the Management Board may be taken without a meeting and without prior notice if all of the Managers consent in writing to that action. The consents will be filed with the minutes of the proceedings of the Management Board and will have the same force and effect as a unanimous vote of the Management Board.
4.4Committees of the Board. The Management Board may designate an executive committee and other committees, each consisting of one or more Managers. Each committee (including its members) will serve at the pleasure of the Management Board and will keep minutes of its meetings and report the same to the Management Board. A majority of all the voting members of a committee will constitute a quorum for the transaction of business, and the vote of majority of all the voting members of a committee will be the act of the committee. In other respects each committee will conduct its business in the same manner as the Management Board conducts its business pursuant to this Section 4. Each committee will adopt whatever other rules of procedure it determines for the conduct of its activities.
4.5Chairman. The Management Board may, if it so determines, elect from among its members a Chairman of the Board. The Chairman of the Board, if any, will preside at all meetings of the Management Board at which the Chairman is present and will have and may exercise such powers as may, from time to time, be assigned to him or her by the Management Board or as may be provided by applicable law.
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4.6Limitation on Liability. Managers will not, solely by reason of being a Manager, be personally liable for the expenses, liabilities, or obligations of the Company, whether arising in contract, tort, or otherwise.
4.7Compensation and Reimbursement. Managers will not receive compensation for their services performed on behalf of the Company or other benefits they provide to the Company, unless otherwise established by the Management Board in its sole discretion. Managers will be entitled to reimbursement for reasonable, documented out-of-pocket expenses incurred by them in connection with attendance at meetings of the Management Board or any committee conducting the business and affairs of the Company.
4.8Authority, Duties, and Obligations. Managers shall devote as much of their time to the affairs of the Company as in the judgment of the Management Board the business reasonably requires, and Managers will not be obligated to do or perform any act or thing in connection with the Company not expressly set forth in this Agreement. Nothing in this Agreement will be deemed to preclude the Managers from engaging directly or indirectly in any other business or from directly or indirectly purchasing, selling, holding, or otherwise dealing with any securities for the account of any such other business, for its own accounts or for other clients.
4.9Certifications. Any person dealing with the Company may rely (without duty of further inquiry) upon a certificate issued by the Company that is signed by any member of the Management Board or any of the officers as to any of the following:
| (i) | the identity of the Managers or an officer or other agent of the Company; |
| (ii) | the existence or nonexistence of any fact or facts that constitutes a condition precedent to acts by the Management Board or the Member; |
| (iii) | the person or persons authorized to execute and deliver any instrument or document of the Company; or |
| (iv) | any act or failure to act by the Company or any other matter whatsoever involving the Company. |
5.Officers.
5.1Election. The officers of the Company will be elected by the Management Board and will include a President, a Secretary, and a Treasurer and may, at the discretion of the Management Board, also include a Chairman of the Board and one or more Vice Presidents and assistant officers. Except as otherwise provided in this Agreement, one person may hold the offices and perform the duties of any two or more offices. Each officer will hold office for the term for which he or she is elected or appointed and until his or her successor is duly elected and qualified, or until his or her earlier death, resignation, or removal.
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5.2Delegation of Duties. The Management Board may delegate the duties and powers of any officer of the Company to any other officer or to any Management Board member for a specified period of time for any reason that the Management Board may deem sufficient.
5.3Removal of Officers. An officer of the Company elected or appointed by the Management Board may be removed with or without cause by resolution adopted by a majority of the members then in office at any regular or special meeting of the Management Board or by a written consent signed by all of the members then in office.
5.4Resignations. Any officer may resign at any time by giving written notice of resignation to the Management Board, to the President, or to the Secretary. Any resignation will take effect upon receipt of the notice or at any later time specified in the notice. Unless otherwise specified in the notice, acceptance of a resignation will not be necessary to make the resignation effective.
5.5President. The President will, in the absence of the Chairman of the Board, preside at all meetings of the Management Board at which he or she is present. The President will be the chief executive officer of the Company and will have general supervision over the business of the Company. The President will have all powers and duties usually incident to the office of the President except as specifically limited by a resolution of the Management Board. The President will have such other powers and perform such other duties as may be assigned to him or her from time to time by the Management Board.
5.6Vice President. In the absence or disability of the President or if the office of President is vacant, the Vice Presidents in the order determined by the Management Board, or if no such determination has been made in the order of their seniority, will perform the duties and exercise the powers of the President, subject to the right of the Management Board at any time to extend or confine those powers and duties or to assign them to others. Any Vice President may have such additional designation in his or her title as the Management Board may determine. The Vice Presidents will generally assist the President in such manner as the President may direct. Each Vice President will have such other powers and perform such other duties as may be assigned to him or her from time to time by the Management Board or the President.
5.7Secretary. The Secretary will act as secretary of all meetings of the Management Board at which he or she is present, will record the proceedings of all meetings in a book to be kept for that purpose, will exercise supervision over the giving and service of notices of the Company and will have supervision over the care and custody of the records and seal of the Company. The Secretary is empowered to affix the corporate seal to documents, the execution of which on behalf of the Company under its seal is duly authorized, and when so affixed may attest the same. The Secretary will have all powers and duties usually incident to the office of Secretary except as specifically limited by a resolution of the Management Board. The Secretary will have such other powers and perform such other duties as may be assigned to him or her from time to time by the Management Board or the President.
5.8Treasurer. The Treasurer will have general supervision over the care and custody of the funds and over the receipts and disbursements of the Company and will cause the
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funds of the Company to be deposited in the name of the Company in such banks or other depositaries as the Management Board may designate. The Treasurer will have supervision over the care and safekeeping of the securities of the Company. The Treasurer will have all powers and duties usually incident to the office of Treasurer except as specifically limited by a resolution of the Management Board. The Treasurer will have such other powers and perform such other duties as may be assigned to him or her from time to time by the Management Board or the President.
6.Indemnification of Managers, Officers, Employees, and Agents.
6.1Right to Indemnification. Each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (“Proceeding”), by reason of the fact that he or she is or was a Manager or an officer of the Company or, while a Manager or an officer of the Company is or was serving at the request of the Company as a manager, officer, employee or agent of any other corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to any employee benefit plan (each, a “Covered Person”), whether the basis of such Proceeding is alleged action in an official capacity as a manager, officer, employee or agent or in any other capacity while serving as a manager, officer, employee or agent, shall, subject toSection 6.9, be indemnified and held harmless by the Company to the fullest extent authorized by Delaware Law (as defined below), as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that the amendment permits the Company to provide broader indemnification rights than such law permitted the Company to provide prior to such amendment), against all expense, liability and loss (including attorneys’ fees, judgments, fines, excise taxes or penalties under the Employee Retirement Income Security Act of 1974, as amended, and amounts paid or to be paid in settlement) reasonably incurred or suffered by such Covered Person in connection therewith;provided,however, that except as provided inSection 6.3 with respect to Proceedings seeking to enforce rights to indemnification, the Company shall indemnify a Covered Person seeking indemnification in connection with a Proceeding (or part thereof) initiated by such Covered Person only if such Proceeding (or part thereof) was authorized by the Management Board. As used in this Agreement, “Delaware Law” means the Delaware Limited Liability Company Act or other applicable statutes of the State of Delaware, as amended from time to time.
6.2Right to Advancement of Expenses. The right to indemnification conferred inSection 6.1 shall include the right to be paid by the Company, subject toSection 6.9, the expenses (including attorneys’ fees) incurred in defending the Proceeding in advance of its final disposition (“Expense Advancement”);provided,however, that if the Management Board so determines, or Delaware Law so requires, an Expense Advancement incurred by a Covered Person in his or her capacity as a Manager or officer of the Company (and not in any other capacity in which service was or is rendered by such Covered Person, including service to an employee benefit plan) will be made only upon delivery to the Company of an undertaking, by or on behalf of such Covered Person, to repay all amounts so advanced if it is ultimately determined by final judicial decision from which there is no further right to appeal (“Final Adjudication”) that such Covered Person is not entitled to be indemnified for such expenses under thisSection6.2 or otherwise (“Undertaking”). No Manager or officer will be required to post any bond or provide any other security with respect to any Undertaking.
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6.3Right of Covered Person to Bring Suit. Any claim underSection 6.1 orSection 6.2 must be made in writing. If any written claim for an Expense Advancement is not paid in full by the Company within 20 days after such claim has been received by the Company, or if any other written claim underSection 6.1 orSection 6.2 is not paid in full by the Company within 30 days after such claim has been received by the Company, the Covered Person making the claim may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. To the fullest extent permitted by Delaware Law, if successful in whole or in part in any such suit, or in a suit brought by the Company to recover an Expense Advancement pursuant to the terms of an Undertaking, a Covered Person shall be entitled to be paid also the expense of prosecuting or defending such suit. In (i) any suit brought by a Covered Person to enforce a right to indemnification under thisSection 6 (but not in a suit brought by a Covered Person to enforce a right to an Expense Advancement) the Company will have as a defense that such Covered Person has not met any applicable standard for indemnification under Delaware Law, and (ii) in any suit brought by the Company to recover an Expense Advancement pursuant to an Undertaking, the Company will be entitled to recover those expenses upon a Final Adjudication that such Covered Person has not met any applicable standard for indemnification under Delaware Law. Neither the failure of the Company (including its Managers who are not parties to such action, a committee of such Managers, independent legal counsel or the Member) to have made a determination prior to the commencement of any such action that indemnification of the Covered Person is proper in the circumstances because the Covered Person has met the applicable standard of conduct under Delaware Law, nor an actual determination by the Company (including its Managers who are not parties to such action, a committee of such Managers, independent legal counsel or the Member) that the Covered Person has not met such applicable standard of conduct, will create a presumption that the Covered Person has not met the applicable standard of conduct or, in the case of such a suit brought by the Covered Person, be a defense to such suit. In any suit brought by a Covered Person to enforce a right to indemnification or to an Expense Advancement hereunder or brought by the Company to recover an Expense Advancement pursuant to the terms of an Undertaking, the Company shall have the burden of proving that the Covered Person is not entitled to such indemnification or Expense Advancement, under thisSection 6 or otherwise.
6.4Non-Exclusivity of Rights. The right to indemnification and Expense Advancement conferred in thisSection 6 shall not be exclusive of any other right which any person may have or subsequently acquire under any statute, provision of this Agreement, agreement, vote of the Member or Managers or otherwise.
6.5Insurance. The Company may maintain insurance, at its expense, to protect itself and any Manager, officer, employee or agent of the Company or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Company would have the power to indemnify such person against such expense, liability or loss under Delaware Law.
6.6Indemnification of Employees and Agents of the Company. The Company may, to the extent authorized from time to time by the Board in its sole discretion, grant rights to
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indemnification and rights to an Expense Advancement to any employee or agent of the Company to the fullest extent of the provisions of thisSection 5 with respect to the indemnification and Expense Advancement of Managers and officers of the Company.
6.7Nature of Rights. The rights to indemnification and to the Expense Advancement conferred inSection 6.1 andSection 6.2 are contract rights, and such rights shall continue as to a Covered Person who has ceased to be a Manager or officer of the Company and shall inure to the benefit of the Covered Person’s heirs, executors and administrators. Any amendment, alteration or repeal of thisSection 6 that adversely affects any right of a Covered Person or its successors shall be prospective only and will not limit, eliminate, or impair any such right with respect to any Proceeding involving any occurrence or alleged occurrence of any action or omission to act that took place prior to such amendment or repeal.
6.8Primary Indemnification. The Company acknowledges that (A) certain individuals employed by, otherwise affiliated with, or appointed by, Holdings Stockholders or their affiliates or funds managed or advised by such Holdings Stockholders or their affiliates (a “Designating Party”) may serve on the Management Board or, at the request of the Company, on the board of managers or other governing body of another entity, and (b) each such individual (each, a “Designated Person”) may be entitled to, or may be provided, indemnification by the Designating Party for certain expenses and liabilities for which he or she may also be entitled to seek indemnification from the Company pursuant to this Agreement, pursuant to Delaware Law, or pursuant to indemnification agreements or other agreements between the Company and such Designated Person (“Company Indemnified Expenses”). The Company acknowledges and agrees that, as between the Company and its subsidiaries, on the one hand, and each Designating Party (other than the Company and its subsidiaries), on the other hand, the Company will be primarily liable to the Designated Persons with respect to any Company Indemnified Expenses, and any liability of a Designating Party to its respective Designated Person(s) will be secondary liability. In recognition of the primary liability of the Company, the Company agrees that if a Designating Party pays any Company Indemnified Expenses to or on behalf of a Designated Person, reimburses a Designated Person for any Company Indemnified Expenses paid by such Designated Person or advances amounts to a Designated Person (including by way of any loan) for the payment of Company Indemnified Expenses, then (i) the Company shall pay to such Designating Party the amounts so paid, reimbursed or advanced, to the extent that such Designated Person would have been entitled to indemnification of such Company Indemnified Expenses and (ii) such Designating Party will be subrogated to all of the rights of the Designated Person with respect to any claim that the Designated Person could have brought against the Company or any subsidiary with respect to any Company Indemnified Expenses that have been paid, reimbursed or advanced to or on behalf of such Designated Person. All such payments to a Designating Party shall be made within five Business Days of receipt by the Company of written notice from such Designating Party of such payment, reimbursement or advance, accompanied by documentation showing, in reasonable detail, the Company Indemnified Expenses so paid, reimbursed or advanced by such Designating Party. The Company shall also reimburse such Designating Party for all expenses, including legal expenses, incurred in enforcing thisSection 6.8. As used in this Agreement, “Holdings Stockholder” means a holder of capital stock of NewPage Holdings Inc., a Delaware corporation and the ultimate parent of the Company.
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6.9Limitation on Indemnification and Advancement of Expenses. Notwithstanding the provisions of thisSection 6 or any other provision contained in this Agreement, the Company shall not have any liability or obligation hereunder or thereunder to indemnify, hold harmless or provide Advancement of Expenses to, any person who was an Manager, officer, employee or agent of the Company prior to September 7, 2011, with respect to any expense, liability and loss related to or arising from any act, omission, event that occurred prior to such date, except to the extent that such amounts are covered by, and fully paid pursuant to, any policies of insurance maintained by the Company pursuant toSection 6.5.
7.Dissolution.The Company will be dissolved and its affairs shall be wound up upon the earlier to occur of: (a) determination by the Management Board; and (b) determination by the Member.
8.Initial Capital Contributions; Percentage Interests. The Member has made a capital contribution to the Company in the amount set forth in the books and records of the Company. The capital account (“Capital Account”) of the Member will be in an amount equal to that Member’s initial capital contribution, adjusted from time to time for additional contributions, withdrawals, allocations of appreciation and depreciation, and other appropriate items.
9.Additional Contributions. The Member will not have any obligation to make additional capital contributions to the Company.
10.Certification of Membership Interests. The Company hereby irrevocably elects that all membership interests in the Company will be securities governed by Article 8 of the Uniform Commercial Code as in effect in the State of New York and each other applicable jurisdiction. Each certificate evidencing membership interests in the Company will bear the following legend: “This certificate evidences an interest in Wickliffe Paper Company LLC and shall be a security governed by Article 8 of the Uniform Commercial Code as in effect in the State of New York and, to the extent permitted by applicable law, Article 8 of the Uniform Commercial Code of each other applicable jurisdiction.” This provision may not be amended, and any purported amendment to this provision will be null and void.
