Exhibit 10.13
FORM OF MANAGEMENT STOCK SUBSCRIPTION AGREEMENT
MANAGEMENT STOCK SUBSCRIPTION AGREEMENT, dated as of _________ (the
"Agreement"), between Allied Worldwide, Inc. (formerly NA Holding Corporation),
a Delaware corporation ("Worldwide"), and the purchaser whose name appears on
the signature page hereof (the "Purchaser").
WITNESSETH:
WHEREAS, to motivate key employees at Worldwide and the subsidiaries
by providing them an ownership interest in Worldwide, the Board of Directors of
Worldwide (the "Board") has adopted the Allied Worldwide, Inc. Stock Incentive
Plan (formerly the NA Holding Corporation Stock Incentive Plan), as the same may
be amended from time to time (the "Stock Incentive Plan");
WHEREAS, Worldwide intends to issue up to an aggregate of ________
shares Common Stock, par value $___ per share, of Worldwide (the "Common
Stock"), to the Purchaser and to certain other purchasers who are executives,
senior officers or other key employees of the Company or one of its Subsidiaries
(as defined herein) pursuant to the Stock Incentive Plan, this Agreement and
other substantially identical management stock subscription agreements to be
entered into with such other purchasers and intends to grant options to purchase
up to an aggregate of ________ additional shares of Common Stock to the
Purchaser and to such other executive officers and key employees;
WHEREAS, the terms of the offering of the shares, and the grant of
options in respect, of the Common Stock to the Purchaser and the other
purchasers (the "Offering") are set forth in a Confidential Offering Memorandum,
dated _________ (as supplemented from time to time, the "Offering Memorandum") a
copy of which has been furnished to the Purchaser;
WHEREAS, the Purchaser desires to subscribe for and purchase from
Worldwide pursuant to the Stock Incentive Plan the aggregate number of shares of
Common Stock set forth on the signature page hereof (each a "Share" and,
collectively, the "Shares"), at a purchase price of $____ per share; and
WHEREAS, the Company desires to sell the Shares to the Purchaser on
the terms and subject to the conditions set forth herein and in the Stock
Incentive Plan and subject to the Registration Statement becoming effective.
NOW, THEREFORE, to implement the foregoing and in consideration of
the mutual agreements contained herein, the parties hereto hereby agree as
follows:
1. Purchase and Sale of Common Stock.
(a) Purchase of Common Stock. Subject to all of the terms and
conditions of this Agreement, the Purchaser hereby subscribes for and shall
purchase, and Worldwide shall sell to the Purchaser, the Shares at a purchase
price of $____ per Share, at the Closing provided for in Section 2(a) hereof.
Notwithstanding anything in this Agreement to the contrary, Worldwide shall have
no obligation to sell any Common Stock to (i) any person who is not an employee
of Worldwide or a Subsidiary thereof (as defined below) at the time that such
Common Stock is to be sold or (ii) any person who is a resident of a
jurisdiction in which the sale of Common Stock to him would constitute a
violation of the securities, "blue sky" or other laws of such jurisdiction.
(b) Consideration. Subject to all of the terms and conditions of
this Agreement, the Purchaser shall deliver to Worldwide at the Closing referred
to in Section 2(a) hereof immediately available funds in an amount equal to the
aggregate purchase price for the Shares set forth on the signature page hereof.
2. Closing.
(a) Time and Place. Except as otherwise agreed by Worldwide and the
Purchaser, the closing (the "Closing") of the transaction contemplated by this
Agreement shall be held at the offices of Debevoise & Plimpton, 875 Third
Avenue, New York, New York at 10:00 am. (New York time) on December 22, 1999.
(b) Delivery by Worldwide. At the Closing, Worldwide shall deliver
to the Purchaser a stock certificate registered in the Purchaser's name and
representing the Shares, which certificate shall bear the legends set forth in
Section 3(b).
(c) Delivery by the Purchaser. At the Closing, the Purchaser shall
deliver to Worldwide the consideration referred to in Section 1(b) hereof.
3. Purchaser's Representations. Warranties and Covenants.
(a) Investment Intention. The Purchaser represents and warrants that
he is acquiring the Shares solely for his own account for investment and not
with a view to or for sale in connection with any distribution thereof. The
Purchaser agrees that he will not, directly or indirectly, offer, transfer,
sell, pledge, hypothecate or otherwise dispose of any of the Shares (or solicit
any offers to buy, purchase or otherwise acquire or take a pledge
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of any Shares), except in compliance with the Securities Act of 1933, as amended
(the "Securities Act"), and the rules and regulations of the Securities and
Exchange Commission (the "Commission") thereunder, and in compliance with
applicable state and foreign securities or "blue sky" laws. The Purchaser
further understands, acknowledges and agrees that none of the Shares may be
transferred, sold, pledged, hypothecated or otherwise disposed of (i) unless the
provisions of Sections 4 through 8 hereof, inclusive, shall have been complied
with or have expired, (ii) unless (A) such disposition is pursuant to an
effective registration statement under the Securities Act, (B) the Purchaser
shall have delivered to Worldwide an opinion of counsel, which opinion and
counsel shall be reasonably satisfactory to Worldwide, to the effect that such
disposition is exempt from the provisions of Section 5 of the Securities Act or
(C) a no-action letter from the Commission, reasonably satisfactory to
Worldwide, shall have been obtained with respect to such disposition and (iii)
unless such disposition is pursuant to registration under any applicable state
securities laws or an exemption therefrom.
