EXHIBIT 10.37
STOCKHOLDERS AGREEMENT
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This Stockholders Agreement (the "Agreement") is entered into as of March
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27, 1998 by and among Fountain View, Inc., a Delaware corporation (the
"Company"), Robert Snukal ("RS"), Sheila Snukal ("SS"), William Scott ("Scott"),
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Heritage Fund II, L.P. ("Heritage"), Heritage Investors II, L.L.C., Heritage
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Fund II Investment Corporation, Keith Abrahams, Stacy Abrahams, Joshua Snukal,
Debbie Wickersham, Joan Chandler, Rosella Felipe, Rolando Abrina, John Padama,
Myles Andrews, Martin Axel, Norbolita Sapiandante, Consolacion Padama, Barbara
Gale, Debra Bowman, Robin Necke, HFV Holdings, LLC, Nassau Capital Partners II
L.P., NAS Partners I LLC, Paribas North America, Inc., Phoenix Home Life Mutual
Insurance Company, PMI Mezzanine Fund, L.P., GS Private Equity Partners, L.P.,
GS Private Equity Partners Offshore, L.P. and Sutro Investment Partners V, LLC
and any Person who hereafter becomes a stockholder of the Company as provided
herein, and is consented to by Scott's spouse, Karen B. Kaplan.
Introduction
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The purpose of this Agreement is to establish certain arrangements with
respect to the management and operation of the Company and to grant certain
rights and impose certain restrictions on the ownership of stock of the Company,
which the parties agree are in their best interests and in the best interests of
the Company.
Capitalized terms used herein and not otherwise defined shall have the
respective meanings given to them in Article VIII at the end of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein expressed,
the parties hereto hereby agree as follows:
ARTICLE I
BOARD OF DIRECTORS; VOTING
Section 1.01. Board Size. At all meetings (and written actions in lieu of
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meetings) of stockholders of the Company at which the number of directors of the
Company is to be determined, each Stockholder shall vote all of such
Stockholder's Stock to fix the number of directors of the Company at the number
specified by a Majority of Investors.
Section 1.02. Election of Directors. At all meetings (and written actions
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in lieu of meetings) of stockholders of the
Company at which directors are to be elected, each Stockholder shall vote all of
such Stockholder's Stock to elect, as directors of the Company:
(a) RS Directors. Two nominees of RS, which number shall be
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increased if necessary to insure that the nominees of RS constitute not less
than twenty-five percent (25%) of the total number of directors (the "RS
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Directors"), as long as RS holds any shares of Stock.
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(b) Scott Directors. One nominee of Scott (the "Scott Director"), as
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long as Scott holds any shares of Stock.
(c) Investor Directors. Such number of nominees of a Majority of
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Investors as may be designated by a Majority of Investors (the "Investor
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Directors").
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Section 1.03. Removal. Each Stockholder agrees to vote such Stockholder's
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Stock, at all meetings (and written actions in lieu of meetings) of stockholders
of the Company, (a) to remove any RS Director, if so requested by RS, (b) to
remove the Scott Director, if so requested by a Scott and (c) to remove any
Investor Director, if so requested by a Majority of Investors. Each Stockholder
agrees not to vote such Stockholder's Stock in favor of the removal of any
director other than in accordance with the preceding sentence.
Section 1.04. Vacancies. Each Stockholder agrees to vote such
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Stockholder's Stock, at all meetings (and written actions in lieu of meetings)
of stockholders of the Company, (a) to fill any vacancy on the Board of
Directors of the Company (the "Board") caused by the resignation or removal of
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any RS Director with a nominee selected by RS, (b) to fill any vacancy on the
Board caused by the resignation or removal of the Scott Director with a nominee
selected by Scott and (c) to fill any vacancy on the Board caused by the
resignation or removal of any Investor Director with a nominee selected by a
Majority of Investors.
Section 1.05. Meetings. The Board will meet not less often than
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quarterly. Each Director shall be given at least three days prior notice of any
meeting and will be permitted to participate in any meeting by telephone. Any
Director may call a meeting of the Board.
Section 1.06. Observation Rights. An Investor shall be entitled to have
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one observer present at any meeting of the Board if such Investor holds at least
75,000 shares of Common Stock (appropriately adjusted for stock splits, stock
dividends, combinations and similar transactions) as of the date notice of such
meeting is delivered. The Company shall give each Investor who is listed on the
record books of the Company as holding the
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number of shares of Stock set forth above at least three days prior notice of
any meeting so that each such Investor may designate an observer to be present
at such meeting. No observer pursuant to this Section 1.06 shall have any right
to vote upon any matters to be considered by the Board.
Section 1.07. Voting on Other Matters. If requested by Heritage, for as
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long as Heritage holds more shares of Common Stock than any other Investor, the
Stockholders agree to vote their Securities on all matters to be voted upon by
holders of the Company's Securities as directed by Heritage, unless the effect
of such matter on such Stockholder differs materially and adversely from the
effect on Heritage. Each Stockholder hereby grants Heritage an irrevocable
proxy, which is coupled with an interest, to vote such Stockholder's Securities
as provided in this Section. Each Qualified Stockholder shall, if such
Qualified Stockholder requests, be given an opportunity to be heard by Heritage
for the purpose of discussing the exercise of such proxy, provided that such
opportunity shall in no way limit the scope or validity of such proxy.
ARTICLE II
SPECIAL PROVISIONS REGARDING
SERIES B COMMON STOCK
Section 2.01. General. The Company has issued to RS and SS an aggregate
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of 62,599 shares of Series B Common Stock and has issued to Scott 51,603 shares
of Series B Common Stock pursuant to which the provisions of this Article II
apply.
Section 2.02. Forfeiture of Series B Common Stock. Immediately prior to
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the consummation of a Trigger Event, a portion of the Series B Common Stock may
be deemed to be entitled to remain outstanding as provided below, and upon such
determination each share of Series B Common Stock that is not entitled to remain
outstanding shall immediately be deemed to be forfeited by the holder thereof,
without further action by the Company or the Stockholders, and shall thereafter
not be outstanding. Upon any such forfeiture, the Company shall pay the holder
thereof an amount equal to the price paid to the Company upon original issuance
of such share. The aggregate number of shares of Series B Common Stock that are
deemed to be entitled to remain outstanding shall be determined in accordance
with Section 2.03 below. The number of shares of Series B Common Stock that are
entitled to remain outstanding for each Stockholder who holds Series B Common
Stock immediately prior to the consummation of a Trigger Event shall be (a) the
total number of Series B Common Stock so held by such Stockholder multiplied by
(b) a fraction of which the numerator is the aggregate number
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of shares of Series B Common Stock that are entitled to remain outstanding and
the denominator is 114,202.