11.Transfer Restrictions. Notwithstanding any other provision in this Agreement, consent of the Management Board shall not be required to permit (i) the Member to pledge its membership interests as security for a loan to the Member or any affiliate of the Member, or (ii) a pledgee of the Member’s membership interests in the Company to transfer those membership interests in connection with the pledgee’s exercise of its rights and remedies with respect to those membership interests, or to permit the pledgee or any purchaser of such membership interests from the pledgee to be substituted for the Member under this Agreement in connection with the pledgee’s exercise of those rights and remedies. Upon pledgee’s obtaining ownership of membership interests pursuant to the pledgee’s exercise of its rights and remedies under the pledge and security documents for such loan, the pledgee or any purchaser of such membership interest from the pledgee shall be substituted for the Member hereunder, and such substituted Member shall have full rights and powers as a Member. So long as any pledge of any Member’s membership interests is in effect, this Section 11 shall inure to the benefit of any such pledgee an its successors and assigns, as an intended third party beneficiary and no amendment, modification or waiver of, or consent with respect to this Section 11 shall in any event be effective without the prior written consent of any such pledgee.
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12.Tax Matters. The Member intends that the Company not be treated as an association for Federal income tax purposes. The Company will maintain a Capital Account for the Member in accordance with Treasury Regulation Section 1.704-1(b). The Company’s taxable income and tax losses will be allocatedpro rata based on Percentage Interests. The sole Member will act as the “tax matters partner” within the meaning of Section 6231(a)(7) of the Internal Revenue Code of 1986, as amended.
13.Distributions.Distributions will be made to the Member at the times and in the aggregate amounts determined by the Management Board. Notwithstanding the foregoing, distributions made in connection with a sale of all or substantially all the Company’s assets or a liquidation of the Company will be made in accordance with the Capital Account balances of the Member within the time period set forth in Treasury Regulation Section 1.704-1(b)(2)(ii)(b)(3).
14.Admission of Substitute Members. The Company may admit substitute members at the Member’s discretion, the names of which will be inscribed on Schedule I to this Agreement from time to time.
15.Liability of the Members. The Member will not have any liability for the obligations or liabilities of the Company except to the extent expressly provided in the Delaware Act.
16.Benefits of Agreement.None of the provisions of this Agreement will be for the benefit of or enforceable by any creditor of the Company or of the Member.
17.Headings. The titles of Sections of this Agreement are for convenience of reference only and will not define or limit any of the provisions of this Agreement.
18.Governing Law. This Agreement will be governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to conflicts of law principles of such State.
19.Amendments.This Agreement may be amended only by written instrument executed by the Member.
IN WITNESS WHEREOF, the undersigned has duly executed this Operating Agreement as of the date and year first written above.
| | |
NEWPAGE CORPORATION |
| |
By: | | |
Name: | | Douglas K. Cooper |
Title: | | Senior Vice President, Secretary and General Counsel |
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SCHEDULE I
MEMBERS
| | | | |
Member Name | | Percentage Interest | |
NewPage Corporation | | | 100 | % |
I-1
Schedule 9.3A
Notice Regarding New Holdco Stockholders Agreement
(Because no changes have been made to this schedule since the filing of the Plan Supplement on December 5, 2012, this schedule will not be re-filed in this Amended Plan Supplement.)
Schedule 9.3B
Stockholders Agreement
STOCKHOLDERS AGREEMENT
among
NEWPAGE HOLDINGS INC.
and
EACH OF THE STOCKHOLDERS PARTY HERETO
Dated as of [ ]
TABLE OF CONTENTS
| | | | | | |
| | | | Page | |
ARTICLE I DEFINITIONS; INTERPRETATION | | | 1 | |
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SECTION 1.1 | | Definitions | | | 1 | |
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SECTION 1.2 | | Rules of Interpretation | | | 9 | |
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ARTICLE II BOARD OF DIRECTORS AND GOVERNANCE | | | 10 | |
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SECTION 2.1 | | Board Composition; Election and Removal of Directors | | | 10 | |
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SECTION 2.2 | | Action by the Board; Affiliate Transactions | | | 12 | |
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SECTION 2.3 | | D&O Indemnification and Insurance | | | 12 | |
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SECTION 2.4 | | Reimbursement and Compensation | | | 12 | |
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SECTION 2.5 | | Actions Requiring Stockholder Approval | | | 12 | |
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ARTICLE III ACCESS TO INFORMATION | | | 13 | |
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SECTION 3.1 | | Exchange Act Registration | | | 13 | |
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SECTION 3.2 | | Information to be Provided by the Company | | | 13 | |
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ARTICLE IV CERTIFICATE OF INCORPORATION AND BYLAWS | | | 14 | |
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ARTICLE V TRANSFERS OF SHARES | | | 14 | |
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SECTION 5.1 | | Restrictions on Transfers | | | 14 | |
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SECTION 5.2 | | Legend on Certificates | | | 16 | |
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SECTION 5.3 | | No Circumvention of Stock Transfer Restrictions | | | 16 | |
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SECTION 5.4 | | Drag-Along - Employee Stockholders | | | 17 | |
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SECTION 5.5 | | Tag-Along - Employee Stockholders | | | 18 | |
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ARTICLE VI ADDITIONAL AGREEMENTS | | | 19 | |
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SECTION 6.1 | | Preemptive Rights | | | 19 | |
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SECTION 6.2 | | Confidentiality | | | 21 | |
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ARTICLE VII | | | | | 22 | |
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SECTION 7.1 | | IPO Covenant | | | 22 | |
| | | | | | |
SECTION 7.2 | | Demand Registration | | | 23 | |
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SECTION 7.3 | | Piggyback Registration | | | 25 | |
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SECTION 7.4 | | Registration Procedures | | | 26 | |
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SECTION 7.5 | | Registration Expenses | | | 30 | |
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SECTION 7.6 | | Underwriting Requirements | | | 31 | |
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SECTION 7.7 | | Indemnification | | | 31 | |
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SECTION 7.8 | | Rule 144 Information | | | 34 | |
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SECTION 7.9 | | Miscellaneous Registration Rights Provisions | | | 35 | |
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ARTICLE VIII MISCELLANEOUS | | | 35 | |
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SECTION 8.1 | | Term; Termination | | | 35 | |
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SECTION 8.2 | | Amendments and Modifications | | | 35 | |
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SECTION 8.3 | | Action by Stockholders | | | 35 | |
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SECTION 8.4 | | After-Acquired Shares | | | 36 | |
| | |
SECTION 8.5 | | Notices | | | 36 | |
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SECTION 8.6 | | Binding Effect; Successors and Assigns | | | 36 | |
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SECTION 8.7 | | Entire Agreement | | | 37 | |
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SECTION 8.8 | | Counterparts; Headings | | | 37 | |
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SECTION 8.9 | | Primary Indemnitor | | | 37 | |
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SECTION 8.10 | | Further Acts and Assurances | | | 37 | |
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SECTION 8.11 | | Governing Law; Consent to Jurisdiction | | | 38 | |
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SECTION 8.12 | | Injunctive Relief | | | 38 | |
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SECTION 8.13 | | Severability | | | 38 | |
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SECTION 8.14 | | Recapitalization, Etc | | | 38 | |
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| | |
Schedule 1: | | Initial Stockholders |
| |
Schedule 2: | | Designating Stockholders |
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Exhibit A: | | Certificate of Incorporation |
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Exhibit B: | | Bylaws |
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Exhibit C: | | Form of Joinder Agreement |
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STOCKHOLDERS AGREEMENT
This STOCKHOLDERS AGREEMENT, dated as of [—] (this “Agreement”), is entered into among NEWPAGE HOLDINGS INC., a Delaware corporation (the “Company”), and the Stockholders and each Person that hereafter becomes a Stockholder and is required by this Agreement to become a Party hereto and, solely for purposes ofSections 5.4 and5.5, the Employee Stockholders. Capitalized terms not otherwise defined herein have the meanings set forth inArticle I.
W I T N E S S E T H:
WHEREAS, on September 7, 2011, NewPage Corporation, a Delaware corporation (“NPC”) and its affiliated co-debtors filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code, 11 U.S.C. §§ 101,et seq, (the “Bankruptcy Code”), thereby initiating Case No. 11-12804 with the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”), and continued to operate their businesses as debtors and debtors-in-possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code;
WHEREAS, the Fourth Amended Plan of Reorganization for NewPage Corporation, as confirmed by an order of the Bankruptcy Court entered on [—] (the “Plan”), provides that on the Effective Date, NPC will become a wholly-owned Subsidiary of the Company, and the Company will issue shares of Common Stock to the Initial Stockholders;
WHEREAS, in connection with the consummation of the transactions contemplated by the Plan, and as required pursuant to the Plan as a condition to the receipt of such shares, the Company and the Initial Stockholders are entering into this Agreement to provide certain rights and obligations among them; and
WHEREAS, each Person who receives shares of Common Stock pursuant to the Plan (and their respective successors and assigns) shall automatically be deemed a party to this Agreement as a “Stockholder” hereunder, whether such Person receives such shares on or after the Effective Date and regardless of whether such Person executes or delivers a signature page to this Agreement.
NOW, THEREFORE, in consideration of the premises set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto, intending to be legally bound hereby, agree as follows:
ARTICLE I
DEFINITIONS; INTERPRETATION
SECTION 1.1Definitions . The following terms shall have the meanings set forth below:
“Acceptance Notice” has the meaning set forth inSection 6.1(c).
“Advice” has the meaning set forth inSection 7.4.
“Affiliate” means, with respect to any specified Person, any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.
“Affiliate Transaction” means any transaction or arrangement between or among the (a) Company or any of its Subsidiaries, on the one hand, and (b) any Director or executive officer of the Company or any of its Subsidiaries, any Stockholder, or any Affiliate, partner or family member of any such Person, or any executive officer, director or employee of any Stockholder, on the other hand (other than employment or compensation arrangements in the ordinary course consistent with past practice approved in accordance with this Agreement).
“Agreement” has the meaning set forth in the preamble of this Agreement.
“Bankruptcy Code” has the meaning set forth in the recitals to this Agreement.
“Bankruptcy Court” has the meaning set forth in the recitals to this Agreement.
“Beneficial Ownership” or “Beneficially Own” has the meaning given to such term in Rule 13d-3 under the Exchange Act and a Person’s Beneficial Ownership of securities shall be calculated in accordance with the provisions of such Rule. Notwithstanding anything to the contrary set forth herein, prior to the pledgee commencing action to foreclose upon any shares of Common Stock pledged pursuant to any Qualified Pledge, such pledged shares of Common Stock will be deemed Beneficially Owned by the pledging party.
“Board” means the Board of Directors of the Company.
“Breaching Employee Stockholder” has the meaning set forth inSection 5.4(e).
“Business Day” means any day other than a Saturday, a Sunday or a day on which banks in New York, New York are authorized or obligated by Law or executive order to close.
“Bylaws” means the bylaws of the Company, as may be amended or modified from time to time.
“Cause” means, with respect to any Director, (a) willful misconduct or gross negligence in the performance of such Director’s duties or responsibilities to the Company, (b) the violation of any material Company policy or agreement applicable to such Director, or (c) such Director’s conviction of, or entry of a plea of guilty or nolo contendere with respect to, a felony or a crime involving an act of moral turpitude.
“Certificate of Incorporation” means the certificate of incorporation of the Company, as may be amended or modified from time to time.
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“Chairman” has the meaning set forth inSection 2.1(b).
“Chief Executive Officer” means, at any particular time, the individual then serving as the Chief Executive Officer of the Company.
“Common Stock” means the Company’s common stock, par value $0.001 per share, including any subdivisions, combinations, splits or reclassifications thereof.
“Company” has the meaning set forth in the preamble of this Agreement.
“Competitor” means any Person engaged (whether directly or indirectly) (a) in the business of owning or operating paper mills or producing coated paper, supercalendered paper, or specialty paper or (b) in any other business in which the Company is, at any time in question, engaged and which accounts for twenty percent (20%) or more of the consolidated revenues or EBITDA of the Company for the twelve (12) month period ended immediately prior to such time, or any Affiliate of any such Person;provided, that no Person shall be deemed to be a Competitor solely on account of the ownership of twenty-five percent (25%) or less of (i) the outstanding shares of any class of equity securities traded on any national securities exchange and/or (ii) the outstanding principal amount of any (x) loans under any credit facility of any such entity and/or (y) debt securities issued by any such entity.
“Confidential Information” means any information concerning the organization, business, technology, trade secrets, know-how, finance, transactions or affairs of a Person (whether conveyed in written, oral or any other form and whether such information has been furnished before, on or after the date of this Agreement) that is not known to the public or otherwise publicly available.
“Delay Period” has the meaning set forth inSection 7.2(e).
“Demand Notice” has the meaning set forth inSection 7.2(a).
“Demand Registration” has the meaning set forth inSection 7.2(c).
“Designated Directors” means, collectively, the Directors designated by the Designating Stockholders pursuant toSection 2.1.
“Designating Stockholder” means, as applicable, the Goldman Stockholders (for so long as they are entitled to designate a Designated Director pursuant toSection 2.1), the JPMC Stockholders (for so long as they are entitled to designate a Designated Director pursuant toSection 2.1) and the Oaktree Stockholders (for so long as they are entitled to designate a Designated Director pursuant toSection 2.1).
“Director” means a member of the Board.
“Director Designation Notice” has the meaning set forth inSection 2.1(a).
“DGCL” means the Delaware General Corporation Law, as amended.
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“Dilutive Securities” has the meaning set forth inSection 6.1(a).
“Disinterested Director” means, with respect to any matter, any Director other than a Director that has, directly or indirectly, any pecuniary or other interest in such matter (other than any interest arising solely as a result of the ownership of Common Stock);provided, that no Designated Director shall be deemed to have a pecuniary or other interest in any matter involving the Designating Stockholder entitled to designate such Designated Director solely as a result of such designation.
“Drag-Along Buyer” has the meaning set forth inSection 5.4(a).
“Drag-Along Closing” has the meaning set forth inSection 5.4(c).
“Drag-Along Notice” has the meaning set forth inSection 5.4(b).
“Drag-Along Seller” has the meaning set forth inSection 5.4(a).
“Effective Date” has the meaning given to such term in the Plan.
“Effectiveness Period” has the meaning set forth inSection 7.2(d).
“Eligible Stockholder” means, at any particular time, any Stockholder that Beneficially Owns (including all shares Beneficially Owned by its Affiliates and Related Funds) at least five percent (5%) of the outstanding shares of Common Stock held by all Stockholders.
“Employee Stockholder” means any Person who Beneficially Owns shares of Common Stock received under or pursuant to the terms of the LTIP or any similar benefit or incentive programs or agreements covering directors, employees or consultants of the Company and its Subsidiaries.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.
“FINRA” means the Financial Industry Regulatory Authority.
“free writing prospectus” has the meaning set forth in Rule 405 under the Securities Act.
“Fund Indemnitor” has the meaning set forth inSection 8.9.
“GAAP” means, at any date of determination, generally accepted accounting principles in effect in the United States of America and which are applicable as of the date of determination and which are consistently applied for all applicable periods.
“Goldman Director” has the meaning set forth inSection 2.1(a)(i).
“Goldman Stockholders” means, collectively, (a) the Persons identified as “Initial Goldman Stockholders” onSchedule 2 hereto, together with (b) any of their Affiliates or Related Funds that receives shares of Common Stock in a Transfer that complies with this Agreement and becomes a Stockholder hereunder.
