EXHIBIT 10.1
VISTEON CORPORATION
WARRANT FOR THE PURCHASE OF SHARES OF
COMMON STOCK OF VISTEON CORPORATION
NO. 1 WARRANT TO PURCHASE
25,000,000 SHARES
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED OR SOLD OR
OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE THEREWITH. THIS SECURITY IS ALSO
SUBJECT TO RESTRICTIONS ON TRANSFER AS SET FORTH HEREIN AND IN THE
STOCKHOLDER AGREEMENT (AS HEREIN DEFINED), COPIES OF WHICH MAY BE OBTAINED
UPON REQUEST FROM THE COMPANY.
FOR VALUE RECEIVED, VISTEON CORPORATION, a Delaware corporation (the
"COMPANY"), hereby certifies that FORD MOTOR COMPANY, a Delaware Corporation
("FORD" and together with its successors and permitted assigns, the "HOLDER"),
is entitled, subject to the provisions of this Warrant and the Stockholder
Agreement (as hereinafter defined), to purchase from the Company, at the times
specified herein, twenty-five million fully paid and non-assessable shares of
Common Stock of the Company, par value $1.00 per share (the "COMMON STOCK"), at
a purchase price per share equal to the Exercise Price (as hereinafter defined).
The number of shares of Common Stock to be received upon the exercise of this
Warrant and the price to be paid for a share of Common Stock are subject to
adjustment from time to time as hereinafter set forth.
1. Definitions. (a) The following terms, as used herein, have the following
meanings:
"AFFILIATE" means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with such other
Person. For the purpose of this definition, the term "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as used with respect to any Person, means having the right to
elect a majority of the board of directors or other comparable body responsible
for management and direction of a Person, or otherwise having, directly or
indirectly, the power to direct or cause the direction of the management and
policies of such Person, by contract or by virtue of share ownership.
"AGGREGATE EXERCISE PRICE" shall have the meaning set forth in paragraph
9(a)(ii).
"BOARD OF DIRECTORS" means the Board of Directors of the Company.
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"BUSINESS DAY" means a day, other than Saturday, Sunday or other day on
which commercial banks in Detroit, Michigan are authorized or required by law to
close.
"CHANGE OF CONTROL" means (i) a liquidation or dissolution of the Company;
(ii) the sale, lease, transfer, conveyance or other disposition, in one or a
series of related transactions, of all or substantially all of the assets of the
Company and its Subsidiaries, taken as a whole; (iii) a merger, consolidation,
share exchange, business combination or similar extraordinary transaction as a
result of which the persons possessing, immediately prior to the consummation of
such transaction, beneficial ownership of the voting securities of the Company
entitled to vote generally in elections of directors of the Company, cease to
possess, immediately after consummation of such transaction, beneficial
ownership of voting securities entitling them to exercise at least 50% of the
total voting power of all outstanding securities entitled to vote generally in
elections of directors of the Company (or, if not the Company, the surviving
entity resulting from such transaction, or its parent); or (iv) a transaction or
series of transactions (including by way of merger, consolidation, sale of stock
or otherwise) the result of which is that any Person or "group" (as defined in
Section 13 of the 1934 Act) becomes the "beneficial owner" (as such term is
defined in Rule 13d-3 and Rule 13d-5 promulgated under the 1934 Act), directly
or indirectly, of more than 50% of the voting power of the outstanding voting
stock of the Company entitled to vote generally in elections of directors of the
Company.
"CONSTITUENT PERSON" shall have the meaning set forth in paragraph 10.
"CURRENT MARKET PRICE PER COMMON SHARE" shall have the meaning set forth in
paragraph 6.
"DAILY PRICE" shall have the meaning set forth in paragraph 6.
"EXCLUDED TRANSACTIONS" shall have the meaning set forth in paragraph 9(b).
"EXERCISE PRICE" means $6.90 per Warrant Share, as such Exercise Price may
be adjusted from time to time as provided herein.
"EXPIRATION DATE" means the eighth anniversary of the date of the Closing
at 5:00 p.m. Detroit, Michigan time.
"NON-ELECTING SHARE" shall have the meaning set forth in paragraph 10.
"NYSE" means the New York Stock Exchange.
"PERSON" means an individual, corporation, partnership, limited liability
company, association, trust or other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
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"STOCKHOLDER AGREEMENT" means the Stockholder Agreement dated as of October
1, 2005 between the Company and Ford.
"WARRANT SHARES" means the shares of Common Stock deliverable upon exercise
of this Warrant, as adjusted from time to time.
(b) Capitalized terms used but not defined herein shall have the
meanings assigned to such terms in the Stockholder Agreement.
