Exhibit 10.1
Execution Version
STOCKHOLDERS' AGREEMENT
BY AND AMONG
MICRON HOLDINGS, INC.,
GS CAPITAL PARTNERS 2000, L.P.,
GS CAPITAL PARTNERS 2000 OFFSHORE, L.P.,
GS CAPITAL PARTNERS 2000 GMBH & CO. BETEILIGUNGS KG,
GS CAPITAL PARTNERS 2000 EMPLOYEE FUND, L.P.,
GOLDMAN SACHS DIRECT INVESTMENT FUND 2000, L.P.,
TRANSPORTATION RESOURCE PARTNERS, LP,
TRP AUTOCAM HOLDINGS I, L.L.C.
TRP AUTOCAM HOLDINGS II, L.L.C.
AND
JOHN C. KENNEDY
DATED AS OF JUNE 21, 2004
TABLE OF CONTENTS
PAGE
----
Section 1. Certain Definitions............................................... 2
Section 2. Methodology for Calculations...................................... 5
Section 3. Corporate Governance.............................................. 5
Section 4. Restrictions on Transfers of Stock by Stockholders................ 11
Section 5. Rights of First Offer............................................. 12
Section 6. Tag-Along Rights.................................................. 14
Section 7. Drag-Along Rights................................................. 16
Section 8. Certain Rights upon Termination of Employment..................... 17
Section 9. Equal and Ratable Treatment of Stockholders....................... 19
Section 10. Pre-Emptive Rights................................................ 19
Section 11. Equity Issuances.................................................. 20
Section 12. Legend............................................................ 21
Section 13. Representations and Warranties.................................... 21
Section 14. Duration of Agreement............................................. 22
Section 15. Further Assurances................................................ 22
Section 16. Amendment and Waiver.............................................. 22
Section 17. Entire Agreement.................................................. 23
Section 18. Successors and Assigns............................................ 23
Section 19. Severability...................................................... 23
Section 20. Remedies.......................................................... 23
Section 21. Notices........................................................... 23
Section 22. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial... 25
Section 23. Descriptive Headings.............................................. 25
1
Section 24. Construction...................................................... 25
Section 25. Survival of Representations and Warrants.......................... 25
Section 26. No Inconsistent Agreements........................................ 25
Section 27. Counterparts...................................................... 25
2
INDEX OF DEFINED TERMS
SECTION
-------------------
Acquisition Sub................... Recitals
Affiliate......................... Section 1
Agreement......................... Preamble
Ancillary Documents............... Section 1
Applicable Valuation Date......... Section 1
Autocam........................... Section 1
Board............................. Section 1
Business Day...................... Section 1
Call Option....................... Section 8(a)
Call Option Notice................ Section 8(b)
Call Option Stock................. Section 8(a)
Cause............................. Section 8(a)
Common Stock...................... Section 1
Common Stock Equivalents.......... Section 1
Company........................... Preamble
Contribution Agreement............ Recitals
Defaulting Stockholder............ Section 5(c)
Designating Parties............... Section 3.1(a)(iii)
Director.......................... Section 1
Drag-Along Notice................. Section 7(b)
Drag-Along Transferee............. Section 7(a)
Exchange Act...................... Section 1
Excluded Securities............... Section 1
Exit Sale......................... Section 7(a)
Fair Market Value................. Section 1
Family Member..................... Section 1
First Offer....................... Section 5(a)
First Offer Acceptance Period..... Section 5(a)
First Offer Notice................ Section 5(a)
First Offer Stock................. Section 5(a)
First Offer Stockholder........... Section 5(a)
FMV Board......................... Section 1
Group............................. Section 1
GS Direct......................... Preamble
GSCP 2000......................... Preamble
GSCP Designating Party............ Section 3.1(a)(i)
GSCP Directors.................... Section 3.1(a)(i)
GSCP Employee..................... Preamble
GSCP Germany...................... Preamble
GSCP Offshore..................... Preamble
GSCP Parties...................... Preamble
Initial Stockholders.............. Preamble
Issuance.......................... Section 1
Issue............................. Section 1
Kennedy........................... Preamble
Kennedy Director.................. Section 3.1(a)(iii)
Kennedy Employment Agreement...... Section 1
Litigation........................ Section 1
Major Actions..................... Section 3.8(b)
Management Services Agreement..... Section 1
Merger............................ Recitals
Merger Agreement.................. Recitals
New Securities.................... Section 10
Non-Voting Observer............... Section 3.4
Offered New Securities............ Section 10(a)
Other Stockholders................ Section 1
Oversubscribed Stockholder........ Section 5(b)
Permitted Transfer................ Section 1
Person............................ Section 1
Plan Options...................... Section 1
Preemptive Offer.................. Section 10(a)
Preemptive Offer Period........... Section 10(a)
Preemptive Stockholder............ Section 10(a)
Pro Rata Share.................... Section 10(a)
Proportionate Percentage.......... Section 1
Qualified IPO..................... Section 1
Registration Rights Agreement..... Section 1
Regulatory Laws................... Section 5(e)
Remaining New Securities.......... Section 10(c)(i)
Remaining Stock................... Section 5(b)
Section 10 Notice of Acceptance... Section 10(b)
Section 10 Offer Notice........... Section 10(a)
Securities Act.................... Section 1
Stock............................. Section 1
Stockholders...................... Section 1
Subject Stock..................... Section 5(a)
Subscription Agreements........... Recitals
Subsidiary........................ Section 1
Tag-Along Notice.................. Section 6(a)
Tag-Along Offer................... Section 6(a)
Tag-Along Offeror................. Section 6(a)
Tag-Along Period.................. Section 6(a)
Titan............................. Recitals
Transfer.......................... Section 1
Transfer Period................... Section 5(d)
3
TRP..................... Preamble
TRP Designating Party... Section 3.1(a)(ii)
TRP Directors........... Section 3.1(a)(ii)
TRP Holdings I.......... Preamble
TRP Holdings II......... Preamble
TRP Parties............. Preamble
Voting Shares........... Section 1
2
STOCKHOLDERS' AGREEMENT
THIS STOCKHOLDERS' AGREEMENT (this "Agreement") is made as of June
21, 2004 by and among MICRON HOLDINGS, INC., a Delaware corporation (the
"Company"), GS CAPITAL PARTNERS 2000, L.P., a Delaware limited partnership
("GSCP 2000"), GS CAPITAL PARTNERS 2000 OFFSHORE, L.P., a Cayman Islands exempt
limited partnership ("GSCP Offshore"), GS CAPITAL PARTNERS 2000 GmbH & Co.
BETEILIGUNGS KG, a German limited partnership ("GSCP Germany"), GS CAPITAL
PARTNERS 2000 EMPLOYEE FUND, L.P., a Delaware limited partnership ("GSCP
Employee"), GOLDMAN SACHS DIRECT INVESTMENT FUND 2000, L.P., a Delaware limited
partnership ("GS Direct", and collectively with GSCP 2000, GSCP Offshore, GSCP
Germany and GSCP Employee, the "GSCP Parties"), TRANSPORTATION RESOURCE
PARTNERS, LP, a Delaware limited partnership ("TRP"), TRP AUTOCAM HOLDINGS I,
L.L.C., a Delaware limited liability company ("TRP Holdings I"), TRP AUTOCAM
HOLDINGS II, L.L.C., a Delaware limited liability company ("TRP Holdings II",
and collectively with TRP and TRP Holdings I, the "TRP Parties"), and JOHN C.
KENNEDY, an individual ("Kennedy", and collectively with the GSCP Parties and
the TRP Parties, the "Initial Stockholders")
W I T N E S S E T H :
WHEREAS, pursuant to the Agreement and Plan of Merger, dated as of
May 1, 2004, as amended (the "Merger Agreement"), by and among the Company,
Micron Merger Corporation, a Delaware corporation and a wholly owned subsidiary
of the Company ("Acquisition Sub") and Titan Holdings, Inc., a Delaware
corporation ("Titan"), Acquisition Sub will merge with and into Titan with Titan
remaining as the surviving corporation and a wholly owned subsidiary of the
Company (the "Merger");
WHEREAS, immediately after the effective time of the Merger, Micron
Notes Corporation, a Delaware corporation and a wholly owned subsidiary of
Parent, will merge with and into Autocam Corporation, a Michigan corporation and
a wholly owned subsidiary of the Company ("Autocam", pursuant to an Agreement
and Plan of Merger entered into by such parties;
WHEREAS, each of the GSCP Parties and TRP Parties is concurrently
herewith entering into Subscription Agreements with the Company (the
"Subscription Agreements"), and Kennedy is entering into a Contribution and
Subscription Agreement (the "Contribution Agreement") pursuant to which the
Company will issue, and each such party will purchase, shares of common stock,
par value $.01 per share, of the Company;
WHEREAS, the Initial Stockholders, in the aggregate, will own all of
the issued and outstanding shares of capital stock of the Company immediately
following consummation of the transactions contemplated by the Subscription
Agreements and the Contribution Agreement;
WHEREAS, certain of the Initial Stockholders and their Affiliates or
members are entering into Management Rights Letters with the Company, Titan and
Autocam setting forth certain management rights of such parties (the "Management
Rights Letters"); and
WHEREAS, in addition to the Management Rights Letters and the
Registration Rights Agreement (as defined below), the Initial Stockholders and
the Company desire to enter into an agreement establishing and setting forth
their agreement with respect to certain rights and obligations associated with
ownership of shares of capital stock of the Company and certain arrangements
relating to the management of the Company.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and obligations hereinafter set forth, the parties hereto hereby agree
as follows:
Section 1. Certain Definitions. As used herein, the following terms
shall have the following meanings:
"Affiliate" means (i) with respect to any Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person or (ii) with respect to any
individual, any Family Member of such individual; provided, however, that, for
purposes hereof, (a) each GSCP Party shall be deemed to be an Affiliate of every
other GSCP Party, (b) each TRP Party shall be deemed to be an Affiliate of every
other TRP Party, and (c) neither the Company nor any Person controlled by the
Company shall be deemed to be an Affiliate of any Stockholder.
"Ancillary Documents" means, collectively, the Contribution
Agreement, the Subscription Agreements, the Kennedy Employment Agreement, the
Management Services Agreement and the Registration Rights Agreement.
"Applicable Valuation Date" means the date of a Call Option Notice.
"Board" means the Board of Directors of the Company.
"Business Day" shall mean a day other than a Saturday, Sunday,
federal or New York State holiday or other day on which commercial banks in New
York are authorized or required by law to close.
"Common Stock" means the common stock, par value $.01 per share, of
the Company and any and all securities of any kind whatsoever of the Company
which may be issued after the date hereof in respect of, or in exchange for,
such shares of common stock of the Company pursuant to a merger, consolidation,
stock split, stock dividend or recapitalization of the Company or otherwise.
"Common Stock Equivalents" means securities convertible into, or
exchangeable or exercisable for, shares of Common Stock or other equity
securities of the Company (including, without limitation, any note or debt
security convertible into or exchangeable for Common Stock or other equity
securities of the Company).
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"Director" means a member of the Board.