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“Governmental Authority” means any court, tribunal, arbitrator, authority, agency, commission, official or any non-governmental self-regulatory agency or other instrumentality of the United States of America, any foreign country, or any domestic or foreign state, county, city or other political subdivision.
“Indemnified Party” has the meaning set forth inSection 7.7(c).
“Indemnifying Party” has the meaning set forth inSection 7.7(c).
“Indemnitee” has the meaning set forth inSection 8.9.
“Initial Stockholder” means each Stockholders listed onSchedule 1 hereto.
“Inspectors” has the meaning set forth inSection 7.4(j).
“Interruption Period” has the meaning set forth inSection 7.4.
“IPO” has the meaning set forth inSection 7.2(a)(i).
“IPO Registration Statement” has the meaning set forth inSection 7.1(a).
“IPO Target Date” has the meaning set forth inSection 7.1(a).
“JPMC Director” has the meaning set forth inSection 2.1(a)(ii).
“JPMC Stockholders” means, collectively, (a) the Persons identified as “Initial JPMC Stockholders” onSchedule 2 hereto, together with (b) any of their Affiliates or Related Funds that receives shares of Common Stock in a Transfer that complies with this Agreement and becomes a Stockholder hereunder.
“Law” means any law, statute, rule, regulation, ordinance or other pronouncement having the effect of law in the United States of America, any foreign country or any domestic or foreign state, county, city or other political subdivision or of any Governmental Authority.
“Losses” has the meaning set forth inSection 7.7(a).
“LTIP” means the NewPage Holdings Inc. 2012 Long-Term Incentive Plan.
“Majority Sale” has the meaning set forth inSection 5.4(a).
“Marketing Materials” has the meaning set forth inSection 7.7(a).
“Notice of Preemptive Rights” has the meaning set forth inSection 6.1(b).
“NPC” has the meaning set forth in the recitals to this Agreement.
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“Oaktree Director” has the meaning set forth inSection 2.1(a)(iii).
“Oaktree Stockholders” means, collectively, (a) the Persons identified as “Initial Oaktree Stockholders” onSchedule 2 hereto, together with (b) any of their Affiliates or Related Funds that receives shares of Common Stock in a Transfer that complies with this Agreement and becomes a Stockholder hereunder.
“Other Purchasers” has the meaning set forth inSection 6.1(d).
“Parties” means, collectively, at any particular time, the Company and each of the Stockholders party to this Agreement at such time. Each of the Parties is referred to as a “Party.”
“Person” means an individual, corporation, partnership, limited liability company, joint venture, association, joint stock company, trust or unincorporated organization, or government or any agency or political subdivision thereof.
“Piggyback Registration” has the meaning set forth inSection 7.3(a).
“Plan” has the meaning set forth in the preamble of this Agreement.
“Proposed Transfer” has the meaning set forth inSection 5.1(b).
“Pro Rata Portion” means:
(a) for purposes ofSection 5.4 (drag-along rights), with respect to any Employee Stockholder, a number of shares of Common Stock determined by multiplying (i) the aggregate number of shares of Common Stock Beneficially Owned by such Employee Stockholder by (ii) a fraction, the numerator of which is the aggregate number of shares of Common Stock proposed to be Transferred by the Drag-Along Seller to the Drag-Along Buyer and the denominator of which is the aggregate number of shares of Common Stock Beneficially Owned by the Drag-Along Seller.
(b) for purposes ofSection 5.5 (tag-along rights), (x) with respect to each Tagging Stockholder, a number of shares of Common Stock determined by multiplying (i) the total number of shares of Common Stock proposed to be Transferred by the Selling Stockholder to the Tag-Along Buyer, by (ii) a fraction, the numerator of which is the number of shares of Common Stock Beneficially Owned by the Tagging Stockholder and the denominator of which is the aggregate number of shares of Common Stock Beneficially Owned by the Selling Stockholder and all of the Employee Stockholders, and (y) with respect to the Selling Stockholder, the total number of shares of Common Stock proposed to be Transferred by the Selling Stockholder minus the aggregate number of shares of Common Stock with respect to which the Tagging Stockholders have exercised their “tag-along” rights pursuant toSection 5.5.
(c) for purposes ofSection 6.1 (preemptive rights), with respect to any Eligible Stockholder, a number of Dilutive Securities determined by multiplying (i) the aggregate number of Dilutive Securities the Company proposes to issue on the relevant issuance date by (ii) a fraction, the numerator of which is the number of shares of Common Stock Beneficially Owned by such Eligible Stockholder immediately prior to such date and the denominator of which is the aggregate number of shares of Common Stock Beneficially Owned by all Stockholders.
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“Prospectus” means the prospectus included in any Registration Statement (including a prospectus that discloses information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement and all other amendments and supplements to such prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such prospectus, including any free writing prospectus.
“Qualified Pledge” means a bona fide pledge of shares of Common Stock in connection with a secured borrowing transaction, the pledgee with respect to which is a financial institution in the business of engaging in secured lending and similar transactions which has entered into such transaction in the ordinary course of such business.
“Qualified Public Offering” means a bona fide underwritten public offering of shares of Common Stock by a nationally recognized investment banking firm that is registered under the Securities Act and that results in (a) the issuance and/or sale, pursuant to such offering, of shares constituting at least ten percent (10%) of the total outstanding shares of Common Stock (calculated on an as-issued basis) and (b) the listing of such shares of Common Stock on The NASDAQ Stock Market or the New York Stock Exchange.
“Records” has the meaning set forth inSection 7.4(j).
“Registrable Securities” means all shares of Common Stock Beneficially Owned by any Stockholder, and any additional securities issued or distributed by way of a dividend or other distribution in respect of any such shares of Common Stock,provided, that any such securities shall cease to be Registrable Securities (a) upon sale to the public pursuant to a Registration Statement or Rule 144 under the Securities Act or (b) upon repurchase by the Company.
“Registration” means registration under the Securities Act of an offering of Registrable Securities pursuant toSection 7.1 or pursuant to a Demand Registration or a Piggyback Registration.
“Registration Statement” means any registration statement of the Company filed under the Securities Act that covers any of the Registrable Securities pursuant to the provisions of this Agreement, including the related Prospectus, all amendments and supplements to such registration statement, including pre- and post-effective amendments, all exhibits thereto and all material incorporated by reference or deemed to be incorporated by reference in such registration statement, and shall also include any registration statement filed pursuant to Rule 462(b) under the Securities Act to register additional securities in connection with any offering.
“Related Fund” means, with respect to any Person, (a) any fund, account or investment vehicle that is controlled or managed (i) by such Person, (ii) by any Affiliate of such Person or (iii) by the same investment manager or advisor as the investment manager or advisor for such Person, or by an Affiliate of such investment manager or advisor or (b) any Person formed and controlled by any of the foregoing.
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“Representative” means, with respect to any Person, such Person’s employees, officers, directors, legal counsel, accountants, financial advisors, consultants and other representatives.
“Requesting Stockholder” has the meaning set forth inSection 5.1(b).
“road show” has the meaning given to such term in Rule 433 under the Securities Act.
“SEC” means the United States Securities and Exchange Commission, or any other Federal agency at the time administering the Securities Act or the Exchange Act.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.
“Selling Stockholder” has the meaning set forth inSection 5.5(a).
“Shelf Registration” means a Registration Statement relating to Registrable Securities to provide for the sale by the Stockholders thereof of the Registrable Securities from time to time on a delayed or continuous basis pursuant to Rule 415 under the Securities Act.
“Stockholders” means, collectively, each of the Initial Stockholders and any other Person who (a) is a Transferee of shares of Common Stock, whether from another Stockholder or from the Company and (b) is required by this Agreement to agree to be bound by the terms and conditions of this Agreement and, with respect to any Stockholder that is a natural person shall include his or her legal representatives, executors or administrators when the context so requires. Each Person that receives shares of Common Stock pursuant to the Plan (and their respective successors and assigns) shall automatically be deemed a party to this Agreement as a “Stockholder” hereunder, whether such Person receives such shares on or after the Effective Date (as defined in the Plan) and regardless of whether it executes or delivers a signature page to this Agreement.
“Subsidiary” means, with respect to any specified Person, any other Person in which such specified Person, directly or indirectly, (a) Beneficially Owns more than fifty percent (50%) of the outstanding equity interests, (b) has the power to elect, or to direct the election of, a majority of the members of the board of directors or other governing body, (c) is a general partner, with respect to any such other Person that is a partnership, or (d) is the managing member or serves in a similar role, with respect to any such other Person that is a limited liability company.
“Subsidiary Board” means, with respect to each Subsidiary of the Company, its respective board of directors, board of managers or similar governing body.
“Tag-Along Buyer” has the meaning set forth inSection 5.5(a).
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“Tag-Along Notice” has the meaning set forth inSection 5.5(b).
“Tag-Along Rights Holder” has the meaning set forth inSection 5.5(a).
“Tagging Stockholder” has the meaning set forth inSection 5.5(a).
“Transfer” means any direct or indirect sale, transfer, assignment, conveyance, pledge or other disposition, including by merger, operation of law, bequest or pursuant to any domestic relations order, whether voluntarily or involuntarily,provided,however that (a) any sale, transfer, assignment, conveyance or other disposition to the Company or any Subsidiary of the Company shall not be a Transfer, (b) no Transfer of shares of Common Stock shall be deemed to have occurred as a result of the entry into, modification of or existence of any Qualified Pledge, it being understood and agreed that a Qualified Pledge does not convey upon the pledgee any of the rights of a Stockholder under this Agreement, including any right to vote, or to direct the vote, of the pledged shares of Common Stock and (c) any foreclosure, transfer in lieu of foreclosure or other enforcement of any Qualified Pledge shall be deemed to constitute a Transfer hereunder.
“Transfer Approval Period” has the meaning set forth inSection 5.1(b).
“Transferee” means any Person acquiring shares of Common Stock pursuant to any Transfer.
“Transfer Request” has the meaning set forth inSection 5.1(b).
“underwritten registration” or “underwritten offering” means a registration under the Securities Act in which securities of the Company are sold to an underwriter for reoffering to the public.
SECTION 1.2Rules of Interpretation. Unless the context otherwise clearly requires: (a) a term has the meaning assigned to it; (b) “or” is not exclusive; (c) wherever from the context it appears appropriate, each term stated in either the singular or the plural shall include the singular and the plural, and pronouns stated in either the masculine, feminine or neuter shall include the masculine, feminine and neuter; (d) provisions apply to successive events and transactions; (e) all references in this Agreement to “including” shall be deemed to be followed by the phrase “without limitation”; (f) all references in this Agreement to designated “Articles,” “Sections,” “paragraphs,” “clauses” and other subdivisions are to the designated Articles, Sections, paragraphs, clauses and other subdivisions of this Agreement, and the words “herein,” “hereof,” “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section, paragraph, clause or other subdivision; (g) any definition of or reference to any agreement, instrument, document, statute, rule or regulation herein shall be construed as referring to such agreement, instrument, document, statute, rule or regulation as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein) and (h) if the date to perform any act or to give any notice under or with respect to this Agreement shall fall on a day other than a Business Day, such act or notice may be timely performed or given if performed or given on the next succeeding Business Day.
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ARTICLE II
BOARD OF DIRECTORS AND GOVERNANCE
SECTION 2.1Board Composition; Election and Removal of Directors.
(a)Board Composition. Each Stockholder agrees to vote (or shall cause to be voted) all shares of Common Stock that it Beneficially Owns, and shall take all other necessary actions within its control, to ensure that the number of Directors constituting the entire Board shall be not less than six (6) nor more than twelve (12), as determined within that range by the Board, subject to adjustment in accordance withSection 2.5(b) and/or the last sentence of thisSection 2.1(a), and that the following individuals shall be elected to the Board to serve as Directors:1
(i) for so long as the Goldman Stockholders Beneficially Own at least five percent (5%) of the outstanding shares of Common Stock held by all Stockholders, one individual designated by the Goldman Stockholders (the “Goldman Director”);
(ii) for so long as the JPMC Stockholders Beneficially Own at least five percent (5%) of the outstanding shares of Common Stock held by all Stockholders, one individual designated by the JPMC Stockholders (the “JPMC Director”);
(iii) for so long as the Oaktree Stockholders Beneficially Own at least five percent (5%) of the outstanding shares of Common Stock held by all Stockholders, one individual designated by the Oaktree Stockholders (the “Oaktree Director”); and
(iv) the Chief Executive Officer,provided, that the Chief Executive Officer shall be employed under an employment agreement which provides that, upon any termination of such Person’s employment (whether by the Company or the executive, regardless of whether or not for “cause”), such executive shall, upon any request by the Board, immediately resign as a Director and, as applicable, from the boards of directors of the Company’s Subsidiaries and any other Person for which he or she is serving, at the request of the Company, as a director, member, manager, trustee or other similar capacity.
Any Designating Stockholder that has not designated a Designated Director on or before the date of this Agreement shall have the right, in its discretion and at any time after the date hereof, to designate a Designated Director pursuant to the foregoing clause (i), (ii) or (iii), as applicable, by written notice to the Company (a “Director Designation Notice”). The Company shall, promptly following its receipt of a Director Designation Notice from any Designating Stockholder, provide written notice thereof to each of the other Stockholders and the number of Directors constituting the entire Board shall be increased by one, with the resulting Board vacancy filled by the individual specified in the Director Designation Notice.
1 | Note to Draft: subject to revision (with corresponding change to “Designating Stockholder” definition) as necessary to delete the board designation right for any Stockholder that (together with its Affiliates and Related Funds) is not entitled to receive, as a distribution under the Plan, at least 10% of the total shares of Common Stock distributed with respect to First Lien Notes Claims under the Plan. |
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(b)Chairman. The Board shall elect a chairman (the “Chairman”) from among the members of the Board.
(c)Vacancies. In the event that a vacancy is created on the Board at any time by the death, disability, retirement, resignation or removal of a Director (other than a Designated Director), such vacancy shall be filled until the election and qualification of such Director’s successor, by an individual designated by a majority of the Directors remaining in office. Except as set forth inSection 2.1(f), in the event that a vacancy is created on the Board at any time by the death, disability, retirement, resignation or removal of a Designated Director, the Designating Stockholder that designated such Director shall, for so long as it is entitled to designated a Director pursuant toSection 2.1(a), have the exclusive right to fill such vacancy.
(d)Removal. If any Designating Stockholder proposes to remove its respective Designated Director from the Board, the other Stockholders agree, promptly upon any request from such Designating Stockholder, to cooperate in effecting such removal and taking any actions necessary to fill any resulting vacancy in accordance withSection 2.1(c). Any Designated Director may be removed for Cause by the affirmative vote or written consent of Stockholders who Beneficially Own a majority of the outstanding shares of Common Stock held by all Stockholders, but Designated Directors may not otherwise be removed except as set forth in the immediately preceding sentence andSection 2.1(f). Any Director that is not a Designated Director may be removed at any time, with or without Cause, by the affirmative vote or written consent of Stockholders who Beneficially Own a majority of the outstanding shares of Common Stock held by all Stockholders.
(e)Board Committees. Except to the extent prohibited by applicable Law or the rules of any stock exchange on which the Common Stock may be listed, any Designating Stockholder shall have the right, at its option, to have its respective Designated Director seated on any one or more committees of the Board.