2. Exercise of Warrant.
(a) The Holder is entitled to exercise this Warrant in whole or in
part at any time, or from time to time, commencing on the earlier of (i) the
first anniversary of the date of the Closing and (ii) the occurrence of a Change
of Control and ending on the Expiration Date or, if any such day is not a
Business Day, then on the next succeeding day that shall be a Business Day. To
exercise this Warrant, the Holder shall execute and deliver to the Company a
Warrant Exercise Notice substantially in the form annexed hereto and, if the
Holder so desires, such Warrant Exercise Notice shall include a written request
by the Holder to exercise this Warrant on a cashless basis pursuant to paragraph
2(e). Promptly, and in any event within five (5) days, after delivery of the
Warrant Exercise Notice, the Company shall notify the Holder in writing (x)
whether it will settle such exercise in cash pursuant to paragraph 2(d)(ii) or
(y) if a request for cashless exercise has been made by the Holder, whether it
will permit the Holder to exercise on a cashless basis pursuant to paragraph
2(e). Subject to paragraph 2(e) below, within ten (10) days after delivery of
the Warrant Exercise Notice, the Holder shall deliver to the Company this
Warrant Certificate, including the Warrant Exercise Subscription Form forming a
part hereof duly executed by the Holder, together with payment of the applicable
Exercise Price (unless the Company shall have elected to settle in cash pursuant
to paragraph 2(d)(ii), in which case the applicable Exercise Price shall be
netted against the cash settlement amount payable by the Company pursuant to
paragraph 2(d)(ii)). At the close of business on the date of such delivery and
payment, the Holder shall be deemed to be the holder of record of the Warrant
Shares subject to such exercise, notwithstanding that the stock transfer books
of the Company shall then be closed or that certificates representing such
Warrant Shares shall not then be actually delivered to the Holder.
(b) The Exercise Price shall be paid by wire transfer of immediately
available funds to a bank account designated by the Company. Any documentary,
stamp or similar issue or transfer taxes payable in respect of the issue or
delivery of the Warrant Shares shall be borne by the party or parties having
responsibility therefor under applicable law, provided that the Company shall
not be required to pay any tax which may be payable in respect of any transfer
involved in the issuance and delivery of the Warrant Shares in a name other than
that of the then Holder of this Warrant; provided further that the parties shall
take reasonable steps to minimize such taxes.
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(c) If the Holder exercises this Warrant in part, this Warrant
Certificate shall be surrendered by the Holder to the Company and a new Warrant
Certificate of the same tenor and for the unexercised number of Warrant Shares
shall be executed by the Company as promptly as reasonably practicable. The
Company shall register the new Warrant Certificate in the name of the Holder or
in such name or names of its transferee pursuant to paragraph 7 hereof as may be
directed in writing by the Holder and deliver the new Warrant Certificate to the
Person or Persons entitled to receive the same as promptly as reasonably
practicable.
(d) Upon surrender of this Warrant Certificate in conformity with the
foregoing provisions, the Company shall, as promptly as reasonably practicable,
either (i) transfer to the Holder of this Warrant Certificate appropriate
evidence of ownership of the shares of Common Stock or other securities or
property (including any money) to which the Holder is entitled, registered or
otherwise placed in, or payable to the order of, the name or names of the Holder
or such transferee as may be directed in writing by the Holder, and shall, as
promptly as reasonably practicable, deliver such evidence of ownership and any
other securities or property (including any money) to the Person or Persons
entitled to receive the same or (ii) if the Company has elected pursuant to
paragraph 2(a) to cash settle, pay an amount in cash equal to (x) such number of
shares of Common Stock to which the Holder is entitled times the Current Market
Price on the Business Day immediately preceding the date on which the Holder
delivered the Warrant Exercise Notice pursuant to paragraph 2(a) minus (y) the
applicable Exercise Price, if any, that would have otherwise been payable by the
Holder, in each case of clauses (i) or (ii) together with an amount in cash in
lieu of any fraction of a share as provided in paragraph 6 below, such amounts
to be paid in cash or by wire transfer of immediately available funds to a bank
account designated by the Holder or by certified or official bank check or bank
cashier's check payable to the order of such Holder or by any combination of
such cash, wire transfer or check.
(e) If, pursuant to paragraph 2(a) the Company permits a cashless
exercise by the Holder, in lieu of making the payment required to exercise the
Warrant pursuant to paragraph 2(a) (but in all other respects in accordance with
the exercise procedure set forth in paragraph 2(a)), the Holder may convert this
Warrant into shares of Common Stock, in which event the Company will issue to
the Holder the number of shares of Common Stock equal to the result obtained
under the following equation:
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(A - B) x C where:
X = -----------
A
X = the number of shares of Common Stock issuable upon exercise
pursuant to this paragraph 2(e);
A = the Current Market Price Per Common Share on the Business Day
immediately preceding the date on which the Holder delivers the
Warrant Exercise Notice pursuant to paragraph 2(a);
B = the Exercise Price; and
C = the number of shares of Common Stock as to which this Warrant is
being exercised pursuant to paragraph 2(a).
