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EXHIBIT 10.23
AGREEMENT
AGREEMENT made as of this 5th day of April, 2000, (the
"Agreement"), by and between Orion Power Holdings, Inc., a Delaware corporation
(the "Company") and Frederic V. Salerno (the "Director").
WHEREAS, the Company is engaged in the business of investing
in and managing the operations of a portfolio of electric generating assets in
the United States and Canada;
WHEREAS, the Company wishes to appoint the Director as
non-executive Chairman of the Board of Directors of the Company (the "Board")
and enter into an agreement with the Director with respect to such appointment;
and
WHEREAS, the Director wishes to accept such appointment and to
serve the Company on the terms set forth herein, and in accordance with, the
provisions of this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, the parties hereto agree as follows:
Position. Subject to the terms and provisions of this
Agreement, the Company shall cause the Director to be appointed as non-executive
Chairman of the Board ("Chairman") and the Director hereby agrees to serve the
Company in that position upon the terms and conditions hereinafter set forth,
provided however, that the Director's continued service on the Board shall be
subject to any necessary approval by the Company's stockholders.
Duties. During the Directorship Term (as defined in
Section 5 hereof), the Director shall serve as Chairman, and the Director shall
make reasonable business efforts to attend all Board meetings, serve on
appropriate subcommittees as reasonably requested by the Board, make himself
available to the Company at mutually convenient times and places, attend
external meetings and presentations, as appropriate and convenient, and perform
such duties, services and responsibilities and have the authority commensurate
to such position.
The Director shall devote the equivalent of one
business day every other week (approximately 25 equivalent days per year) to the
performance of such duties, services and responsibilities, and will use his best
efforts to promote the interests of the Company. The Company recognizes that the
Director is a full-time executive employee of another entity and that his
responsibilities to such entity must have priority, although Director will use
reasonable business efforts to coordinate his respective commitments so as to
fulfill his obligations to the Company and, in any event, will fulfill his legal
obligations as a director. The Director will not, without the prior written
approval of the Board, engage in any other business activity which could
materially interfere with the performance of his duties, services and
responsibilities hereunder or which is in violation of the reasonable policies
established from time to time by the Company, provided that the foregoing shall
in no way limit his activities on behalf of his current employer and its
affiliates.
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Monetary Remuneration.
(a) Fees and Compensation. During the Directorship
Term the Director shall receive the same compensation and benefits, as other
non-employee members of the Board.
The Director's status during the Agreement Term shall be that
of an independent contractor and not, for any purpose, that of an employee or
agent with authority to bind the Company in any respect. All payments and other
consideration made or provided to the Director under Sections 3 and 4 shall be
made or provided without withholding or deduction of any kind, and the Director
shall assume sole responsibility for discharging, all tax or other obligations
associated therewith.
(b) Expense Reimbursements.
During the Directorship Term, the Company shall reimburse the
Director for all reasonable out-of-pocket expenses incurred by the Director in
carrying out the Director's duties, services and responsibilities under this
Agreement, provided that the Director complies with the generally applicable
policies, practices and procedures of the Company for submission of expense
reports, receipts or similar documentation of such expenses. Any reimbursements
for allocated expenses (as compared to out-of-pocket expenses of the Director)
must be approved in advance by the Company.
Equity Arrangements. On the date hereof, the Company
and the Director have simultaneously entered into an investor rights agreement,
attached as Exhibit A hereto (the "Investor Rights Agreement"). The shares
purchased pursuant to Section 4(a) and the shares acquired upon exercise of the
Option granted pursuant to Section 4(b) hereof shall be subject to the terms and
conditions of the Investor Rights Agreement.
(a) Stock Purchases. On the date hereof, Company has
simultaneously entered into a Stock Purchase Agreement, attached as Exhibit B
hereto (the "Stock Purchase Agreement").
(b) Stock Options. Company shall grant the Director
the right and option ("Option") to purchase 3,226 shares at an exercise price of
$1550 per share pursuant to an option agreement in the form attached hereto as
Exhibit C (the "Option Agreement").