(f)Loss of Designating Stockholder Status. Notwithstanding anything contained in thisSection 2.1, if any of the Designating Stockholders ceases to Beneficially Own, at any time, at least five percent (5%) of the outstanding shares of Common Stock held by all Stockholders, then such Designating Stockholder (i) shall thereupon cease to be a “Designating Stockholder” for all purposes of this Agreement and shall no longer have the right to designate a Designated Director pursuant to thisSection 2.1, (ii) shall, if its loss of Designating Stockholder status is a result of any Transfer of Common Stock by such Designating Stockholder, promptly (and in no event more than one Business Day thereafter) notify the Company of such fact, and (iii) shall cause its respective Designated Director to promptly resign from the Board and from any Board committee on which he or she is seated, and if such Designated Director fails to promptly resign, the Company and the Stockholders shall take all necessary actions within their control to effectuate such removal. Any Board vacancy created by thisSection 2.1(f) shall be filled by the Directors remaining in office.
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(g)No Transfer of Designated Director Rights. Designating Stockholders may not Transfer their rights pursuant to thisSection 2.1 to any other Person.
(h)Further Assurances. The Company hereby agrees to cause each individual designated as a Designated Director to be nominated to serve as a Director, and to take all other necessary actions (including calling special meetings of the Board and/or Stockholders) to ensure that the composition of the Board is as set forth inSection 2.1(a) and to otherwise effectuate the provisions of thisSection 2.1. Each Stockholder hereby agrees to vote, in person or by proxy, all of the shares of Common Stock that it Beneficially Owns, at any annual or special meeting of Stockholders or pursuant to any written consent of the Stockholders in lieu of a meeting, and take all other necessary actions within its control, to effectuate the provisions of thisSection 2.1.
SECTION 2.2Action by the Board; Affiliate Transactions. Except as otherwise set forth in this Agreement or in the Bylaws, all actions taken by the Board shall be taken by a majority vote of the Directors present at any meeting at which a quorum is present. Notwithstanding the foregoing, entering into or engaging in, or amending or modifying the terms of, an Affiliate Transaction shall require the affirmative approval of a majority of Disinterested Directors.
SECTION 2.3D&O Indemnification and Insurance. The Company shall enter into an indemnification agreement with each Director upon his or her appointment in such form as is adopted by the Board. The Company shall maintain continuously in effect directors’ and officers’ liability insurance and each director shall be covered under such insurance.
SECTION 2.4Reimbursement and Compensation. The Company shall pay the reasonable out-of-pocket costs and expenses incurred by each Director in the course of his or her service to the Company, including in connection with attending regular and special meetings of the Board and any Board committees on which he or she is seated, in each case subject to the Company’s policies and procedures with respect thereto (including the requirement of reasonable documentation thereof). Directors may be compensated for their service as a Directors, at the discretion of the Board.
SECTION 2.5Actions Requiring Stockholder Approval. Notwithstanding that a lesser percentage vote may be specified by Law, by the Certificate of Incorporation or Bylaws, or otherwise, the Company and the Stockholders agree that:
(a)Majority Approval. The Company shall not, and shall not permit any of its Subsidiaries to, take any of the following actions without first obtaining Board approval and the affirmative vote or written consent of Stockholders who Beneficially Own a majority of the outstanding shares of Common Stock held by all Stockholders:
(i) merge, consolidate with or into, engage in a share exchange with, or otherwise consummate any similar business combination transaction with, any other Person (other than transactions solely involving the merger or consolidation of a wholly owned Subsidiary with or into, or a share exchange by a wholly owned Subsidiary with, the Company or another wholly owned Subsidiary of the Company);
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(ii) sell, assign, lease, license transfer or otherwise dispose of all or substantially all of the assets of the Company and its Subsidiaries, considered on a consolidated basis (other than any such transaction solely between the Company and one or more wholly owned Subsidiaries or between one or more wholly owned Subsidiaries of the Company); or
(iii) enter into any contract, agreement, arrangement or commitment to do or engage in any of the foregoing.
(b)Supermajority Approval. The Company shall not, and shall not permit any of its Subsidiaries to, take any of the following actions without first obtaining Board approval and the affirmative vote or written consent of Stockholders who Beneficially Own at least sixty-six and two-thirds percent (662/3%) of the outstanding shares of Common Stock held by all Stockholders:
(i) initiate or take any action for the liquidation, dissolution or winding up of the Company or any of its Subsidiaries;
(ii) make any change in the number of Directors that constitutes the entire Board outside of the range set forth inSection 2.1(a); or
(iii) enter into any contract, agreement, arrangement or commitment to do or engage in any of the foregoing.
ARTICLE III
ACCESS TO INFORMATION
SECTION 3.1Exchange Act Registration. As soon as practicable after the date of this Agreement (but in no event later than the date that is six (6) months after the date of this Agreement), the Company shall file a Registration Statement on Form 10 to register the Common Stock under the Exchange Act, and shall thereafter use its best efforts to cause such Registration Statement to be declared effective by the SEC as promptly as practicable.
SECTION 3.2 Information to be Provided by the Company.
(a)Periodic Reports. From the date of this Agreement until the Registration Statement on Form 10 is filed pursuant toSection 3.1 and becomes effective, and at any other time that the Company is not subject to the periodic and current reporting requirements of the Exchange Act, the Company shall provide the following reports to the Stockholders by posting them on the Company’s website (which postings shall include, for each such annual or quarterly report, the dial-in instructions for any Person that wishes to participate in the conference call to be held with respect to such report pursuant toSection 3.2(b)) and in an electronic data room to which each Stockholder is given access:
(i) within one hundred twenty (120) days after the fiscal year ending December 31, 2012, and within ninety (90) days after the end of each subsequent fiscal year, an annual report containing substantially all of the information that would have been required to be contained in an Annual Report on Form 10-K if the Company had been a reporting company under the Exchange Act;
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(ii) within forty-five (45) days after the end of each of the first three fiscal quarters of each fiscal year, a quarterly report containing substantially all of the information that would have been required to be contained in a Quarterly Report on Form 10-Q if the Company had been a reporting company under the Exchange Act; and
(iii) within five (5) Business Days after the occurrence of any event that would have been required to be reported in a Current Report on Form 8-K if the Company had been a reporting company under the Exchange Act, a current report containing substantially all of the information that would have been required to be reported in such a Form 8-K.
(b)Quarterly Conference Calls. Within fifteen (15) days after providing any annual or quarterly report to the Stockholders pursuant toSection 3.2(a), the Company shall hold a conference call with the Stockholders to discuss the information contained in such report and the Company’s results of operations and financial performance, and to answer questions related thereto.
ARTICLE IV
CERTIFICATE OF INCORPORATION AND BYLAWS
The Stockholders acknowledge and agree that, as of the date of this Agreement, the Certificate of Incorporation and the Bylaws shall be in effect in the forms attached asExhibit A andExhibit B hereto, respectively. If and to the extent that any provision of this Agreement conflicts with or is inconsistent with any provision of the Certificate of Incorporation or the Bylaws, then to the fullest extent permitted by Law, such provision of this Agreement shall be controlling and, to the extent practicable, the conflicting or inconsistent provision of the Certificate of Incorporation and/or Bylaws, as applicable, shall be construed in a manner consistent with such provision of this Agreement. It is hereby agreed that neither the Certificate of Incorporation nor the Bylaws will be amended in any manner that is inconsistent with the provisions of this Agreement.
ARTICLE V
TRANSFERS OF SHARES
SECTION 5.1Restrictions on Transfers.
(a)General. Each Stockholder, severally and not jointly, agrees and acknowledges that, except with the prior written consent of the Company, such Stockholder will not Transfer any shares of Common Stock except as expressly permitted by this Agreement. Any Stockholder may Transfer all or any portion of its shares of Common Stock at any time to any Person that is not a Competitor,provided, that such Transfer (i) complies with the Securities Act and all applicable state securities and “blue sky” laws, (ii) will not result in the Company’s being required to file reports under the Exchange Act if it is not otherwise then subject to such
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requirements and (iii) except for any Transfer to a Related Fund of such Stockholder, is made pursuant to a Transfer Request that has been (or is deemed to have been) approved by the Company. Any attempted or purported Transfer of all or a portion of the shares of Common Stock that is not expressly permitted by thisSection 5.1 shall be null and voidab initio and of no force or effect whatsoever, and (A) the Company shall not recognize any such attempted or purported Transfer in its books and records and (B) the purported Transferee shall not be treated as an owner of shares of Common Stock for any purpose, and shall not be entitled to any of the rights of ownership with respect to such shares of Common Stock, including the right to vote such shares or to receive a certificate for such shares or to receive any dividends or other distributions on or with respect to such shares.
(b)Transfer Requests. In order to provide for the effective policing ofSection 5.1(a), any Stockholder who proposes to effect any Transfer of shares of Common Stock to any Person other than a Related Fund of such Stockholder (a “Proposed Transfer”) must submit to the Company, at least three (3) Business Days prior to the date of the Proposed Transfer, a written notice that contains the following information and requests that the Company approve the Proposed Transfer pursuant to thisSection 5.1(b) (any such notice, a “Transfer Request”): (i) the name of the Stockholder proposing such Transfer (the “Requesting Stockholder”) and the number of shares of Common Stock that it Beneficially Owns, (ii) the name, address, jurisdiction of organization or citizenship and telephone number of the proposed Transferee, (iii) the number of shares of Common Stock that are subject to the Proposed Transfer and (iv) the date on which the Proposed Transfer is expected to occur. Within three (3) Business Days after its receipt of a Transfer Request, which period shall automatically be extended to the first Business Day after the Company receives all such additional information as the Company in its discretion may reasonably request from the Requesting Stockholder and/or the proposed transferee (which may include an opinion of counsel to establish that registration of the Proposed Transfer is not required under the Securities Act or any applicable state securities or “blue sky” laws) (such period, the “Transfer Approval Period”), the Company shall determine whether to approve or deny the Proposed Transfer and shall notify the Requesting Stockholder of such determination;provided, that the Company shall not deny a Proposed Transfer unless it determines that (x) the proposed Transferee is a Competitor or (y) such Proposed Transfer does not satisfy the requirements set forth inSection 5.1(a)(ii) (but for the avoidance of doubt, the Company may, in its discretion, approve a Proposed Transfer despite the fact that it does not satisfy the requirements set forth inSection 5.1(a));provided,further, that if the Company does not notify the Requesting Stockholder of its determination within the Transfer Approval Period, the Company shall be deemed to have approved such Transfer.
(c)Joinder. With respect to any Transfer of shares of Common Stock, the Transferee of such shares shall execute and deliver to the Company, as a condition precedent to the effectiveness of such Transfer, an instrument in substantially the form attached hereto asExhibit C (or such other documentation as is agreed by the Company and such Transferee) to confirm that the Transferee takes such shares subject to all the terms and conditions of this Agreement and agrees to be bound by all of the terms and conditions of this Agreement.
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SECTION 5.2Legend on Certificates.
(a) Each outstanding certificate representing shares of Common Stock that are subject to this Agreement shall bear an endorsement reading substantially as follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE (THE “SECURITIES”) WERE ORIGINALLY ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENT OF SECTION 5 OF THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), PROVIDED BY SECTION 1145 OF THE BANKRUPTCY CODE, 11 U.S.C. § 1145. THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE ACT OR ANY STATE SECURITIES LAW, AND TO THE EXTENT THE HOLDER OF THE SECURITIES IS AN “UNDERWRITER,” AS DEFINED IN SECTION 1145(B)(1) OF THE BANKRUPTCY CODE, THE SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN EXEMPTION FROM REGISTRATION THEREUNDER.
THE SALE, ASSIGNMENT, PLEDGE, ENCUMBRANCE OR OTHER TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS RESTRICTED BY THE TERMS OF, AND THE HOLDER HEREOF IS SUBJECT TO CERTAIN OTHER OBLIGATIONS PURSUANT TO, THE PROVISIONS OF A STOCKHOLDERS AGREEMENT, DATED AS OF [—], AS MAY BE AMENDED FROM TIME TO TIME IN ACCORDANCE WITH ITS TERMS, AMONG THE COMPANY AND HOLDERS OF ITS COMMON STOCK. A COPY OF SUCH STOCKHOLDER AGREEMENT IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICE OF THE COMPANY.
(b) In the event that the Common Stock shall cease to be subject to the restrictions on Transfer set forth in thisArticle V, the Company shall, upon the written request of any Stockholder, issue to such holder a new certificate evidencing the shares of Common Stock Beneficially Owned by such Stockholder without the legend required by thisSection 5.2.
SECTION 5.3No Circumvention of Stock Transfer Restrictions. Each Party agrees that the Transfer restrictions in this Agreement may not be avoided by the holding of shares of Common Stock directly or indirectly through a Person that can itself be sold in order to dispose of an interest in shares of Common Stock free of such restrictions. Any Transfer of any shares of Common Stock (or other interest) resulting in any change in the control, directly or indirectly, of a Stockholder or of any other Person having control, directly or indirectly, over that Stockholder shall be treated as being a Transfer of the shares of Common Stock Beneficially Owned by that Stockholder, and the provisions of this Agreement that apply in respect of the Transfer of shares of Common Stock shall thereupon apply in respect of the shares of Common Stock so held;provided that thisSection 5.3 shall not apply in respect of a bona fide Transfer of equity securities of a Person having a direct or indirect interest in any shares of Common Stock, where that interest does not represent more than ten percent (10%) of the assets of that Person.
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SECTION 5.4Drag-Along - Employee Stockholders.
(a) In the event that any Stockholder or group of Stockholders (collectively, in such capacity, the “Drag-Along Seller”) proposes to Transfer to any Person or a group of Persons that is not an Affiliate or Related Fund of such Stockholder(s) (a “Drag-Along Buyer”), in one transaction or a series of related transactions, shares of Common Stock representing more than fifty percent (50%) of the then-outstanding shares of Common Stock (a “Majority Sale”), the Drag-Along Seller shall have the right to require each of the Employee Stockholders to Transfer its Pro Rata Portion of the shares of Common Stock to the Drag-Along Buyer, as part of such Majority Sale, upon the same terms and subject to the same conditions as are applicable to the Drag-Along Seller.
(b) In order to exercise its rights underSection 5.4(a) with respect to any Majority Sale, the Drag-Along Seller shall provide written notice of such Majority Sale to the Company and the Employee Stockholders (or, if requested to do so in writing, the Company shall provide such notice to the Employee Stockholders on behalf of the Drag-Along Seller), which notice shall include the following information with respect to such Majority Sale (a “Drag-Along Notice”): the identity of the Drag-Along Buyer, the number of shares of Common Stock proposed to be Transferred by the Drag-Along Seller, the total number of shares of Common Stock (and each Employee Stockholder’s Pro Rata Portion thereof) to be Transferred to the Drag-Along Buyer pursuant to the Majority Sale, and the other material terms and conditions of the Majority Sale, including the purchase price payable for the shares of Common Stock and the anticipated closing date, which shall be at least ten (10) Business Days after the date of such notice. Notwithstanding the foregoing, with respect to any Majority Sale, (i) no Employee Stockholder will be required to make any representations or warranties, or provide any indemnity to any Person, other than with respect to its having unencumbered title to the shares of Common Stock that it is required to Transfer in such Majority Sale and the power, authority and legal right to Transfer such shares and (ii) the aggregate liability or loss incurred by any Employee Stockholder with respect to such representations, warranties, indemnities or other agreements shall not exceed the proceeds that such Employee Stockholder receives, or is entitled to receive, in connection with such Majority Sale.