(b) Legends. The Purchaser acknowledges that the certificate or
certificates representing the Shares shall bear an appropriate legend, which
will include, without limitation, the following language:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
TRANSFER RESTRICTIONS, HOLDBACK AND OTHER PROVISIONS OF A MANAGEMENT
STOCK SUBSCRIPTION AGREEMENT, DATED AS OF __________, AND NEITHER
THIS CERTIFICATE NOR THE SHARES REPRESENTED BY IT ARE ASSIGNABLE OR
OTHERWISE TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF
SUCH MANAGEMENT STOCK SUBSCRIPTION AGREEMENT, A COPY OF WHICH IS ON
FILE WITH THE SECRETARY OF WORLDWIDE. THE SHARES REPRESENTED BY THIS
CERTIFICATE ARE ENTITLED TO CERTAIN OF THE BENEFITS OF AND ARE BOUND
BY THE OBLIGATIONS SET FORTH IN A REGISTRATION AND PARTICIPATION
AGREEMENT, DATED AS OF MARCH 30, 1998, AS AMENDED, AND ANY
AMENDMENTS, SUPPLEMENTS OR MODIFICATIONS THERETO, AMONG WORLDWIDE
AND CERTAIN STOCKHOLDERS OF WORLDWIDE, A COPY OF THE CURRENT FORM OF
WHICH IS ON FILE WITH THE SECRETARY OF WORLDWIDE."
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE OR
FOREIGN SECURITIES
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LAWS AND MAY NOT BE TRANSFERRED, SOLD, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF UNLESS (i) (A) SUCH DISPOSITION IS PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, AS AMENDED, (B) THE HOLDER HEREOF SHALL HAVE DELIVERED TO
WORLDWIDE AN OPINION OF COUNSEL, WHICH OPINION AND COUNSEL SHALL BE
REASONABLY SATISFACTORY TO WORLDWIDE, TO THE EFFECT THAT SUCH
DISPOSITION IS EXEMPT FROM THE PROVISIONS OF SECTION 5 OF SUCH ACT
OR (C) A NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE
COMMISSION, REASONABLY SATISFACTORY TO COUNSEL FOR WORLDWIDE, SHALL
HAVE BEEN OBTAINED WITH RESPECT TO SUCH DISPOSITION AND (ii) SUCH
DISPOSITION IS PURSUANT TO REGISTRATION UNDER ANY APPLICABLE STATE
SECURITIES LAWS OR AN EXEMPTION THEREFROM."
(c) Securities Law Matters. The Purchaser acknowledges receipt of
advice from Worldwide that (i) the Shares have not been registered under the
Securities Act or any state or foreign securities or "blue sky" laws, (ii) it is
not anticipated that there will be any public market for the Shares, (iii) the
Shares must be held indefinitely and the Purchaser must continue to bear the
economic risk of the investment in the Shares unless the Shares are subsequently
registered under the Securities Act and such state or foreign laws or an
exemption from registration is available, (iv) Rule 144 promulgated under the
Securities Act ("Rule 144") is not presently available with respect to sales of
securities of Worldwide and Worldwide has made no covenant to make Rule 144
available, (v) when and if the Shares may be disposed of without registration in
reliance upon Rule 144, such disposition can generally be made only in limited
amounts in accordance with the terms and conditions of such Rule, (vi) Worldwide
does not plan to file reports with the Commission or make information concerning
Worldwide publicly available, unless required to do so by law or the terms of
its Financing Agreements (as hereinafter defined), (vii) if the exemption
afforded by Rule 144 is not available, sales of the Shares may be difficult to
effect because of the absence of public information concerning Worldwide, (viii)
a restrictive legend in the form heretofore set forth shall be placed on the
certificates representing the Shares and (ix) a notation shall be made in the
appropriate records of Worldwide indicating that the Shares are subject to
restrictions on transfer set forth in this Agreement and, if Worldwide should in
the future engage the services of a stock transfer agent, appropriate
stop-transfer restrictions will be issued to such transfer agent with respect to
the Shares.
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(d) Compliance with Rule 144. If any of the Shares are to be
disposed of in accordance with Rule 144, the Purchaser shall transmit to
Worldwide an executed copy of Form 144 (if required by Rule 144) no later than
the time such form is required to be transmitted to the Commission for filing
and such other documentation as Worldwide may reasonably require to assure
compliance with Rule 144 in connection with such disposition.
(e) Ability to Bear Risk. The Purchaser represents and warrants that
(i) the financial situation of the Purchaser is such that he or she can afford
to bear the economic risk of holding the Shares for an indefinite period and
(ii) he or she can afford to suffer the complete loss of his or her investment
in the Shares.
(f) Access to Information, Etc. The Purchaser represents and
warrants that (i) the Purchaser has carefully reviewed the Offering Memorandum,
each of the attachments to the Offering Memorandum, each document incorporated
by reference into the Offering Memorandum, and the other materials furnished to
the Purchaser in connection with the transactions contemplated hereby, and (ii)
the Purchaser is, and will be at the Closing, an officer or employee of the
Company or a subsidiary thereof.
(g) Registration; Restrictions on Sale upon Public Offering. The
Purchaser shall be entitled to the rights and subject to the obligations created
under the Registration and Participation Agreement, dated as of March 30, 1998,
as amended, as the same may be amended from time to time, among Worldwide and
certain stockholders of Worldwide, to the extent provided therein. The Purchaser
agrees that, in the event that Worldwide files a registration statement under
the Securities Act with respect to an underwritten public offering of any shares
of its capital stock, the Purchaser will not effect any public sale (including a
sale under Rule 144) or distribution of any shares of the Common Stock (other
than as part of such underwritten public offering) during the 20 days prior to
and the 180 days after the effective date of such registration statement.
(h) Section 83(b) Election. The Purchaser agrees that, within 20
days after the Closing, he or she shall give notice to Worldwide as to whether
or not he has made or will make an election pursuant to Section 83(b) of the
Internal Revenue Code of 1986, as amended, with respect to the Shares purchased
at such Closing, and acknowledges that he or she will be solely responsible for
any and all tax liabilities payable by him or her in connection with his
purchase and receipt of the Shares or attributable to his or her making or
failing to make such an election.