Directorship Term. The "Directorship Term", as used
in this Agreement, shall mean the period commencing on the date hereof and
terminating on the earliest of the following to occur:
(a) the death of the Director ("Death");
(b) the termination of the Director from the position
of Chairman by the mutual agreement of the Company and the Director;
(c) by the Company for "Cause." For purposes of this
Agreement, Cause shall mean (i) the Director's indictment for or conviction of,
or plea of guilty or nolo contendere to, any felony, (ii) the Director's willful
misconduct in the performance of the duties set forth in Section 2 hereof, or
(iii) the Director's material
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breach of this Agreement which breach is not cured within fifteen (15) days of
receipt of written notice from the Board specifying the actions constituting
Cause;
(d) the resignation by the Director from the Board if
after the date hereof, the Company enters the telecommunication business and
thereafter the board of directors or the chief executive officer of his current
employer determines that the Director's continued service on the Board conflicts
with his fiduciary obligations to his current employer (a "Fiduciary
Resignation");
(e) the resignation by the Director from the Board
after he has been removed from the position of Chairman (a "Good Reason
Resignation");
(f) the resignation by the Director from the Board if
the board of directors or the chief executive officer of his current employer
requires the Director to resign and such resignation is neither a Fiduciary
Resignation nor a Good Reason Resignation; and
(g) the second anniversary of the date hereof.
Director's Representation and Acknowledgment.
Based on the understanding that the Company is
currently only engaged in the energy business, the Director represents to the
Company that his execution and performance of this Agreement shall not be in
violation of any agreement or obligation (whether or not written) that he may
have with or to any person or entity, including without limitation, any prior
employer. The Director hereby acknowledges and agrees that this Agreement (and
the Exhibits hereto and any other agreement or obligation referred to herein)
shall be an obligation solely of the Company, and the Director shall have no
recourse whatsoever against any stockholder of the Company or any of their
respective affiliates with regard to this Agreement.
Director Covenants.
(a) Unauthorized Disclosure. The Director agrees and
understands that in the Director's position with the Company, the Director has
been and will be exposed to and receive information relating to the confidential
affairs of the Company, including but not limited to technical information,
business and marketing plans, strategies, customer information, other
information concerning the Company's products, promotions, development,
financing, expansion plans, business policies and practices, and other forms of
information considered by the Company to be confidential and in the nature of
trade secrets. The Director agrees that during the Directorship Term and
thereafter, the Director will keep such information confidential and will not
disclose such information, either directly or indirectly, to any third person or
entity without the prior written consent of the Company; provided, however, that
(i) the Director shall have no such obligation to the extent such information is
or becomes publicly known or generally known in the Company's industry other
than as a result of the Director's breach of his obligations hereunder and (ii)
the Director may, after giving prior notice to the Company to the extent
practicable under the circumstances, disclose such information to the extent
required by applicable laws or governmental regulations or judicial or
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regulatory process. This confidentiality covenant has no temporal, geographical
or territorial restriction. Upon termination of the Directorship Term, the
Director will promptly return to the Company all property, keys, notes,
memoranda, writings, lists, files, reports, customer lists, correspondence,
tapes, disks, cards, surveys, maps, logs, machines, technical data or any other
tangible product or document which has been produced by, received by or
otherwise submitted to the Director in the course or otherwise as a result of
the Director's position with the Company during or prior to the Directorship
Term, provided that, the Company shall retain such materials and make them
available to the Director if requested by him in connection with any litigation
against the Director under circumstances in which (i) the Director demonstrates
to the reasonable satisfaction of the Company that the materials are necessary
to his defense in the litigation, and (ii) the confidentiality of the materials
is preserved to the reasonable satisfaction of the Company.