"Excluded Securities" means (i) options issued by the Company
pursuant to the Company's 2004 Stock Option Plan (and any shares of Common Stock
issuable upon exercise thereof or thereunder) (such options being referred to as
"Plan Options"), (ii) any shares of Common Stock or any Common Stock Equivalents
of the Company (and any shares of Common Stock issuable upon the conversion,
exchange or exercise thereof) issued by the Company as direct consideration in
connection with any acquisition transaction complying with Section 3.8 hereof,
and (iii) shares of Common Stock issued pursuant to the Subscription Agreements
and the Contribution Agreement.
"Fair Market Value" means, solely in regards to the Call Option
Stock, the estimated realizable sales price of the Call Option Stock as of the
Applicable Valuation Date in a bona-fide arms' length sale to a third party that
is not an Affiliate with any party to this Agreement, as determined: (x)
mutually by the Board (excluding any Kennedy Director, including without
limitation for the purposes of any quorum or voting requirements set forth in
Section 3.8) (such constituted Board, the "FMV Board") and Kennedy or (y) if a
mutual agreement is not reached within twenty (20) days of the delivery of the
Call Option Notice, by an arbitration conducted by a nationally recognized
investment bank experienced in the valuation of securities that is independent
of each of the Company and its Affiliates and Kennedy and his Affiliates (such
entity, an "Arbiter") (whose fees and expenses shall be shared equally by the
Company and Kennedy). The Arbiter shall be selected by the mutual agreement of
the FMV Board and Kennedy; provided, that if such mutual agreement is not
reached within five (5) days after the expiration of the time period provided
for in the preceding sentence, then the Arbiter shall be selected by two other
nationally recognized investment banks (the "Selecting Firms"), one of which to
be selected by each of the FMV Board and Kennedy; in each case to be selected
not later than five (5) days after the expiration of the time period set forth
in the immediately preceding clause. The Selecting Firms shall choose an Arbiter
within ten (10) days of the first date that both Selecting Firms have been
appointed and such selection of an Arbiter shall be conclusive and binding upon
the parties. The FMV Board and Kennedy shall submit their respective
presentations, including their proposed valuations of the Fair Market Value of
the Call Option Stock and other relevant data to the Arbiter, and the Arbiter
shall, within fifteen (15) days of its appointment, make its own determination
of the Fair Market Value of the Call Option Stock based solely on the
presentations made to the Arbiter. The final Fair Market Value of the Call
Option Stock for purposes hereof shall be the average of (i) the Fair Market
Value of the Call Option Stock calculated by the Arbiter and (ii) the Fair
Market Value of the Call Option Stock from among those submitted by the FMV
Board and Kennedy which, in the sole discretion of the Arbiter, is closer to the
Fair Market Value of the Call Option Stock calculated by the Arbiter. The
determination of the final Fair Market Value of the Call Option Stock by the
Arbiter shall be conclusive and binding upon the parties. If required by any
such Arbiter, the FMV Board and Kennedy shall execute a retainer and engagement
letter containing reasonable and customary terms and conditions consistent with
this provision.
"Family Member" means with respect to any individual (i) any member
of the immediate family of such individual (which shall mean any parent, spouse,
child or other lineal descendants (including by adoption) thereof), (ii) each
trust, limited liability company, limited
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partnership or private foundation (x) created for the benefit of such individual
or one or more members of such individual's immediate family or (y) in which
such individual or one or more members of such individual's immediate family
has, individually or in the aggregate, a majority interest and (iii) any Person
who is controlled by any such immediate family member or trust, limited
liability company, limited partnership or private foundation (including each
custodian of property for one or more such Persons).
"Group" means two or more Persons who agree to act together for the
purpose of acquiring, holding, voting or disposing of Stock.
"Issue" or "Issuance" means any direct or indirect issue, Transfer
or exchange, or agreement to issue, Transfer or exchange, in each case, of New
Securities by the Company.
"Kennedy Employment Agreement" means the new Employment Agreement to
be entered into between Kennedy, the Company, Titan and Autocam, which shall be
effective as of the effective time of the Merger.
"Litigation" means any action, proceeding or investigation in any
court or before any governmental authority.
"Management Services Agreement" means the Management Services
Agreement to be entered into among Autocam, Goldman Sachs & Co., a New York
corporation, Transportation Resource Advisors, LLC, a Delaware limited liability
company, and Kennedy.
"Option Stock" means Common Stock received upon the exercise of
Common Stock Equivalents (including, without limitation, Plan Options).
"Other Stockholders" means, with respect to any selling
Stockholder(s), all Stockholders other than such selling Stockholder(s).
"Permitted Transfer" means any Transfer of Stock (i) between a
Stockholder and any of its Affiliates, members or partners, (ii) by Kennedy to
the Company in accordance with Section 8 or (iii) upon the death of an
individual Stockholder pursuant to the terms of any trust or will of the
deceased individual Stockholder or by the laws of intestate succession.
"Person" means any individual, corporation, limited liability
company, limited or general partnership, joint venture, association, joint-stock
company, trust, unincorporated organization or government or any agency or
political subdivisions thereof.
"Proportionate Percentage" means, as to each First Offer Stockholder
(as defined in Section 5(a)), the quotient obtained (expressed as a percentage)
by dividing (i) the number of shares of Common Stock owned by such First Offer
Stockholder as of the first day of the First Offer Acceptance Period (as defined
in Section 5(a)) by (ii) the aggregate number of shares of Common Stock owned as
of the first day of the First Offer Acceptance Period by all First Offer
Stockholders.
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"Qualified IPO" means the initial underwritten offering pursuant to
which the Common Stock becomes registered under Section 12 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") resulting in at least $10
million of net proceeds to the Company.
"Registration Rights Agreement" means the Registration Rights
Agreement to be entered into among the parties hereto substantially in the form
set forth on Exhibit A.
"Securities Act" means the Securities Act of 1933, as amended.
"Stock" means (i) any shares of Common Stock and (ii) any Common
Stock Equivalents, in each case whether owned on the date hereof or acquired
hereafter.
"Stockholders" means the Initial Stockholders and any other
subsequent holder of Stock who is bound by the terms of this Agreement.
"Subsidiary" means, with respect to any Person, (i) any corporation,
limited liability company, limited or general partnership or other entity of
which shares of capital stock or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other similar
managing body of such corporation, limited liability company, limited or general
partnership or other entity are at the time directly or indirectly owned or
controlled by such Person, or (ii) the management of which is otherwise
controlled, directly or indirectly, through one or more intermediaries by such
Person.
"Transfer" means any direct or indirect transfer, sale, assignment,
distribution, pledge, encumbrance, hypothecation or other disposition, either
voluntarily or involuntarily and by operation of law or otherwise.
"Voting Shares" means, at any time, any securities of the Company
the holders of which are then generally entitled to vote in the election of
Directors.
Section 2. Methodology for Calculations. For all purposes of this
Agreement, the proposed Transfer or the Transfer of a Common Stock Equivalent
shall be treated as the proposed Transfer or the Transfer of the shares of
Common Stock receivable upon the conversion, exchange or exercise of such Common
Stock Equivalent. Except as otherwise expressly provided in this Agreement, for
purposes of calculating (a) the amount of outstanding Common Stock as of any
date and (b) the amount of Common Stock owned by a Person hereunder (and the
percentage of the outstanding Common Stock owned by a Person), no Common Stock
Equivalents shall be treated as having been converted, exchanged or exercised
for the underlying Common Stock.
Section 3. Corporate Governance.
3.1. Composition of the Board.
(a) Subject to Section 3.1(b), the Company shall take all necessary
action and exercise all authority under applicable law, and the Stockholders
shall vote all of their Voting Shares, at any regular or special meeting of
stockholders called for the purpose of electing
5
Directors to the Board, or in any written consent executed in lieu of such
meeting of stockholders, and take all other necessary action, to ensure that the
Board shall consist of five Directors, and to ensure the election to the Board
of the following individuals:
(i) for so long as the GSCP Parties hold at least 9% of the
outstanding Common Stock held by Stockholders, two Directors designated by GSCP
2000 on behalf of the GSCP Parties (the "GSCP Designating Party") (such
Directors, the "GSCP Directors");
(ii) for so long as the TRP Parties hold at least 9% of the
outstanding Common Stock held by Stockholders, two Directors designated by TRP
on behalf of the TRP Parties (the "TRP Designating Party") (such Directors, the
"TRP Directors"); and
(iii) for so long as Kennedy holds at least 9% of the outstanding
Common Stock held by Stockholders, one Director designated by Kennedy
(collectively with the GSCP Designating Party and the TRP Designating Party, the
"Designating Parties"), which Director shall serve as Chairman of the Board
(such Director, the "Kennedy Director"); provided, however, that if the
transaction that results in Kennedy holding less than 9% of the outstanding
Common Stock held by Stockholders is as a result of a drag-along Transfer in
accordance with Section 7 of this Agreement, Kennedy shall retain the right to
designate one Director pursuant to this clause (iii) for so long as Kennedy
holds at least four and one-half percent (4-1/2%) of the outstanding Common
Stock held by Stockholders.
(b) Upon the written request of TRP given to the Company at least
thirty (30) days prior to the date on which the increase in Board size
contemplated by this Section 3.1(b) is desired to be effected by TRP, the
Company shall take all necessary action and exercise all authority under
applicable law, and the Stockholders shall vote all of their Voting Shares, at
any regular or special meeting of stockholders called for the purpose of
electing Directors to the Board, or in any written consent executed in lieu of
such meeting of stockholders, and take all other necessary action, to ensure
that the size of the Board shall be increased to consist of ten Directors, and
to ensure the election to the Board of the following individuals:
(i) for so long as the GSCP Parties hold at least 9% of the
outstanding Common Stock held by Stockholders, four Directors designated by the
GSCP Designating Party (and all such Directors shall be considered GSCP
Directors for the purposes of this Agreement);
(ii) for so long as the TRP Parties hold at least 9% of the
outstanding Common Stock held by Stockholders, four Directors designated by the
TRP Designating Party (and all such Directors shall be considered TRP Directors
for the purposes of this Agreement); and
(iii) for so long as Kennedy holds at least 9% of the outstanding
Common Stock held by Stockholders, two Directors designated by Kennedy, one of
which, at Kennedy's sole discretion, shall serve as Chairman of the Board (and
all such Directors shall be considered Kennedy Directors for the purposes of
this Agreement); provided, however, that if the transaction that results in
Kennedy holding less than 9% of the outstanding Common Stock held by
Stockholders is as a result of a drag-along Transfer in accordance with Section
7 of this
6
Agreement, Kennedy shall retain the right to designate two Directors pursuant to
this clause (iii) for so long as Kennedy holds at least four and one-half
percent (4-1/2%) of the outstanding Common Stock held by Stockholders.
3.2. Committees; Subsidiaries.
(a) The Board shall create a compensation committee and an audit
committee and may create such other committees as it may determine in its
discretion.
(b) Subject to applicable law and the rules of any applicable self
regulatory organizations, the Company and the Board shall, at the request of the
appropriate Designating Party, take all necessary action and exercise all
authority to cause at least one GSCP Director, one TRP Director and one Kennedy
Director to be appointed to each committee of the Board.
(c) The Company shall cause each Director to be appointed to each
board of directors or other similar managing body of each Subsidiary of the
Company and, subject to applicable law and the rules of any applicable
self-regulatory organization, at least one TRP Director, GSCP Director and
Kennedy Director to be appointed to each committee of the board of directors or
other similar managing body of each Subsidiary of the Company. The Company shall
exercise its direct or indirect voting power in each such Subsidiary to effect
the foregoing.