4. Restrictions on Disposition of Shares. Neither the Purchaser nor
any of his or her heirs or representatives shall sell, assign, transfer, pledge
or otherwise directly or indirectly dispose of or encumber any of the Shares to
or with any other person, firm or
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corporation (including, without limitation, transfers to any other holder of
Worldwide's capital stock, dispositions by gift, by will, by a corporation as a
distribution in liquidation and by operation of law other than a transfer of
Shares by operation of law to the estate of the Purchaser upon the death of the
Purchaser, provided that such estate shall be bound by all provisions of this
Agreement) except as provided in Sections 5 through 8 hereof, inclusive. The
restrictions contained in this Section 4 shall terminate in the event that an
underwritten public offering of the Common Stock led by one or more underwriters
at least one of which is of nationally recognized standing (a "Public Offering")
has been consummated and shall not apply to a sale as part of a Public Offering
or at any time thereafter.
5. Options of Worldwide and the CD&R Fund Upon Proposed Disposition.
(a) Rights of First Refusal. If the Purchaser desires to accept an
offer (which must be in writing and for cash, be irrevocable by its terms for at
least 60 days and be a bona fide offer as determined in good faith by the Board
or the Executive Committee thereof) from any prospective purchaser to purchase
all or any part of the Shares at any time owned by him, he shall give notice in
writing to Worldwide and Clayton, Dubilier & Rice Fund V Limited Partnership
(the "CD&R Fund") (i) designating the number of Shares proposed to be sold, (ii)
naming the prospective purchaser of such Shares and (iii) specifying the price
(the "Offer Price") at and terms (the "Offer Terms") upon which he desires to
sell the same. During the 30-day period following receipt of such notice by
Worldwide and the CD&R Fund (the "First Refusal Period"), Worldwide shall have
the right to purchase from the Purchaser all (but not less than all) of the
Shares specified in such notice, at the Offer Price and on the Offer Terms.
Worldwide hereby undertakes to use reasonable efforts to act as promptly as
practicable following receipt of such notice to determine whether it shall elect
to exercise such right. If Worldwide fails to exercise such right within the
First Refusal Period, the CD&R Fund shall have the right to purchase all (but
not less than all) of the Shares specified in such notice, at the Offer Price
and on the Offer Terms, at any time during the period beginning on the earlier
of (x) the end of the First Refusal Period and (y) the date of receipt by the
CD&R Fund of written notice that Worldwide has elected not to exercise its
rights under this Section 5(a) and ending 30 days thereafter (the "Second
Refusal Period"). The rights provided hereunder shall be exercised by written
notice to the Purchaser given at any time during the applicable period. If such
right is exercised, Worldwide or the CD&R Fund, as the case may be, shall
deliver to the Purchaser a certified or bank check for the Offer Price, payable
to the order of the Purchaser, against delivery of certificates or other
instruments representing the Shares so purchased, appropriately endorsed by the
Purchaser. If such right shall not have been exercised prior to the expiration
of the Second Refusal Period, then at any time during the 30 days following the
expiration of the Second Refusal Period, the Purchaser may sell
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such Shares to (but only to) the intended purchaser named in his notice to
Worldwide and the CD&R Fund at the Offer Price and on the Offer Terms specified
in such notice, free of all restrictions or obligations imposed by, and free of
any rights or benefits set forth in, Sections 5 through 8, inclusive, of this
Agreement, provided that such intended purchaser shall have agreed in writing to
make and be bound by the representations, warranties and covenants set forth in
Section 3 hereof, other than those set forth in Sections 3(f)(i) and 3(f)(iii),
the first sentence of Section 3(g) and Section 3(h), pursuant to an instrument
of assumption satisfactory in substance and form to Worldwide. The right of the
Purchaser to sell Shares set forth in this Section 5(a), subject to the rights
of first refusal set forth in this Section 5(a), shall be suspended during the
Option Periods referred to in Section 6 hereof, but the provisions of Section 6
shall not otherwise restrict the ability of the Purchaser to sell the Shares,
whether before or after such Option Periods, pursuant to the terms and subject
to the restrictions set forth in this Section 5(a).
(b) Public Offering. In the event that a Public Offering has been
consummated, neither Worldwide nor the CD&R Fund shall have any rights to
purchase the Shares from the Purchaser pursuant to this Section 5 and this
Section 5 shall not apply to a sale as part of a Public Offering or at any time
thereafter.
6. Options Effective on Termination of Employment or Unforeseen
Personal Hardship of the Purchaser.