If the foregoing calculation results in a negative number, then no shares
of Common Stock shall be issued upon exercise pursuant to this paragraph 2(e).
3. Beneficial Ownership. Notwithstanding anything to the contrary in this
Warrant, in no event shall the Holder be entitled to receive, or shall be deemed
by applicable law to receive, any Warrant Shares if, upon the receipt of such
Warrant Shares, the "beneficial ownership" (within the meaning of Section 13 of
the 1934 Act and the rules and regulations promulgated thereunder) of Common
Stock by the Holder would be equal to or greater than 9.9% of the outstanding
shares of Common Stock. If any delivery owed to the Holder hereunder is not
made, in whole or in part, as a result of this provision, the Company's
obligation to make such delivery shall not be extinguished and the Company shall
make such delivery as promptly as practicable after, but in no event later than
two Business Days after, the Holder gives notice to the Company that such
delivery would not result in the Holder directly or indirectly so beneficially
owning in excess of 9.9% of the outstanding shares of Common Stock. Upon
request, the Company shall advise the Holder of the number of shares of Common
Stock outstanding, in order to permit the Holder to make the calculation
contemplated by this paragraph 3. The Company shall have no responsibility to
monitor the beneficial ownership of Common Stock by the Holder. For the
avoidance of doubt, nothing in this paragraph 3 shall entitle the Holder to
exercise this Warrant after the Expiration Date.
4. Restrictive Legend. Certificates representing shares of Common Stock
issued pursuant to this Warrant shall bear a legend substantially in the form of
the legend set forth on the first page of this Warrant Certificate to the extent
that and for so long as such legend is required pursuant to the Stockholder
Agreement.
5. Reservation of Shares; NYSE Listing. The Company hereby agrees that at
all times there shall be reserved for issuance and delivery upon exercise of
this Warrant such number of its authorized but unissued shares of Common Stock
or other securities of the Company from time to time issuable upon exercise of
this
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Warrant as will be sufficient to permit the exercise in full of this Warrant.
All such shares shall be duly authorized and, when issued upon such exercise,
shall be validly issued, fully paid and non-assessable, free and clear of all
liens, security interests, charges and (except as contemplated in the legend
referred to in paragraph 4) other encumbrances or restrictions on sale and free
and clear of all preemptive rights.
If the Warrant Shares have not been approved for listing on the NYSE as of
the date hereof, the Company shall use its reasonable best efforts to cause the
Warrant Shares to be so approved for listing as soon as practicable after the
date hereof.
6. Fractional Shares. No fractional shares or scrip representing fractional
shares shall be issued upon the exercise of this Warrant and in lieu of delivery
of any such fractional share upon any exercise hereof, the Company shall pay to
the Holder an amount in cash equal to such fraction multiplied by the Current
Market Price Per Common Share on the Business Day immediately preceding the date
on which the Holder delivers the Warrant Exercise Notice pursuant to paragraph
2(a).
"CURRENT MARKET PRICE PER COMMON SHARE" on any date shall be the average of
the Daily Prices (as defined below) per share of Common Stock for the twenty
(20) consecutive trading days immediately prior to such date. "DAILY PRICE"
means (A) the last reported sale price on such day on the NYSE Composite
Transactions Tape; or (B) if the shares of Common Stock then are not traded on
the NYSE, the closing price (at the close of the regular trading session) on
such day as reported by the principal national securities exchange (or principal
trading market/quotation system) on which the shares are listed and traded. If
on any determination date the shares of such class of Common Stock are not
quoted by any such organization, the Current Market Price Per Common Share shall
be the fair market value of such shares on such determination date as determined
in good faith by the Board of Directors.
7. Exchange, Transfer or Assignment of Warrant. Subject to compliance with
the Stockholder Agreement, the Holder of this Warrant shall be entitled, without
obtaining the consent of the Company to assign and transfer this Warrant, at any
time in whole or from time to time in part, to any Person or Persons. Subject to
the preceding sentence, upon surrender of this Warrant to the Company, together
with the attached Warrant Assignment Form duly executed, the Company shall, as
promptly as reasonably practicable and without charge, execute and deliver new
Warrant Certificates in the name of the assignee or assignees named in such
instrument of assignment and, if the Holder's entire interest is not being
assigned, in the name of the Holder and this Warrant Certificate shall promptly
be canceled. Each taker and holder of this Warrant Certificate by taking or
holding the same, consents and agrees that the registered holder hereof may be
treated by the Company and all other persons dealing with this Warrant
Certificate as the absolute owner hereof for any purpose and as the person
entitled to exercise
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the rights represented hereby.