Section 2.03. Determination of Number of Shares of Series B Common Stock
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that are Entitled to Remain Outstanding. The aggregate number of shares of
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Series B Common Stock that are entitled to remain outstanding shall be
determined as follows in the circumstances indicated:
(a) Base Case Terminal Value. If, at the time of a Trigger Event, the
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Terminal Value (as hereinafter defined) of the Company is equal to or less than
the Base Case, the number of shares of Series B Common Stock that are entitled
to remain outstanding shall be 0.
(b) Mid Case Terminal Value. If, at the time of a Trigger Event, the
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Terminal Value of the Company is equal to the Mid Case, the number of shares of
Series B Common Stock that are entitled to remain outstanding shall be 81,739.
(c) Target Case Terminal Value. If, at the time of a Trigger Event,
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the Terminal Value of the Company is equal to or greater than the Target Case,
the number of shares of Series B Common Stock that are entitled to remain
outstanding shall be 114,202.
(d) Intermediate Cases. If, at the time of a Trigger Event, the
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Terminal Value of the Company is more than the Base Case but less than the Mid
Case, the number of shares of Series B Common Stock that are entitled to remain
outstanding shall be adjusted ratably between the amount specified in Subsection
(a) above and the amount specified in Subsection (b) above. If, at the time of
a Trigger Event, the Terminal Value is more than the Mid Case but less than the
Target Case, the number of shares of Series B Common Stock that are entitled to
remain outstanding shall be adjusted ratably between the amount specified in
Subsection (b) above and the amount specified in Subsection (c) above.
(e) Definition of Base Case, Mid Case and Target Case. As used herein,
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"Base Case", "Mid Case" and "Target Case" shall have the meanings specified on
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Exhibit 2.03 hereto, on the respective dates indicated. The Base Case, Mid Case
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and Target Case Terminal Value targets for forfeiture of Series B shares may be
changed by the Board to reflect acquisitions, dispositions, start-ups and other
transactions not in the ordinary course, provided that in selecting the new
targets the members of the Board approving such changes believe in good faith
that the new targets are broadly consistent with the valuation methodology
applied in determining the initial Terminal Value targets set forth on Exhibit
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2.03 hereto. Prompt notice of any change in the
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Terminal Value targets will be given by the Company to each record holder of
shares of Series B Common Stock.
(f) Definition of Terminal Value. As used herein, "Terminal Value"
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shall mean the following:
(i) In the case of a Trigger Event which is a registered,
underwritten public offering of shares of common stock of the Company (a
"Public Offering"), Terminal Value shall mean the aggregate value of all
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Common Stock and equivalents of the Company, based on the price per share
at which shares of Common Stock are to be sold to the public in such
offering, determined immediately prior to such offering.
(ii) In the case of any other Trigger Event, Terminal Value
shall mean the aggregate net proceeds (including the fair market value of
any property) distributable in respect of all Common Stock and equivalents
of the Company from the transaction giving rise to such Trigger Event.
(iii) Definition of Trigger Event. As used herein, "Trigger
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Event" shall mean any of the following: (A) the closing of a Public
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Offering, (B) the sale of Stock in a single transaction or a series of
related transactions, or a merger or consolidation of the Company as a
result of which a majority of the outstanding Stock is not held by the
initial parties to this Agreement and their transferees under clauses (a)
through (f) of the definition of "Permitted Transfers", or (C) the sale of
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all or substantially all of the consolidated assets of the Company and its
Subsidiaries, approved as required by this Agreement.
(g) Certain Events. In the event of any stock split, stock dividend,
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combination or other similar transaction affecting the Series B Common Stock,
the share numbers contained in this Article shall be appropriately adjusted by
the Board.
ARTICLE III
PREEMPTIVE RIGHTS
Section 3.01. Notice of Issuance. The Company will give each Qualified
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Stockholder (as hereinafter defined) at least 20 business days prior written
notice of any proposed sale or issuance by the Company of any Securities, except
for Exempt Issuances (as hereinafter defined). Such notice will identify the
Securities to be issued, the approximate date of issuance, and the price and
other terms and conditions of the issuance.
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Such notice will also include an offer (the "Offer") to transfer to each
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Qualified Stockholder its Proportionate Percentage (as hereinafter defined) of
such Securities (the "Offered Securities") at the price and on the other terms
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as are proposed for such sale or issuance, which Offer by its terms shall remain
open for a period of 15 business days from the date of receipt of such notice
and which offer may be accepted by any such Qualified Stockholder in such
Qualified Stockholder's sole discretion. The Offer will also specify each
Qualified Stockholder's Proportionate Percentage, and the manner in which it was
determined.
Section 3.02. Acceptance. Each Qualified Stockholder shall give notice to
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the Company of such Qualified Stockholder's intention to accept an Offer prior
to the end of the 15-day period of such Offer, setting forth the portion of the
Offered Securities which such Qualified Stockholder elects to purchase and
specifying the maximum number of additional Securities such Qualified
Stockholder is willing to purchase if any other Qualified Stockholder declines
to purchase all of such other Qualified Stockholder's Offered Securities. If
any Qualified Stockholder fails to subscribe for such Qualified Stockholder's
Proportionate Percentage of the Offered Securities, the other subscribing
Qualified Stockholders shall be entitled to purchase such Offered Securities as
are not subscribed for by such Qualified Stockholder, up to the number of
additional Securities specified in their notice in the same relative proportion
in which they were initially entitled to purchase the Offered Securities. The
Company shall notify each Qualified Stockholder within five days following the
expiration of the 15-day period described above of the additional amount of
Offered Securities which each Qualified Stockholder may purchase pursuant to the
foregoing sentence and each Qualified Stockholder shall then have five days from
the delivery of such notice to indicate such additional amount, if any, that
such Qualified Stockholder wishes to purchase.
Section 3.03. Sale to Qualified Stockholders. Upon the closing of any
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sale or issuance as to which the Company has given notice under Section 3.01,
the Qualified Stockholders shall purchase from the Company, and the Company
shall sell to the Qualified Stockholders the Offered Securities subscribed for
by the Qualified Stockholders at the price and on the terms specified in the
Offer, which shall be the same price and terms at which all other Persons
acquire such Securities in connection with such sale or issuance.