(a) Termination of Employment. If the Purchaser's active employment
with Worldwide or any Subsidiary thereof that employs the Purchaser is
terminated for any reason whatsoever, Worldwide shall have an option to purchase
all or a portion of the Shares then held by the Purchaser (or, if his employment
was terminated by his death, his estate) and shall have 60 days from the date of
the Purchaser's termination (such 60-day period being hereinafter referred to as
the "First Option Period") during which to give notice in writing to the
Purchaser (or his estate) of its election to exercise or not to exercise such
option, in whole or in part. Worldwide hereby undertakes to use reasonable
efforts to act as promptly as practicable following such termination to make
such election. If Worldwide fails to give notice that it intends to exercise
such option within the First Option Period or Worldwide gives notice that it
does not intend to exercise such option or that it intends to exercise such
option with respect to only a portion of the Shares, the CD&R Fund shall have
the right to purchase all or a portion of the Shares then held by the Purchaser
(or his estate) that will not be repurchased by Worldwide and shall have until
the expiration of the earlier of (x) 60 days following the end of the First
Option Period or (y) 60 days from the date of receipt by the CD&R Fund of
written notice from Worldwide indicating whether it will exercise its option to
purchase any of the Shares (such 60-day period being hereinafter referred to as
the "Second Option Period"), to give notice in writing to the Purchaser (or his
estate) of the CD&R Fund's exercise of its option, in
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whole or in part. If the options of Worldwide and the CD&R Fund to purchase the
Shares pursuant to this subsection are not exercised with respect to all of the
Shares as provided herein (other than as a result of Section 11 hereof), the
Purchaser (or his estate) shall be entitled to retain the Shares which could
have been acquired on exercise thereof, subject to all of the provisions of this
Agreement (including without limitation Section 5(a)). If Worldwide and the CD&R
Fund have failed to exercise their respective options pursuant to this Section
6(a) with respect to all of the Shares within the time periods specified herein,
and if the Purchaser's active employment with Worldwide and each Subsidiary
thereof that employs the Purchaser is terminated (A) by such employer or
employers Without Cause, (B) by the Purchaser by Retirement at Normal Retirement
Age, or (C) by reason of the Disability or death of the Purchaser, then on
notice from the Purchaser (or his estate) in writing and delivered to Worldwide
within 30 days following the earlier of (i) the last day of the Second Option
Period and (ii) the date the CD&R Fund delivers written notice to the Purchaser
indicating whether the CD&R Fund will exercise its option to purchase any of the
Shares, Worldwide shall purchase all (but not less than all) of the Shares then
held by the Purchaser (or his estate). All purchases pursuant to this Section
6(a) by Worldwide or the CD&R Fund shall be for a purchase price and in the
manner prescribed by Section 7 hereof.
(b) Unforeseen Personal Hardship. In the event that the Purchaser,
while in the employment of Worldwide or any Subsidiary thereof, experiences
Unforeseen Personal Hardship, the Board will carefully consider any request by
the Purchaser that Worldwide repurchase the Purchaser's Shares at a price
determined in accordance with Section 7 hereof, but Worldwide shall have no
obligation to repurchase such Shares. The Board shall consider such request with
respect to Unforeseen Personal Hardship as soon as practicable after receipt by
Worldwide of a written request by the Purchaser, such request to include
sufficient details of the Purchaser's Unforeseen Personal Hardship to permit the
Board to review the request and the circumstances in an informed manner.
(c) Certain Definitions. As used in this Agreement the following
terms shall have the following meanings:
(i) "Cause" shall mean (i) the continued and willful failure of the
Purchaser substantially to perform the duties of his or her employment for
Worldwide or any Subsidiary (other than any such failure due to the
Grantee's physical or mental illness) after a demand for substantial
performance has been delivered in writing to the Purchaser by the
executive to whom the Purchaser reports or by the Board, which demand
identifies the manner in which such executive or the Board, as the case
may be, believes that the Purchaser has not substantially performed such
duties, (ii) the Purchaser's engaging in willful and serious misconduct
that has caused or is reasonably expected to result in material injury to
Worldwide or any
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of its Subsidiaries or Affiliates (as defined herein), (iii) the
Purchaser's conviction of, or entering a plea of guilty or nolo contendere
to, a crime that constitutes a felony or (iv) the material breach by the
Purchaser of any of his or her obligations hereunder or under any other
written agreement or covenant with Worldwide or any of its Subsidiaries or
Affiliates.
(ii) "Retirement at Normal Retirement Age" shall mean the
Purchaser's retirement from employment with Worldwide or the Subsidiary
thereof that employs the Purchaser at age 65 or later.
(iii) "Disability" shall mean a physical or mental disability or
infirmity that prevents the performance of the Purchaser's
employment-related duties lasting (or likely to last, based on competent
medical evidence presented to the Board) for a period of six months or
longer. The Board's reasoned and good faith judgment as to Disability
shall be final and shall be based on such competent medical evidence as
shall be presented to it by the Purchaser or by any physician or group of
physicians or other competent medical expert employed by the Purchaser or
Worldwide to advise the Board.
(iv) "Unforeseen Personal Hardship" shall mean financial hardship
arising from (x) extraordinary medical expenses or other expenses directly
related to illness or disability of the Purchaser, a member of the
Purchaser's immediate family or one of the Purchaser's parents or (y)
payments necessary or required to prevent the eviction of the Purchaser
from the Purchaser's principal residence or foreclosure on the mortgage on
that residence. The Board's reasoned and good faith determination of
Unforeseen Personal Hardship shall be binding on Worldwide and the
Purchaser.
(d) Notice of Termination. Worldwide or the Subsidiary thereof that
employs the Purchaser shall give written notice of any termination of the
Purchaser's active employment with each of Worldwide and any Subsidiary thereof
that employs the Purchaser to the CD&R Fund, except that if such termination (if
other than as a result of death) is by the Purchaser, the Purchaser shall give
written notice of such termination to Worldwide and Worldwide shall give written
notice of such termination to the CD&R Fund.
(e) Public Offering. In the event that a Public Offering has been
consummated, none of Worldwide, the CD&R Fund or the Purchaser shall have any
rights to purchase or sell the Shares, as the case may be, pursuant to this
Section 6 and this Section 6 shall not apply to a sale as part of a Public
Offering.
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7. Determination of the Purchase Price; Manner of Payment.