8. Loss or Destruction of Warrant. Upon receipt by the Company of evidence
satisfactory to it (in the exercise of its reasonable discretion) of the loss,
theft, destruction or mutilation of this Warrant Certificate, and (in the case
of loss, theft or destruction) of reasonably satisfactory indemnification, and
upon surrender and cancellation of this Warrant Certificate, if mutilated, the
Company shall execute and deliver a new Warrant Certificate of like tenor and
date.
9. Anti-dilution Provisions.
(a) (i) In case the Company shall at any time after the date hereof
subdivide or split its outstanding shares of Common Stock into a greater number
of shares, the Exercise Price in effect immediately prior to such subdivision or
split shall be proportionately reduced and the number of shares of Common Stock
purchasable under this Warrant shall be proportionately increased. Conversely,
in case the outstanding shares of Common Stock shall be combined or reclassified
into a smaller number of shares, the Exercise Price in effect immediately prior
to such combination or reclassification shall be proportionately increased and
the number of shares of Common Stock purchasable under this Warrant shall be
proportionately decreased.
(ii) In case the Company shall at any time after the date hereof
declare a dividend or make a distribution on Common Stock generally,
that is payable in Common Stock, the Exercise Price in effect at the
time of the record date for such dividend or distribution and the
aggregate number of shares of Common Stock receivable upon exercise of
this Warrant shall be proportionately adjusted so that the exercise of
this Warrant in full after such time shall entitle the Holder to
receive (for the Aggregate Exercise Price (as defined below)) the
aggregate number of shares of Common Stock which, if this Warrant had
been exercised in full immediately prior to such time (for the
aggregate Exercise Price in effect at such time (the "AGGREGATE
EXERCISE PRICE")), such Holder would have owned upon such exercise and
been entitled to receive by virtue of such dividend or distribution.
If any declared dividend or distribution on Common Stock payable in
Common Stock for which adjustments have been made pursuant to the
immediately preceding sentence is not paid in whole or in part on the
applicable payment date, then, effective as of the time of the record
date for such dividend or distribution, the Exercise Price and the
aggregate number of shares of Common Stock receivable upon exercise of
this Warrant shall be proportionately readjusted so that the exercise
of this Warrant in full after such time shall entitle the Holder to
receive (for the Aggregate Exercise Price) the aggregate number of
shares of Common Stock which, if this Warrant had been exercised in
full immediately prior to such time (for the Aggregate Exercise
Price),
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such Holder would have owned upon such exercise and in fact received
by virtue of such dividend or distribution.
(iii) In case the Company shall at any time after the date hereof
issue any shares of its capital stock in a reclassification of Common
Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing
corporation), then, as a condition to such reclassification, lawful
provisions shall be made, and duly executed documents evidencing the
same from the Company or its successor shall be delivered to the
Holder, so that the Holder shall have the right at any time that this
Warrant is exercisable to purchase, at a total price equal to that
payable upon exercise of this Warrant, the kind and amount of capital
stock receivable in connection with such recapitalization by a record
holder of the same number of shares of Common Stock as were
purchasable (without applying the restrictions set forth in paragraph
3 hereof) by the Holder immediately prior to such recapitalization.
Such adjustments under this paragraph 9(a) shall be made successively
whenever any event listed above shall occur.