Section 3.04. Sale to Third Parties. If, but only if, the Qualified
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Stockholders do not subscribe for all of the Offered Securities, the Company
shall have 150 days from the end of the foregoing 15- or five-day period,
whichever is applicable, to
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sell all or any part of such Offered Securities as to which Qualified
Stockholders have not accepted an Offer to any other Persons, at a price and on
terms and conditions which are no more favorable to such other Persons or less
favorable to the Company than those set forth in the Offer. Any Offered
Securities not purchased by the Qualified Stockholders or other Persons in
accordance with Sections 3.03 and 3.04 may not be sold or otherwise disposed of
until they are again offered to the Stockholders under the procedures specified
in this Article III.
Section 3.05. Exempt Issuances. As used herein, "Exempt Issuances" means
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(a) the issuance of Stock and Stock Equivalents to current employees,
consultants and directors of the Company or its subsidiaries (or to former
employees, consultants and directors of the Company or its subsidiaries pursuant
to the exercise of outstanding stock options or similar rights), (b) the
issuance of shares of Stock upon the conversion or exercise of Stock Equivalents
as to which the Company complied with the provisions of this Article or was not
required to comply such provisions, including without limitation the issuance of
Common Stock upon the exercise of warrants to purchase Series C Common Stock
issued on or about the date hereof, and (c) the issuance of Securities which the
Board determines in good faith should not, in the best interests of the Company,
be subject to the provisions of this Article, provided that none of such
Securities are being issued to Heritage or its Affiliates.
ARTICLE IV
TRANSFER RESTRICTIONS
FOR STOCKHOLDERS
Section 4.01. No Transfer. No Stockholder (other than Heritage, as to
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which this Article IV shall not apply) may sell, pledge, give, assign,
distribute, hypothecate, mortgage or transfer (all hereinafter referred to as
"transfer") any Securities owned by such Stockholder, directly or indirectly, to
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any other person or entity, except (a) in the case of Management Stockholders,
after the fourth anniversary of the date hereof (or, in the case or RS, the
earlier date, if any, on which his employment with the Company is terminated by
the Company without cause (other than upon death or disability pursuant to his
employment agreement with the Company) and upon compliance with the other
provisions of this Article IV, (b) in the case of Investors, other than
Heritage, upon compliance with the other provisions of this Article IV, or (c)
in a Permitted Transfer (as hereinafter defined) without compliance with the
other provisions of this Article IV.
Section 4.02. Offer to Company and Qualified Stockholders. If a
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Stockholder (the "Transferring Stockholder") desires to
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transfer any of such Stockholder's Securities, such Stockholder shall first
offer such Securities to the Company and the other Qualified Stockholders by
written notice (the "Initial Notice") stating the Securities such Stockholder
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desires to transfer and the proposed price (expressed in dollars) and terms of
transfer (which shall be for cash payable upon the transfer). The Company and
each of the other Qualified Stockholders shall then have 30 days within which to
give notice (the "Return Notice") of the maximum number of such Securities they
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wish to acquire at the specified price and terms. Copies of each Return Notice
shall be sent to the Company, to the Transferring Stockholder and to each other
Qualified Stockholder.
The Company shall be entitled to purchase any or all of the Securities
offered. If the Company elects to purchase fewer than all of the Securities
offered, each Qualified Stockholder (other than the Transferring Stockholder)
shall be entitled to acquire a pro rata portion of the balance of the Securities
remaining, determined in accordance with their Proportionate Percentages. If any
Qualified Stockholder elects to acquire less than such Qualified Stockholder's
pro rata portion of the available Securities, the other Qualified Stockholders
may acquire a pro rata portion of the balance of the Securities remaining.
The Company and the Qualified Stockholders shall not be entitled to acquire
any Securities from the Transferring Stockholder unless they have elected, in
the aggregate, to purchase all of the Securities specified in the Initial
Notice.
Section 4.03. Payment. The Company shall, at the close of the 30-day
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period provided in Section 4.02 for delivery of the Return Notice, confirm by
notice the Securities to be acquired by each Qualified Stockholder and by the
Company. Payment for such Securities shall be delivered within 30 days
thereafter at the price and on the terms specified in the Initial Notice,
against receipt from the Transferring Stockholder of certificates for the
Securities purchased, duly endorsed for transfer, free and clear of all liens,
restrictions, claims and encumbrances, except as provided in this Agreement and
under applicable securities laws.
Section 4.04. Right to Sell. If, at the close of the 30-day period
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provided in Section 4.02 for delivery of the Return Notice, the Company and the
other Qualified Stockholders have not sent notice of their intention to acquire,
in the aggregate, all of the Securities offered, the Transferring Stockholder
shall have 120 days to transfer the Securities specified in the Initial Notice
at the price and on the terms set forth in the Initial Notice, or at a higher
price than the price specified therein. After the expiration of 120 days the
Transferring Stockholder may not transfer such Securities unless and until they
are again
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offered to the Company and the other Qualified Stockholders under the procedures
specified in this Article IV, where applicable.
Section 4.05. Legends. All certificates or instruments representing
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Securities issued to any party to this Agreement shall bear substantially the
following legends:
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR THE SECURITIES LAWS OF
ANY STATE. SUCH SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT, AND MAY NOT
BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED IN THE ABSENCE OF
EFFECTIVE REGISTRATION STATEMENTS COVERING SUCH SECURITIES UNDER THE ACT
AND ANY APPLICABLE STATE SECURITIES LAWS, UNLESS THE HOLDER SHALL HAVE
OBTAINED AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY, THAT SUCH
REGISTRATION IS NOT REQUIRED.
THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO RESTRICTIONS ON
TRANSFER AND OTHER OBLIGATIONS CONTAINED IN A STOCKHOLDERS
AGREEMENT BETWEEN THE COMPANY AND CERTAIN OF ITS STOCKHOLDERS, A
COPY OF WHICH IS ON FILE WITH THE COMPANY AND WILL BE FURNISHED
WITHOUT COST TO THE HOLDER HEREOF UPON WRITTEN REQUEST TO THE
SECRETARY OF THE COMPANY.
ARTICLE V
TRANSFERS BY HERITAGE
Section 5.01. Co-Sale Rights. If Heritage determines to transfer,
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including without limitation any transfer pursuant to a merger, consolidation or
other business combination of the Company or any subsidiary with another person
or entity (except pursuant to a Public Offering), all or a portion of the Common
Stock held by it (any such transfer being referred to herein as a "Heritage
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Transfer Event"), Heritage shall give prior notice thereof (the "Transfer Event
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Notice") to the other Qualified Stockholders, indicating the overall value of
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the Company implied by the transfer, the Securities to be transferred and the
value of such Securities in the proposed transfer, which value will be
determined by taking the overall Company value stated in the notice and
allocating that value among the Company's outstanding Securities in accordance
with the liquidation provisions of the Certificate of Incorporation.