(a) Purchase Price. For the purposes of any purchase of the Shares
pursuant to Section 6, and subject to Section 11(c), the purchase price per
Share to be paid to the Purchaser (or his estate) for each Share (the "Purchase
Price") shall equal the fair market value (the "Fair Market Value") of such
Share as of the effective date of the termination of employment that gives rise
to the right of Worldwide and the CD&R Fund or obligation of Worldwide to
repurchase such Share or, in the case of a repurchase as a result of Unforeseen
Personal Hardship, as of the date such Shares are repurchased (such date of
termination or repurchase, as applicable, the "Determination Date"); provided
that if the Purchaser's employment is terminated by Worldwide or any Subsidiary
thereof for Cause, the Purchase Price for such Share shall equal the lesser of
(i) the Fair Market Value of such Share as of the Determination Date and (ii)
the price at which the Purchaser purchased such Share from Worldwide pursuant to
this Agreement. Whenever determination of the Fair Market Value of a Share is
required by this Agreement, such Fair Market Value shall be such amount as is
determined in good faith by the Board. In making a determination of Fair Market
Value, the Board shall give due consideration to such factors as it deems
appropriate, including, without limitation, the earnings and certain other
financial and operating information of Worldwide and its Subsidiaries in recent
periods, the potential value of Worldwide and its Subsidiaries as a whole, the
future prospects of Worldwide and its Subsidiaries and the industries in which
they compete, the history and management of Worldwide and its Subsidiaries, the
general condition of the securities markets, the fair market value of securities
of companies engaged in businesses similar to those of Worldwide and its
Subsidiaries and the Applicable Share Valuation (as defined below). The
determination of Fair Market Value will not give effect to any restrictions on
transfer of the Shares or the fact that such Shares would represent a minority
interest in Worldwide. For purposes of this Agreement, the term "Applicable
Share Valuation" shall mean the annual valuation of the Common Stock performed
as of the last day of the last fiscal year of Worldwide ending prior to the
Determination Date by an independent valuation firm chosen by the Board, except
that, in the case of a Determination Date occurring during the fourth fiscal
quarter of any fiscal year of Worldwide beginning with the fourth quarter of the
1999 fiscal year of Worldwide, the term "Applicable Share Valuation" shall mean
the annual valuation of the Common Stock performed as of the last day of such
fourth fiscal quarter by an independent valuation firm chosen by the Board. Such
annual valuations shall be performed as promptly as practicable following the
end of each fiscal year of Worldwide, beginning with the 2000 fiscal year of
Worldwide. The Fair Market Value as determined in good faith by the Board and in
the absence of fraud shall be binding and conclusive upon all parties hereto. If
Worldwide at any time subdivides (by any stock split, stock dividend or
otherwise) the Common Stock into a greater number of shares, or combines (by
reverse stock split or otherwise) the Common Stock into a smaller number of
shares, the Purchase Price (including any minimum or maximum Purchase Price
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specified herein or in effect as a result of a prior adjustment) shall be
appropriately adjusted to reflect such subdivision or combination.
(b) Closing of Purchase; Payment of Purchase Price. Subject to
Section 11, the closing of a purchase pursuant to Section 6 shall take place at
the principal office of Worldwide on the tenth business day following whichever
of the following is applicable: (i) the receipt by the Purchaser (or his estate)
of the notice of Worldwide or the CD&R Fund, as the case may be, of its exercise
of its option to purchase any of the Shares pursuant to Section 6(a) or (ii)
Worldwide's receipt of notice from the Purchaser (or his estate) requiring
Worldwide to purchase all of the Shares pursuant to Section 6(a) or (iii) the
Board's determination (which shall be delivered to the Purchaser) that Worldwide
is authorized to purchase Shares as a result of Unforeseen Personal Hardship
pursuant to Section 6(b). At the closing, (i) subject to the proviso below,
Worldwide or the CD&R Fund, as the case may be, shall pay to the Purchaser (or
his estate) an amount equal to the Purchase Price and (ii) the Purchaser (or his
estate) shall deliver to Worldwide such certificates or other instruments
representing the Shares so purchased, appropriately endorsed by the Purchaser
(or his estate), as Worldwide may reasonably require; provided, however, that if
the Determination Date occurs during the first or last fiscal quarter of any
fiscal year of Worldwide, Worldwide or the CD&R Fund, as the case may be, may
elect to pay the Purchase Price in two installments. In any such event, (i) at
the closing of the purchase of the Shares, Worldwide or the CD&R Fund, as the
case may be, shall pay to the Purchaser (or his estate) an amount (the "First
Installment Amount") equal to 80% of the Fair Market Value of the Shares,
determined pursuant to Section 7(a) hereof on the basis of the most recent
available valuation of the Shares, and (ii) no later than the tenth business day
following receipt by Worldwide of the Applicable Share Valuation, Worldwide or
the CD&R Fund, as the case may be, shall pay an additional amount to the
Purchaser (or his estate) equal to the sum of (1) the excess (the "Excess
Payment"), if any, of (A) the Purchase Price for the Shares, over (B) the First
Installment Amount and (2) an amount calculated by multiplying the Excess
Payment by a percentage equal to the average annual cost to Worldwide of its and
its Subsidiaries bank indebtedness obligations outstanding during the period
commencing on the closing date of the purchase of the Shares and ending on the
date of payment of such additional amount pursuant to this clause (ii) or, if
there are no such obligations outstanding, one percentage point greater than the
average annual prime rate charged during such period by Chase Bank or such other
nationally recognized bank designated by Worldwide.
(c) Application of the Purchase Price to Certain Loans. The
Purchaser agrees that Worldwide and the CD&R Fund shall be entitled to apply any
amounts to be paid by Worldwide or the CD&R Fund, as the case may be, to
repurchase Shares pursuant to Section 5 or 6 hereof to discharge any
indebtedness of the Purchaser to Worldwide or any Subsidiary thereof or
indebtedness that is guaranteed by Worldwide or any such
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Subsidiary, which indebtedness was incurred by the Purchaser in connection with
his purchase of any shares of Common Stock, including the Shares.