(d) If any GSCP Director, TRP Director or Kennedy Director serving
on any committee of the Board or on any board of directors or other similar
managing body (or any committee thereof) of any Subsidiary of the Company shall
for any reason cease to serve as a member of, or shall otherwise be unable to
fulfill his or her duties on, any such committee, board of directors, or other
similar managing body, as the case may be, he or she shall be succeeded by
another Director selected by his or her Designating Party.
3.3. Vacancies; Removal.
(a) Subject to Section 3.3(b), each GSCP Director, TRP Director and
Kennedy Director shall hold office until his or her death, disability,
retirement, resignation or removal or until his or her successor has been duly
elected and qualified. In the event that a vacancy is created on the Board for
any reason, each Stockholder shall vote for, and cause the Directors designated
by its respective Designating Party to vote for, the individual designated to
fill such vacancy by the appropriate Designating Party so that the Board, upon
filling such vacancy, is reflective of the representation rights set forth in
Section 3.1 above.
(b) No GSCP Director, TRP Director or Kennedy Director may be
removed from office without the written consent of his or her Designating Party.
Each GSCP Director, TRP Director or Kennedy Director may be removed from office
at any time, with or without cause, at the written request of his or her
Designating Party. The Director(s) appointed by each Designating Party shall
have the right to call a meeting of the Board and/or stockholders of the Company
(or to request written consents in lieu of such meetings) to remove any Director
designated by such Designating Party at any time.
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3.4. Non-Voting Observer. So long as any of the GSCP Parties or any
of the TRP Parties, respectively, hold any Stock, at all times that there is no
GSCP Director or no TRP Director, respectively, on the Board, the applicable
Designating Party shall be entitled to have one observer (such person, a
"Non-Voting Observer") selected by such Designating Party present at all
meetings of the Board and at all meetings of each committee of the Board, as
well as the boards of directors or other similar managing bodies (and any
committees thereof) of each of the Subsidiaries of the Company, and the
Non-Voting Observer shall be notified of any such meetings, including the time
and place of such meetings, in the same manner as the directors or members
thereof. The Non-Voting Observer shall have the same access to information
concerning the business and operations of the Company and at the same time as
the boards of directors or similar managing bodies of the Company and its
Subsidiaries and the various committees thereof, as applicable, and shall be
entitled to participate in discussions and consult with, and make proposals and
furnish advice to, the Board, the board of directors or other similar managing
bodies of the Company's Subsidiaries, and the various committees thereof, but
shall not have the right to vote; provided, however, that the obligation of the
Company to provide the foregoing information and access to such Non-Voting
Observer shall be conditioned upon the prior execution of a confidentiality
agreement satisfactory to the Company; provided, further, that the Company shall
have no obligation to provide any of the foregoing information to such
Non-Voting Observer if such disclosure could reasonably be believed to result in
the waiver or forfeiture of any applicable attorney-client privilege with
respect to such information.
3.5. Expenses. The Company shall pay the reasonable out-of-pocket
expenses incurred by each Director in connection with performing his or her
duties as a Director, including without limitation the reasonable out-of-pocket
expenses incurred by such person for attending meetings of the Board or any
committee thereof or meetings of any board of directors or other similar
managing body (and any committee thereof) of any Subsidiary of the Company.
3.6. Directors' Indemnification.
(a) The Company shall obtain and cause to be maintained in effect,
with financially sound insurers, a policy of directors' and officers' liability
insurance covering each of the Directors in an amount of $10,000,000 or more and
upon such terms as shall be determined by the Board.
(b) The certificate of incorporation, by-laws and other
organizational documents of the Company and each of its Subsidiaries shall at
all times, to the fullest extent permitted by law, provide for indemnification
of, advancement of expenses to, exculpation of, and limitation of the personal
liability of, the Directors and the members of the boards of directors or other
similar managing bodies of each of the Company's Subsidiaries and such other
persons, if any, who, pursuant to a provision of such certificate of
incorporation, by-laws or other organizational documents, exercise or perform
any of the powers or duties otherwise conferred or imposed upon Directors or the
boards of directors or other similar managing bodies of each of the Company's
Subsidiaries. Such provisions may not be amended, repealed or otherwise modified
in any manner adverse to any Director or any member of the boards of directors
or other similar managing bodies of any of the Company's Subsidiaries, until at
least six years following the later of (i) the date that the GSCP Parties are no
longer entitled to designate a
8
Director, (ii) the date that the TRP Parties are no longer entitled to designate
a Director and (iii) the date that Kennedy is no longer entitled to designate a
Director.
(c) Any determinations required to be made with respect to whether
any Director may be entitled to indemnification will, if requested by such
Director, be made by independent legal counsel selected by such Director and
reasonably satisfactory to the Company.
(d) In the event of any Litigation involving a Director or
Directors, such Director(s) shall be entitled to control the defense thereof
with one counsel of such Director's own choosing reasonably acceptable to the
Company and the Company shall cooperate in the defense thereof and bear the
expense of such counsel.
(e) Each Director is intended to be a third-party beneficiary of the
obligations of the Company pursuant to this Section 3.6, and the obligations of
the Company pursuant to this Section 3.6 shall be enforceable by each such
Director.
3.7. By-Laws; Covenant to Vote.
(a) As of the effective time of the Merger, the by-laws of the
Company shall, to the extent possible, provide for the matters set forth in
Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.6 and 3.8 hereof and to provide that such
by-laws will not be amended without the approval of at least one GSCP Director,
one TRP Director and one Kennedy Director. Notwithstanding the foregoing, at
such time as any of the GSCP Parties, the TRP Parties or Kennedy, as applicable,
is no longer entitled to designate a Director, the provisions in the by-laws
that provide for the matters set forth Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.6 and
3.8 may be amended without the approval of a Director designated by such party.
(b) Each Stockholder shall vote all of its Voting Shares and shall
take all other necessary or desirable actions within its control (including,
without limitation, attending all meetings in person or by proxy for purposes of
obtaining a quorum and executing all written consents in lieu of meetings, as
applicable), and the Company shall take all necessary and desirable actions
within it control (including, without limitation, calling special Board and
stockholder meetings and amending its by-laws and, subject to stockholder
approval, its certificate of incorporation), to effectuate the provisions of
this Section 3. In addition, each Stockholder agrees to vote its Voting Shares
upon any other matter arising under this Agreement submitted to a vote of the
stockholders in a manner that will implement the terms of this Agreement.
3.8. Board Action.
(a) (i) A simple majority of the entire Board, including at least
one GSCP Director, one TRP Director and one Kennedy Director, shall constitute a
quorum for the transaction of business by the Board, provided, however, that if
a meeting of the Board is called and notice thereof duly delivered to each
Director and a quorum is not obtained for such meeting, in the event that a
second meeting is called to transact the same business, a simple
9
majority of the entire Board shall constitute a quorum at such second meeting;
provided, further, that notice of such second meeting is duly delivered to each
Director.
(ii) Subject to Section 3.8(b), the affirmative vote of not less
than a simple majority of the entire Board shall be required for valid Board
action.
(b) Notwithstanding Section 3.8(a)(ii), neither the Board nor the
Company shall, and the Company shall not permit any of its Subsidiaries to,
directly or indirectly, take any of the following actions (such actions, "Major
Actions") without the approval of a simple majority of the entire Board,
provided, that, such approval shall include (1) with respect to clause (i),
(ii), (iii) and (iv) below (and clause (vi) to the extent it applies to the
foregoing clauses), the approval of (x) for so long as the GSCP Parties are
entitled to designate a Director, at least one GSCP Director, (y) for so long as
the TRP Parties are entitled to designate a Director, at least one TRP Director
and (z) for so long as Kennedy is entitled to designate a Director, at least one
Kennedy Director, and (2) with respect to clause (v) below (and clause (vi) to
the extent it applies to clause (v)), for so long as Kennedy is entitled to
designate a Director, at least one Kennedy Director:
(i) purchase, acquire or obtain any significant portion of the
capital stock or other proprietary interest, directly or indirectly, in
another Person or all or substantially all of the business or assets of
another Person, in each case outside of the automotive precision parts
business;
(ii) enter into or engage in the ownership, active management,
development, construction or operation of any line of business that is
not substantially similar to that conducted by Titan and its
Subsidiaries;
(iii) enter into any transactions (except as expressly contemplated
by this Agreement or any of the Ancillary Documents) with any Affiliate
of the Company (provided, that, for the purposes of this clause
3.8(b)(iii) only, the term Affiliate shall not include clause (c) of
the proviso of the definition thereof);
(iv) amend or repeal any provision of its certificate of
incorporation, by-laws or other organizational documents (except with
respect to any actions required to be taken by the Company solely to
implement the terms of Section 3 hereof);
(v) appoint any person to the position of, determine the
remuneration of, amend the terms of any existing employment agreement
with its, enter into any new employment agreement with its, or
terminate or otherwise remove its, Chief Executive Officer, President,
Chief Operating Officer, Chief Financial Officer or other key executive
officers (in each case, other than Kennedy), provided, however, that
this clause (v) shall constitute a Major Action only for so long as
Kennedy remains the Chief Executive Officer of any of Autocam, Titan or
the Company;
10
(vi) agree or otherwise commit to take any actions set
forth in the foregoing subparagraphs (i) through (v).
Section 3.9. Stockholder Approval Right.
(a) Anything to the contrary contained in this Agreement
notwithstanding, but subject to Section 3.9(b), if no Kennedy Director is a
Director, all Major Actions shall require the approval of Kennedy in his
capacity as a Stockholder until such time as Kennedy holds less than 9% of the
outstanding Common Stock held by Stockholders; provided, however, that if the
transaction that results in Kennedy holding less than 9% of the outstanding
Common Stock held by Stockholders is as a result of a drag-along Transfer in
accordance with Section 7 of this Agreement, Kennedy shall retain the right to
exercise his rights under this Section 3.9(a) until such time as Kennedy holds
less than four and one-half percent (4-1/2%) of the outstanding Common Stock
held by Stockholders.
(b) Anything to the contrary contained in this Agreement
notwithstanding, for so long as Kennedy owns any Common Stock, Kennedy's
approval in his capacity as a Stockholder shall be required for the Major Action
set forth in Section 3.8(b)(iii), such approval not to be unreasonably delayed
or withheld.
Section 4. Restrictions on Transfers of Stock by Stockholders.
(a) Subject to the remaining subsections of this Section 4, (i) no
Stockholder shall Transfer any Stock prior to the third anniversary of the date
hereof other than pursuant to a Permitted Transfer and (ii) on or after the
third anniversary of the date hereof, no Stockholder shall Transfer any Stock
unless such Stockholder has first complied with the provisions of Section 5,
Section 6 and Section 7, in each case if and to the extent applicable to such
Transfer.
(b) Anything to the contrary contained in this Agreement
notwithstanding, any transferee of Stock who is not a Stockholder at the time of
Transfer shall, upon consummation of, and as a condition to, such Transfer,
execute and deliver to the Company (which the Company shall then deliver to all
other Stockholders) an agreement pursuant to which such transferee agrees to be
bound by the terms of this Agreement and such transferee shall thereafter be
deemed to be a Stockholder hereunder, with, subject to Section 4(c), the same
rights and obligations as the transferor of such Stock.