(b) Except in the case of Excluded Transactions (as defined below), in
case the Company shall fix a record date for the issuance of rights, options or
warrants to the holders of its Common Stock generally, entitling such holders to
subscribe for or purchase shares of Common Stock (or securities convertible into
shares of Common Stock) at a price per share of Common Stock (or having a
conversion price per share of Common Stock, if a security convertible into
shares of Common Stock) less than the Current Market Price Per Common Share on
such record date (or if such date of issuance is more than sixty days after the
record date, less than the Current Market Price Per Common Share on such date of
issuance), the maximum number of shares of Common Stock issuable upon exercise
of such rights, options or warrants (or conversion of such convertible
securities) shall be deemed to have been issued and outstanding as of such
record date (or if such date of issuance is more than sixty days after the
record date, on such date of issuance) and the Exercise Price to be in effect
after such issuance or sale shall be determined by multiplying the Exercise
Price in effect immediately prior to such issuance or sale by a fraction, the
numerator of which shall be the sum of (x) the number of shares of Common Stock
outstanding immediately prior to the time of such issuance or sale multiplied by
the Current Market Price Per Common Share immediately prior to such issuance or
sale and (y) the aggregate consideration, if any, to be received by the Company
upon such issuance or sale, and the denominator of which shall be the product of
the aggregate number of shares of Common Stock outstanding immediately after
such issuance or sale and the Current Market Price Per Common Share immediately
prior to such issuance or sale. In case any portion of the consideration to be
received by the Company shall be in a form other than cash, the fair market
value of such noncash consideration shall be utilized in the foregoing
computation. Such fair market value shall be determined by the Board of
Directors. The Holder
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shall be notified promptly of any consideration other than cash to be received
by the Company and furnished with a description of the consideration and the
fair market value thereof, as determined in good faith by the Board of
Directors. Such adjustment shall be made successively whenever any such record
date is fixed; and in the event that such rights, options or warrants or
securities convertible into shares of Common Stock are not so issued or expire
unexercised, or in the event of a change in the number of shares of Common Stock
to which the holders of such rights, options or warrants or securities
convertible into shares of Common Stock are entitled or the aggregate
consideration payable by the holders of such rights, options, warrants or
convertible securities for such shares of Common Stock prior to their receipt of
such shares of Common Stock (other than pursuant to adjustment provisions
therein comparable to those contained in this paragraph 9), the Exercise Price
shall again be adjusted to be the Exercise Price which would then be in effect
if such rights, options or warrants or securities convertible into shares of
Common Stock that were not so issued or expired unexercised had never had their
related record date fixed, in the former event, or the Exercise Price which
would then be in effect if such holder had initially been entitled to such
changed number of shares of Common Stock or required to pay such changed
consideration, in the latter event. "EXCLUDED TRANSACTIONS" means any Common
Stock issued by the Company (i) upon exercise or conversion of any security the
issuance of which caused an adjustment under this paragraph 9, (ii) pursuant to
employee or director compensation plans or arrangements and (iii) pursuant to a
stockholder rights plan adopted by the Company.
(c) In case the Company shall fix a record date for the making of a
distribution to holders of Common Stock in their capacities as such (including
any such distribution made in connection with a consolidation or merger in which
the Company is the continuing corporation) of cash, evidences of indebtedness,
assets or other property (other than (i) ordinary dividends payable in cash,
(ii) dividends payable in Common Stock, (iii) distributions in connection with a
stockholder rights plan adopted by the Company; or (iv) rights, options or
warrants or convertible securities referred to in, and for which an adjustment
is made pursuant to, paragraph 9(b) hereof), the Exercise Price to be in effect
after such record date shall be determined by multiplying the Exercise Price in
effect immediately prior to such record date by a fraction, the numerator of
which shall be the Current Market Price Per Common Share on such record date,
less the fair market value (determined as set forth in paragraph 9(b) hereof) of
the portion of the assets, other property or evidence of indebtedness so to be
distributed which is applicable to one share of Common Stock, and the
denominator of which shall be such Current Market Price Per Common Share. Such
adjustments shall be made successively whenever such a record date is fixed; and
in the event that such distribution is not so made, the Exercise Price shall
again be adjusted to be the Exercise Price which would then be in effect if such
record date had not been fixed
(d) In case at any time or from time to time the Company shall take
any action affecting its capital stock as such, other than an action described
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in any of the foregoing clauses (a) through (c), which the Board of Directors of
the Company reasonably determines in good faith will adversely affect the rights
of the Holders of the Warrants, the number of shares of Common Stock purchasable
upon exercise of each Warrant and/or the Exercise Price shall be adjusted in
such manner and at such time as the Board of Directors of the Company may
reasonably and in good faith determine to be equitable in the circumstances.
(e) The Company may, at its option, at any time during the term of the
Warrants, reduce the then current Exercise Price (but in no event below the par
value of a share of Common Stock) or increase the number of shares of Common
Stock for which the Warrant may be exercised to any amount deemed appropriate by
the Board of Directors; provided, however, that if the Company elects to make
such adjustment, such adjustment will remain in effect for at least a 5-day
period, after which time the Company may, at its option, reinstate the Exercise
Price or number of shares of Common Stock in effect prior to such adjustment, as
applicable, subject to any interim adjustments pursuant to this paragraph 9.
(f) No adjustment in the Exercise Price or otherwise pursuant to
paragraph 9(a) through (c) shall be required unless such adjustment would
require an increase or decrease of at least one percent in such price; provided
that any adjustments which by reason of this paragraph 9(f) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this paragraph 9 shall be made to the nearest
$0.001 or to the nearest hundredth of a share of Common Stock, as the case may
be.
(g) In the event that, at any time as a result of the provisions of
this paragraph 9, the holder of this Warrant upon subsequent exercise shall
become entitled to receive any shares of capital stock of the Company other than
Common Stock, the number of such other shares so receivable upon exercise of
this Warrant shall thereafter be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions
contained herein.