8. Drag-Along Rights.
(a) Drag-Along Notice. If the CD&R Fund intends to effect a sale of
51% or more of its shares of common stock of Worldwide to a third party (a
"Third Party Buyer") and the CD&R Fund elects to exercise its rights under this
Section 8, the CD&R Fund shall deliver written notice (a "Drag-Along Notice") to
the Purchaser, which notice shall (a) state (i) that the CD&R Fund wishes to
exercise its rights under this Section 8 with respect to such sale, (ii) the
name and address of the Third Party Buyer, (iii) the per share amount and form
of consideration the CD&R Fund proposes to receive for its shares of common
stock of Worldwide and (iv) the terms and conditions of payment of such
consideration and all other material terms and conditions of such sale, (b)
contain an offer (the "Drag-Along Offer") by the Third Party Buyer to purchase
from the Purchaser a percentage of his Shares equal to the percentage of the
shares of common stock of Worldwide owned by the CD&R Fund that are to be sold
to the Third Party Buyer (such percentage, the "Applicable Percentage") on and
subject to the same terms and conditions offered to the CD&R Fund and (c) state
the anticipated time and place of the closing of the purchase and sale of the
Applicable Percentage of the Shares (a "Section 8 Closing"), which (subject to
such terms and conditions) shall occur not fewer than five (5) days nor more
than ninety (90) days after the date such Drag-Along Notice is delivered,
provided that if such Section 8 Closing shall not occur prior to the expiration
of such 90-day period, the CD&R Fund shall be entitled to deliver additional
Drag-Along Notices with respect to such Drag-Along Offer.
(b) Conditions to Drag-Along. Upon delivery of a Drag-Along Notice,
the Purchaser shall have the obligation to sell and transfer to the Third Party
Buyer the Applicable Percentage of the Purchaser's Shares pursuant to the
Drag-Along Offer, as the same may be modified from time to time, provided that
the CD&R Fund sells and transfers the Applicable Percentage of its shares of
common stock of Worldwide to the Third Party Buyer at the Section 8 Closing.
Within 10 days of receipt of the Drag-Along Notice, the Purchaser shall (i)
execute and deliver to the CD&R Fund a power of attorney and a letter of
transmittal and custody agreement appointing, and in form and substance
reasonably satisfactory to, the CD&R Fund or one or more of its affiliates
designated by the CD&R Fund (the "Custodian"), the true and lawful
attorney-in-fact and custodian for the Purchaser, with full power of
substitution, and authorizing the Custodian to take such actions as the
Custodian may deem necessary or appropriate to effect the sale and transfer of
the Applicable Percentage of the Shares to the Third Party Buyer, upon receipt
of the purchase price therefor at the Section 8 Closing, free and clear of all
security interests, liens, claims, encumbrances, charges, options, restrictions
on transfer, proxies and voting
12
and other agreements of whatever nature, and to take such other action as may be
necessary or appropriate in connection with such sale or transfer, including
consenting to any amendments, waivers, modifications or supplements to the terms
of the sale (provided that the CD&R Fund also so consents, and, to the extent
applicable, sells and transfers the Applicable Percentage of its shares of
common stock of Worldwide on the same terms as so amended, waived, modified or
supplemented) and (ii) deliver to the Custodian certificates representing the
Applicable Percentage of the Shares, together with all necessary duly executed
stock powers. The Custodian shall hold the Applicable Percentage of the Shares
and other documents in trust for the Purchaser pending completion or abandonment
of such sale. If, within 90 days after the CD&R Fund delivers the Drag-Along
Notice, the CD&R Fund has not completed the sale of the Applicable Percentage of
the Shares and of its shares of common stock of Worldwide to the Third Party
Buyer and another Drag-Along Notice with respect to such Drag-Along Offer has
not been sent to the Purchaser, the Custodian shall return to the Purchaser all
certificates representing the Applicable Percentage of the Shares and all other
documents that the Purchaser delivered in connection with such sale. Promptly
after the Section 8 Closing, the Custodian shall give notice thereof to the
Purchaser, shall remit to the Purchaser the total consideration for the
Applicable Percentage of the Shares sold pursuant thereto (reduced by any amount
required to be held in escrow pursuant to the terms of the purchase and sale
agreement), and shall furnish such other evidence of the completion and time of
completion of such sale and the terms thereof as may reasonably be requested by
the Purchaser.
(c) Remedies. The Purchaser acknowledges that the CD&R Fund would be
irreparably damaged in the event of a breach or a threatened breach by the
Purchaser of any of its obligations under this Section 8 and the Purchaser
agrees that, in the event of a breach or a threatened breach by the Purchaser of
any such obligation, the CD&R Fund shall, in addition to any other rights and
remedies available to it in respect of such breach, be entitled to an injunction
from a court of competent jurisdiction (without any requirement to post bond)
granting it specific performance by the Purchaser of its obligations under this
Section 8. In the event that the CD&R Fund shall file suit to enforce the
covenants contained in this Section 8 (or obtain any other remedy in respect of
any breach thereof), the prevailing party in the suit shall be entitled to
recover, in addition to all other damages to which it may be entitled, the costs
incurred by such party in conducting the suit, including reasonable attorney's
fees and expenses. In the event that, following a breach or a threatened breach
by the Purchaser of the provisions of this Section 8, the CD&R Fund does not
obtain an injunction granting it specific performance of the Purchaser's
obligations under this Section 8 in connection with such proposed sale prior to
the time the CD&R Fund completes the sale of the Applicable Percentage of its
shares of common stock of Worldwide or, in its sole discretion, abandons such
sale, then Worldwide shall have the option to purchase all of the Shares from
the Purchaser at a purchase price per Share equal to the price at which the
Purchaser purchased such shares of
13
Common Stock from Worldwide or, if less, the per share consideration payable
pursuant to the Drag-Along Offer.
(d) Public Offering. In the event that a Public Offering has been
consummated, the provisions of this Section 8 shall terminate and cease to have
further effect.