Each other Qualified Stockholder shall have the right, by giving notice
thereof to Heritage within 20 days after receipt of the Transfer Event Notice,
to include in such transfer the same proportion of its holdings of each class of
Securities as Heritage transfers of its holdings of Common Stock in such
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transaction; provided, that each holder of Preferred Stock shall be entitled to
include all of such holder's shares of Preferred Stock in any such transfer that
constitutes a Trigger Event. Except as provided below, Heritage will not
transfer any Securities in a transaction covered by this Section 5.01 unless the
transferee also acquires any Securities requested by the other Qualified
Stockholders pursuant to the preceding sentence to be included in such transfer,
at the applicable values determined in accordance with the preceding paragraph
(except as provided in Section 5.04 below) and terms specified in the Transfer
Event Notice and in the same form of consideration received by Heritage, and as
to which the other Qualified Stockholders comply with the following paragraph.
In the event that more Securities are requested to be included in any transfer
under this Section 5.01 than the transferee is willing to purchase, the
Securities to be transferred by Heritage and the other Qualified Stockholders to
such transferee shall be reduced pro rata among Heritage and such other
Qualified Stockholders based on the number of Securities requested to be
included in such transfer (and subject to the prior rights of holders of
Preferred Stock to transfer their shares in a Trigger Event).
Heritage shall have 150 days after the close of the 20-day period specified
above to transfer the Securities described in the Transfer Event Notice at the
price (except as provided in Section 5.04 below) and on the terms specified
therein, together with any additional Securities to be included in such transfer
pursuant to the preceding paragraph. Any Qualified Stockholder whose Securities
are being transferred pursuant hereto, in order to be entitled to have such
Securities transferred, shall deliver on no less than five business days notice
from Heritage, at the time and place specified by Heritage, certificates
representing the Securities to be transferred, duly endorsed for transfer to the
transferee designated by Heritage, free and clear of all liens, restrictions,
claims and encumbrances, except as provided in this Agreement and under
applicable securities laws.
Notwithstanding the foregoing, (a) this Section shall not apply to
transfers by Heritage to its partners which are required by its Agreement of
Limited Partnership, as amended, if such partners become parties to this
Agreement, and (b) no shares of Series B Common Stock may be included in any
transfer covered by this Section unless the transfer constitutes a Trigger
Event.
Section 5.02. Required Transfers. Each Stockholder agrees, at Heritage's
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request and upon not less than 20 days prior notice from Heritage, to transfer
in any transaction constituting a Heritage Transfer Event which occurs on or
after the occurrence of a Trigger Event (other than any transfer to an Affiliate
of Heritage), at a price (except as provided in Section 5.04 below) and on terms
determined in the manner applicable to transfers
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under Section 5.01, the same proportion of its holdings of each class of
Securities as Heritage transfers of its holdings of Common Stock in such
transaction, except that the holders of Preferred Stock may elect, if such
Heritage Transfer Event involves a Trigger Event, to transfer all shares of
Preferred Stock held by them in such transaction.
Upon receipt of notice from Heritage under this Section, each Stockholder
shall deliver, on not less than five business days notice from Heritage, at the
time and place specified by Heritage, certificates representing the Securities
to be transferred, duly endorsed for transfer to the transferee designated by
Heritage, free and clear of all liens, restrictions, claims and encumbrances,
except as provided in this Agreement and under applicable securities laws.
Section 5.03. Certain Obligations Relating to Transfer Events. The
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Stockholders will (a) cooperate with Heritage in all respects in the
consummation of any Heritage Transfer Event, (b) vote their Securities in favor
of any Heritage Transfer Event, if requested by Heritage, and (c) execute all
agreements, documents and instruments required by Heritage, which agreements,
documents and instruments will be substantially similar to those executed by
Heritage to consummate such Heritage Transfer Event, provided, however, that any
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indemnification obligations of the Investors shall be several and not joint and
that such indemnification obligations shall be limited for each Investor to the
amount of proceeds received by such Investor in such Heritage Transfer Event.
Section 5.04. Treatment of Stock Equivalents. For purposes of Sections
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5.01 and 5.02, Stock Equivalents shall be deemed to be the same class of Stock
as the Securities for which they are exercisable or into which they are
convertible, but the price payable for them in connection with a Heritage
Transfer Event shall be reduced by the exercise price thereof or other
consideration required to be paid to the Company to acquire the underlying
Stock.
ARTICLE VI
INITIAL PUBLIC OFFERING
Section 6.01. Recapitalization in Connection with Initial Public Offering.
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Notwithstanding anything to the contrary contained in this Agreement or in the
Certificate of Incorporation, in connection with an initial Public Offering of
the Company, the Company will recapitalize its Common Stock into a single class
of Common Stock effective immediately prior to such Public Offering, in
accordance with Section 6.02. In connection with any such recapitalization, the
Stockholders will
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(a) cooperate with a Majority of Investors in all respects and enter into any
transaction reasonably required to effect such recapitalization, (b) vote their
Stock in favor of any such transaction reasonably required to consummate such
recapitalization, if requested by a Majority of Investors, and not exercise any
dissenter's rights or rights to seek an appraisal under Delaware law in
connection with such recapitalization effective upon the initial Public
Offering, and (c) execute all agreements, documents and instruments reasonably
required by a Majority of Investors, consistent with this Section 6.01, whereby
such Stockholders shall (i) undertake all actions reasonably necessary to
effectuate the recapitalization of its Common Stock into a single class of
Common Stock and (ii) agree not to sell, grant any option for the purchase of,
or otherwise dispose of any Securities (other than those included in such
registration) for such period as may be requested by the managing underwriter of
any public offering of the Company's Securities (not to exceed (A) 180 days
thereafter, in the case of the initial public offering of the Company's Common
Stock or (B) 90 days thereafter, in the case of any other registration).
Section 6.02. Determination of Number of Shares. Upon such
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recapitalization, each share of Common Stock (including, in the case of Series B
Common Stock, only shares that are entitled to remain outstanding in accordance
with Article II) will be converted into a number of shares of Common Stock
determined by dividing (a) the amount that would be distributed in respect of
such share upon a liquidation of the Company in accordance with the Certificate
of Incorporation, assuming an amount of cash available to distribute equal to
the aggregate value of all common equity and equivalents of the Company (but not
any preferred stock) immediately prior to such Public Offering, based on the
price per share at which shares of Common Stock are to be sold to the public in
such Public Offering (the "Per Share Offering Price"), by (ii) the Per Share
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Offering Price. In order to facilitate the Public Offering, the Board may
determine in good faith its estimate of the Per Share Offering Price in advance
of the Public Offering, and the parties agree that the foregoing adjustment may
be made on the basis of that estimate. Each share of Series B Common Stock not
entitled to remain outstanding in accordance with Article II will be canceled.