(c) At the closing of any Majority Sale (the “Drag-Along Closing”), each Employee Stockholder shall deliver to the Drag-Along Buyer certificates or other instruments, duly endorsed in blank for Transfer or accompanied by stock powers duly endorsed in blank, in either case with signatures guaranteed, representing such Employee Stockholder’s Pro Rata Portion of the total number of shares of Common Stock to be Transferred to the Drag-Along Buyer pursuant to the Majority Sale, against payment of a pro rata share of the purchase price (net of a pro rata share of any holdback or escrow) for such shares. Each Employee Stockholder hereby authorizes and directs the Company (or the Company’s transfer agent, as applicable) to record in the books and records of the Company the Transfer of such number of shares of Common Stock from such Employee Stockholder to the Drag-Along Buyer, as of the date of the Drag-Along Closing. In addition, each Employee Stockholder shall take any and all actions as the Drag-Along Seller or the Drag-Along Buyer may reasonably request from time to time, to effectuate such Transfer and vest in the Drag-Along Buyer all shares of Common Stock that such Employee Stockholder is required to Transfer in such Majority Sale, whether in certificated or uncertificated form, free and clear of all liens, charges and encumbrances of any kind.
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(d) With respect to any Majority Sale that is structured as a merger, consolidation, amalgamation, or similar transaction, each Employee Stockholder shall, to the extent applicable: (i) vote, at a meeting of stockholders or by written consent in lieu of a meeting, all of its shares of Common Stock in favor of such transaction; (ii) waive or refrain from exercising any appraisal, dissenters’ or similar rights with respect to such transaction; and (iii) take such other action, consistent withSection 5.4(b), as may reasonably be required to complete such transaction.
(e) Solely for purposes ofSection 5.4(d) and in order to secure the performance of each Employee Stockholder’s obligations underSection 5.4(d) with respect to any Majority Sale, each Employee Stockholder hereby irrevocably appoints the Drag-Along Seller as its attorney-in-fact and proxy (with full power of substitution) to vote or provide a written consent with respect to any and all of its shares of Common Stock, if, and only in the event that, such Employee Stockholder fails to vote in favor of or provide a written consent with respect to its shares of Common Stock in accordance with the terms ofSection 5.4(d) within three (3) Business Days of a request for such vote or written consent (any such Employee Stockholder, a “Breaching Employee Stockholder”). Upon any such failure, the Drag-Along Seller shall have and is hereby irrevocably granted a proxy to vote or provide a written consent with respect to each Breaching Employee Stockholder’s shares of Common Stock solely for the purpose of taking the actions required bySection 5.4(d). Each Employee Stockholder intends this proxy to be, and it shall be, irrevocable and coupled with an interest, and each Employee Stockholder will take such further action and execute such other instruments as may be necessary to effectuate the intent of this proxy and hereby revokes any proxy previously granted by it with respect to the matters set forth inSection 5.4(d) with respect to any of its shares of Common Stock. Notwithstanding the foregoing, the conditional proxy granted by thisSection 5.4(e) shall be deemed to be revoked upon the termination of thisArticle V in accordance with its terms.
(f) If any Majority Sale is not consummated within ninety (90) days of the date the applicable Drag-Along Notice was provided (which ninety (90)-day period may be extended by notice from the Drag-Along Seller to the Employee Stockholders for up to two-hundred and seventy (270) days in the event any required approval of such sales from any governmental entity, including termination or expiration of the applicable waiting period under the applicable antitrust and competition laws has not then been obtained), the Drag-Along Seller shall return to the Employee Stockholders all applicable instruments representing shares of Common Stock that the Employee Stockholders delivered for Transfer, together with any other documents, that have been executed by the Employee Stockholders in connection with such proposed Majority Sale and are in the Drag-Along Seller’s possession or control.
SECTION 5.5Tag-Along - Employee Stockholders.
(a) In the event that any Stockholder or group of Stockholders (collectively, in such capacity, the “Selling Stockholder”) proposes to Transfer shares of Common Stock to any third party that is not an Affiliate or Related Fund of such Stockholder (the “Tag-Along Buyer”) pursuant to a Majority Sale, other than a Majority Sale with respect to which the Drag-Along Seller exercises its “drag-along” rights pursuant toSection 5.4, each Employee Stockholder (a “Tag-Along Right Holder”) shall have the right to participate in the Majority Sale by Transferring up to its Pro Rata Portion to the Tag-Along Buyer on the same terms and conditions as those proposed by the Selling Stockholder (each such participating Tag-Along Right Holder, the “Tagging Stockholder”).
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(b) The Selling Stockholder shall give written notice (a “Tag-Along Notice”) to each Tag-Along Right Holder of a Majority Sale, setting forth the number of shares of Common Stock proposed to be so Transferred, the name and address of the Tag-Along Buyer, the proposed amount and form of consideration and other terms and conditions of payment offered by the Tag-Along Buyer. The Selling Stockholder shall deliver or cause to be delivered to each Tag-Along Right Holder copies of all transaction documents relating to the Majority Sale as the same become available. The tag-along rights provided by thisSection 5.5 must be exercised by a Tag-Along Right Holder by delivery of an irrevocable written notice to the Selling Stockholder, within ten (10) Business Days after the date of the Tag-Along Notice, which notice shall specify the portion of such Tagging Stockholder’s Pro Rata Portion of the shares of Common Stock that it wishes to include in the Majority Sale. In the event that the Tag-Along Buyer fails to purchase all the shares of Common Stock proposed to be Transferred by the Selling Stockholder and the Tagging Stockholders, then the number of shares of Common Stock that the Selling Stockholder and each Tagging Stockholder is permitted to sell in such Majority Sale shall be reduced pro rata based on the number of shares of Common Stock proposed to be Transferred by the Selling Stockholder or such Tagging Stockholder, as applicable, relative to the aggregate number of shares of Common Stock proposed to be Transferred by the Selling Stockholder and all Tagging Stockholders. The Selling Stockholder shall have a period of ninety (90) days following the expiration of the ten (10) Business Day notice period mentioned above to sell all the shares of Common Stock agreed to be purchased by the Tag-Along Buyer on the terms specified in the notice required by the first sentence of thisSection 5.5(b).
(c) Any Transfer of shares of Common Stock by a Tagging Stockholder to a Tag-Along Buyer pursuant to thisSection 5.5 shall be on the same terms and conditions (including, without limitation, price, time of payment and form of consideration) as to be paid to the Selling Stockholder. Notwithstanding the foregoing, no Tagging Stockholder shall be required to make any representation or warranty, or provide any indemnity to any person, in connection with any Majority Sale other than with respect to the unencumbered title to its shares of Common Stock and its power, authority and legal right to Transfer such shares of Common Stock and the aggregate liability or loss as a result of such representations, warranties, indemnities or other agreements shall not exceed the proceeds such Tagging Stockholder received in connection with such Majority Sale. Each Tagging Stockholder shall be responsible for its proportionate share of the costs of the proposed Transfer to the extent not paid or reimbursed by the Tag-Along Buyer or the Company.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.1Preemptive Rights.
(a) In the event that the Company proposes to sell or otherwise issue shares of Common Stock or any other equity securities of the Company or any of its Subsidiaries, or any rights or securities (including options or warrants) exercisable, exchangeable or convertible into
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shares of Common Stock or such equity securities, whether immediately, upon the happening of any event or the passage of time, or otherwise, and whether issued by the Company, any Subsidiary of the Company or any other Person (collectively, “Dilutive Securities”), each Eligible Stockholder shall have the right to acquire a portion of such Dilutive Securities, in accordance with the provisions of thisSection 6.1.
(b) Not later than fifteen (15) Business Days prior to the anticipated issuance date of Dilutive Securities, the Company shall give written notice (the “Notice of Preemptive Rights”) to each Eligible Stockholder which shall state the Company’s intention to issue Dilutive Securities, the type and amount of Dilutive Securities to be issued, the purchase price therefor, a summary of the other material terms of the proposed issuance and the Pro Rata Portion of such Dilutive Securities which the Eligible Stockholder to which the notice is directed may purchase in connection with such issuance.
(c) Each Eligible Stockholder that is an “accredited investor” as defined in Rule 501 promulgated under the Securities Act shall have the right to purchase up to its Pro Rata Portion of such Dilutive Securities at the price and on the terms and conditions specified in the Notice of Preemptive Rights by delivering an irrevocable written notice (the “Acceptance Notice”) to the Company no later than fifteen (15) Business Days from the date the Notice of Preemptive Rights is delivered to such Eligible Stockholder at the price and upon the terms specified in the Notice of Preemptive Rights, setting out the number of Dilutive Securities with respect to which such right is being exercised. Such Acceptance Notice shall also include the maximum number of Dilutive Securities the Eligible Stockholder would be willing to purchase in the event any Dilutive Securities remain available for purchase after the date on which Acceptance Notices are due to the Company. If any Eligible Stockholder fails to elect to purchase its full Pro Rata Portion of such Dilutive Securities (or if there are Dilutive Securities in excess of the aggregate Pro Rata Portion of all Eligible Stockholders), the Company shall allocate any remaining amount among those Eligible Stockholders (prorata in accordance with the shares of Common Stock then Beneficially Owned by each such Eligible Stockholders relative to the aggregate number of shares of Common Stock held by all Eligible Stockholders participating in such issuance of Dilutive Securities) who have indicated in their Acceptance Notice a desire to purchase Dilutive Securities in excess of their respective Pro Rata Portions (it being understood that if Eligible Stockholders elect to purchase more Dilutive Securities than remain available for sale, such allocation shall be madeprorata in accordance with the shares of Common Stock then Beneficially Owned by each such Eligible Stockholder relative to the aggregate number of shares of Common Stock held by all Eligible Stockholders participating in such issuance of Dilutive Securities);provided that no Eligible Stockholder shall be required to purchase more Dilutive Securities than the maximum number set forth in such Eligible Stockholder’s Acceptance Notice.
(d) The Company may sell or issue any Dilutive Securities not covered by an Acceptance Notice to any other Person or Persons, but only upon terms and conditions that are in all respects no more favorable to such other Person or Persons than those set forth in the Notice of Preemptive Rights. If the Company does not consummate the sale or issuance of all or part of such remaining Dilutive Securities to such other Person or Persons within sixty (60) days after the end of the fifteen (15) Business Day period specified inSection 6.1(b), the right provided hereunder shall be deemed to be revived and such Dilutive Securities shall not be issued unless
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first reoffered to the Eligible Stockholders in accordance with thisSection 6.1. Concurrently with the closing of the sale or issuance to such other Person or Persons (the “Other Purchasers”) of all or part of such Dilutive Securities, each Eligible Stockholder shall purchase from the Company, and the Company shall sell or issue to such Eligible Stockholder, the securities covered by the Acceptance Notice delivered to the Company by such Eligible Stockholder on the terms specified in the Notice of Preemptive Rights. The purchase by an Eligible Stockholder of any such securities is subject in all cases to the execution and delivery by the Company and the Eligible Stockholder of (a) a purchase agreement or subscription agreement relating to such securities and (b) all other documents in form and substance similar in all material respects, to the extent applicable, to those executed and delivered by the Company and the Other Purchasers.
(e) If any Eligible Stockholder does not deliver an Acceptance Notice within such fifteen (15) Business Day period, such Eligible Stockholder shall be deemed to have irrevocably waived any and all rights under thisSection 6.1 with respect to the purchase of such Dilutive Securities (but not with respect to future issuances in accordance with thisSection 6.1). Any sale of Dilutive Securities by the Company without first giving the Eligible Stockholders the rights described in thisSection 6.1 shall be void and of no force and effect.
(f) ThisSection 6.1 shall not apply to Dilutive Securities issued (i) under or pursuant to the terms of the LTIP or any similar benefit or incentive programs or arrangements covering directors, employees or consultants of the Company and its Subsidiaries; (ii) as consideration for the acquisition of assets or in any merger or business combination transaction involving the Company or any of its Subsidiaries; (iii) in any public offering registered under the Securities Act; (iv) in connection with a stock split, dividend or similar transaction; or (v) pursuant to the exercise of any options, warrants, convertible securities or other rights that were issued subject to, and in compliance with, thisSection 6.1.
SECTION 6.2Confidentiality. Each Stockholder who has received Confidential Information from the Company or its Representatives agrees that it shall not, and shall cause its Affiliates and Representatives not to, reveal to any other Person other than such Stockholder’s Affiliates and Representatives, or use for any purpose not related to such Stockholder’s investment in the Company, any such Confidential Information without the prior written consent of the Company;provided that such undertaking shall not apply to:
(a) disclosure of Confidential Information that is or has become generally available to the public other than as a result of disclosure by or at the direction of a Party or a Party’s Representatives or the Representatives of any Affiliate of any Party in violation of this Agreement;
(b) disclosures of Confidential Information to the extent necessary or required under any (i) applicable Law, (ii) accounting standard, or (iii) in connection with any judicial process regarding any legal action, suit or proceeding arising out of or relating to this Agreement, in each case after giving prior written notice to the other Parties to the extent practicable under the circumstances, and subject to having undertaken any reasonably available arrangements to protect confidentiality (for example, seeking a protective order in relation to such Confidential Information);
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(c) disclosures of Confidential Information with respect to the Company by any Stockholder to a third party who is not a Competitor and who has executed a confidentiality agreement whereby such party is bound by the confidentiality provisions of this Agreement;
(d) disclosures of Confidential Information that was available a Party from a source other than the Company, provided that such source, to such Party's knowledge after reasonable inquiry, is not and was not bound by a duty of confidentiality to the Company with respect to such Confidential Information; or
(e) disclosures of Confidential Information that has been independently acquired or developed by a Party or a Party’s Representatives without violating any of such Party’s obligations under this Agreement.
Notwithstanding any earlier termination of this Agreement, the obligations of each Stockholder under thisSection 6.2 shall survive until the earlier of (i) the second anniversary of the termination of this Agreement pursuant toSection 8.1 and (ii) the first anniversary of the date on which such Stockholder ceased to own any shares of Common Stock.
ARTICLE VII
REGISTRATION RIGHTS
SECTION 7.1IPO Covenant.
(a) On or before the date that is twelve (12) months after the date of this Agreement (the “IPO Target Date”), the Company shall file, and shall thereafter use its best efforts to cause to be declared effective as promptly as practicable, a Registration Statement on Form S-1 for the registration and sale of shares of Common Stock pursuant to an underwritten primary or secondary public offering that results in a Qualified Public Offering (the “IPO Registration Statement”).
(b) The Company shall be entitled to postpone the IPO Target Date for a reasonable period of time, if (i) the managing underwriter for such offering advises the Company in writing that unfavorable conditions in the U.S. equity markets are likely to delay or jeopardize the success of such offering (including the price per share of the Common Stock) in any material respect or (ii) the Board determines in good faith and in its reasonable judgment that the registration and distribution of shares of Common Stock pursuant to such Registration Statement is (A) likely to materially interfere with (or require premature disclosure of) any pending material financing, acquisition or corporate reorganization or other material corporate development involving the Company or any of its Subsidiaries or (B) otherwise not in the best interests of the Company and its Stockholders.