(b) Non-competition. By and in consideration of
payments and benefits to be provided to the Director by the Company hereunder,
the Director's exposure to the proprietary information of the Company and as an
inducement to the Company to enter into this Agreement with the Director, the
Director agrees that during the Directorship Term and for a period of one (1)
year after the Director ceases to be a director of the Company for any reason
(the "Noncompetition Term"), the Director will not, directly or indirectly own,
manage, operate, join, control, be employed by, or participate in the ownership,
management, operation or control of, or be connected in any manner, including
but not limited to, holding the positions of shareholder, director, officer,
consultant, independent contractor, director, partner, or investor, with any
Competing Enterprise. For purposes of this paragraph, the term "Competing
Enterprise" shall mean any person, corporation, partnership or other entity (or
any of their respective subsidiaries) which, directly or indirectly, is
principally engaged in the business of investing in or managing the operations
of electric generating assets (other than the Director's current employer and
its affiliates if after the date hereof any of them enters any such business).
Notwithstanding anything contained in this Section 7(b) to the contrary, the
Director shall not be prohibited from acquiring less than three percent (3%) of
any class of securities or debt of a publicly traded corporation or from having
an investment of less than three percent (3%) in any private equity fund or
other pooled investment vehicle as to which Director has no discretionary
investment control.
(c) Non-solicitation. During the Noncompetition Term,
the Director shall not interfere with the Company's relationship with, or
endeavor to entice away from the Company, any person who, on the date of the
termination of the Directorship Term, was an employee or customer of the Company
or otherwise had a material business relationship with the Company.
(d) Remedies. The Director agrees that any breach of
the terms of this Section 7 would result in irreparable injury and damage to the
Company for which the Company would have no adequate remedy at law; the Director
therefore also agrees
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that in the event of said breach or any threat of breach, the Company shall be
entitled to an immediate injunction and restraining order to prevent such breach
and/or threatened breach and/or continued breach by the Director and/or any and
all entities acting for and/or with the Director, without having to prove
damages, in addition to any other remedies to which the Company may be entitled
at law or in equity. The terms of this paragraph shall not prevent the Company
from pursuing any other available remedies for any breach or threatened breach
hereof, including but not limited to the recovery of damages from the Director.
The Director acknowledges that the Company would not have entered into this
Agreement had the Director not agreed to the provisions of this Section 7. The
Director and the Company agree that the provisions of the covenant not to
compete set forth in this Section 7 are reasonable. Should a court or arbitrator
determine, however, that any provision of the covenant not to compete is
unreasonable or unenforceable, either in period of time, geographical area, or
otherwise, the parties hereto agree that the covenant should be interpreted and
enforced to the maximum extent possible in accordance with law.
The provisions of this Section 7 shall survive any termination
of the Directorship Term, and the existence of any claim or cause of action by
the Director against the Company, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by the Company of
the covenants and agreements of this Section 7.
Indemnification. The Company agrees to indemnify the Director
for his activities as a director of the Company to the fullest extent permitted
by law, and to cover the Director under any directors and officers liability
insurance obtained by the Company.
Non-Waiver of Rights. The failure to enforce at any time the
provisions of this Agreement or to require at any time performance by the other
party of any of the provisions hereof shall in no way be construed to be a
waiver of such provisions or to affect either the validity of this Agreement or
any part hereof, or the right of either party to enforce each and every
provision in accordance with its terms. No waiver by either party hereto of any
breach by the other party hereto of any provision of this Agreement to be
performed by such other party shall be deemed a waiver of similar or dissimilar
provisions at that time or at any prior or subsequent time.
Notices. Every notice relating to this Agreement shall be in
writing and shall be given by personal delivery or by registered or certified
mail, postage prepaid, return receipt requested; to:
If to the Company: Orion Power Holdings, Inc.
7 E. Redwood Street, 10th Floor
Baltimore, Maryland 21201
Telephone: (410) 230-3507
with a copy to:
Fried, Frank, Harris, Shriver & Jacobson
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One New York Plaza
New York, New York 10004
Telephone: (212) 859-8156
Attention: Paul M. Reinstein, Esq.
If to the Director: Frederic V. Salerno
1095 Avenue of the Americas
New York, New York 10036
with a copy to:
Michael S. Sirkin, Esq.