Section 6.03. Termination. This Agreement will terminate upon the
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consummation of an initial Public Offering by the Company.
ARTICLE VII
MISCELLANEOUS
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Section 7.01. Affiliate Transactions. The Company will not, and will not
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permit any of its subsidiaries to, engage in any transaction with any Affiliate
of the Company other than (a) as expressly contemplated by this Agreement, (b)
issuances of securities in compliance with (or which are exempt from) Article
III or (c) those transactions that are on a commercially-reasonable, arms-length
basis and that are approved by a disinterested majority of the Board.
Section 7.02. Information. The Company will provide to each Qualified
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Stockholder the following reports:
(a) Monthly Reports. As soon as available, a consolidated balance
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sheets of the Company as at the end of such period and the related consolidated
statement of operations for such period and for the portion of the Company's
fiscal year ended on the last day of such month, in each case setting forth in
comparative form the corresponding figures for the same period and portion of
the next preceding fiscal year.
(b) Quarterly Reports. As soon as available, a consolidated balance
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sheet of the Company as at the end of such period and the related consolidated
statements of operations, stockholders' equity and cash flows for such period
and for the portion of the Company's fiscal year ended on the last day of such
quarter, in each case setting forth in comparative form the corresponding
figures for the same period.
(c) Annual Reports. As soon as available, a consolidated balance
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sheet of the Company as at the end of such year and the related consolidated
statements of income, stockholders' equity and cash flows for such year, in each
case setting forth in comparative form the corresponding figures for the next
preceding fiscal year, accompanied by the report on such consolidated financial
statements of national independent certified public accountants selected by the
Board.
(d) Securities Filings. As promptly as practicable and in any event
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within five days after the same are available, copies of all periodic and
special reports, documents and registration statements which the Company
furnishes or files with the Securities and Exchange Commission or any securities
exchange.
(e) Board of Directors Information. As promptly as practicable,
------------------------------
copies of all information furnished by the Company to its directors in
connection with meetings of the Board.
(f) Other Information. Such other information relating to the Company
-----------------
as from time to time may reasonably be requested.
-13-
Section 7.03. Inspection. The Company will permit any person designated
------------ ----------
by a Qualified Stockholder, on reasonable notice and during normal business
hours, to visit and inspect any of the properties, books and records of the
Company or its subsidiaries and to discuss issues relating to the Company with
the Company's management.
Section 7.04. Other Activities of Stockholders and Directors. The
------------ ----------------------------------------------
Stockholders and their Affiliates may engage in and possess interests in other
business ventures and investment opportunities, except as provided in any
employment agreement between such Stockholder and the Company. Neither the
Company nor any other Stockholder shall have any rights in or to such ventures
or opportunities or the income or profits therefrom by reason of this Agreement.
Section 7.05. Option Pool. Following the merger of FV-SCC Acquisition
------------ -----------
Corp., a wholly-owned subsidiary of the Company, into Summit Care Corporation,
the Company expects to create and put into effect a management option program to
provide incentives to employees, other than RS and Scott.
Section 7.06. Failure to Deliver Securities. If any Stockholder fails to
------------ -----------------------------
deliver any Securities to be acquired, Transferred or exchanged hereunder, the
acquiror may elect to establish a segregated account in the amount of the price
to be paid therefor, such account to be turned over to such Stockholder upon
delivery of instruments Transferring the Securities. If a segregated account is
so established, the Company shall take such action as is appropriate to Transfer
record title to the Securities from such Stockholder to the acquiror. Each
Stockholder hereby irrevocably grants the Company a power of attorney to
effectuate the purposes of this Section.
Section 7.07. Requirement to Sign Agreement. Unless waived by the Board,
------------ -----------------------------
notwithstanding anything to the contrary contained in this Agreement, no Person
shall acquire any Securities, whether by Transfer from a Stockholder, issuance
by the Company or otherwise, and whether or not any such Securities are subject
to vesting or similar restrictions, unless such Person first becomes a signatory
to this Agreement as a Stockholder, agreeing to be bound by all the terms of
this Agreement. The Company shall not issue any Securities or transfer any
Securities on its books which have been issued or transferred in violation of
this Agreement, or treat as the owner of such Securities, or accord the right to
vote as such owner or pay dividends to, any Person to which any such Securities
shall have been issued or transferred in violation of this Agreement.
Section 7.08. Exercise of Contractual Rights. The Company and its
------------ ------------------------------
Stockholders recognize, acknowledge and agree that the
-14-
Stockholders have substantial financial interests in the Company to preserve and
that the exercise by them of any of their respective rights under this Agreement
or any of the other agreements contemplated hereby shall not be deemed to
constitute a lack of good faith, a breach of fiduciary duties or unfair dealing.
Section 7.09. Specific Enforcement. Each Stockholder expressly agrees
------------ --------------------
that the other Stockholders and the Company would be irreparably damaged if this
Agreement is not specifically enforced. Upon a breach or threatened breach of
the terms or provisions of this Agreement by any Stockholder, the other
Stockholders and the Company shall, in addition to all other remedies, each be
entitled to a temporary or permanent injunction, and/or decree for specific
performance, in accordance with the provisions hereof, without the necessity of
proof of actual charges or the posting of a bond or other security.
Section 7.10. Successors and Assigns. Subject to the restrictions on
------------ ----------------------
Transfers set forth herein, this Agreement shall be binding upon and shall inure
to the benefit of the Stockholders and their respective successors, successors-
in-title, heirs and assigns, and each and every successor-in-interest to any
Stockholder shall hold all Securities subject to all of the terms and provisions
of this Agreement. None of the provisions of this Agreement shall be for the
benefit of or enforceable by any creditor of any Stockholder, or any creditor of
the Company other than a Stockholder who is such a creditor of the Company.
Section 7.11. Waivers, Amendments, Etc. Except as otherwise provided
------------ ------------------------
herein, no waiver, modification or amendment of this Agreement shall be valid or
binding unless such waiver, modification or amendment is in writing and duly
executed by (a) the Company, (b) Heritage, (c) a Majority of Investors (other
than Heritage) as to which the effect of such waiver, modification or amendment
(A) differs in a material and adverse manner from the effect on Heritage, or (B)
would eliminate any of the material rights of such Investors provided for in
this Agreement, including but not limited to any rights under Sections 7.02 or
7.03 hereof, or create any material additional obligation for such Investors,
and (d) a Majority of Management Stockholders as to which the effect of such
waiver, modification or amendment (A) differs in a material and adverse manner
from the effect on Heritage, or (B) would eliminate any of the material rights
of such Management Stockholders provided for in this Agreement, including but
not limited to any rights under Sections 7.02 or 7.03 hereof, or create any
material additional obligation for such Management Stockholders.