(c) Anything to the contrary contained in this Agreement
notwithstanding, (i) a Designating Party shall not be permitted to assign its
right to designate Director(s) under Section 3.1 except to a transferee of
Common Stock in connection with a Transfer complying with this Section 4 and in
accordance with the following: a Designating Party shall only be permitted to
assign its right to designate that number of Director(s) under Section 3.1 as is
equal to the number obtained (rounded down to the nearest whole number) by
multiplying (i) the total number of Directors such Designating Party is entitled
to designate at the time of such Transfer by (ii) a fraction, the numerator of
which is the number of shares of Common Stock proposed to be Transferred by such
Designating Party and its Affiliates and the denominator of which is the number
of shares of Common Stock held by such Designating Party and its Affiliates
prior to
11
giving effect to such Transfer; provided, that, in no event shall any rights to
designate Directors under Section 3.1 be assigned in connection with any
Transfer of less than that percentage of Common Stock as is required to be owned
by the Designating Party (including any Affiliates of such Designating Party) to
exercise such rights under Section 3.1; and (ii) a Designating Party shall not
be permitted to assign its right to designate a Non-Voting Observer under
Section 3.4 unless it would be permitted to assign its right to designate at
least one Director in accordance with the preceding clause (i).
(d) Any Transfer or attempted Transfer of Stock in violation of any
provision of this Agreement shall be void, and the Company shall not record such
Transfer on its books or treat any purported transferee of such Stock as the
owner of such Stock for any purpose.
Section 5. Rights of First Offer. Subject to Section 5(g) and in
addition to and not in limitation of any other restrictions on Transfers of
Stock contained in this Agreement, any Transfer of Stock by a Stockholder
pursuant to Section 4(a)(ii) shall be consummated only in accordance with the
following procedures:
(a) The selling Stockholder shall deliver to each Other Stockholder
(with a copy to the Company) a written notice (a "First Offer Notice"), which
shall (i) state the selling Stockholder's intention to sell Stock to one or more
Persons, the amount and type of Stock to be sold (the "Subject Stock"), the
purchase price therefor and a summary of the other material terms and conditions
of the proposed Transfer and (ii) offer each Other Stockholder the option to
acquire any portion of the Subject Stock upon the terms and subject to the
conditions of the proposed Transfer as set forth in the First Offer Notice (the
"First Offer"). The First Offer shall remain open and irrevocable for the period
set forth below (and, to the extent the First Offer is accepted during such
period, shall remain irrevocable until the consummation of the Transfer
contemplated by the First Offer). Each Other Stockholder shall have the right
and option, for a period of fifteen (15) days after delivery of the First Offer
Notice (the "First Offer Acceptance Period"), to accept the First Offer for any
part of the Subject Stock at the purchase price and on the terms and conditions
stated in the First Offer Notice; provided, however, that the Other Stockholders
must, in the aggregate, accept all, but not less than all, of the Subject Stock
during the First Offer Acceptance Period (and, if the Other Stockholders do not
so accept all of the Subject Stock, the selling Stockholder shall be permitted
to Transfer the Subject Stock pursuant to Section 5(d)). Such acceptance shall
be made by delivering a written notice to the selling Stockholder (with a copy
to the Company) within the First Offer Acceptance Period specifying the maximum
number of shares such Other Stockholder will purchase (such accepting Other
Stockholder, a "First Offer Stockholder", and the Subject Stock accepted for
purchase by such First Offer Stockholder, the "First Offer Stock").
(b) If, upon the expiration of the First Offer Acceptance Period,
the aggregate amount of First Offer Stock exceeds the amount of Subject Stock,
the Subject Stock shall be allocated among the First Offer Stockholders as
follows: (i) first, each First Offer Stockholder shall be entitled to purchase
no more than its Proportionate Percentage of the Subject Stock; (ii) second, if
an amount of Subject Stock has not been allocated for purchase pursuant to
clause (i) above (the "Remaining Stock"), each First Offer Stockholder (an
"Oversubscribed Stockholder") which had offered to purchase an amount of Subject
Stock in excess of the amount of stock
12
allocated for purchase to it in accordance with clause (i) above, shall be
entitled to purchase an amount of Remaining Stock equal to no more than its
Proportionate Percentage (treating only Oversubscribed Stockholders as First
Offer Stockholders for these purposes) of the Remaining Stock; and (iii) third,
the process set forth in (ii) above shall be repeated with respect to any
amounts of Subject Stock not yet allocated for purchase until the Subject Stock
is allocated for purchase in its entirety. Within 2 business days of the
expiration of the First Offer Acceptance Period, the Company shall notify each
First Offer Stockholder in writing (with a copy to the selling Stockholder) of
the amount of Subject Stock allocated for purchase to such First Offer
Stockholder.
(c) Within thirty (30) days from the date of delivery of the First
Offer Notice and to the reasonable satisfaction of the selling Stockholder, each
First Offer Stockholder shall be required to demonstrate the availability of
sufficient financing to consummate the Transfer of such First Offer
Stockholder's portion of the Subject Stock. In the event that any First Offer
Stockholder has not complied with the foregoing sentence (such party, a
"Defaulting Stockholder"), such Defaulting Stockholder's effective acceptance of
the First Offer shall be deemed revoked, provided, however, that such revocation
shall not effect the effective acceptance of any other First Offer Stockholder's
acceptance of the First Offer pursuant to Section 5(a).
(d) If (i) effective acceptance shall not be received pursuant to
Section 5(a) with respect to all of the Subject Stock offered for Transfer
pursuant to the First Offer Notice or (ii) effective acceptance is deemed
revoked pursuant to Section 5(c), then the selling Stockholder shall be
permitted to consummate the Transfer of, in the case of clause (i), all of the
Subject Stock offered for Transfer pursuant to the First Offer Notice and, in
the case of clause (ii), that portion of the Subject Stock that would otherwise
have been Transferred to the Defaulting Stockholder, in each case at a price not
less than the price, and on terms and conditions not more favorable to the
purchaser thereof than the terms, stated in the First Offer Notice at any time
within one hundred and eighty (180) days (plus, if necessary, a sufficient
number of days to allow the expiration or termination of all waiting periods
under Regulatory Laws (as defined below) applicable to such Transfer) after, in
the case of clause (i) above, the expiration of the First Offer Acceptance
Period, and in the case of clause (ii) above, the date on which a First Offer
Stockholder becomes a Defaulting Stockholder (in either case, the "Transfer
Period"). To the extent the selling Stockholder Transfers the Subject Stock so
offered for Transfer during the Transfer Period, the selling Stockholder shall
promptly notify the Company, and the Company shall promptly notify the Other
Stockholders, as to (i) the number of shares of Stock, if any, that the selling
Stockholder then owns, (ii) the number of shares of Stock that the selling
Stockholder has Transferred, (iii) the terms of such Transfer and (iv) the name
of the transferee(s) of any shares of Stock Transferred. In the event that all
of the Subject Stock is not Transferred by the selling Stockholder during the
Transfer Period, the right of the selling Stockholder to Transfer such Subject
Stock which is not Transferred shall expire and the obligations of this Section
5 shall be reinstated; provided, however, in the event that the selling
Stockholder determines, at any time during the Transfer Period, that the
Transfer of all of the Subject Stock on the terms set forth in the First Offer
Notice is impractical, the selling Stockholder may terminate the offer and
reinstate the procedure provided in this Section 5 without waiting for the
expiration of the Transfer Period.
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(e) All Transfers of Subject Stock to the First Offer Stockholders
shall be consummated contemporaneously at the offices of the Company on the
later of (i) a mutually satisfactory Business Day within seventy-five (75) days
after the delivery of the First Offer Notice or (ii) the fifth Business Day
following the expiration or termination of all waiting periods under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and any other
state, local or foreign antitrust or similar laws (collectively, "Regulatory
Laws"), applicable to such Transfers, or at such other time and/or place as the
parties to such Transfers may collectively agree. The delivery of certificates
or other instruments evidencing such Subject Stock duly endorsed for transfer
shall be made on such date against payment of the purchase price for such
Subject Stock in immediately available funds by wire transfer.
(f) Notwithstanding anything to the contrary contained in this
Agreement, prior to any Transfer of Stock by a selling Stockholder pursuant to
this Section 5, the selling Stockholder shall, after complying with the
provisions of this Section 5, comply with the provisions of Section 6.
(g) The requirements of this Section 5 shall not apply to (i) any
Permitted Transfer, (ii) any Transfer of Stock by any Other Stockholder to a
Tag-Along Offeror pursuant to Section 6, (iii) any Exit Sale, (iv) any Transfer
of Stock by any Other Stockholder to a Drag-Along Transferee pursuant to Section
7, or (v) any other Transfer as to which the Initial Stockholders unanimously
waive compliance with this Section 5.
Section 6. Tag-Along Rights.
(a) Subject to Section 6(d), any Stockholder, whether alone or in
concert with any other Stockholder, desiring to Transfer Stock pursuant to
Section 4(a)(ii), shall give not less than fifteen (15) days' prior written
notice of such intended Transfer to each Other Stockholder (the "Tag-Along
Notice") (with a copy to the Company), which shall identify the proposed
transferee (the "Tag-Along Offeror"), the amount and type of Stock being
Transferred, the purchase price therefor, and a summary of the other material
terms and conditions of the proposed Transfer, and shall contain an offer (the
"Tag-Along Offer") by the Tag-Along Offeror to each Other Stockholder, which
shall be irrevocable for a period of fifteen (15) days after the delivery
thereof (the "Tag-Along Period") (and, to the extent the Tag-Along Offer is
accepted during such period, shall remain irrevocable until the consummation of
the Transfer contemplated by the Tag-Along Offer) to purchase the Stock (as
calculated below) of such Other Stockholder at the same price per share (and, in
the case of Common Stock Equivalents, such price per share multiplied by the
number of shares of Common Stock issuable upon the conversion, exchange or
exercise of such Common Stock Equivalent subject to reduction, if appropriate,
for the amount per share of the exercise or purchase price (if any) of such
Common Stock Equivalent) to be paid to, and upon the same terms and conditions
as, the selling Stockholder. Notice of any Other Stockholder's intention to
accept a Tag-Along Offer, in whole or in part, shall be evidenced by a writing
signed by such Other Stockholder and delivered to the Tag-Along Offeror (with a
copy to the Company) prior to the end of the Tag-Along Period, setting forth the
number of shares and class of Stock that such Other Stockholder elects to
Transfer; provided, however, that such Other Stockholder may only Transfer up to
that number of shares of Stock as shall equal the product of (x) a fraction, the
numerator of which is the
14
number of shares of Stock owned by such Other Stockholder as of the date of the
Tag-Along Offer and the denominator of which is the aggregate number of shares
of Stock issued and outstanding and held by Stockholders as of the date of the
Tag-Along Offer and (y) the aggregate number of shares of Stock proposed to be
Transferred by the selling Stockholder. The Tag-Along Offer may be accepted in
whole or in part at the option of each of the Other Stockholders. Promptly upon
receipt of such writing from any Other Stockholder, the Company shall provide a
copy of such writing to each Other Stockholder. The number of shares of Stock
proposed to be Transferred by the selling Stockholder shall be reduced if and to
the extent necessary to comply with this Section 6(a).