Proskauer Rose LLP
1585 Broadway
New York, New York 10036
Either of the parties hereto may change their address for
purposes of notice hereunder by giving notice in writing to such other party
pursuant to this Section 10.
Binding Effect/Assignment. This Agreement shall inure
to the benefit of and be binding upon the parties hereto and their respective
heirs, executors, personal representatives, estates, successors (including,
without limitation, by way of merger) and assigns. Notwithstanding the
provisions of the immediately preceding sentence, neither the Director nor the
Company shall assign all or any portion of this Agreement without the prior
written consent of the other party.
Entire Agreement. This Agreement (together with the
Exhibits hereto and the other agreements referred to herein) sets forth the
entire understanding of the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements, written or oral, between them as to
such subject matter.
Severability. If any provision of this Agreement, or
any application thereof to any circumstances, is invalid, in whole or in part,
such provision or application shall to that extent be severable and shall not
affect other provisions or applications of this Agreement.
Governing Law. This Agreement shall be governed by
and construed in accordance with the internal laws of the State of Delaware,
without reference to the principles of conflict of laws. All actions and
proceedings arising out of or relating to this Agreement shall be heard and
determined in any Maryland state or federal court sitting in The City of
Baltimore, and the parties hereto hereby consent to the jurisdiction of such
courts in any such action or proceeding; provided, however, that neither party
shall commence any such action or proceeding unless prior thereto the parties
have in good faith attempted to resolve the claim, dispute or cause of action
which is the subject of such action or proceeding through mediation by an
independent third party.
Legal Fees. The parties hereto agree that the
non-prevailing party in any dispute, claim, action or proceeding between the
parties hereto arising out of or relating to the terms and conditions of this
Agreement or any provision thereof (a "Dispute"), shall reimburse the prevailing
party for reasonable attorney's fees and
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expenses incurred by the prevailing party in connection with such Dispute;
provided, however, that the Director shall only be required to reimburse the
Company for its fees and expenses incurred in connection with a Dispute, if the
Director's position in such Dispute was found by the court, arbitrator or other
person or entity presiding over such Dispute to be frivolous or advanced not in
good faith.
Modifications. Neither this Agreement nor any
provision hereof may be modified, altered, amended or waived except by an
instrument in writing duly signed by the party to be charged.
Tense and Headings. Whenever any words used herein
are in the singular form, they shall be construed as though they were also used
in the plural form in all cases where they would so apply. The headings
contained herein are solely for the purposes of reference, are not part of this
Agreement and shall not in any way affect the meaning or interpretation of this
Agreement.
Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.
Registration Rights. The Director and any of his
Permitted Transferees (as defined in the Orion Power Holdings, Inc. 1998 Stock
Incentive Plan (the "Plan") and for purposes of this Agreement, also including
limited liability corporations, the members of which are all "immediate family"
members (as such term is defined in the Plan)) shall have the right, subject to
pro rated cut-back arrangements on the same basis as other non-management
stockholders (if the managing underwriter in connection with such registration
shall have reasonably determined, in its sole discretion, that such inclusion
shall adversely affect, in any manner, the public offering of such shares), to
include in any registration statement filed by the Company to register shares of
its Common Stock (whether for its own account or for the account of other
stockholders), shares of Common Stock then owned by the Director (or which the
Director transferred to his Permitted Transferees) or issued or issuable upon
the exercise of any Options awarded to the Director and to have the Company pay
all expenses incurred (other than underwriting discounts and commissions) in
connection with the registration of such shares of Common Stock.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by authority of its Board of Directors, and the Director has
hereunto set his hand, on the day and year first above written.
ORION POWER HOLDINGS, INC.
By:
Name:
Title:
Frederic V. Salerno
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EXHIBIT B
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (the "Agreement"), dated as of April 5, 2000 by and
between Orion Power Holdings Inc., a Delaware corporation (the "Company"), and
Frederic V. Salerno (the "Purchaser").