Notwithstanding the foregoing, any waiver, modification or amendment which
requires any Investor or Management Stockholder to make additional cash
contributions to
-15-
the Company shall require the consent of such Investor or Management
Stockholder.
Section 7.12. Notices. All notices under this Agreement shall be in
------------ -------
writing. Any notice shall be deemed to have been duly given upon receipt if
delivered personally, mailed, certified mail, return receipt requested, sent by
facsimile, with verification of receipt and written confirmation provided by
another means permitted hereunder, or sent by nationally recognized overnight
delivery service, to the parties hereto at the addresses set forth on Exhibit A.
---------
Upon notice from any Stockholder of a change in address, the Board will cause
Exhibit A to be amended to reflect the new address of such Stockholder. The
- ---------
address of any new Stockholder shall be added by the Board to Exhibit A.
---------
Section 7.13. Governing Law. This Agreement and the rights and
------------ -------------
obligations of the parties hereunder shall be governed by and interpreted,
construed and enforced in accordance with the internal laws of the Commonwealth
of Massachusetts and with the General Corporation Law of the State of Delaware.
Wherever possible, each provision of this Agreement shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
hereof shall be prohibited by or invalid under any such law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating or nullifying the remainder of such provision or any other
provisions of this Agreement.
Section 7.14. Headings. The headings of Articles and Sections herein are
------------ --------
inserted for convenience of reference only and shall be ignored in the
construction or interpretation hereof.
Section 7.15. Counterparts. This Agreement may be executed in any number
------------ ------------
of counterparts, and with counterpart signature pages, all of which together
shall for all purposes constitute one Agreement, binding on the Company and all
the Stockholders notwithstanding that not all Stockholders have signed the same
counterpart. Any of the initial parties to this Agreement listed in the
preamble hereto who does not sign a counterpart signature page to this Agreement
on the date hereof may become a party to this Agreement after the date hereof by
signing a counterpart signature page hereto.
Section 7.16. Entire Agreement. This Agreement embodies the entire
------------ ----------------
agreement and understanding among the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements and understandings relating to
such subject matter, including without limitation (a) the Agreement dated as of
February 6, 1998 by and among the Company, RS, SS, Scott and
-16-
Heritage Fund II, L.P. and (b) the Stockholders Agreement dated as of August 1,
1997 originally by and among the Company, RS, SS and Heritage Fund II Investment
Corporation.
ARTICLE VIII
DEFINITIONS
For purposes of this Agreement, the following terms shall have the
following respective meanings:
Act shall have the meaning specified in Section 4.05.
---
Affiliate shall have the meaning given to it in Rule 405 promulgated under
---------
the Securities Act.
Agreement shall mean this Stockholders Agreement, as amended from time to
---------
time.
Base Case shall have the meaning specified in Section 2.03.
---------
Board shall have the meaning specified in Section 1.04.
-----
Business Day shall mean any day on which businesses are generally open in
------------
Los Angeles, California.
Certificate of Incorporation shall mean the Certificate of Incorporation of
----------------------------
the Company, as amended from time to time.
Code shall mean the Internal Revenue Code of 1986, as amended.
----
Common Stock shall mean all classes and series of common stock of the
------------
Company.
Company shall have the meaning specified in the Preamble, and shall also
-------
include any successor entity to the Company.
Exempt Issuances shall have the meaning specified in Section 3.05.
----------------
Heritage shall have the meaning specified in the preamble to this
--------
Agreement.
Initial Notice shall have the meaning specified in Section 4.02.
--------------
Investors shall mean Heritage, Heritage Investors II L.L.C., Heritage Fund
---------
II Investment Corporation, HFV Holdings, LLC, Nassau Capital Partners II L.P.,
NAS Partners I LLC, Paribas North America, Inc., Phoenix Home Life Mutual
Insurance Company,
-17-
PMI Mezzanine Fund, L.P., GS Private Equity Partners, L.P., GS Private Equity
Partners Offshore, L.P. and Sutro Investment Partners V, LLC and each other
Stockholder that first becomes a Stockholder as a result of acquiring Stock from
Heritage or from another Investor.
Investor Directors shall have the meaning specified in Section 1.02.
------------------
Majority of Management Stockholders shall mean Management Stockholders who
-----------------------------------
hold a majority of the Common Stock held by all Management Stockholders.
Majority of Investors shall mean Investors who hold a majority of the
---------------------
Common Stock held by all Investors; provided that any decision, determination or
actions to be made or taken by a Majority of Investors shall be made or taken by
Heritage as long as Heritage holds more shares of Common Stock than any other
Investor.
Management Stockholders shall mean all Stockholders that are not Investors.
-----------------------
Mid Case shall have the meaning specified in Section 2.03.
--------
Offer shall have the meaning specified in Section 3.01.
-----
Offered Securities shall have the meaning specified in Section 3.01.
------------------
Permitted Transfers shall mean any of the following:
-------------------
(a) Transfers of Securities of a Stockholder to the trustees of a
trust revocable by such Stockholder alone, the beneficiaries of which consist
solely of such Stockholder and transferees enumerated in clause (d) below;
(b) Transfers of Securities between a Stockholder and such
Stockholder's guardian or conservator;
(c) Transfers of Securities of a deceased Stockholder to such
Stockholder's executors or administrators or to trustees under such
Stockholder's will and thereafter to transferees enumerated in clause (d) below;
(d) Transfers of Securities of a Stockholder to the spouse of such
Stockholder, to any of such Stockholder's children or their issue (or to
custodians for the benefit of minor children or issue), or to such Stockholder's
parents or siblings;
-18-
(e) Transfers of Securities by any Stockholder which is a corporation,
partnership, limited liability company or other entity to any owner or Affiliate
of such Stockholder, provided that such Stockholder may not transfer Securities
to more than (i) a total of five (5) of its owners or Affiliates pursuant to
this clause (e) before January 1, 2004 (unless such transfer relates to a
liquidation or winding-up of such Stockholder, in which case the maximum number
specified in this clause (i) shall be 16), and (ii) a total of fifteen (16) of
its owners or Affiliates pursuant to this clause (e) after January 1, 2005;
(f) Transfers of Securities by Heritage Fund II Investment Corporation
to any other Person within one year of the date hereof; and
(g) Transfers of Securities pursuant to Articles II, V or VI;
provided, however that Securities Transferred pursuant to clauses (a) - (e) may
- --------
not be further Transferred under such clauses except to a Person that would have
been a permitted transferee thereof from the initial Stockholder who held such
Securities.