(b) All Transfers of Stock to the Tag-Along Offeror shall be
consummated contemporaneously at the offices of the Company on the later of (i)
the closing date for the Transfer by the selling Stockholder to the Tag-Along
Offeror, which shall not be more than sixty (60) days after the expiration of
the Tag-Along Period, or (ii) the fifth Business Day following the expiration or
termination of all waiting periods under Regulatory Laws applicable to such
Transfers, or at such other time and/or place as the parties to such Transfers
may collectively agree. The delivery of certificates or other instruments
evidencing such Stock duly endorsed for transfer shall be made on such date
against payment of the purchase price for such Stock in the form specified in
the Tag-Along Notice. In connection with the consummation of a Transfer pursuant
to this Section 6, each Other Stockholder accepting the Tag-Along Offer shall
execute all documents containing such terms and conditions, including, without
limitation, representations and warranties with respect to (x) matters of title
to the Other Stockholders' securities and (y) the due authorization (or
capacity) and due and valid execution and delivery by such Other Stockholder of
documentation in respect of such Transfer, as those executed by the selling
Stockholder, and shall execute and deliver such other instruments and agreements
as may be reasonably requested by the Tag-Along Offeror; provided, however, that
such representations and warranties shall be made by the Other Stockholders
severally and not jointly and that the liability of the selling Stockholder and
the Other Stockholders (whether pursuant to a representation, warranty,
covenant, indemnification provision or agreement) for liabilities in respect of
the Company shall be evidenced in writings executed by them and the Tag-Along
Offeror and shall be borne by each of them on a several basis in proportion to
the amount of consideration to be received.
(c) Notwithstanding anything to the contrary contained in this
Agreement, each Stockholder shall, prior to complying with the provisions of
this Section 6, first comply with the provisions of Section 5; provided,
however, that the provisions of this Section 6 shall apply to any Exit Sale
pursuant to which the selling Stockholder(s) do not exercise their drag-along
rights under Section 7, notwithstanding that Section 5 would not be applicable
to such Exit Sale.
(d) The requirements of this Section 6 shall not apply to (i) any
Permitted Transfer, (ii) any Transfer of Stock by any Other Stockholder to a
Drag-Along Transferee pursuant to Section 7, (iii) any sale of Kennedy's Stock
pursuant to Section 8(c) or (iv) any other Transfer as to which the Initial
Stockholders unanimously waive compliance with this Section 6.
15
Section 7. Drag-Along Rights. (a) If any of the GSCP Parties or the
TRP Parties, whether alone or in concert with any other Stockholder, propose to
Transfer Stock pursuant to Section 4(a)(ii) to any Person who is not, or Group
comprised entirely of Persons who are not, an Affiliate of such Stockholder(s)
(collectively, a "Drag-Along Transferee"), in a bona fide arm's-length
transaction or series of transactions (including by way of a purchase agreement,
tender offer, merger or other business combination transaction or otherwise),
which in the aggregate represents at least 50% of the outstanding Common Stock
(any such transaction, an "Exit Sale"), then the selling Stockholders may elect
to require each (but not fewer than each) Other Stockholder to Transfer Stock
(as calculated below) as a part of such Exit Sale to such Drag-Along Transferee
at the same price per share (and, in the case of Common Stock Equivalents, such
price per share multiplied by the number of shares of Common Stock issuable upon
the conversion, exchange or exercise of such Common Stock Equivalent subject to
reduction, if appropriate, for the amount per share of the exercise or purchase
price (if any) of such Common Stock Equivalent) to be paid to, and upon the same
terms and conditions as, the selling Stockholders, all of which shall be set
forth in the Drag-Along Notice (as defined below). Each Other Stockholder may be
required to sell that number of shares of Stock as shall equal the product of
(x) a fraction, the numerator of which is the number of shares of Stock proposed
to be Transferred by the selling Stockholders and the denominator of which is
the aggregate number of shares of Stock owned as of the date of the Drag-Along
Notice by the selling Stockholders and (y) the number of shares of Stock owned
by such Other Stockholder as of the date of the Drag-Along Notice.
(b) The rights set forth in Section 7(a) shall be exercised by
giving written notice (the "Drag-Along Notice") to each Other Stockholder which
shall identify the Drag-Along Transferee, the amount and type of Stock being
Transferred, the purchase price therefor, and a summary of the other material
terms and conditions of the proposed Exit Sale and the proposed closing date
thereof.
(c) All Transfers of Stock to the Drag-Along Transferee pursuant to
this Section 7 shall be consummated contemporaneously at the offices of the
Company on the later of (i) the proposed closing date set forth in the
Drag-Along Notice or (ii) the fifth Business Day following the expiration or
termination of all waiting periods under Regulatory Laws applicable to such
Transfers, or at such other time and/or place as the parties to such Transfers
may collectively agree. The delivery of certificates or other instruments
evidencing such Stock duly endorsed for transfer shall be made on such date
against payment of the purchase price for such Stock in the form specified in
the Drag-Along Notice.
(d) Each Other Stockholder will (i) take all such actions,
including, without limitation, voting all of its Voting Shares in favor of such
proposed Exit Sale and waiving any appraisal, dissenter or similar rights under
applicable law (in each case if applicable to such Exit Sale), as may be
requested by the selling Stockholders to carry out the purposes of this Section
7, and (ii) execute all documents containing such terms and conditions,
including representations and warranties solely with respect to (x) matters of
title to the Other Stockholders' securities and (y) the due authorization (or
capacity) and due and valid execution and delivery by such Other Stockholder of
documentation in respect of such Transfer, as those executed by the selling
Stockholders, and shall execute and deliver such other instruments and
agreements as may be
16
reasonably requested by the selling Stockholders; provided, however, that such
representations and warranties shall be made by the Other Stockholders severally
and not jointly.
Section 8. Certain Rights upon Termination of Employment.
(a) If at any time Kennedy shall be terminated by the Company, Titan
or Autocam for "cause" (as such term or alternative or analogous term is defined
in the Kennedy Employment Agreement, "Cause"), subject to Section 8(e), the
Company shall have the right to purchase all, but not less than all, of the
Stock owned by Kennedy and any transferee who obtained Stock as a direct or
indirect result of a Permitted Transfer by Kennedy (a "Permitted Kennedy
Transferee") (the "Call Option", and such Stock (not including unexercised
Common Stock Equivalents to the extent cancelled upon such termination) subject
to the Call Option, the "Call Option Stock") at a price equal to the Fair Market
Value (as determined in accordance with the procedures set forth in Section 1
under the definition of "Fair Market Value") of the Call Option Stock.
(b) If the Company desires to exercise its Call Option, it shall
deliver written notice thereof (which shall include its valuation of the Fair
Market Value of the Call Option Stock) (a "Call Option Notice") to Kennedy and
any Permitted Kennedy Transferees within ninety (90) days of (i) in the case of
Call Option Stock that is Option Stock, the date that is six months following
the later of (x) termination of Kennedy's employment with the Company, Titan or
Autocam for Cause and (ii) the exercise of the Common Stock Equivalent resulting
in the issuance of the Option Stock with respect to which the Company desires to
exercise its Call Option or (ii) in the case of Call Option Stock that is not
Option Stock, the termination of Kennedy's employment with the Company, Titan or
Autocam for Cause. Kennedy and any Permitted Kennedy Transferees shall deliver
to the Company certificates representing the shares of Call Option Stock, free
and clear of all claims, liens, or encumbrances, together with blank stock
powers, duly executed with all signature guarantees at a closing at the
principal office of the Company on the tenth day after the Fair Market Value of
the Call Option Stock has been determined, or at such other place and time and
in such manner as may be mutually agreed to by Kennedy and the Company. The
proceeds from the purchase of the Call Option Stock pursuant to the Call Option
shall be paid in immediately available funds by wire transfer, which shall be
delivered to Kennedy and any Permitted Kennedy Transferees at the closing of
such purchase.
(c) If, at any time during the period beginning on the date of the
consummation of the purchase of Call Option Stock which is not Option Stock
pursuant to clause (b) above (or, if all of the Call Option Stock is Option
Stock, the date of the consummation of the first purchase of Option Stock
pursuant to clause (b) above) and ending on the date that is one (1) year
thereafter (the "Additional Payment Period"), a binding agreement is entered
into with respect to an "Exit Event" (as such term is defined in the form of
Nonqualified Stock Option Agreement (Performance-Vesting) of the Company
attached as Exhibit B hereto (the "NQSO") without regard to (i) any
modifications to the NQSO after the date hereof or (ii) any modifications to the
Plan (as defined in the NQSO) after the date hereof with respect to any
cross-references to the Plan contained in the NQSO) or an Exit Event is
consummated, Kennedy and the Permitted Kennedy Transferees shall be entitled to
an additional payment, payable upon consummation of such Exit Event, equal to
the excess, if any, of (1) the consideration that would
17
have been received by Kennedy and the Permitted Kennedy Transferees had they
held the Call Option Stock and participated in the Exit Event over (2) the
amount paid with respect to the Call Option Stock pursuant to the Call Option
(such excess amount, if any, the "Additional Payment"); provided, however, that
if all of the Call Option Stock would not have participated in such Exit Event
(assuming a pro rata participation), for purposes of determining the Additional
Payment with respect to such Exit Event, the amount in clause (2) shall be
proportionately reduced to reflect only the amount paid for that portion of the
Call Option Stock equal to the portion that would have been deemed to have
participated in such Exit Event pursuant to clause (1); provided, further, that,
with respect to any Call Option Stock that is deemed not to have participated in
an Exit Event pursuant to the foregoing proviso (such Call Option Stock, if any,
"Non-Participating Call Option Stock"), Kennedy and the Permitted Kennedy
Transferees shall be entitled to an Additional Payment (if any, as determined in
accordance herewith) in respect of such Non-Participating Call Option Stock in
connection with any subsequent Exit Event as to which a binding agreement is
entered into or is consummated prior to the expiration of the Additional Payment
Period, which Additional Payment(s) shall payable in accordance with the
following sentence. Any Additional Payment shall be paid to Kennedy and the
Permitted Kennedy Transferees by the Company or, if applicable, the surviving
entity (or ultimate parent thereof) of the Exit Event, in immediately available
funds by wire transfer concurrently with the consummation of the Exit Event and
the parties hereto agree that they shall not consummate an Exit Event without
providing for the Additional Payment (if any) to be paid as set forth herein;
provided, however, that, subject to the following sentence, in the event that
the Company is to make an Additional Payment, that portion of the Additional
Payment attributable to Option Stock which may not be purchased by the Company
upon the proposed consummation of the Exit Event as a result of the provisions
of Section 8(e) shall not be required to be paid concurrently with the
consummation of the Exit Event but instead shall be paid at such time as the
Company otherwise consummates the purchase of such Option Stock in accordance
with this Section 8. Anything to the contrary contained in this Agreement
notwithstanding, if Kennedy or any Permitted Kennedy Transferee, respectively,
holds any Option Stock at the time of consummation of an Exit Event (as a result
of the provisions of Section 8(e)) and (x) Kennedy or any Permitted Kennedy
Transferee, respectively, is entitled to participate in such Exit Event with
respect to such Option Stock pursuant to the terms of such Exit Event and (y)
the participation of Kennedy or any Permitted Kennedy Transferee, respectively,
in such Exit Event with respect to such Option Stock would not otherwise
conflict with the terms of this Agreement, then in such event, Kennedy or any
Permitted Kennedy Transferee, respectively, shall not be entitled to the portion
of the Additional Payment that would have been paid in respect of such Option
Stock.