RECITALS
WHEREAS, the Company and the Purchaser are simultaneously
entering into an agreement pursuant to which the Purchaser is being appointed as
Chairman of the Board of Directors ("Chairman") of the Company;
WHEREAS, in connection with the Purchaser's appointment to
Chairman by the Company, the Company desires to provide the Purchaser with an
opportunity to purchase shares of common stock of the Company, par value $.01
per share (the "Common Stock"); and
WHEREAS, the parties hereto desire to set forth in this
Agreement certain rights, obligations and restrictions with respect to the
issuance to, and ownership by, the Purchaser of capital stock of the Company.
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, and
intending to be legally bound hereby, the parties hereto hereby agree as
follows:
ARTICLE 1
PURCHASE AND SALE OF SHARES
Section 1.1. Commitment to Purchase Shares
On the terms and subject to the conditions of this
Agreement, the Purchaser hereby commits to purchase 6,452 shares of Common Stock
(the "Shares") at $1,550 per share (the "Purchase Price Per Share"), for an
aggregate commitment of $10,000,600 (the "Commitment Amount"). Purchaser's
commitment shall be subject to compliance with applicable federal and state
securities laws.
Section 1.2. Consideration
On the terms and subject to the conditions of this
Agreement, in consideration for the sale of the Shares, on the closing date of
such sale, the Purchaser will (a) pay to the Company 50% of the Commitment
Amount for such Shares in cash ("Cash Payment") and (b) issue a note in the form
attached hereto as Annex A payable to the order of the Company in
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the principal amount of the remaining 50% of the Commitment Amount (the "Note"),
(collectively, the "Purchase Price").
Section 1.3. Delivery of Shares and Payment
Subject to Section 1.5 hereof, on the Closing Date (as
defined below), (i) the Company shall issue certificates representing the
Shares, together with duly executed stock powers, free and clear of all liens
and restrictions of any kind (except for those imposed by applicable securities
laws, this Agreement and the Note) and (ii) the Purchaser shall deliver or cause
to be delivered to the Company (x) the Cash Payment by wire transfer of
immediately available funds, to an account or accounts designated by the Company
in a written notice to the Purchaser and (y) the Note, duly authorized and
executed.
Section 1.4. Closing Date
The closing date for the purchase of the Shares pursuant to
this Agreement shall occur on April 5, 2000 (the "Closing Date"), or such other
date mutually agreed between the parties.
Section 1.5. Investor Rights Agreement
Prior to and as a condition to the Company's issuance to the
Purchaser certificates representing the Shares, the Purchaser shall execute an
investor's rights agreement, substantially in the form attached hereto as Annex
B (the "Investor Rights Agreement"). Any Shares acquired by the Purchaser
pursuant to this Article 1 shall be subject to the terms and conditions of the
Investor Rights Agreement.
ARTICLE 2
REPRESENTATIONS AND
WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Purchaser as
follows:
Section 2.1. Organization and Authority
The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. The
Company has all requisite corporate power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. All
necessary action, corporate or otherwise, required to have been taken by or on
behalf of the Company by applicable law, its charter documents or otherwise to
authorize (i) the approval, execution and delivery on behalf of the Company of
this Agreement and (ii) the performance by the Company of its obligations under
this Agreement and the consummation of the transactions contemplated hereby has
been taken. This Agreement constitutes a valid and binding agreement of the
Company, enforceable against each respectively in accordance with its terms.
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Section 2.2. The Shares
Upon delivery to Purchaser from time to time of certificates
representing the Shares, and upon receipt by Company of the payment in full
therefor, (i) good and valid title to the Shares will pass to Purchaser, free
and clear of all liens and restrictions of any kind (except for those imposed by
applicable securities laws and the Note) and (ii) the Shares will be validly
issued, fully paid and nonassessable.