(h) Upon the occurrence of each adjustment or readjustment pursuant to
this paragraph 9 or paragraph 10 below, the Company at its expense shall
promptly compute such adjustment or readjustment in accordance with the terms
hereof and furnish to the holder of this Warrant a certificate setting forth
such adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The Company shall, upon the written
request, at any time, of the holder, furnish or cause to be furnished to such
holder a like certificate setting forth (i) such adjustments and readjustments,
(ii) the Exercise Price at the time in effect and (iii) the number of shares and
the amount, if any, of other property that at the time would be received upon
exercise of the Warrant.
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(i) The Company will not, by any voluntary action, avoid or seek to
avoid the observance or performance of any of the terms to be observed or
performed hereunder by the Company, but will at all times in good faith assist
in the carrying out of all of the provisions of this paragraph 9 and in the
taking of all such action necessary or appropriate in order to protect the
rights of the holder of this Warrant against impairment.
10. Consolidation, Merger or Sale of Assets. In case of any consolidation
of the Company with, or merger of the Company into, any other Person, any merger
of another Person into the Company (other than a consolidation or merger which
does not result in any reclassification, conversion, exchange or cancellation of
outstanding shares of Common Stock) or any sale or transfer of all or
substantially all of the assets of the Company or of the Person formed by such
consolidation or resulting from such merger or which acquires such assets, as
the case may be, the Holder shall have the right thereafter, upon exercise of
this Warrant in accordance with and subject to all of the provisions of this
Warrant, to receive the kind and amount of securities, cash and other property
receivable upon such consolidation, merger, sale or transfer by a holder of the
number of shares of Common Stock for which this Warrant may have been exercised
(without applying the restrictions set forth in paragraph 3 hereof) immediately
prior to such consolidation, merger, sale or transfer, assuming (i) such holder
of Common Stock is not a Person with which the Company consolidated or into
which the Company merged or which merged into the Company or to which such sale
or transfer was made, as the case may be ("CONSTITUENT PERSON"), or an Affiliate
of a constituent Person and (ii) in the case of a consolidation, merger, sale or
transfer which includes an election as to the consideration to be received by
the holders, such holder of Common Stock failed to exercise its rights of
election, as to the kind or amount of securities, cash and other property
receivable upon such consolidation, merger, sale or transfer (provided that if
the kind or amount of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer is not the same for each share of Common
Stock held immediately prior to such consolidation, merger, sale or transfer by
other than a constituent Person or an Affiliate thereof and in respect of which
such rights of election shall not have been exercised ("NON-ELECTING SHARE"),
then for the purpose of this paragraph 9 the kind and amount of securities, cash
and other property receivable upon such consolidation, merger, sale or transfer
by each non-electing share shall be deemed to be the kind and amount so
receivable per share by a plurality of the non-electing shares). Adjustments for
events subsequent to the effective date of such a consolidation, merger and sale
of assets shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Warrant. In any such event, effective provisions shall be
made in the certificate or articles of incorporation of the resulting or
surviving corporation, in any contract of sale, conveyance, lease or transfer,
or otherwise so that the provisions set forth herein for the protection of the
rights of the Holder shall thereafter continue to be applicable; and any such
resulting or surviving corporation shall expressly assume the obligation to
deliver, upon exercise, such shares of stock, other securities, cash and
property. The
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provisions of this paragraph 10 shall similarly apply to successive
consolidations, mergers, sales, leases or transfers.
11. Notices. All notices, requests and other communications to any party
hereunder shall be in writing (including facsimile transmission and electronic
mail ("E-MAIL") transmission, so long as a receipt of such e-mail is requested
and received) and shall be given,
if to Ford, to:
Ford Motor Company
Office of the Secretary
One American Road
11th Floor World Headquarters
Dearborn, Michigan 48126
Facsimile No.: (313) 248-8713
E-mail: psherry@ford.com
with a copy to:
Ford Motor Company
Office of the General Counsel
One American Road
320 World Headquarters
Dearborn, Michigan 48126
Facsimile No.: (313) 337-3209
E-mail: mnunn@ford.com
and to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention: Paul R. Kingsley
Facsimile No.: (212) 450-3800
E-mail: paul.kingsley@dpw.com
if to the Company, to:
Visteon Corporation
One Village Center Drive
Van Buren Township, Michigan 48111
Attention: John Donofrio, General Counsel
Facsimile No.: (734) 710-7132
E-mail: jdonofri@visteon.com
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with a copy (which shall not constitute notice) to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
Attention: Michael E. Lubowitz
Facsimile No.: (212) 310-8007
E-mail: michael.lubowitz@weil.com
or such other address, facsimile number or e-mail address as such party may
hereafter specify for the purpose by notice to the other parties hereto. All
such notices, requests and other communications shall be deemed received on the
date of receipt by the recipient thereof if received prior to 5:00 p.m. in the
place of receipt and such day is a Business Day in the place of receipt.