(d) If at any time Kennedy shall cease to be employed by the Company
or any Subsidiary other than as a result of a termination for Cause, the
Company, the GSCP Parties and the TRP Parties shall use their respective
reasonable best efforts, for the period beginning on the date of the occurrence
of the event giving rise to such termination of employment and ending one
hundred and eighty (180) days thereafter, to assist Kennedy and any Permitted
Kennedy Transferees in finding a purchaser for their Stock (to the extent such
Stock is permitted to be Transferred pursuant to this Agreement or any other
agreement then in effect); provided, however, that that the tag-along rights
pursuant to Section 6 shall not apply to any Transfer pursuant to this Section
8(d).
18
(e) Notwithstanding any other provision of this Section 8, a Call
Option may not be exercised with respect to any Option Stock prior to the six
month anniversary of the exercise of the Common Stock Equivalent resulting in
the issuance of such Option Stock subject to the Call Option.
Section 9. Equal and Ratable Treatment of Stockholders.
Subject to the terms of this Agreement, all Stockholders shall be
treated equally and shall be entitled to participate on a pro rata basis in
connection with any transactions or series of related transactions involving the
Company in which any Stockholder(s) are contemplated to participate, including
without limitation any Issuances (in accordance with Section 10), mergers,
recapitalizations, liquidations or other liquidity events.
Section 10. Pre-Emptive Rights.
The Company shall not Issue any of its capital stock other than
Excluded Securities (such capital stock other than Excluded Securities, "New
Securities"), except in accordance with the following procedures:
(a) The Company shall not Issue any New Securities unless the
Company shall have first given written notice (the "Section 10 Offer Notice") to
each Stockholder (each a "Preemptive Stockholder") which shall (a) state the
Company's intention to Issue the New Securities, the amount to be Issued, the
terms of such New Securities, the purchase price therefor and a summary of the
other material terms and conditions of the proposed Issuance and (b) offer (a
"Preemptive Offer") to Issue to each Preemptive Stockholder up to such
Preemptive Stockholder's Pro Rata Share (as defined below) of such New
Securities (with respect to each Preemptive Stockholder, the "Offered New
Securities") upon the terms and conditions set forth in the Section 10 Offer
Notice, which Preemptive Offer by its terms shall remain open for a period of
forty-five (45) days from the date it is delivered by the Company to the
Preemptive Stockholder (the "Preemptive Offer Period") (and, to the extent the
Preemptive Offer is accepted during such period, shall remain open until the
closing of the Issuance contemplated by the Preemptive Offer). "Pro Rata Share"
means the quotient obtained by dividing (i) the number of shares of Stock owned
by such Preemptive Stockholder on the date of the Preemptive Offer by (ii) the
aggregate number of shares of Stock issued and outstanding and held by
Preemptive Stockholders on the date of the Preemptive Offer.
(b) Notice of a Preemptive Stockholder's acceptance of a Preemptive
Offer, in whole or in part, shall be evidenced by a writing signed by the
Preemptive Stockholder and delivered to the Company prior to the end of the
Preemptive Offer Period (each, a "Section 10 Notice of Acceptance"), setting
forth such portion of the Offered New Securities that the Preemptive Stockholder
elects to purchase.
(c) (i) In the event that Section 10 Notices of Acceptance are not
given by Preemptive Stockholders accepting all the Offered New Securities, the
Company shall have forty-five (45) days following the expiration of the
Preemptive Offer Period (or, if longer, five (5) days following the expiration
or termination of all waiting periods under Regulatory Laws, so
19
long as an agreement with respect to such Issuance is entered into within such
forty-five (45) day period) to Issue all or any part of such remaining Offered
New Securities not covered by the Section 10 Notices of Acceptance (the
"Remaining New Securities") to any other Person or Persons, but only upon terms
and conditions, including, without limitation, unit price and interest rates,
which are no more favorable, in the aggregate, to such other Person or Persons
or less favorable to the Company than those set forth in the Preemptive Offer.
(ii) If the Company does not consummate the Issuance of all or part
of the Remaining New Securities to such other Person or Persons within the
forty-five (45) day period referred to in clause (c)(i) above, the preemptive
right provided hereunder shall be deemed to be revived and such Remaining New
Securities shall not be subsequently offered for Issuance unless first reoffered
to the Preemptive Stockholders in accordance with this Section 10.
(iii) Upon the closing of the Issuance to such other Person or
Persons of all or part of the Remaining New Securities, each Preemptive
Stockholder shall purchase from the Company, and the Company shall Issue to such
Preemptive Stockholder, the Offered New Securities covered by the Section 10
Notice of Acceptance delivered to the Company by such Preemptive Stockholder on
the terms specified in the Preemptive Offer. The delivery of certificates or
other instruments evidencing such Offered New Securities shall be made on such
date by the Company against payment of the purchase price therefor.
(d) The Company will give any notices to third parties and will use its
reasonable best efforts to obtain any necessary regulatory approvals and third
party consents with respect to any Issuances of Offered New Securities
(including, for this purposes of this Section 10(d), Excluded Securities). The
Company will not take any action that will prevent, delay or hinder in any
material respect the procurement of the necessary regulatory approvals or third
party consents. The Company will give any notices to, make any filings with, and
use its reasonable best efforts to obtain any authorizations, consents, and
approvals of any governmental entity in connection with the necessary regulatory
approval matters so as to permit the Issuance of such Offered Securities as
promptly as practicable.
(e) The Company shall not Issue any New Securities to any Person
unless, in connection with and as a condition to such Issuance, each purchaser
or recipient of such capital stock who is not then a party to this Agreement
executes and delivers to the Company (which the Company shall then deliver to
all Stockholders) an agreement pursuant to which it agrees to be bound by the
terms of this Agreement and such Person shall thereafter be deemed a Stockholder
hereunder.
Section 11. Equity Issuances. The Company shall not Issue any of its
capital stock (other than capital stock issued upon the exercise of Plan
Options, it being understood and agreed that each holder thereof shall execute a
separate Employee Stockholder's Agreement with the Company as in effect at the
time) to any Person unless, in connection with and as a condition to such
Issuance, each purchaser or recipient of such capital stock who is not then a
party to this Agreement executes and delivers to the Company (which the Company
shall then deliver to all Stockholders) an agreement pursuant to which it agrees
to be bound by the terms of this Agreement.
20
Section 12. Legend. Each Stockholder and the Company shall take all
such action necessary (including exchanging with the Company certificates
representing shares of Stock issued prior to the date hereof) to cause each
certificate representing outstanding shares of Stock owned by a Stockholder to
bear a legend containing the following words:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED,
SOLD, PLEDGED, EXCHANGED, TRANSFERRED OR OTHERWISE DISPOSED OF
EXCEPT IN COMPLIANCE WITH SUCH ACT."
"IN ADDITION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO THE RESTRICTIONS ON TRANSFER AND VOTING SET FORTH IN THE
STOCKHOLDERS' AGREEMENT DATED AS OF JUNE 21, 2004 BY THE COMPANY AND
THE PARTIES THERETO, A COPY OF WHICH IS ON FILE IN THE OFFICE OF THE
COMPANY."
The requirement that the above securities legend be placed upon
certificates evidencing shares of Stock shall cease and terminate upon the
earliest of the following events: (i) when such shares are transferred in a
public offering, (ii) when such shares are transferred pursuant to Rule 144, as
such Rule may be amended (or any successor provision thereto), under the
Securities Act or (iii) when such shares are transferred in any other
transaction if the seller delivers to the Company an opinion of its or his
counsel, which counsel and opinion shall be reasonably satisfactory to the
Company, or a "no-action" letter from the staff of the Securities and Exchange
Commission, in either case to the effect that such legend is no longer necessary
in order to protect the Company against a violation by it of the Securities Act
upon any sale or other disposition of such shares without registration
thereunder. Upon the consummation of any event requiring the removal of a legend
hereunder, the Company, upon the surrender of certificates containing such
legend, shall, at its own expense, deliver to the holder of any such shares as
to which the requirement for such legend shall have terminated, one or more new
certificates evidencing such shares not bearing such legend.
Section 13. Representations and Warranties; Acknowledgements.
(a) Each party hereto represents and warrants to the other parties hereto
as follows:
(i) It or he has full power and authority to execute, deliver and
perform its or his obligations under this Agreement.
(ii) This Agreement has been duly and validly authorized, executed
and delivered by it or him, and constitutes a valid and binding obligation
of it or him, enforceable against it or him in accordance with its terms
except to the extent that enforceability may be limited by bankruptcy,
insolvency or other similar laws
21
affecting creditors' rights generally (whether considered in a proceeding
in equity or at law).
(iii) The execution, delivery and performance of this Agreement by
it or him does not (x) violate, conflict with, or constitute a breach of
or default under its organizational documents, if any, or any material
agreement to which it or he is a party or by which it or he is bound or
(y) violate any law, regulation, order, writ, judgment, injunction or
decree applicable to it or him.
(iv) No consent or approval of, or filing with, any governmental or
regulatory body is required to be obtained or made by it or him in
connection with the execution and delivery hereof.
(v) It or he is not a party to any agreement or other arrangement of
any kind with another Stockholder or any other Person which is
inconsistent with or has the effect of altering the terms of this
Agreement or which may impair its or his ability to comply with this
Agreement except for such agreements or arrangements to which all
Stockholders either: (1) are a party or (2) have consented to in writing.
(b) The parties hereto acknowledge and agree that any Stockholder or any
of its Affiliates may directly or indirectly acquire, own, hold, dispose and/or
make a market in any securities issued by, or debt obligations of, the Company
or any of its Affiliates, including, without limitation, Autocam's 10.875%
Senior Subordinated Notes due June 15, 2014 and obligations under the Credit and
Guaranty Agreement, dated as of June 21, 2004, among Titan, Autocam, certain
Autocam subsidiaries and the lenders thereunder.
Section 14. Duration of Agreement. Except as otherwise provided in
Section 3.6(b), (i) the rights and obligations of a Stockholder under this
Agreement shall terminate at such time as such Stockholder no longer owns any
shares of Stock, and (ii) this Agreement shall terminate and be of no further
force or effect in its entirety immediately prior to a Qualified IPO.
Section 15. Further Assurances. At any time or from time to time
after the date hereof, the parties agree to cooperate with each other, and at
the request of any other party, to execute and deliver any further instruments
or documents and to take all such further action as the other party may
reasonably request in order to evidence or effectuate the consummation of the
transactions contemplated hereby and to otherwise carry out the intent of the
parties hereunder.
Section 16. Amendment and Waiver. Except as otherwise provided
herein, no modification, amendment or waiver of any provision of this Agreement
shall be effective unless such modification, amendment or waiver is approved in
writing by Stockholders holding a majority of the then outstanding Common Stock;
provided, that, notwithstanding the foregoing, any modification, amendment or
waiver of any provision of this Agreement that adversely effects any Stockholder
shall not be effective against such Stockholder without such Stockholders'
written approval. The failure of any party to enforce any of the provisions of
this Agreement
22
shall in no way be construed as a waiver of such provisions and shall not affect
the right of such party thereafter to enforce each and every provision of this
Agreement in accordance with its terms.