Section 2.3 Financial Statements
The Company has heretofore delivered to the Purchaser true and
complete copies of an audited balance sheet of the Company as at December 31,
1999, and audited statements of operations, cash flow and stockholders' equity
for the year ended December 31, 1999 (the "Financial Statements"). The Financial
Statements present fairly in all material respects the financial position of the
Company as at the date thereof, and such statements of operations, cash flow and
stockholders' equity of the Company and the notes thereto present fairly in all
material respects the results of operations, cash flow and stockholders' equity
of the Company for the periods therein referred to; all in accordance with
United States generally accepted accounting principles ("GAAP") consistently
applied.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF PURCHASER
The Purchaser hereby represents and warrants to the Company as
follows:
Section 3.1. Natural Person; Authorization
The Purchaser is a natural person and competent to execute
this Agreement and has taken all action required by law to authorize the
execution and delivery of this Agreement and the transactions contemplated
hereby. Upon execution, this Agreement is the valid and binding obligation of
the Purchaser enforceable in accordance with its terms.
Section 3.2. Purchase Entirely for Own Account; Disclosure of
Information
This Agreement is made with the Purchaser in reliance upon the
Purchaser's representations to the Company which by the Purchaser's execution of
this Agreement it hereby confirms, that the Shares to be received by the
Purchaser will be acquired for investment for the Purchaser's own account, not
as a nominee or agent, and not with a view to the resale or distribution of any
part thereof, and that the Purchaser has no present intention of selling,
granting any participation in, or otherwise distributing the same. The Purchaser
does not have any contract, undertaking, agreement or arrangement (except as set
forth in this Agreement) with any person to sell, transfer or grant
participations to such person or to any third person, with respect to any of the
Shares. The Purchaser acknowledges that it has received all the information it
has requested or considers necessary or appropriate for deciding whether to
purchase the Shares. The Purchaser further represents that it has had an
opportunity to ask questions and
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receive answers from the Company regarding the Company and the terms and
conditions of the offering of the Shares and to obtain any additional
information necessary to verify the accuracy of the information given to the
Purchaser.
Section 3.3. Restricted Securities; Accredited Investor
(a) The Purchaser understands that the Shares are "restricted
securities" under the Securities Act of 1933, as amended ("Act"), as they are
being acquired from the Company in a transaction not involving a public offering
and that under the Act and the rules and regulations thereunder such securities
may be resold without registration under the Act, only in certain limited
circumstances. In this connection, the Purchaser represents that it is familiar
with Rule 144 promulgates under the Act, as presently in effect, and understands
the resale limitations imposed thereby and by the Act. The Purchaser is an
"accredited investor" within the meaning of paragraph (a) of Rule 501 of
Regulation D promulgated under the Act. The Purchaser has sufficient knowledge
and experience to analyze the Company so as to be able to evaluate the risks and
merits of its investments in the Company and is financially able to bear the
risks thereof.
ARTICLE 4
MISCELLANEOUS
Section 4.1. Right of First Refusal.
(a) Subject to subsection (d) hereof, any Shares acquired
pursuant to Article I hereof shall be subject to a right of first refusal in
favor of the Company with respect to any proposed sale by the Purchaser or any
subsequent holder (the "Holder") of the Shares. If the Holder receives and
intends to accept an offer to sell or transfer such Shares, the Holder shall
deliver written notice (the "Proposed Sale Notice") by certified mail, return
receipt requested to the Secretary of the Company, at its principal executive
office. The Proposed Sale Notice shall state that the Holder intends to sell
such Shares and the name of the proposed purchaser (the "Proposed Purchaser")
and shall state the number of Shares, the price per Share and the terms and
conditions for the payment of such price (the "Terms of Sale"). The foregoing
right of first refusal shall not apply to any gift (or transfer without
consideration) of any Shares to any Permitted Transferee (as such term is
defined in the Orion Power Holdings, Inc., 1998 Stock Incentive Plan, as amended
from time to time (the "Plan") and for purposes of this Agreement, also
including limited liability corporations, the members of which are all
"immediate family" members (as such term is defined in the Plan)), so long as
such Permitted Transferee agrees in writing, in such form reasonably acceptable
to the Company, that such Shares shall continue to be subject to the same
conditions, restrictions and covenants in effect immediately prior to such gift
or transfer.