Otherwise, any such notice, request or communication shall be deemed not to have
been received until the next succeeding Business Day in the place of receipt.
12. Rights of the Holder. Prior to the exercise of any Warrant, the Holder
shall not, by virtue hereof, be entitled to any rights of a shareholder of the
Company, including, without limitation, the right to vote, to receive dividends
or other distributions, to exercise any preemptive right or to receive any
notice of meetings of shareholders or any notice of any proceedings of the
Company except as may be specifically provided for herein.
13. Governing Law. This Warrant shall be governed by and construed in
accordance with the law of the State of Michigan, without regard to the
conflicts of law rules of such state.
14. Dispute Resolution.
(a) If a dispute arises between the parties relating to this Warrant,
the following shall be the sole and exclusive procedure for enforcing the terms
hereof and for seeking relief, including but not limited to damages, injunctive
relief and specific performance:
(i) The parties promptly shall hold a meeting of senior
executives with decision-making authority to attempt in good faith to
negotiate a mutually satisfactory resolution of the dispute; provided
that no party shall be under any obligation whatsoever to reach,
accept or agree to any such resolution; provided further, that no such
meeting shall be deemed to vitiate or reduce the obligations and
liabilities of the parties or be deemed a waiver by a party hereto of
any remedies to which such party would otherwise be entitled.
(ii) If the parties are unable to negotiate a mutually
satisfactory resolution as provided above, then upon request by either
party, the matter shall be submitted to binding arbitration
13
before a sole arbitrator in accordance with the CPR Rules, including
discovery rules, for Non-Administered Arbitration. Within five (5)
Business Days after the selection of the arbitrator, each party shall
submit its requested relief to the other party and to the arbitrator
with a view toward settling the matter prior to commencement of
discovery. If no settlement is reached, then discovery shall proceed.
Upon the conclusion of discovery, each party shall again submit to the
arbitrator its requested relief (which may be modified from the
initial submission) and the arbitrator shall select only the entire
requested relief submitted by one party or the other, as the
arbitrator deems most appropriate. The arbitrator shall not select one
party's requested relief as to certain claims or counterclaims and the
other party's requested relief as to other claims or counterclaims.
Rather, the arbitrator must only select one or the other party's
entire requested relief on all of the asserted claims and
counterclaims, and the arbitrator shall enter a final ruling that
adopts in whole such requested relief. The arbitrator shall limit
his/her final ruling to selecting the entire requested relief he/she
considers the most appropriate from those submitted by the parties.
(iii) Arbitration shall take place in the City of Dearborn,
Michigan unless the parties agree otherwise or the arbitrator selected
by the parties orders otherwise. Punitive or exemplary damages shall
not be awarded. This paragraph 14 is subject to the Federal
Arbitration Act, 28 U.S.C.A. Section 1, et seq., or comparable
legislation in non-U.S. jurisdictions, and judgment upon the award
rendered by the arbitrator may be entered by any court having
jurisdiction.
15. Jurisdiction. Subject to paragraph 14, the parties hereto agree that
any suit, action or proceeding seeking to enforce any provision of, or based on
any matter arising out of or in connection with, this Warrant or the
transactions contemplated hereby shall be brought in any federal court sitting
in Michigan or any Michigan State court sitting in Wayne County or Oakland
County, Michigan, so long as one of such courts shall have subject matter
jurisdiction over such suit, action or proceeding, and that any cause of action
arising out of this Warrant shall be deemed to have arisen from a transaction of
business in the State of Michigan. Each of the parties hereby irrevocably
consents to the jurisdiction of such courts (and of the appropriate appellate
courts therefrom) in any such suit, action or proceeding and irrevocably waives,
to the fullest extent permitted by law, any objection that it may now or
hereafter have to the laying of the venue of any such suit, action or proceeding
in any such court or that any such suit, action or proceeding brought in any
such court has been brought in an inconvenient forum. Process in any such suit,
action or proceeding may be served on any party anywhere in the world, whether
within or without the jurisdiction of any such court.
14
16. Amendments; Waivers. Any provision of this Warrant Certificate may be
amended or waived if, but only if, such amendment or waiver is in writing and is
signed, in the case of an amendment, by the Holder and the Company, or in the
case of a waiver, by the party against whom the waiver is to be effective;
provided that if there shall be more than one Holder of this Warrant, any
amendment of this Warrant Certificate approved by the Company and holders of a
majority of the Warrant Shares will be binding on each Holder. No failure or
delay by either party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided shall
be cumulative and not exclusive of any rights or remedies provided by law.
15
IN WITNESS WHEREOF, the Company has duly caused this Warrant Certificate to
be signed by its duly authorized officer and to be dated as of October 1, 2005.