Per Share Offering Price shall have the meaning specified in Section 6.03.
------------------------
Person shall mean any natural person, corporation, limited liability
------
company, partnership, trust or other entity.
Proportionate Percentage of a Stockholder shall mean a fraction of which
------------------------
(a) the numerator is the number of then outstanding shares of Common Stock held
by such Stockholder, on a fully-diluted basis, and (b) the denominator is the
total number of then outstanding shares of Common Stock, on a fully-diluted
basis.
Public Offering shall have the meaning specified in Section 2.03.
---------------
Qualified Stockholder shall mean any Stockholder then holding more than
---------------------
10,000 shares of Stock (assuming the exercise or conversion of all Stock
Equivalents held by such Stockholder, and appropriately adjusted for stock
splits, stock dividends, combinations and other similar transactions); provided
that (a) all shares of Stock held by a Stockholder and any transferees of such
Stockholder under clause (e) of the definition of Permitted Transfers shall be
aggregated for purposes of determining whether any of them is a Qualified
Stockholder, (b) all shares of Stock held by GS Private Equity Partners, L.P.
and GS Private Equity Partners Offshore, L.P. shall be aggregated for purposes
of determining whether any of them is a Qualified Stockholder, and (c) all
shares of Stock held by Nassau Capital Partners II L.P.
-19-
and NAS Partners I LLC shall be aggregated for purposes of determining whether
any of them is a Qualified Stockholder.
Return Notice shall have the meaning specified in Section 4.02.
-------------
RS shall mean Robert Snukal.
--
Scott shall mean William Scott.
-----
Securities shall mean all Stock, Stock Equivalents and all other equity
----------
securities of the Company, and any debt securities issued together with warrants
or similar rights.
Securities Act shall mean the Securities Act of 1933, as amended.
--------------
Series A Common Stock shall mean any of the Series A Common Stock and any
---------------------
Stock into which any of the same shall have been converted or exchanged.
Series B Common Stock shall mean any of the Series B Common Stock and any
---------------------
Stock into which any of the same shall have been converted or exchanged.
Series C Common Stock shall mean any of the Series C Common Stock and any
---------------------
Stock into which any of the same shall have been converted or exchanged.
SS shall mean Sheila Snukal.
--
Stock shall mean all outstanding capital stock of the Company.
-----
Stock Equivalents shall mean any equity or debt security convertible into
-----------------
or exchangeable for any Stock, or any right, warrant or option to acquire any
Stock or such convertible or exchangeable equity interest or security.
Stockholder shall mean each Person who holds any Stock.
-----------
Target Case shall have the meaning specified in Section 2.03.
-----------
Terminal Value shall have the meaning specified in Section 2.03.
--------------
transfer shall have the meaning specified in Section 4.01.
--------
Transferring Stockholder shall have the meaning specified in Section 4.02.
------------------------
-20-
Trigger Event shall have the meaning specified in Section 2.03.
-------------
-21-
IN WITNESS WHEREOF, the parties hereto have signed and sworn to this
Agreement as of the date first above written.
FOUNTAIN VIEW, INC.
By: /s/ Robert Snukal /s/ Robert Snukal
--------------------------- ------------------------------
Robert Snukal, President Robert Snukal
/s/ William Scott /s/ Sheila Snukal
- ------------------------------ ------------------------------
William Scott Sheila Snukal
HERITAGE INVESTORS II, L.L.C. HERITAGE FUND II, L.P.
By Heritage Partners Management By HF Partners II, L.L.C.,
Company Inc., its manager its general partner
By: [SIGNATURE ILLEGIBLE] ^^ By: [SIGNATURE ILLEGIBLE] ^^
--------------------------- ------------------------------
(title) (title)
/s/ Keith Abrahams Stacy Abrahams
- ------------------------------ ------------------------------
Keith Abrahams Stacy Abrahams
/s/ Joshua Snukal HERITAGE FUND II
- ------------------------------ INVESTMENT CORPORATION
Joshua Snukal
/s/ Debbie Wickersham By: [SIGNATURE ILLEGIBLE] ^^
- ------------------------------ ---------------------------
Debbie Wickersham (title)
/s/ Joan Chandler /s/ Rosellla Felipe
- ------------------------------ ------------------------------
Joan Chandler Rosella Felipe
/s/ Rolando Abrina /s/ John Padama
- ------------------------------ ------------------------------
Rolando Abrina John Padama
/s/ Myles Andrews /s/ Martin Axel
- ------------------------------ ------------------------------
Myles Andrews Martin Axel
/s/ Norbolita Sapiandante /s/ Consolacion Padama
- ------------------------------ ------------------------------
Norbolita Sapiandante Consolacion Padama
-22-
/s/ Barbara Gale /s/ Debra Bowman
- ------------------------------ ------------------------------
Barbara Gale Debra Bowman
/s/ Robin Necke HFV HOLDINGS, LLC
- ------------------------------
Robin Necke By _______________________,
its Manager
By: /s/ Andrew H. McQuarrie
--------------------------
Andrew H. McQuarrie (title)
Vice President
NASSAU CAPITAL PARTNERS II L.P. PARIBAS NORTH AMERICA, INC.
By Nassau Capital L.L.C
-------------------------,
its general partner
By: /s/ John G. Quigley By: /s/ John G. Martinez
--------------------------- ---------------------------
Member (title) JOHN G. MARTINEZ (title)
FINANCIAL CONTROLLER
PHOENIX HOME LIFE PMI MEZZANINE FUND, L.P.
MUTUAL INSURANCE COMPANY By _____________________,
its general partner
By: [SIGNATURE ILLEGIBLE] ^^ By: /s/ Schuyler G. Lance
--------------------------- ---------------------------
(title) Schuyler G. Lance, (title)
Principal
GS PRIVATE EQUITY GS PRIVATE EQUITY
PARTNERS, L.P. PARTNERS OFFSHORE, L.P.
By GS PRIVATE EQUITY MANAGEMENT, By GS PRIVATE EQUITY MANAGEMENT
LLC OFFSHORE, INC:
---------------------------- ----------------------------
its general partner its general partner
By GSAM GEN - PARLLC (its managing member)
By: /s/ Donald Opatrny By: /s/ Donald Opatrny
--------------------------- ---------------------------
DONALD OPATRNY (title) DONALD OPATRNY (title)
-23-
SUTRO INVESTMENT PARTNERS V, LLC NAS PARTNERS I LLC
By Sutro Group, Inc. By John G. Quigley
---------------------------, ----------------------------,
its Manager its Manager
By: [SIGNATURE ILLEGIBLE] ^^ By: [SIGNATURE ILLEGIBLE] ^^
--------------------------- ---------------------------
(title) (title)
The undersigned, Karen B. Kaplan, spouse of William Scott, hereby consents
to the foregoing agreement.