(b) The Company shall have thirty (30) days from the date of
receipt of the Proposed Sale Notice to purchase the Shares on the Terms of Sale.
The Company shall exercise its right of first refusal by giving written notice
(the "Purchase Notice") to the Holder. The Purchase Notice shall set forth a
date not more than thirty (30) days after the date of such notice by which the
Holder
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should deliver the certificate(s) representing such Shares to the Company's
principal executive office.
(c) If the Company elects not to exercise its right of first
refusal within thirty (30) days, the Holder may dispose of the Shares; provided,
however, that such sale (i) is to the Proposed Purchaser, (ii) on the Terms of
Sale, and (iii) occurs within thirty (30) days after the expiration of the
Company's right of first refusal.
(d) The Company's right of first refusal as provided herein
shall expire at the time of an Initial Public Offering.
Section 4.2. Right of Repurchase.
(a) Subject to subsection (b) hereof, in the event that the
Purchaser's service as director with the Company terminates for any reason
(other than (A) a termination by the Company without "Cause" (as defined in the
agreement between the Purchaser and the Company, dated April 5, 2000 (the
"Director Agreement")), (B) by reason of a "Fiduciary Resignation" or a "Good
Reason Resignation" (as such terms are defined in the Director Agreement), or
following the second anniversary of the commencement of the "Directorship Term"
(as defined in the Director Agreement)), the Company, or such other party as the
Company may designate, shall have the right (as described below) to purchase
from the Holder any and all Shares issued pursuant to Article I hereof. This
repurchase right shall be exercisable by the Company, or such other party as the
Company may designate, by delivery of a repurchase notice to the Holder prior to
the date which is one (1) year after the later of (i) the date the Purchaser's
service with the Company as a director terminates or (ii) the date of issuance
of any Share(s) pursuant to Article I hereof. The price payable to the Holder by
the Company in connection with the Company's purchase of any Share pursuant to
this Section 4.2 shall be equal to the Fair Market Value (as such term is
defined in the Plan) of a Share on the date preceding the date of purchase.
Following the expiration of the Directorship Term, references in this Agreement
to defined terms in the Director Agreement shall continue to refer to such
defined terms notwithstanding the expiration of the Directorship Term.
(b) The Company's right of repurchase as provided herein shall
expire at the time of an Initial Public Offering.
Section 4.3. Governing Law
This Agreement shall be construed in accordance with and
governed by the laws of the State of Delaware applicable to agreements made and
to be performed wholly within such jurisdiction.
Section 4.4. Successors and Assigns
The terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the respective successors and assigns of the
parties hereto. No party hereto shall have the right to assign its rights and
obligations under this Agreement, without the prior written
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consent of the other party.
Section 4.5. Notices
Every notice relating to this Agreement shall be in writing
and shall be given by personal delivery or by registered or certified mail,
postage prepaid, return receipt requested; to:
(a) If to the Company: Orion Power Holdings, Inc.
7 E. Redwood Street, 10th Floor
Baltimore, Maryland 21201
Telephone: (410) 230-3507
with a copy to:
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004
Telephone: (212) 859-8156
Attention: Paul M. Reinstein, Esq.
(b) If to the Purchaser: Frederic V. Salerno 1095 Avenue of
the Americas New York, New York 10036
with a copy to:
Michael S. Sirkin, Esq.
Proskauer Rose LLP
1585 Broadway
New York, New York 10036
Section 4.6. Amendment.
This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties.
IN WITNESS WHEREOF, the parties have executed this Agreement
and caused the same to be duly delivered on their behalf as of the day and year
first written above.
ORION POWER HOLDINGS, INC.
By:
14
Name:
Title:
FREDERIC V. SALERNO
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ANNEX A
to
STOCK PURCHASE AGREEMENT
by and between
ORION POWER HOLDINGS, INC.
and
FREDERIC V. SALERNO
ANNEX B
to
STOCK PURCHASE AGREEMENT
by and between
ORION POWER HOLDINGS, INC.
and
FREDERIC V. SALERNO