(c) The Company shall promptly give each Stockholder written notice of any such determination, containing a general statement of the reasons for such postponement and an approximation of the period of the anticipated delay;provided,however, that the IPO Target Date shall not be postponed beyond the date that is twenty-four (24) months after the date of this Agreement without the prior written consent of Stockholders holding at least sixty-six and two-thirds percent (662/3%) of the outstanding shares of Common Stock held by all Stockholders.
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(d) At any time following the IPO Target Date, if the Company shall not have completed an initial public offering of shares of the Common Stock pursuant to an IPO Registration Statement or filed an IPO Registration Statement that is pending before the SEC, any Stockholder or group of Stockholders that Beneficially Owns in the aggregate shares of Common Stock representing at least 25% of the outstanding shares of Common Stock held by all Stockholders shall be entitled, by written notice, to require the Company to file an IPO Registration Statement within forty-five (45) days after the date of such notice and the Company shall thereafter use its best efforts to cause such IPO Registration Statement to be declared effective as promptly as practicable.
SECTION 7.2Demand Registration
(a) Any Stockholder or group of Stockholders that Beneficially Owns, in the aggregate Registrable Securities representing at least ten percent (10%) of the outstanding shares of Common Stock held by all Stockholders shall have the right, by written notice given to the Company (a “Demand Notice”), to request the Company to register under and in accordance with the provisions of the Securities Act all or any portion of the Registrable Securities designated by such Stockholder(s);provided,however, that:
(i) the Stockholder shall not be permitted to give a Demand Notice, and the Company shall not be required to take any of the actions to register Registrable Securities pursuant to thisSection 7.2 until six (6) months following the completion of an initial public offering by the Company of shares of the Common Stock (an “IPO”);
(ii) prior to the time the Company becomes eligible to use Form S-3 (or any successor form) for the registration of Registrable Securities for resale, such Stockholder(s), in the aggregate, shall only be entitled to three (3) Demand Registrations pursuant to the provisions of thisSection 7.2 (provided, that each Stockholder entitled to deliver a Demand Notice pursuant toSection 2.1(a) shall be entitled to initiate at least one (1) Demand Registration), unless any Demand Registration does not become effective or is not maintained in effect for the respective periods set forth inSection 7.2(e), in which case the relevant Stockholder(s) will be entitled to an additional Demand Registration pursuant hereto;
(iii) following the time that the Company is eligible to use Form S-3 for the registration of Registrable Securities for resale, in no event shall the Company be required to file more than three (3) Demand Registrations during any twelve (12) month period; and
(iv) the Registrable Securities requested to be registered constitute at least ten percent (10%) of the shares of Common Stock issued and outstanding on the date of this Agreement.
(b) Upon receipt of a Demand Notice, the Company shall promptly (and in any event within ten (10) Business Days from the date of receipt of such Demand Notice), notify all other Stockholders of the receipt of such Demand Notice and allow them the opportunity to include Registrable Securities held by them in the proposed registration by submitting their own
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Demand Notice. In connection with any Demand Registration that involves an undewritten offering in which more than one Stockholder participates, in the event that the managing underwriter or underwriters for such offering advise such Stockholders in writing that the total number of Registrable Securities to be included in such offering exceeds the amount that can be sold in (or during the time of) such offering without delaying or jeopardizing the success of such offering (including the price per share of the Registrable Securities to be sold), then the Registrable Securities to be offered shall be distributed amongst the participating Stockholderspro rata according to each Stockholder’s overall percentage of ownership in the Company at the time of delivery of the Demand Notice. In the event of such a pro-rata distribution, to the extent that any Stockholder (or Stockholders) has not submitted a Demand Notice, or withdraws from the underwriting, then those shares of Common Stock that would have been allocated pro-rata to the non-participating Stockholder if they had participated shall be allocated amongst the participating Stockholders,pro rata according to each participating Stockholder’s overall percentage of ownership in the Company.
(c) The Company, within forty-five (45) days of the date on which the Company receives a Demand Notice given by Stockholders in accordance withSection 7.2(a), shall file with the SEC, and the Company shall thereafter use its best efforts to cause to be declared effective as promptly as practicable, a Registration Statement on the appropriate form for the registration and sale, in accordance with the intended method or methods of distribution, of the total number of Registrable Securities specified by the Stockholders in such Demand Notice (a “Demand Registration”). Any Demand Registration may, at the request of the Stockholders submitting the Demand Notice Beneficially Owning a majority of the Registrable Securities to be registered pursuant to such Demand Registration, be a Shelf Registration pursuant to Rule 415 under the Securities Act.
(d) The Company shall use commercially reasonable efforts to keep each Registration Statement filed pursuant to thisSection 7.2 continuously effective and usable for the resale of the Registrable Securities covered thereby (i) in the case of a Registration that is not a Shelf Registration, for a period of one hundred twenty (120) days from the date on which the SEC declares such Registration Statement effective and (ii) in the case of a Shelf Registration, for a period of three (3) years from the date on which the SEC declares such Registration Statement effective, in either case (x) until such earlier date as all of the Registrable Securities covered by such Registration Statement have been sold pursuant to such Registration Statement, and (y) as such period may be extended pursuant to thisSection 7.2. The time period for which the Company is required to maintain the effectiveness of any Registration Statement shall be extended by the aggregate number of days of all Delay Periods and all Interruption Periods occurring with respect to such Registration and such period and any extension thereof is hereinafter referred to as the “Effectiveness Period”.
(e) The Company shall be entitled to postpone the filing of any Registration Statement otherwise required to be prepared and filed by the Company pursuant to thisSection 7.2, or suspend the use of any effective Registration Statement under thisSection 7.2 (during which suspension each Stockholder Beneficially Owning Registrable Securities covered by the Registration Statement shall discontinue disposition of any Registrable Securities covered by the Registration Statement), for a reasonable period of time (a “Delay Period”), if the Board determines in good faith and in the Board’s reasonable judgment that the registration and
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distribution of the Registrable Securities covered or to be covered by such Registration Statement would materially interfere with any pending material financing, acquisition or corporate reorganization or other material corporate development involving the Company or any of its Subsidiaries or would require premature disclosure thereof and promptly gives the Stockholders written notice of such determination, containing a general statement of the reasons for such postponement and an approximation of the period of the anticipated delay;provided,however, that (i) the aggregate number of days included in all Delay Periods during any consecutive twelve (12) months shall not exceed the aggregate of (x) forty-five (45) days minus (y) the number of days occurring during all Interruption Periods during such consecutive twelve (12) months and (ii) a period of at least forty-five (45) days shall elapse between the termination of any Delay Period or Interruption Period and the commencement of the immediately succeeding Delay Period. If the Company shall so postpone the filing of a Registration Statement, the Stockholders of Registrable Securities to be registered shall have the right to withdraw the request for registration by giving written notice from the Stockholders of a majority of the Registrable Securities that were to be registered to the Company within forty-five (45) days after receipt of the notice of postponement or, if earlier, the termination of such Delay Period (and, in the event of such withdrawal, such request shall not be counted for purposes of determining the number of requests for registration to which the Stockholders of Registrable Securities are entitled pursuant to thisSection 7.2). The Company shall not be entitled to initiate or continue a Delay Period unless it shall (A) concurrently prohibit sales by all other security holders under registration statements covering securities held by such other security holders and (B) in accordance with the Company’s policies from time to time in effect, forbid purchases and sales in the open market by Directors and executive officers of the Company.
(f) The Company shall not include any securities (whether for its own account or otherwise) that are not Registrable Securities in any Registration Statement filed pursuant to thisSection 7.2 without the prior written consent of the Stockholders of a majority in number of the Registrable Securities covered by such Registration Statement. Any such securities so included shall be subject to the cut-back provisions ofSection 7.2(b).
(g) Stockholders holding a majority in number of the Registrable Securities to be included in a Registration Statement pursuant to thisSection 7.2 may, at any time prior to the effective date of the Registration Statement relating to such Registration, revoke such request by providing a written notice to the Company revoking such request. Any such Demand Request so withdrawn shall not be counted for purposes of determining the number of requests for registration to which the Stockholders of Registrable Securities are entitled pursuant to thisSection 7.2 if the Stockholders of Registrable Securities who revoked such request reimburse the Company for all its out-of-pocket expenses incurred in the preparation, filing and processing of the Registration Statement;provided,however, that, if such revocation was based on (i) the Company’s failure to comply in any material respect with its obligations hereunder or (ii) the institution by the Company of a Delay Period or the occurrence of any Interruption Period, such reimbursement shall not be required.
SECTION 7.3Piggyback Registration.
(a)Right to Piggyback. If at any time the Company proposes to file a registration statement under the Securities Act with respect to a public offering by the Company
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for its own account or on behalf of any other Person of securities of the same type as the Registrable Securities (other than a registration statement for an IPO), then the Company shall give written notice of such proposed filing to the Stockholders at least fifteen (15) days before the anticipated filing date. Such notice shall offer the Stockholders the opportunity to register such amount of Registrable Securities as they may request (a “Piggyback Registration”). Subject toSection 7.3(b), the Company shall include in each such Piggyback Registration all Registrable Securities with respect to which the Company has received written requests for inclusion therein within ten (10) days after notice has been given to the Stockholders. Each Stockholder shall be permitted to withdraw all or any portion of the Registrable Securities of such Stockholder from a Piggyback Registration at any time prior to the effective date of such Piggyback Registration without incurring cost or liability solely as a result of such withdrawal.
(b)Priority on Piggyback Registrations. The Company shall permit the Stockholders to include all such Registrable Securities on the same terms and conditions as any similar securities, if any, of the Company or any other Persons included therein. Notwithstanding the foregoing, if the Company or the managing underwriter or underwriters participating in such offering advise the Stockholders in writing that the total amount of securities requested to be included in such Piggyback Registration exceeds the amount which can be sold in (or during the time of) such offering without delaying or jeopardizing the success of the offering (including the price per share of the securities to be sold), then the amount of securities to be offered for the account of the Stockholders and other holders of securities who have piggyback registration rights with respect thereto shall be reduced (to zero if necessary)pro rata on the basis of the number of Registrable Securities requested to be registered by each such Stockholder or other holder participating in such offering.
(c)Right To Abandon. Nothing in thisSection 7.3 shall create any liability on the part of the Company to the Stockholders if the Company in its sole discretion should decide not to file a registration statement proposed to be filed pursuant toSection 7.3(a) or to withdraw such registration statement subsequent to its filing, regardless of any action whatsoever that a Stockholder may have taken, whether as a result of the issuance by the Company of any notice hereunder or otherwise. Any such determination not to file or to withdraw a registration statement shall not affect the obligations of the Company to pay or to reimburse all registration expenses pursuant toSection 7.5.
SECTION 7.4Registration Procedures. In connection with the registration obligations of the Company pursuant to and in accordance withSections 7.2 and7.3 (and subject toSections 7.2 and7.3), the Company shall use commercially reasonable efforts to effect such registration to permit the sale of such Registrable Securities in accordance with the intended method or methods of disposition thereof, and pursuant thereto the Company shall as expeditiously as possible:
(a) prepare and file with the SEC a Registration Statement for the sale of the Registrable Securities on any form for which the Company then qualifies or which counsel for the Company shall deem appropriate in accordance with such Stockholders’ intended method or methods of distribution thereof, and, subject to the Company’s right to terminate or abandon a registration pursuant toSection 7.3(c), use commercially reasonable efforts to cause such Registration Statement to become effective and remain effective as provided herein;
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(b) prepare and file with the SEC such amendments (including post-effective amendments) to such Registration Statement, and such supplements to the related Prospectus, as may be required by the rules, regulations or instructions applicable to the Securities Act during the applicable period in accordance with the intended methods of disposition specified by the Stockholders of the Registrable Securities covered by such Registration Statement, make generally available earnings statements satisfying the provisions of Section 11(a) of the Securities Act (provided that the Company shall be deemed to have complied with thisSection 7.4 if it has complied with Rule 158 under the Securities Act), and cause the related Prospectus as so supplemented to be filed pursuant to Rule 424 under the Securities Act;provided,however, that before filing a Registration Statement or Prospectus, or any amendments or supplements thereto (other than reports required to be filed by it under the Exchange Act that are incorporated or deemed to be incorporated by reference into the Registration Statement and the Prospectus except to the extent that such reports related primarily to the offering), the Company shall furnish to the Stockholders of Registrable Securities covered by such Registration Statement and their counsel for review and comment, copies of all documents required to be filed;
(c) notify the Stockholders of any Registrable Securities covered by such Registration Statement promptly and (if requested) confirm such notice in writing, (i) when a Prospectus or any Prospectus supplement or post-effective amendment has been filed, and, with respect to such Registration Statement or any post-effective amendment, when the same has become effective, (ii) of any request by the SEC for amendments or supplements to such Registration Statement or the related Prospectus or for additional information regarding the Company or the Stockholders, (iii) of the issuance by the SEC of any stop order suspending the effectiveness of such Registration Statement or the initiation of any proceedings for that purpose, (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose, and (v) of the happening of any event that requires the making of any changes in such Registration Statement, Prospectus or documents incorporated or deemed to be incorporated therein by reference so that they will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading;
(d) use commercially reasonable efforts to prevent the issuance of any order suspending the effectiveness of such Registration Statement or the qualification or exemption from qualification of any Registrable Securities for sale in any jurisdiction in the United States, and to obtain the lifting or withdrawal of any such order at the earliest practicable time;
(e) furnish to the Stockholder of any Registrable Securities covered by such Registration Statement and their counsel, and to each managing underwriter, if any, without charge, one conformed copy of such Registration Statement, as declared effective by the SEC, and of each post-effective amendment thereto, in each case including financial statements and schedules and all exhibits and reports incorporated or deemed to be incorporated therein by reference; and deliver, without charge, such number of copies of the preliminary prospectus, any amended preliminary prospectus, any free writing prospectus, each final Prospectus and any post-effective amendment or supplement thereto, as such Stockholder may reasonably request in order to facilitate the disposition of the Registrable Securities of such Stockholder covered by such Registration Statement in conformity with the requirements of the Securities Act;
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(f) prior to any public offering of Registrable Securities covered by such Registration Statement, use its reasonable best efforts to register or qualify such Registrable Securities for offer and sale under the securities or “Blue Sky” laws of such jurisdictions as the Stockholders of such Registrable Securities shall reasonably request in writing;provided,however, that the Company shall in no event be required to qualify generally to do business as a foreign corporation or as a dealer in any jurisdiction where it is not at the time required to be so qualified or to execute or file a general consent to service of process in any such jurisdiction where it has not theretofore done so or to take any action that would subject it to general service of process or taxation in any such jurisdiction where it is not then subject;
(g) upon the occurrence of any event contemplated bySection 7.4(c)(v), prepare a supplement or post-effective amendment to such Registration Statement or the related Prospectus or any document incorporated or deemed to be incorporated therein by reference and file any other required document so that, as thereafter delivered to the purchasers of the Registrable Securities being sold thereunder (including upon the termination of any Delay Period), such Prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;
(h) use commercially reasonable efforts to cause all Registrable Securities covered by such Registration Statement to be listed on each securities exchange or automated interdealer quotation system, if any, on which similar securities issued by the Company are then listed or quoted, or, if none, on such securities exchange or automated interdealer quotation system reasonably selected by the Company;
(i) on or before the effective date of such Registration Statement, provide the transfer agent of the Company for the Registrable Securities with printed certificates for the Registrable Securities covered by such Registration Statement (if the Registrable Securities are certificated), which are in a form eligible for deposit with The Depository Trust Company;
(j) if such offering is an underwritten offering, make available for inspection by any Stockholder of Registrable Securities included in such Registration Statement, any underwriter participating in any offering pursuant to such Registration Statement, and any attorney, accountant or other agent retained by any such Stockholder or underwriter (collectively, the “Inspectors”), all financial and other records and other information, pertinent corporate documents and properties of any of the Company and its Subsidiaries and affiliates (collectively, the “Records”), as shall be reasonably necessary to enable them to exercise their due diligence responsibilities;provided,however, that the Records that the Company determines, in good faith, to be confidential and which it notifies the Inspectors in writing are confidential shall not be disclosed to any Inspector unless such Inspector signs a confidentiality agreement reasonably satisfactory to the Company, which shall permit the disclosure of such Records in such Registration Statement or the related Prospectus if (i) necessary to avoid or correct a material misstatement in or material omission from such Registration Statement or Prospectus or (ii) the release of such Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction;provided further,however, that (A) any decision regarding the disclosure of information pursuant to subsection (i) shall be made only after consultation with counsel for the applicable Inspectors and the Company and (B) with respect to any release of Records
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pursuant to subsection (ii), each Stockholder of Registrable Securities agrees that it shall, promptly after learning that disclosure of such Records is sought in a court having jurisdiction, give notice to the Company so that the Company, at the Company’s expense, may undertake appropriate action to prevent disclosure of such Records;
(k) not later than the effective date of a registration statement, the Company shall provide to the Stockholders the CUSIP number for all Registrable Securities; and
(l) if such offering is an underwritten offering, enter into such agreements (including an underwriting agreement in form, scope and substance as is customary in underwritten offerings) and take all such other appropriate and reasonable actions requested by the Stockholders of a majority of the Registrable Securities being sold in connection therewith (including those reasonably requested by the managing underwriters) in order to expedite or facilitate the disposition of such Registrable Securities, and in such connection, (i) use commercially reasonable efforts to obtain opinions of counsel to the Company and updates thereof (which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to the managing underwriters and counsel to the Stockholders of the Registrable Securities being sold), addressed to each selling Stockholder of Registrable Securities covered by such Registration Statement and each of the underwriters as to the matters customarily covered in opinions requested in underwritten offerings and such other matters as may be reasonably requested by such counsel and underwriters, (ii) use commercially reasonable efforts to obtain “cold comfort” letters and updates thereof from the independent certified public accountants of the Company (and, if necessary, any other independent certified public accountants of any Subsidiary of the Company or of any business acquired by the Company for which financial statements and financial data are, or are required to be, included in the Registration Statement), addressed to each selling holder of Registrable Securities covered by the Registration Statement (unless such accountants shall be prohibited from so addressing such letters by applicable standards of the accounting profession) and each of the underwriters, such letters to be in customary form and covering matters of the type customarily covered in “cold comfort” letters in connection with underwritten offerings, (iii) if requested and if an underwriting agreement is entered into, provide indemnification provisions and procedures customary for underwritten public offerings, but in any event no less favorable to the indemnified parties than the provisions set forth inSection 7.7, and (iv) provide for the reasonable participation and cooperation by the management of the Company with respect thereto, including participation by management in road shows, investor meetings and other customary cooperation. The above shall be done at each closing under such underwriting or similar agreement, or as and to the extent required thereunder.