Section 17. Entire Agreement. This Agreement and the other writings
referred to herein or delivered pursuant hereto which form a part hereof contain
the entire agreement and understanding among the parties hereto with respect to
the subject matter hereof and supersedes and preempts any prior understandings,
agreements or representations by or among the parties, written or oral, which
may have related to the subject matter hereof in any way, including without
limitation the term sheet relating to this Agreement agreed to by the parties in
connection with the execution of the Merger Agreement.
Section 18. Successors and Assigns. Except as otherwise provided
herein, this Agreement shall bind and inure to the benefit of and be enforceable
by the Company and its successors and assigns and each Stockholder and their
respective successors, assigns, heirs and personal representatives, so long as
they hold Stock. Each Stockholder shall have the right to assign all or part of
its or his rights and obligations under this Agreement only to a transferee
pursuant to a Transfer of Stock in compliance with Section 4 (including, without
limitation, Section 4(c)). Upon any such assignment, such assignee shall have
and be able to exercise and enforce all rights of the assigning Stockholder
which are assigned to it and, to the extent such rights are assigned, any
reference to the assigning Stockholder shall be treated as a reference to the
assignee.
Section 19. Severability. Whenever 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 of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
Section 20. Remedies. Each Stockholder shall be entitled to enforce
its or his rights under this Agreement specifically, to recover damages by
reason of any breach of any provision of this Agreement and to exercise all
other rights existing in its or his favor. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that each party may in its or his sole
discretion apply to any court of law or equity of competent jurisdiction for
specific performance and/or injunctive relief (without posting a bond or other
security) in order to enforce or prevent any violation of the provisions of this
Agreement. All remedies, either under this Agreement, by law, or otherwise
afforded to any party, shall be cumulative and not alternative.
Section 21. Notices. Any notice provided for in this Agreement shall
be in writing and shall be either personally delivered, or mailed first class
mail (postage prepaid) or sent by reputable overnight courier service (charges
prepaid) to the Company at the address set forth below (with a copy to each of
GSCP 2000 and TRP at the addresses indicated on Schedule 21) and to any other
Initial Stockholder at the address indicated on Schedule 21 hereto and to any
23
subsequent holder of Stock subject to this Agreement at such address as
indicated by the Company's records, or at such address or to the attention of
such other person as the recipient party has specified by prior written notice
to the sending party. Notices will be deemed to have been given hereunder when
received. The Company's address is:
Micron Holdings, Inc.
c/o Transportation Resource Partners, LP
2555 Telegraph Road
Bloomfield Hills, MI 48302
Attention: Rich Peters and Dave Mitchell
Fax: (248) 648-2105
with a copy to:
GS Capital Partners 2000, L.P.
85 Broad Street, 10th Floor
New York, New York 10004
Attn: Adrian Jones and Jack Daly
Fax: (212) 357-5505
and:
Fried, Frank, Harris, Shriver & Jacobson LLP
One New York Plaza
New York, New York 10004
Attn: Robert C. Schwenkel, Esq.
Fax: (212) 859-4000
and:
Mr. John C. Kennedy
Autocam Corporation
4070 East Paris Avenue Southeast
Grand Rapids, MI 49512
Fax: (616) 698-6876
and:
Skadden, Arps, Slate, Meagher & Flom LLP
333 W. Wacker Dr.
Chicago, IL 60606
Attn: L. Byron Vance III
Fax: (312) 407-0411
24
Section 22. Governing Law; Waiver of Jury Trial. This Agreement
shall be governed by and construed and enforced in accordance with the laws of
the State of Delaware, without reference to the conflict of laws principles
thereof. Each of the parties irrevocably and unconditionally waives, to the
fullest extent permitted by applicable law, any and all rights to trial by jury
in connection with any Litigation arising out of or relating to this Agreement
or the transactions contemplated hereby.
Section 23. Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
Section 24. Construction. Where specific language is used to clarify
by example a general statement contained herein, such specific language shall
not be deemed to modify, limit or restrict in any manner the construction of the
general statement to which it relates. The language used in this Agreement shall
be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied against any
party.
Section 25. Survival of Representations and Warrants. All
representations and warranties contained in this Agreement or made in writing by
any party in connection herewith shall survive the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby
regardless of any investigation made by, or on behalf of, any Stockholder.
Section 26. No Inconsistent Agreements. No Stockholder shall enter
into any agreement or other arrangement of any kind with another Stockholder or
any other Person which is inconsistent with or has the effect of altering the
terms of this Agreement or which may impair its ability to comply with this
Agreement unless all Stockholders are a party to such agreement or consent in
writing to such agreement.
Section 27. Counterparts. This Agreement may be executed in separate
counterparts each of which shall be an original and all of which taken together
shall constitute one and the same agreement.
25
IN WITNESS WHEREOF, the parties hereto have executed this
Stockholders' Agreement as of the day and year first above written.
MICRON HOLDINGS, INC.
By: /s/ Jack Daly
------------------------------------------
Name: Jack Daly
Title: Vice President
/s/ John C. Kennedy
----------------------------------------------
JOHN C. KENNEDY
GS CAPITAL PARTNERS 2000, L.P.
By: GS Advisors 2000, L.L.C., its general partner
By: /s/ Adrian Jones
------------------------------------------
Name: Adrian Jones
Title: Managing Director
GS CAPITAL PARTNERS 2000 OFFSHORE, L.P.
By: GS Advisors 2000, L.L.C., its general partner
By: /s/ Adrian Jones
------------------------------------------
Name: Adrian Jones
Title: Managing Director
GS CAPITAL PARTNERS 2000 GmbH & Co.
BETEILIGUNGS KG
By: Goldman, Sachs Management GP GmbH, its general partner
By: /s/ Adrian Jones
------------------------------------------
Name: Adrian Jones
Title: Managing Director
26
GS CAPITAL PARTNERS 2000 EMPLOYEE
FUND, L.P.
By: GS Employee Funds 2000 GP, L.L.C., its general partner
By: /s/ Adrian Jones
------------------------------------------
Name: Adrian Jones
Title: Managing Director
GOLDMAN SACHS DIRECT INVESTMENT
FUND 2000, L.P.
By: GS Employee Funds 2000 GP, L.L.C., its
general partner
By: /s/ Adrian Jones
------------------------------------------
Name: Adrian Jones
Title: Managing Director
TRANSPORTATION RESOURCE PARTNERS, LP
By: Transportation Resource Management, L.L.C., its
general partner
By: /s/ James Hislop
------------------------------------------
Name: James Hislop
Title: Managing Director
TRP AUTOCAM HOLDINGS I, L.L.C.
By: Transportation Resource Management, L.L.C., its
managing member
By: /s/ James Hislop
------------------------------------------
Name: James Hislop
Title: Managing Director
27
TRP AUTOCAM HOLDINGS II, L.L.C.
By: Transportation Resource Management, L.L.C., its
managing member
By: /s/ James Hislop
-----------------------------------
Name: James Hislop
Title: Managing Director
28
Schedule 21
if to the Company, to:
Micron Holdings, Inc.
c/o Transportation Resource Partners, LP
2555 Telegraph Road
Bloomfield Hills, MI 48302
Attn: Rich Peters and Dave Mitchell
Fax: (248) 648-2105
with a copy to:
GS Capital Partners 2000, L.P.
85 Broad Street
New York, New York 10004
Attn: Adrian Jones and Jack Daly
Fax: (212) 357-5505
and:
Fried, Frank, Harris, Shriver & Jacobson LLP
One New York Plaza
New York, New York 10004
Attn: Robert C. Schwenkel, Esq.
Fax: (212) 859-4000
if to the Initial Stockholders listed below, to:
GS Capital Partners 2000, L.P.
GS Capital Partners 2000 Offshore, L.P.
GS Capital Partners 2000 GmbH & Co. Beteiligungs KG
GS Capital Partners 2000 Employee Fund, L.P.
Goldman Sachs Direct Investment Fund 2000, L.P.
85 Broad Street
New York, New York 10004
Attn: Adrian Jones and Jack Daly
Fax: (212) 357-5505
With a copy to:
Fried, Frank, Harris, Shriver & Jacobson LLP
One New York Plaza
New York, New York 10004
Attn: Robert C. Schwenkel, Esq.
-1-
Fax: (212) 859-4000
if to the Initial Stockholders listed below, to:
Transportation Resource Partners, LP
TRP Autocam Holdings I, L.L.C.
TRP Autocam Holdings II, L.L.C.
2555 Telegraph Road
Bloomfield Hills, MI 48302
Attn: Rich Peters and Dave Mitchell
Fax: (248) 648-2105
With a copy to:
Fried, Frank, Harris, Shriver & Jacobson LLP
One New York Plaza
New York, New York 10004
Attn: Robert C. Schwenkel, Esq.
Fax: (212) 859-4000
if to Kennedy, to:
Mr. John C. Kennedy
Autocam Corporation
4070 East Paris Avenue Southeast
Grand Rapids, MI 49512
Fax No.: (616) 698-6876
With a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
333 W. Wacker Dr.
Chicago, IL 60606
Attn: L. Byron Vance III
Fax: (312) 407-0411
2
Exhibit A
[Form of Registration Rights Agreement]
-1-
Exhibit B
NONQUALIFIED STOCK OPTION AGREEMENT
(Performance-Vesting)
THIS AGREEMENT (the "Agreement"), is made effective as of the ___ day of
May, 2004 (the "Date of Grant"), between Micron Holdings, Inc., a Delaware
corporation (the "Company"), and _____________ (the "Participant"):
R E C I T A L S:
WHEREAS, the Company has adopted the Micron Holdings, Inc. 2004 Stock
Option Plan (the "Plan"), which Plan is incorporated herein by reference and
made a part of this Agreement. Capitalized terms not otherwise defined herein
shall have the meanings given thereto in the Plan; and
WHEREAS, the Committee has determined that it would be in the best
interests of the Company and its shareholders to grant the Option to the
Participant pursuant to the Plan and the terms set forth herein.
NOW THEREFORE, in consideration of the mutual covenants hereinafter set
forth, the parties agree as follows:
Grant of the Option. The Company hereby grants to the Participant the
right and option (the "Option") to purchase, on the terms and conditions
hereinafter set forth, all or any part of an aggregate of __________ Shares,
subject to adjustment as set forth in the Plan. The purchase price of the Shares
subject to the Option shall be $_____ per Share (the "Option Price").
Vesting.
Subject to the earlier termination or cancellation of the Option as
set forth herein, the Option shall vest and become exercisable upon the earliest
to occur of (i) a Transaction, (ii) a Qualified IPO in which the TRP Parties and
the GSCP Parties (as each of these capitalized terms is defined in the
Stockholders' Agreement) participate (either concurrently or as a secondary
sale), (iii) a sale by the TRP Parties and the GSCP Parties of at least 50% of
the Shares held by them in the aggregate or (iv) a recapitalization of the
Company (each of (i), (ii), (iii) or (iv), an "Exit Event"), but, in the case of
any such Exit Event, only if such action achieves at least a 20% IRR (calculated
in accordance with Exhibit A) to the TRP Parties and the GSCP Parties Amount on
a fully diluted basis. If an Exit Event occurs that does not result achieve a
20% IRR to the TRP Parties and the GSCP Parties Amount on a fully diluted basis,
the Option shall, immediately prior to such Exit Event, be automatically
cancelled without payment of consideration therefor.
If the Participant's Employment is terminated by the Company for
Cause, as defined in Section 3(b) below, the Option shall, whether or not
vested, be automatically canceled without payment of consideration therefor.