9. Representations and Warranties of Worldwide. Worldwide represents
and warrants to the Purchaser that (a) Worldwide has been duly incorporated and
is an existing corporation in good standing under the laws of the State of
Delaware, (b) this Agreement has been duly authorized, executed and delivered by
Worldwide and constitutes a valid and legally binding obligation of Worldwide
enforceable against Worldwide in accordance with its terms, and (c) the Shares,
when issued, delivered and paid for in accordance with the terms hereof, will be
duly and validly issued, fully paid and nonassessable, and free and clear of any
liens or encumbrances other than those created pursuant to this Agreement, or
otherwise in connection with the transactions contemplated hereby.
10. Covenants of Worldwide.
(a) Rule 144. Worldwide agrees that at all times after it has filed
a registration statement after the date hereof pursuant to the requirements of
the Securities Act or Section 12 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), relating to any class of equity securities of
Worldwide (other than (i) the registration of equity securities of Worldwide
and/or options in respect thereof to be offered primarily to directors or
members of management or employees of Worldwide, any Subsidiary thereof or any
of their respective predecessors, or to senior executives of, or consultants to,
corporations in which entities managed or sponsored by Clayton, Dubilier & Rice,
Inc. have or have made equity investments, or (ii) the registration of equity
securities and/or options in respect thereof solely on Form S-4 or S-8 or any
successor form), it will file the reports required to be filed by it under the
Securities Act and the Exchange Act and the rules and regulations adopted by the
Commission thereunder (or, if Worldwide is not required to file such reports, it
will, upon the request of the Purchaser, make publicly available such
information as necessary to permit sales pursuant to Rule 144 under the
Securities Act), and will take such further action as the Purchaser may
reasonably request, all to the extent required from time to time to enable the
Purchaser to sell Shares without registration under the Securities Act within
the limitation of the exemptions provided by (i) Rule 144, as such Rule may be
amended from time to time, or (ii) any successor rule or regulation hereafter
adopted by the Commission.
14
(b) State Securities Laws. Worldwide agrees to use its best efforts
to comply with all state securities or "blue sky" laws applicable to the sale of
the Shares to the Purchaser, provided that Worldwide shall not be obligated to
qualify or register the Shares under any such law or to qualify as a foreign
corporation or file any consent to service of process under the laws of any
jurisdiction or subject itself to taxation as doing business in any such
jurisdiction.
11. Certain Restrictions on Repurchases.
(a) Financing Agreements, etc. Notwithstanding any other provision
of this Agreement, Worldwide shall not be permitted or obligated to repurchase
any Shares from the Purchaser if (i) such repurchase (or the payment of a
dividend by a Subsidiary to Worldwide to fund such repurchase) would result in a
violation of the terms or provisions of, or result in a default or an event of
default under any of the Credit Agreement, dated as of November 19, 1999 and
amended as of November 23, 1999, among North American Van Lines, Inc. ("NAVL"),
the Foreign Subsidiary Borrowers from time to time party thereto, the several
banks and financial institutions from time to time party thereto, the Bank of
New York, as documentation agent, Banc of America Securities, LLC, as
syndication agent, and The Chase Manhattan Bank, as administrative agent, the
Indenture dated as of November 19, 1999, among NAVL, certain subsidiaries of
NAVL, as guarantors, and State Street Bank and Trust Company, as Trustee, any
other guaranty, financing or security agreement or document entered into (x) by
Worldwide or any subsidiary that is in effect on or after the date hereof (y) in
connection with the operations of Worldwide or its Subsidiaries from time to
time, or (z) to refinance or replace any indebtedness described in this Section
11(a) (such agreements and documents, as each may be amended, modified or
supplemented from time to time, are referred to herein as the "Financing
Agreements"), in each case as the same may be amended, modified or supplemented
from time to time, or (ii) such repurchase would violate any of the terms or
provisions of the Certificate of Incorporation of Worldwide, or (iii) Worldwide
has no funds legally available therefor under the General Corporation Law of the
State of Delaware.
(b) Delay of Repurchase. In the event that a repurchase by Worldwide
otherwise permitted or required under Section 6(a) is prevented solely by the
terms of Section 11(a), (i) such repurchase will be postponed and will take
place without the application of further conditions or impediments (other than
as set forth in Section 7 hereof or in this Section 11) at the first opportunity
thereafter when Worldwide has funds legally available therefor and when such
repurchase will not result in any default, event of default or violation under
any of the Financing Agreements or in a violation of any term or provision of
the Certificate of Incorporation of Worldwide and (ii) such repurchase
obligation shall rank against other similar repurchase obligations with respect
to shares of
15
Common Stock or options in respect thereof according to priority in time of the
effective date of the termination of employment giving rise to such repurchase,
provided that any such repurchase obligations as to which a common date
determines priority shall be of equal priority and shall share pro rata in any
repurchase payments made pursuant to clause (i) above and provided, further,
that any repurchase commitment arising from Disability, death, Retirement at
Normal Retirement Age or any repurchase commitment made by the Board pursuant to
Section 6(b) or the comparable provisions of any other applicable management
stock subscription agreement shall have priority over any other repurchase
obligation.
(c) Purchase Price Adjustment. In the event that a repurchase of
Shares from the Purchaser is delayed pursuant to this Section 11, the purchase
price per Share when the repurchase of such Shares eventually takes place as
contemplated by Section 11(b) shall equal the sum of (i) the Purchase Price
determined in accordance with Section 7 hereof at the time that the repurchase
of such Shares would have occurred but for the operation of this Section 11,
plus (ii) an amount equal to interest on such Purchase Price for the period from
the date on which the completion of the repurchase would have taken place but
for the operation of this Section 11 to the date on which such repurchase
actually takes place (the "Delay Period") at a rate equal to the average annual
cost to Worldwide of its and its Subsidiaries bank indebtedness obligations
outstanding during the Delay Period or, if there are no such obligations
outstanding, one percentage point greater than the average prime rate charged
during such period by Chase Bank or such other nationally recognized bank
designated by Worldwide.