The Company may require each Stockholder of Registrable Securities covered by a Registration Statement to furnish such information regarding such Stockholder and such Stockholder’s intended method of disposition of such Registrable Securities as it may from time to time reasonably request in writing. If any such information is not furnished within a reasonable period of time after receipt of such request, the Company may exclude such Stockholder’s Registrable Securities from such Registration Statement. Notwithstanding the foregoing, in no event shall any Stockholder be required to provide any information about its investors unless required by the SEC to do so.
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Each Stockholder of Registrable Securities covered by a Registration Statement agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described inSection 7.4(c)(ii),7.4(c)(iii),7.4(c)(iv) or7.4(c)(v), that such Stockholder shall discontinue disposition of any Registrable Securities covered by such Registration Statement or the related Prospectus until receipt of the copies of the supplemented or amended Prospectus contemplated bySection 7.4(g), or until such Stockholder is advised in writing (the “Advice”) by the Company that the use of the applicable Prospectus may be resumed, and has received copies of any amended or supplemented Prospectus or any additional or supplemental filings which are incorporated, or deemed to be incorporated, by reference in such Prospectus (such period during which disposition is discontinued being an “Interruption Period”) and, if requested by the Company, the Stockholder shall deliver to the Company (at the expense of the Company) all copies then in its possession, other than permanent file copies then in such holder’s possession, of the Prospectus covering such Registrable Securities at the time of receipt of such request.
Each Stockholder of Registrable Securities covered by a Registration Statement further agrees not to utilize any material other than the applicable current preliminary prospectus, free writing prospectus, road show or Prospectus in connection with the offering of such Registrable Securities.
SECTION 7.5Registration Expenses. Whether or not any Registration Statement is filed or becomes effective, the Company shall pay all costs, fees and expenses incident to the registration of Registrable Securities, including (i) all registration and filing fees, including FINRA filing fees, (ii) all fees and expenses of compliance with securities or “Blue Sky” laws, including reasonable fees and disbursements of counsel in connection therewith, (iii) printing expenses (including expenses of printing certificates for Registrable Securities and of printing prospectuses if the printing of prospectuses is requested by the Stockholders or the managing underwriter, if any), (iv) messenger, telephone and delivery expenses, (v) fees and disbursements of counsel for the Company, (vi) fees and disbursements of all independent certified public accountants of the Company (including expenses of any “cold comfort” letters required in connection with this Agreement) and all other advisors retained by the Company in connection with such Registration Statement, (vii) fees and disbursements of one counsel, other than the Company’s counsel, selected by Stockholders of a majority of the Registrable Securities being registered and reasonably acceptable to the other Stockholders participating in such offering, to represent all such Stockholders, (viii) in the event of an underwritten offering, the expenses of the Company and the underwriters associated with any “road show” which are customarily paid or reimbursed by issuers, (ix) fees and disbursements of underwriters customarily paid by the issuers or sellers of securities and (x) all other costs, fees and expenses incident to the Company’s performance or compliance with this Agreement. Notwithstanding the foregoing, the fees and expenses of any advisors retained by any Stockholder, other than one counsel for all such Stockholders, and any underwriting discounts or commissions, brokers’ fees or fees of similar securities industry professionals and any transfer taxes relating to the disposition of the Registrable Securities by a Stockholder, will be payable by such Stockholder and the Company will have no obligation to pay any such amounts.
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SECTION 7.6Underwriting Requirements.
(a) Subject toSection 7.6(c), any Stockholder that initiates a Demand Registration shall have the right, by written notice, to require that such Demand Registration provide for an underwritten offering.
(b) In the case of any underwritten offering pursuant to a Demand Registration, the Company shall be entitled to select the institution or institutions that shall manage or lead such offering, which institution or institutions shall be subject to the reasonable consent of the Stockholder(s) making the demand. In the case of any underwritten offering pursuant to a Piggyback Registration, the Company shall select the institution or institutions that shall manage or lead such offering.
(c) In the case of any Registration, no Stockholder shall be entitled to participate in any underwritten offering with respect to any Registrable Securities that it owns unless and until such Stockholder has entered into an underwriting or other agreement with such institution or institutions for such offering in such customary form as the Company and such institution or institutions shall reasonably determine, pursuant to which the Stockholder agrees that it shall not make any short sale of, loan, grant any option for the purchase of or effect any public sale or distribution, including a sale pursuant to Rule 144 under the Securities Act, of any Registrable Securities for one-hundred and eighty (180) days, or such other time period as may be required by FINRA regulations or applicable Law, following the effective date of the Registration Statement filed with respect to the IPO;provided, that no holder of Registrable Securities included in any underwritten registration shall be required to make any representation or warranties to the Company or the underwriters (other than representations and warranties regarding such holder and such holder’s ownership of the shares to be sold pursuant to such underwriting) or to undertake any indemnification or contribution obligations to the Company or any underwriter with respect thereto, other than as specifically provided inSection 7.7.
SECTION 7.7Indemnification.
(a)Indemnification by the Company. The Company shall, without limitation as to time, indemnify and hold harmless, to the fullest extent permitted by law, each Stockholder of Registrable Securities whose Registrable Securities are covered by a Registration Statement or Prospectus, the officers, directors and agents and employees of each of them, each Person who controls each such Stockholder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, agents and employees of each such controlling person, to the fullest extent permitted by applicable Law, from and against any and all losses, claims, damages, liabilities, judgment, costs (including costs of investigation or preparation and reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising out of or based upon (w) any untrue or alleged untrue statement of a material fact contained in such Registration Statement or Prospectus or in any amendment or supplement thereto in any preliminary prospectus, any free writing prospectus, any information the Company has filed or is required to file pursuant to Rule 433(d) under the Securities Act, or any other material or information provided to or made available to investors by, or with the approval of, the Company in connection with the offering, including any road show for the offering (collectively, “Marketing Materials”), (x) any omission or alleged omission of a material fact
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required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same are based upon information furnished in writing to the Company by or on behalf of such Stockholder expressly for use in the Marketing Materials, (y) any untrue statement or alleged untrue statement of a material fact in the information conveyed to any purchaser at the time of the sale to such purchaser, or the omission or alleged omission to state therein a material fact required to be stated therein, or (z) any violation by the Company of any federal, state or common law rule or regulation applicable to the Company and relating to action required of or inaction by the Company in connection with any such registration;provided,however, that the Company shall not be liable to any such Stockholder to the extent that any such Losses arise out of or are based upon an untrue statement or alleged untrue statement or omission or alleged omission made in any preliminary prospectus if (i) having previously been furnished by or on behalf of the Company with copies of the Prospectus, such Stockholder failed to send or deliver a copy of the Prospectus with or prior to the delivery of written confirmation of the sale of Registrable Securities by such Stockholder to the Person asserting the claim from which such Losses arise and (ii) the Prospectus would have corrected in all material respects such untrue statement or alleged untrue statement or such omission or alleged omission; andprovided further,however, that the Company shall not be liable in any such case to the extent that any such Losses arise out of or are based upon an untrue statement or alleged untrue statement or omission or alleged omission in the Prospectus, if (A) such untrue statement or alleged untrue statement, omission or alleged omission is corrected in all material respects in an amendment or supplement to the Prospectus and (B) having previously been furnished by or on behalf of the Company with copies of the Prospectus as so amended or supplemented, such Stockholder thereafter fails to deliver such Prospectus as so amended or supplemented, prior to or concurrently with the sale of Registrable Securities.
(b)Indemnification by Stockholder of Registrable Securities. In connection with any Registration Statement in which a Stockholder is participating, such Stockholder shall furnish to the Company in writing such information as the Company reasonably requests with respect to such Stockholder and securities of the Company Beneficially Owned by such Stockholder and its Affiliates for use in connection with the Marketing Materials and agrees to indemnify, severally and not jointly with the other Stockholders and to the fullest extent permitted by applicable Law, the Company, its Directors, officers, agents or employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) and the directors, officers, agents or employees of such controlling Persons, from and against all Losses arising out of or based upon (x) any untrue statement of a material fact contained in the Marketing Materials or (y) any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, to the extent, but only to the extent, that such untrue statement or omission is based upon and is consistent with information so furnished in writing by or on behalf of such Stockholder to the Company expressly for use in such Marketing Materials. No Stockholder shall be held liable for any Losses (including all amounts for which such Stockholder is required to provide indemnification pursuant to thisSection 7.7(b) or contribution pursuant toSection 7.7(d)) in excess of the total amount of proceeds received by such Stockholder from the sale of the Registrable Securities sold by such Stockholder (net of all underwriting discounts and commissions) under that particular Registration Statement.
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(c)Conduct of Indemnification Proceedings. If any Person shall be entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified Party shall give prompt notice to the party from which such indemnity is sought (the “Indemnifying Party”) of any claim or of the commencement of any proceeding with respect to which such Indemnified Party seeks indemnification or contribution pursuant hereto;provided,however, that the delay or failure to so notify the Indemnifying Party shall not relieve the Indemnifying Party from any obligation or liability except to the extent that the Indemnifying Party has been materially prejudiced by such delay or failure. The Indemnifying Party shall have the right, exercisable by giving written notice to an Indemnified Party promptly after the receipt of written notice from such Indemnified Party of such claim or proceeding, to assume, at the Indemnifying Party’s expense, the defense of any such claim or proceeding, with counsel reasonably satisfactory to such Indemnified Party;provided,however, that (i) an Indemnified Party shall have the right to employ separate counsel in any such claim or proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless: (1) the Indemnifying Party agrees to pay such fees and expenses; (2) the Indemnifying Party fails promptly to assume the defense of such claim or proceeding or fails to employ counsel reasonably satisfactory to such Indemnified Party; or (3) the named parties to any proceeding (including impleaded parties) include both such Indemnified Party and the Indemnifying Party, and such Indemnified Party shall have been advised by counsel that there may be one or more legal defenses available to it that are in addition to or are inconsistent with those available to the Indemnifying Party or that a conflict of interest is likely to exist among such Indemnified Party and any other indemnified parties (in which case the Indemnifying Party shall not have the right to assume the defense of such action on behalf of such Indemnified Party); and (ii) subject to subsection (3) above, the Indemnifying Party shall not, in connection with any one such claim or proceeding or separate but substantially similar or related claims or proceedings in the same jurisdiction, arising out of the same general allegations or circumstances, be liable for the fees and expenses of more than one counsel (together with appropriate local counsel) at any time for all of the Indemnified Parties. Whether or not such defense is assumed by the Indemnifying Party, such Indemnified Party shall not be subject to any liability for any settlement made without its consent, which consent shall not be unreasonably withheld, conditioned or delayed. The Indemnifying Party shall not consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release, in form and substance reasonably satisfactory to the Indemnified Party, from all liability in respect of such claim or litigation for which such Indemnified Party would be entitled to indemnification hereunder.
(d)Contribution. If the indemnification provided for in thisSection 7.7 is applicable in accordance with its terms but is legally unavailable to an Indemnified Party in respect of any Losses, then each applicable Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party, on the one hand, and such Indemnified Party, on the other hand, in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party, on the one hand, and Indemnified Party, on the other hand, shall be determined by reference to, among other things, whether any action in question, including any untrue statement of a material fact or omission or alleged omission to state a material fact, has been taken by, or relates to information
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supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent any such action, statement or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include any legal or other fees or expenses incurred by such party in connection with any investigation or proceeding. The parties hereto agree that it would not be just and equitable if contribution pursuant to thisSection 7.7(d) were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provision of thisSection 7.7(d), an Indemnifying Party that is a Stockholder shall not be required to contribute any amount which (together with all amounts that such Stockholder is required to provide indemnification pursuant toSection 7.7(b)) is in excess of the amount by which the total proceeds received by such Stockholder from the sale of the Registrable Securities sold by such Stockholder (net of all underwriting discounts and commissions) exceeds the amount of any damages that such Indemnifying Party has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.