/s/ Karen B. Kaplan
------------------------------
Karen B. Kaplan
-24-
EXHIBIT A
Addresses for Notice
--------------------
If to Heritage,
Heritage Investors, L.L.C.
or Heritage Fund II
Investment Corporation: c/o Heritage Partners, Inc.
30 Rowes Wharf, Suite 300
Boston, MA 02110
Attn: Mark J. Jrolf
with a copy to:
Choate, Hall & Stewart
Exchange Place
53 State Street
Boston, Massachusetts 02109
Attn: Stephen M. L. Cohen, Esq.
If to RS, SS, Keith Abrahams,
Stacy Abrahams or Joshua
Snukal: Mr. Robert Snukal
c/o Fountain View Management, Inc.
11900 W. Olympic Blvd.
Los Angeles, CA 90064
with a copy to:
David Bloom, Esq.
Law Offices of David Bloom
3325 Wilshire Boulevard, 9th Floor
Los Angeles, CA 90010
If to Scott: William C. Scott
12612 Promontory Road
Los Angeles, CA 90049
If to Nassau Capital
Partners II L.P.
NAS Partners I LLC: c/o Nassau Capital Funds L.P.
22 Chambers Street
Princeton, NJ 08542
Attn: Mr. Thomas Barnds
-25-
If to Sutro Investment
Partners V, LLC: c/o Sutro & Co., Incorporated
11150 Santa Monica Boulevard
Suite 1500
Los Angeles, CA 90025
Attn: Mr. Joseph A. Boystack
If to Paribas North
America, Inc.: c/o Paribas
787 7th Avenue
New York, NY 10019
Attn: Mr. Steve Alexander
If to HFV Holdings, LLC: HFV Holdings, LLC
824 Market Street, Suite 900
Wilmington, DE 19801
Attn: Mr. Andrew H. McQuarrie
with a copy to:
The Hillman Company
1900 Grant Building
Pittsburgh, PA 15219
Attn: H. Vaughan Blaxter, III
and Mr. R. Alan Wright
If to GS Private Equity
Partners, L.P.
GS Private Equity Partners
c/o Goldman Sachs & Co.
Offshore, L.P.: 85 Broad Street
New York, NY 10004
Attn: Ms. Elizabeth Varley Camp
If to Phoenix Home Life
Mutual Insurance Company: c/o Phoenix Duff & Phelps
56 Prospect Street
Hartford, CT 06115
Attn: Mr. Paul Chute
If to PMI Mezzanine
Fund, L.P.: c/o Pacific Mezzanine Group
610 Newport Center Drive
Suite 1100
Newport Beach, CA 92660
Attn: Mr. Sky Lance
If to the Company: Fountain View Management, Inc.
11900 W. Olympic Blvd.
Los Angeles, CA 90064
Attn: President
-26-
with copies to: Heritage, RS and Choate, Hall &
Stewart, in each case at their respective
addresses set forth above
-27-
EXHIBIT 2.03
The following constitute the Base Case, Mid Case and Target Case, at the
indicated times (all numbers in thousands):
Determination Date Base Case Mid Case Target Case
------------------ --------- --------- -----------
4/1/98 through 6/30/98 126,534 136,345 140,167
7/1/98 through 9/30/98 133,101 157,055 171,750
10/1/98 through 12/31/98 139,667 177,765 203,333
1/1/99 through 3/31/99 146,234 198,476 234,916
4/1/99 through 6/30/99 152,801 219,186 288,499
7/1/99 through 9/30/99 173,526 243,074 298,999
10/1/99 through 12/31/99 194,252 266,982 331,498
1/1/00 through 3/31/00 214,977 290,850 363,998
4/1/00 through 6/30/00 235,702 314,738 396,497
7/1/00 through 9/30/00 245,053 340,397 430,655
10/1/00 through 12/31/00 254,403 366,056 464,812
1/1/01 through 3/31/01 263,754 391,714 498,970
4/1/01 through 6/30/01 273,104 417,373 533,127
7/1/01 through 9/30/01 287,174 450,009 577,406
10/1/01 through 12/31/01 301,244 482,645 621,685
1/1/02 through 3/31/02 315,314 515,281 665,964
4/1/02 through 6/30/02 329,384 547,917 710,243
7/1/02 through 9/30/02 345,976 576,531 746,058
10/1/02 through 12/31/02 362,568 605,145 781,874
1/1/03 through 3/31/03 379,159 633,759 817,689
4/1/03 through 6/30/03 395,751 662,373 853,504
7/1/03 through 9/30/03 420,485 716,191 938,854
10/1/03 through 12/31/03 445,220 770,009 1,024,205
1/1/04 through 3/31/04 469,954 823,825 1,109,555
4/1/04 through 6/30/04 494,689 877,644 1,194,908
7/1/04 through 9/30/04 525,607 948,953 1,314,396
10/1/04 through 12/31/04 556,525 1,020,261 1,433,887
-28-
Determination Date Base Case Mid Case Target Case
------------------ --------- --------- -----------
1/1/05 through 3/31/05 587,443 1,091,570 1,553,377
4/1/05 through 6/30/05 618,361 1,162,878 1,672,868
7/1/05 through 9/30/05 657,008 1,257,362 1,840,155
10/1/05 through 12/31/05 695,658 1,351,846 2,007,441
1/1/06 through 3/31/06 734,304 1,446,330 2,174,728
4/1/06 through 6/30/06 772,951 1,540,814 2,342,015
7/1/06 through 9/30/06 821,261 1,666,005 2,576,216
10/1/06 through 12/31/06 869,570 1,791,196 2,810,418
1/1/07 through 3/31/07 917,880 1,916,388 3,044,619
4/1/07 through 6/30/07 966,189 2,041,579 3,278,821
7/1/07 through 9/30/07 1,026,576 2,207,457 3,606,703
10/1/07 through 12/31/07 1,086,963 2,373,335 3,934,585
1/1/08 through 3/31/08 1,147,349 2,539,214 4,262,467
4/1/08 through 6/30/08 1,207,736 2,705,092 4,590,349
7/1/08 through 9/30/08 1,283,220 2,924,881 5,049,384
10/1/08 through 12/31/08 1,358,703 3,144,669 5,508,419
1/1/09 through 3/31/09 1,434,187 3,364,458 5,967,454
4/1/09 through 6/30/09 1,509,670 3,584,247 6,426,489
-29-