12. Miscellaneous.
(a) Notices. All notices and other communications required or
permitted to be given under this Agreement shall be in writing and shall be
deemed to have been given if delivered personally or sent by certified or
express mail, return receipt requested, postage prepaid, or by any recognized
international equivalent of such delivery, to Worldwide, the CD&R Fund or the
Purchaser, as the case may be, at the following addresses or to such other
address as Worldwide, the CD&R Fund or the Purchaser, as the case may be, shall
specify by notice to the others:
16
(i) if to Worldwide, to it at:
c/o North American Van Lines, Inc.
Law Department
5501 U.S. Highway 30 West
Fort Wayne, Indiana 46801
Attention: General Counsel
(ii) if to the Purchaser, to the Purchaser at the address set forth
on the signature page hereof.
(iii) if to the CD&R Fund, to:
Clayton, Dubilier & Rice Fund V Limited Partnership
1403 Foulk Road, Suite 106
Wilmington, Delaware 19803
Attention: Joseph L. Rice, III
All such notices and communications shall be deemed to have been received on the
date of delivery if delivered personally or on the third business day after the
mailing thereof. Copies of any notice or other communication given under this
Agreement shall also be given to:
Clayton, Dubilier & Rice, Inc.
375 Park Avenue, 18th Floor
New York, New York 10152
Attention: Kevin J. Conway
and
Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
Attention: Paul S. Bird, Esq.
The CD&R Fund also shall be given a copy of any notice or other communication
between the Purchaser and Worldwide under this Agreement at its address as set
forth above.
(b) Binding Effect; Benefits. This Agreement shall be binding upon
and inure to the benefit of the parties to this Agreement and their respective
successors and
17
assigns. Except as provided in Sections 4 through 8, inclusive, nothing in this
Agreement, express or implied, is intended or shall be construed to give any
person other than the parties to this Agreement or their respective successors
or assigns any legal or equitable right, remedy or claim under or in respect of
any agreement or any provision contained herein.
(c) Waiver; Amendment.
(i) Waiver. Any party hereto may by written notice to the other
parties (A) extend the time for the performance of any of the obligations
or other actions of the other parties under this Agreement, (B) waive
compliance with any of the conditions or covenants of the other parties
contained in this Agreement, and (C) waive or modify performance of any of
the obligations of the other parties under this Agreement, provided that
any waiver of the provisions of Sections 4 through 8, inclusive, must be
consented to by the CD&R Fund. Except as provided in the preceding
sentence, no action taken pursuant to this Agreement, including, without
limitation, any investigation by or on behalf of any party, shall be
deemed to constitute a waiver by the party taking such action of
compliance with any representations, warranties, covenants or agreements
contained herein. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver
of any preceding or succeeding breach and no failure by a party to
exercise any right or privilege hereunder shall be deemed a waiver of such
party's rights or privileges hereunder or shall be deemed a waiver of such
party's rights to exercise the same at any subsequent time or times
hereunder.
(ii) Amendment. This Agreement may be amended, modified or
supplemented only by a written instrument executed by the Purchaser and
Worldwide, provided that any amendment adversely affecting the rights of
the CD&R Fund hereunder must be consented to by the CD&R Fund. The parties
hereto acknowledge that Worldwide's consent to an amendment or
modification of this Agreement is subject to the terms and provisions of
the Financing Agreements.
(d) Assignability. Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof shall be
assignable by Worldwide or the Purchaser without the prior written consent of
the other parties. The CD&R Fund may assign from time to time all or any portion
of its rights under Sections 4 through 8, inclusive, to one or more persons or
other entities designated by it.
(e) Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE
18
OF DELAWARE, REGARDLESS OF THE LAW THAT MIGHT BE APPLIED UNDER PRINCIPLES OF
CONFLICT OF LAWS.
(f) Section and Other Headings, etc. The section and other headings
contained in this Agreement are for reference purposes only and shall not affect
the meaning or interpretation of this Agreement.
(g) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same instrument.
(h) Certain Definitions.
"Affiliate": with respect to any Person, means any other Person
that, directly or indirectly through one or more intermediaries, Controls, is
Controlled by, or is under common Control with the first Person, including but
not limited to a Subsidiary of the first Person, a Person of which the first
Person is a Subsidiary, or another Subsidiary of a Person of which the first
Person is also a Subsidiary.
"Control": with respect to any Person, means the possession,
directly or indirectly, severally or jointly, of the power to direct or cause
the direction of the management policies of such Person, whether through the
ownership of voting securities, by contract or credit arrangement, as trustee or
executor, or otherwise.
"Person": any natural person, firm, partnership, limited liability
company, association, corporation, company, trust, business trust, governmental
authority or other entity.
"Subsidiary": with respect to any Person, each corporation or other
Person in which the first Person owns or Controls, directly or indirectly,
capital stock or other ownership interests representing 50% or more of the
combined voting power of the outstanding voting stock or other ownership
interests of such corporation or other Person.
"Successor": of a Person means a Person that succeeds to the first
Person's assets and liabilities by merger, liquidation, dissolution or otherwise
by operation of law, or a Person to which all or substantially all the assets
and/or business of the first Person are transferred.
19
IN WITNESS WHEREOF, Worldwide and the Purchaser have executed this
Agreement as of the date first above written.
ALLIED WORLDWIDE, INC.
By:______________________________________
Name:
Title:
THE PURCHASER:
(Name)
By:______________________________________
as Attorney-in-Fact
Name:
Address of the Purchaser:
(Address)
Total Number of Shares
of Common Stock to be
Purchased: (Shares)
Total Purchase
Price: $(Share Amount)
20