SECTION 7.8Rule 144 Information. With a view to making available the benefits of certain rules and regulations of the Commission which may at any time permit the sale of the Registrable Securities to the public without registration, after such time as a registration statement relating to the Common Stock has been declared effective under either the Securities Act or the Exchange Act, the Company agrees to use its best efforts to:
(a) Make and keep public information available, as those terms are understood and defined in Rule 144 under the Securities Act, at all times after the earlier of (i) such time as a registration statement relating to the Common Stock has been declared effective under either the Securities Act or the Exchange Act or (ii) the date that the Company becomes subject to the periodic reporting requirements under Section 13 or 15(d) of the Exchange Act, for so long as the Company remains subject to the periodic reporting requirements under Section 13 or 15(d) of the Exchange Act.
(b) Use its best efforts to file with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements).
(c) Furnish to any Stockholder forthwith upon request a written statement by the Company as to its compliance with the reporting requirements of Rule 144 under the Securities Act (at any time after ninety (90) days after the effective date of the first registration statement filed by the Company for an offering of its securities to the general public), and of the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), a copy of the most recent annual or quarterly report of the Company, and such other reports and documents of the Company and other information in as such Stockholder may reasonably request in availing itself of any rule or regulation of the Commission allowing such Stockholder to sell any such securities without registration.
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SECTION 7.9Miscellaneous Registration Rights Provisions.
(a)Limitation on Subsequent Grants. The Company shall not grant registration rights to any Person other than the rights set forth in thisArticle VII, unless the Company has obtained the prior written consent of Stockholders holding at least sixty-six and two-thirds percent (662/3%) of the number of Registrable Securities then outstanding;provided,however, that after the effectiveness of any shelf Registration Statement filed pursuant toSection 7.2(c), the Company may grant piggyback registration rights that are junior to the registration rights granted to Stockholders pursuant to thisArticle VII.
(b)Assignment of Registration Rights. In connection with any Transfer of Registrable Securities by any Stockholder, the registration rights related to such Registrable Securities shall automatically transfer to the transferee of such Registrable Securities. Any other purported direct or indirect Transfer of such registration rights by any Stockholder shall be null and void and of no force or effect.
(c)Termination of Registration Rights. All of the Company’s obligations to register Registrable Securities of any Stockholder under thisArticle VII shall terminate on the date on which such Stockholder ceases to Beneficially Own any Registrable Securities.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1Term; Termination. This Agreement may be terminated pursuant to a writing signed by Stockholders holding at least sixty-six and two-thirds percent (662/3%) of the outstanding shares of Common Stock held by all Stockholders, and shall automatically terminate on the earlier to occur of (a) the completion of a Qualified Public Offering, (b) the date that is the ten (10) year anniversary of the date hereof;provided that the provisions ofSection 6.2,Article VII andArticle VIII shall survive any such termination of this Agreement. This Agreement shall terminate automatically with respect to any Stockholder when such Stockholder ceases to beneficially own any shares of Common Stock;provided, thatSection 6.2 shall survive any such termination and shall terminate as set forth therein.
SECTION 8.2Amendments and Modifications. This Agreement may be modified or amended only by a writing signed by the Company and by Stockholders that Beneficially Own in the aggregate at least sixty-six and two-thirds percent (662/3%) of the outstanding shares of Common Stock held by all Stockholders;provided, that any modification or amendment that would reasonably be expected to disproportionately and adversely affect any Stockholder in any material respect shall require the written consent of each Stockholder that is so affected;provided,further, that any modification or amendment toSection 5.4 orSection 5.5 that would reasonably be expected to adversely affect the Employee Stockholders in any material respect shall require the written consent of Employee Stockholders holding a majority of the outstanding shares of Common Stock held by all Employee Stockholders.
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SECTION 8.3Action by Stockholders. Any action required or contemplated by this Agreement to be taken by a majority of the Stockholders may be taken by delivery of a written consent executed on behalf of one or more Stockholders that Beneficially Own, in the aggregate, at least a majority of the shares of Common Stock held by all Stockholders, and the Company shall be entitled to rely upon any such written consent without prior notice to or consultation with any Person.
SECTION 8.4After-Acquired Shares. This Agreement shall apply to all shares of Common Stock Beneficially Owned by a Stockholder at all times, whether such shares of Common Stock are acquired prior to or after the date hereof.
SECTION 8.5Notices. All notices, requests, waivers and other communications made pursuant to this Agreement shall be in writing and shall be deemed to have been effectively given (a) when personally delivered to the Party to be notified; (b) when sent by confirmed facsimile to the Party to be notified at the number set forth below; (c) three (3) Business Days after deposit in the United States mail postage prepaid by certified or registered mail return receipt requested and addressed to the Party to be notified as set forth below; or (d) one (1) Business Day after deposit with a national overnight delivery service, postage prepaid, addressed to the Party to be notified as set forth below with next-business-day delivery guaranteed, in each case as follows:
In the case of the Company, to:
NewPage Holdings Inc.
8540 Gander Creek Drive
Miamisburg, Ohio 45342
Attention: General Counsel
Telephone: (937) 781-5101
Facsimile: (937) 242-9324
In the case of any Stockholder:
To the names and addresses set forth in the books and records of the Company.
With a copy (which shall not constitute notice) to, in the case of the Goldman Stockholders:
Weil, Gotshal & Manges LLP
100 Federal Street, 34th Floor
Boston, Massachusetts 02110
Attention: Steven M. Peck
Telephone: (617) 772-8344
Facsimile: (671) 772-8333
A Party may change its address for purposes of notice hereunder by giving ten (10) days’ notice of such change to all other Parties in the manner provided in thisSection 8.5.
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SECTION 8.6Binding Effect; Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the respective successors and assigns of the Parties hereto. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the Parties hereto or their respective successors and permitted assignees any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided herein.
SECTION 8.7Entire Agreement. This Agreement (together with the documents attached as exhibits hereto and any documents or agreements specifically contemplated hereby) supersedes all prior discussions and agreements among any of the Parties hereto (and their Affiliates) with respect to the subject matter hereof and contains the entire understanding of the Parties with respect to the subject matter hereof.
SECTION 8.8Counterparts; Headings. This Agreement may be executed in counterparts, each of which shall be signed by the Company and one or more Stockholders, and all of which are deemed to be one and the same agreement binding upon the Company and each of the Stockholders. The headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of this Agreement.
SECTION 8.9Primary Indemnitor. Any Designated Director entitled to indemnification, advancement of expenses and/or insurance, pursuant to this Agreement, any other agreement with the Company, the Certificate of Incorporation or the Bylaws and that is an officer, employee, partner or advisor of the applicable Designating Stockholder or its Affiliates (each such person, an “Indemnitee”), may have certain rights to indemnification, advancement of expenses and/or insurance provided by or on behalf of such Designating Stockholder and/or its Affiliates (collectively, the “Fund Indemnitors”). Notwithstanding anything to the contrary in this Agreement, the Certificate of Incorporation or the Bylaws or otherwise: (a) the Company is the indemnitor of first resort (i.e., the Company’s obligations to each Indemnitee are primary and any obligation of the Fund Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by each Indemnitee are secondary), (b) the Company will be required to advance the full amount of expenses incurred by each Indemnitee;provided,however, in the event the Company is suing an Indemnitee, the Company shall not be responsible to advance any expenses to any such Indemnitee during the pendency of such action, (c) will be liable for the full amount of all liabilities, expenses, judgments, penalties, fines and amounts paid in settlement to the extent legally permitted and as required by this Agreement, without regard to any rights each Indemnitee may have against the Fund Indemnitors, and (d) the Company irrevocably waives, relinquishes and releases the Fund Indemnitors from any and all claims against the Fund Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. Notwithstanding anything to the contrary in this Agreement, the Certificate of Incorporation of the Company or the By-Laws of the Company or otherwise, no advancement or payment by the Fund Indemnitors on behalf of an Indemnitee with respect to any claim for which such Indemnitee has sought indemnification or advancement of expenses from the Company will affect the foregoing and the Fund Indemnitors will have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of such Indemnitee against the Company. The Fund Indemnitors are express third party beneficiaries of the terms of thisSection 8.9.
SECTION 8.10Further Acts and Assurances. Each Party shall give such further assurance, provide such further information, take such further actions and execute and deliver such further documents and instruments as are, in each case, within its power to give, provide and take so as to give full force and effect to the provisions of this Agreement.
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SECTION 8.11Governing Law; Consent to Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to its conflicts of law doctrine. Each Party hereby submits to the exclusive jurisdiction of the Chancery Court of the State of Delaware and any state appellate court therefrom within the State of Delaware (unless the Delaware Court of Chancery shall decline to accept jurisdiction over a particular matter, in which case, in any Delaware state or federal court within the State of Delaware, and any appellate court thereof) and any judicial proceeding brought against any of the Parties on any dispute arising out of this Agreement or any matter related hereto shall be brought in such courts. Each Party hereby irrevocably waives, to the fullest extent permitted by law, any objection it may have or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum. Each Party hereby consents to process being served in any such proceeding by the mailing of a copy thereof by registered or certified mail, postage prepaid, to the address specified inSection 8.5, or in any other manner permitted by law. EACH PARTY HERETO HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUCH ACTION OR PROCEEDING.
SECTION 8.12Injunctive Relief. It is hereby agreed and acknowledged that it will be impossible to measure in money the damages that would be suffered if any of the Parties fail to comply with any of the obligations imposed on them by this Agreement and that in the event of any such failure, an aggrieved Party will be irreparably damaged and will not have an adequate remedy at law. Any such aggrieved Party shall, therefore, be entitled to seek injunctive relief, including specific performance, to enforce such obligations, and if any action should be brought in equity to enforce any of the provisions of this Agreement, none of the Parties shall raise the defense that there is an adequate remedy at law.
SECTION 8.13Severability. The invalidity or unenforceability of any provisions of this Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Agreement in such jurisdiction or the validity, legality or enforceability of any provision of this Agreement in any other jurisdiction, it being intended that all rights and obligations of the Parties shall be enforceable to the fullest extent permitted by law.
SECTION 8.14Recapitalization, Etc. In the event that any capital stock or other securities are issued in respect of, in exchange for, or in substitution of, shares of capital stock of the Company by reason of any reorganization, recapitalization, reclassification, merger, consolidation, spin-off, partial or complete liquidation, stock dividend, split-up, sale of assets, distribution to stockholders or combination of shares or any other change in the Company’s capital structure, appropriate adjustments shall be made to the provisions of this Agreement so as to fairly and equitably preserve, as far as practicable, the original rights and obligations of the Parties hereto under this Agreement.
[Signature Pages Follow]
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IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed and delivered by its duly authorized officer as of the date first written above.
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NEWPAGE HOLDINGS INC. |
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STOCKHOLDERS: |
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SCHEDULE 1
INITIAL STOCKHOLDERS
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EXHIBIT A
CERTIFICATE OF INCORPORATION
EXHIBIT B
BYLAWS
EXHIBIT C
FORM OF JOINDER AGREEMENT
This Joinder Agreement (this “Agreement”), dated as of , 201 , is made by and among NEWPAGE HOLDINGS INC., a Delaware corporation (the “Company”), and (the “Joining Party” and, together with the Company, the “Parties”). Capitalized terms that are used but are not otherwise defined herein shall have the meanings given to them in the Stockholders Agreement (as defined below).
WHEREAS, the Company and the Stockholders are parties to that certain Stockholders Agreement, dated as of [•, 2012] (as may be amended or modified from time to time pursuant to the terms thereof, the “Stockholders Agreement”); and
WHEREAS, , a Stockholder, desires to Transfer shares of Common Stock to the Joining Party (such shares, the “Transferred Shares”), and the Joining Party is delivering this Agreement to the Company pursuant toSection 5.1(c) of the Stockholders Agreement, as a condition precedent to the effectiveness of such Transfer.
NOW, THEREFORE, in consideration of the premises and of the mutual agreements and covenants hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows:
| 1. | Agreement to be Bound. The Joining Party hereby confirms that it has been furnished with and has carefully read a copy of the Stockholders Agreement prior to its execution of this Agreement. By executing and delivering this Agreement, the Joining Party hereby becomes a party to the Stockholders Agreement as a Stockholder thereunder with the same force and effect as if it was [an original Stockholder signatory thereto] / [originally named as a Stockholder onSchedule 1 thereto]. Without limiting the generality of the foregoing, the Joining Party hereby irrevocably (a) agrees to be bound by and to comply with all of the covenants, terms and conditions contained in the Stockholders Agreement, (b) expressly assumes all obligations of a Consenting Holder under the Stockholders Agreement and (c) acknowledges that all of the Transferred Shares will be subject to all of the covenants, terms and conditions (including, without limitation, Transfer restrictions) applicable to shares of Common Stock under the Stockholders Agreement. |
| 2. | Representations and Warranties. The Joining Party hereby represents and warrants, to the Company and each of the Stockholders, that it (a) has the requisite organizational and legal authority to enter into this Joinder Agreement and (b) is not a “Competitor” (as such term is defined in the Stockholders Agreement) of the Company. |
| 3. | Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to its conflicts of law doctrine. |
| 4. | Binding Effect. This Agreement shall be binding upon each of the Parties and their respective heirs, executors, administrators, personal representatives, successors and assigns, as the case may be. |
| 5. | Counterparts. This Agreement may be signed in counterparts, any of which may be delivered via facsimile, PDF, or other forms of electronic delivery, each of which shall be deemed an original, and all of which are deemed to be one and the same agreement binding upon the Parties. |
[Signature page follows]
IN WITNESS WHEREOF, each of the undersigned Parties has caused this Joinder Agreement to be duly executed and delivered as of the date first written above.
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ACKNOWLEDGED AND AGREED: |
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NEWPAGE HOLDINGS INC. |
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Schedule X
Insiders to be Employed by Reorganized Debtors and
Nature of Compensation of Insiders
A.Reorganized Debtors Senior Executive Officers
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Individual | | Job Title | | Nature of Compensation |
George F. Martin | | President and Chief Executive Officer | | The nature of compensation for all of the Reorganized Debtors’ senior executive officers is disclosed in the employment agreements and other compensation related agreements included in Schedule 1.2.146 of the Plan Supplement. |
Jay A. Epstein | | Senior Vice President, Chief Financial Officer & Assistant Secretary | |
Daniel A. Clark | | Senior Vice President, Chief Administrative Officer | |
Laszlo M. Lukacs | | Senior Vice President, Operations | |
James C. Tyrone | | Executive Vice President, Commercial Operations & Business Development | |
Douglas K. Cooper | | Senior Vice President, General Counsel & Secretary | |
B.Reorganized Debtors Non- Executive Officers
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Individual | | Job Title | | Nature of Compensation |
Ronald J. Arling Steven J. DeVoe Glenn R. Grill D. Wayne Howard Linda M. McClinchy Shelley L. Nash Timothy D. Nusbaum Curtis H. Short | | Controller & Chief Accounting Officer Vice President, Marketing Vice President, Human Resources Vice President, Sourcing & Logistics Vice President, Order Management Vice President, Sustainable Profitability Treasurer Vice President, Strategy | | The non-executive officers will retain their current compensation. The compensation includes base salary and incentive awards as provided under theShort-Term Incentive Plan for Insider Employees, approved by the Court on December 13, 2011 [Docket No. 706] and theLong-Term Incentive Plan for Insider Employees, approved by the Court on March 5, 2012 [Docket No.1232]. Further, the non-executive officers will receive certain compensation under the (new)Long-Term Incentive Plan(which will replace the current LTIP) once it is approved by the new Board of Directors (TheLong-Term Incentive Planis attached to Schedule 1.2.146 of the Plan Supplement). |