If the Participant's Employment with the Company terminates for any
reason other than Cause, the Option shall be canceled by the Company without
payment of consideration therefor.
-1-
Exercise of Option.
Period of Exercise. Subject to the provisions of the Plan and this
Agreement, the Participant may exercise the Option, to the extent then vested,
at any time prior to the earliest to occur of:
the tenth anniversary of the Date of Grant;
one year following the date of the Participant's termination
of Employment due to death or Disability; and
90 days following the date of the Participant's termination of
Employment by the Company without Cause (other than due to Disability) or due to
the Participant's resignation for any reason (including normal or early
retirement).
Definitions. For purposes of this Agreement:
"Cause" shall mean (A) the Participant's continued failure to
perform the Participant's duties (other than as a result of the Participant's
Disability or permitted leave of absence) for a period of 10 days following
written notice by the Company to the Participant of such failure, (B) material
dishonesty in the performance of the Participant's duties, (C) the Participant's
conviction of, or plea of nolo contendere to, (x) a felony (other than a traffic
violation) or (y) any crime (whether or not a felony) involving dishonesty,
fraud, embezzlement or breach of trust, (D) the Participant's willful act or
omission which is injurious to the financial condition or business reputation of
the Company or its Affiliates or (E) the Participant's material breach of any
employment agreement with the Company to which the Participant is a party or any
noncompetition, confidentiality or intellectual property agreements or covenants
relating to the Company or its Affiliates to which the Participant is a party or
by which the Participant is otherwise bound; and
"Disability" shall mean (i) the Participant's "disability" as
determined under the long-term disability plan in which the Participant
participates, or (ii) if there is no such plan, the Participant's physical or
mental incapacitation that makes the Participant unable, for a period of six
months in any twelve-month period, to perform the Participant's duties.
Method of Exercise.
Subject to Section 3(a), the Option may be exercised by
delivering to the Company at its principal office written notice of intent so to
exercise; provided that the Option may be exercised with respect to whole Shares
only. Such notice shall specify the number of Shares for which the Option is
being exercised (the "Purchased Shares") and shall be accompanied by payment in
full of the Option Price in cash or by check or wire transfer, provided,
however, that with the consent of the Committee, payment of such aggregate
exercise price may instead be made, in whole or in part, by (i) the delivery to
the Company of a certificate or certificates representing Shares, duly endorsed
or accompanied by a duly executed stock power, which delivery effectively
transfers to the Company good and valid title to such shares, free and clear of
any pledge, commitment, lien, claim or other encumbrance (such shares to be
valued on the basis of the aggregate Fair Market Value thereof on the date of
such exercise), or (ii) by a reduction in the number of Purchased Shares to be
issued upon such exercise having a Fair Market Value on the date of exercise
equal to the aggregate exercise price in respect of the
2
Purchased Shares, provided that the Company is not then prohibited from
purchasing or acquiring such Shares. The Participant shall not have any rights
to dividends or other rights of a stockholder with respect to Shares subject to
the Option until the Participant has given written notice of exercise of the
Option, paid in full for such Shares and, if applicable, has satisfied any other
conditions imposed by the Committee or pursuant to the Plan or this Agreement.
Notwithstanding any other provision of the Plan or this
Agreement to the contrary, the Option may not be exercised prior to the
completion of any registration or qualification of the Option or the Shares
under applicable state and federal securities or other laws, or under any ruling
or regulation of any governmental body or national securities exchange that the
Committee shall in its sole discretion determine to be necessary or advisable,
unless an exemption to such registration or qualification is available and
satisfied.
Upon the Company's determination that the Option has been
validly exercised as to any of the Shares, the Company shall issue certificates
in the Participant's name for such Shares.
In the event of the Participant's death, the Option shall, if
then vested, remain exercisable by the Participant's executor or administrator,
or the person or persons to whom the Participant's rights under this Agreement
shall pass by will or by the laws of descent and distribution as the case may
be, to the extent set forth in Section 3(a) (and the term "Participant" shall be
deemed to include such heir or legatee). Any such heir or legatee of the
Participant shall take rights herein granted subject to the terms and conditions
hereof.
In consideration of the grant of this Option, the Participant
agrees that, as a condition to the exercise of any option to purchase Shares
(whether this Option or any other option), the Participant shall, with respect
to such Shares, become a party to a stockholders' agreement in the form then
being used by the Company.
No Right to Continued Employment; No Claims to Compensation.
The granting of the Option evidenced hereby and this Agreement shall
impose no obligation on the Company or any Affiliate to continue the Employment
of the Participant and shall not lessen or affect the Company's or its
Affiliates' right to terminate the Employment of such Participant.
In consideration of the grant of the Option, the Participant
acknowledges and agrees that the Participant has no claims relating to periods
prior to the Date of Grant against the Company or any of its subsidiaries or
Affiliates (or the predecessors of any of the foregoing) for unpaid cash
compensation, other than (i) payment of unpaid base salary earned since the most
recently ended payroll date and (ii) reimbursement of unreimbursed business
expenses, any and all such claims (other than those contemplated by clause (i)
or (ii)) being hereby waived.
Legend on Certificates. The certificates representing the Shares purchased
by exercise of the Option shall be subject to such stop transfer orders and
other restrictions as the Committee may deem advisable under the Plan or the
rules, regulations, and other requirements of the Securities and Exchange
Commission, any stock exchange upon which such Shares are listed, and any
applicable Federal or state laws, and the Committee may cause a legend or
legends to be put on any such certificates to make appropriate reference to such
restrictions.
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Transferability. The Option may not be assigned, alienated, pledged,
attached, sold or otherwise transferred or encumbered by the Participant
otherwise than by will or by the laws of descent and distribution, and any such
purported assignment, alienation, pledge, attachment, sale, transfer or
encumbrance shall be void and unenforceable against the Company or any
Affiliate; provided that the designation of a beneficiary shall not constitute
an assignment, alienation, pledge, attachment, sale, transfer or encumbrance. No
such permitted transfer of the Option to heirs or legatees of the Participant
shall be effective to bind the Company unless the Committee shall have been
furnished with written notice thereof and a copy of such evidence as the
Committee may deem necessary to establish the validity of the transfer and the
acceptance by the transferee or transferees of the terms and conditions hereof.
During the Participant's lifetime, the Option is exercisable only by the
Participant.
Withholding. The Participant shall be required to pay to the Company or
any Affiliate, and the Company shall have the right and is hereby authorized to
withhold, any applicable withholding taxes in respect of the Option, its
exercise or any payment or transfer under, or with respect to, the Option and to
take such other action as may be necessary in the opinion of the Committee to
satisfy all obligations for the payment of such withholding taxes.
Securities Laws. Upon the acquisition of any Shares pursuant to the
exercise of the Option, the Participant will make or enter into such written
representations, warranties and agreements as the Committee may reasonably
request in order to comply with applicable securities laws or with this
Agreement.
Notices. Any notice necessary under this Agreement shall be addressed to
the Company in care of its Secretary at the principal executive office of the
Company and to the Participant at the address appearing in the personnel records
of the Company for the Participant or to either party hereto at such other
address as either party may hereafter designate in writing to the other. Any
such notice shall be deemed effective upon receipt thereof by the addressee.
Choice of Law. This agreement shall be governed by and construed in
accordance with the laws of the state of Delaware without regard to principles
of conflicts of laws.
Option Subject to Plan. By entering into this Agreement, the Participant
agrees and acknowledges that the Participant has received and read a copy of the
Plan. The Option is subject to the Plan. The terms and provisions of the Plan,
as it may be amended from time to time, are hereby incorporated herein by
reference. In the event of a conflict between any term or provision contained
herein and a term or provision of the Plan, the applicable terms and provisions
of the Plan will govern and prevail.
Signature in Counterparts. This Agreement may be signed in counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
effective as of the Date of Grant.
MICRON HOLDINGS, INC.
By:______________________________
Name:
Title:
Agreed and acknowledged as
of the date first above written:
___________________________________
Participant's Name
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Exhibit A
In connection with an Exit Event, the Committee shall perform the following
calculations:
Step 1) The Committee shall determine (i) the aggregate
proceeds, including any cash, securities, partnership or limited liability
company interests or other rights or property, that the TRP Parties and the GSCP
Parties will receive in respect of their investment in the Company as a result
of the transaction or transactions resulting in the Exit Event and (ii) the
value of the remaining portion of their investment in the Company not disposed
of in the transaction or transactions resulting in the Exit Event, implied by
the value of the actual proceeds received as a result of the transaction or
transactions resulting in the Exit Event (and treating such remaining portion as
proceeds), in each case net of (a) any fees, costs or expenses incurred or paid
by them and (b) any other payments required to be made by them, in each case in
connection with the Exit Event (the "Net Transaction Proceeds").
Step 2) The Committee shall also determine the sum of all
other proceeds (excluding any Net Transaction Proceeds) received by the TRP
Parties and the GSCP Parties in respect of their investment in the Company, net
of (a) any fees, costs or expenses incurred or paid by them and (b) any other
payments made by them, in each case on or prior to the occurrence of the Exit
Event in connection with the receipt of those proceeds (the "Net Historical
Proceeds" and together with the Net Transaction Proceeds, the "Net Proceeds").
Step 3) The Committee shall then determine whether the amount
by which the Net Proceeds in excess of the aggregate capital contributions made
by the TRP Parties and the GSCP Parties to the Company on or prior to the Exit
Event achieved an IRR (as of the consummation of the Exit Event) of at least 20%
with respect to the investment in the Company by each of them (a "20% IRR").
The amount of "proceeds" received by the TRP Parties and the GSCP Parties shall
be (a) in the case of cash received by them, the amount of such cash and (b) in
the case of securities, partnership or limited liability company interests or
other rights or property ("non-cash proceeds"), the fair market value of such
non-cash proceeds as determined by the Committee.
In the event that one or more of the TRP Parties or the GSCP Parties transfers
its or their interests prior to the occurrence of an Exit Event, the above
calculations shall be calculated assuming it or they had not transferred such
interests, had received all distributions and had made all contributions, in
each case applicable to such interests subsequent to such transfer.
For purposes of this Exhibit A, "IRR" shall mean, with respect to an investment,
the discount rate at which the net present value of all capital in-flows
relating to such investment is equal to the net present value of all cash
out-flows (whether from operating cash flow or capital transaction proceeds)
from such investment. The TRP Parties and the GSCP Parties shall be deemed to
have received a specified IRR in connection with an Exit Event with respect to
capital contributions to the Company if, in connection with or prior to the Exit
Event, they receive a return of all of such capital contributions made by them
plus a cumulative return on such capital contributions at the specified rate per
annum, compounded monthly, calculated commencing on
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the date on which such capital contributions are made and compounded monthly to
the extent not paid on a current basis, taking into account the timing and
amounts of all previous distributions made by the Company to them and the timing
and amounts of all previous capital contributions made to the Company by them.
In the event of an Exit Event that does not result in the disposition by the TRP
Parties and the GSCP Parties of all of the interests in the Company held by
them, IRR shall be determined on a hypothetical basis as if such a disposition
had occurred, as described in Step 1. Any cash funding of the Company by the TRP
Parties and the GSCP Parties, regardless of form (equity, debt or otherwise),
shall be taken into account for purposes of calculating IRR.
All determinations by the Committee hereunder shall be determined in good faith.
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