VISTEON CORPORATION
By: /s/ James F. Palmer
------------------------------------
Name: James F. Palmer
Title: Executive Vice President
and Chief Financial Officer
Acknowledged and Agreed:
FORD MOTOR COMPANY
By: /s/ Donat R. Leclair
---------------------------------
Name: Donat R. Leclair
Title: Executive Vice President and
Chief Financial Officer
16
EXHIBIT 10.2
STOCKHOLDER AGREEMENT
dated as of
October 1, 2005
between
VISTEON CORPORATION
and
FORD MOTOR COMPANY
TABLE OF CONTENTS
PAGE
----
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions................................................ 1
ARTICLE 2
REGISTRATION RIGHTS
Section 2.01. Shelf Registration......................................... 4
Section 2.02. Demand Registration........................................ 4
Section 2.03. Postponement............................................... 7
Section 2.04. Piggyback Registration..................................... 8
Section 2.05. Expenses................................................... 9
Section 2.06. Registration and Qualification............................. 9
Section 2.07. Underwriting; Due Diligence................................ 12
Section 2.08. Indemnification and Contribution........................... 13
Section 2.09. Rule 144 and Form S-3...................................... 17
Section 2.10. Lock-Up Agreements......................................... 17
Section 2.11. Inconsistent Agreements.................................... 18
ARTICLE 3
VOTING
Section 3.01. Voting of Warrant Shares................................... 18
ARTICLE 4
STANDSTILL
Section 4.01. Standstill................................................. 19
ARTICLE 5
HEDGING
Section 5.01. Limitations on Hedging..................................... 21
Section 5.02. Notice..................................................... 21
i
ARTICLE 6
TRANSFER RESTRICTIONS
Section 6.01. Transfers; Rights of Transferees of Registrable
Securities; Legends........................................ 22
ARTICLE 7
MISCELLANEOUS
Section 7.01. Remedies................................................... 23
Section 7.02. Waiver; Consents to Amendments............................. 23
Section 7.03. Successors and Assigns..................................... 23
Section 7.04. Severability............................................... 24
Section 7.05. Counterparts; Effectiveness; Third Party Beneficiaries.... 24
Section 7.06. Descriptive Headings; Interpretation....................... 24
Section 7.07. Governing Law.............................................. 24
Section 7.08. Dispute Resolution......................................... 24
Section 7.09. Jurisdiction............................................... 25
Section 7.10. WAIVER OF JURY TRIAL....................................... 26
Section 7.11. Addresses and Notices...................................... 26
Section 7.12. Business Days.............................................. 27
ii
STOCKHOLDER AGREEMENT
AGREEMENT (this "AGREEMENT") dated as of October 1, 2005 between Ford Motor
Company, a Delaware corporation ("FORD"), and Visteon Corporation, a Delaware
corporation (the "COMPANY").
WITNESSETH:
WHEREAS, pursuant to the Visteon "A" Transaction Agreement dated as of
September 12, 2005 between Ford and the Company (the "TRANSACTION AGREEMENT"),
among other things Ford is acquiring a warrant for the purchase of shares of
common stock, par value $1.00 per share, of the Company (the "COMMON STOCK");
and
WHEREAS, the parties hereto desire to enter into this Agreement to govern
certain of their rights, duties and obligations after consummation of the
transactions contemplated by the Transaction Agreement;
NOW, THEREFORE, in consideration of the mutual promises made herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions. (a) The following capitalized terms shall have
the meanings set forth below:
"AFFILIATE" means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with such other
Person. For the purpose of this definition, the term "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as used with respect to any Person, means having the right to
elect a majority of the board of directors or other comparable body responsible
for management and direction of a Person, or otherwise having, directly or
indirectly, the power to direct or cause the direction of the management and
policies of such Person, by contract or by virtue of share ownership.
"BENEFICIAL OWNERSHIP" shall be determined in accordance with Rule 13d-3
under the 1934 Act.
"BOARD OF DIRECTORS" means the board of directors of the Company.
"BUSINESS DAY" means a day, other than Saturday, Sunday or other day on
which commercial banks in Detroit, Michigan are authorized or required by law to
close.
"CLOSING" means the date on which the transactions contemplated by the
Transaction Agreement are consummated.
"HEDGING TRANSACTION" means, with respect to any security, a short sale
with respect to such security, entering into or acquiring an offsetting
derivative contract with respect to such security, entering into or acquiring a
futures or forward contract to deliver such security or entering into any other
hedging or other derivative transaction that has the effect of materially
changing the economic benefits and risks of ownership.
"HOLDER" means Ford and, subject to Article 6, any Permitted Transferees.
"INITIAL REQUESTING HOLDER" means the Requesting Holders initiating the
registration pursuant to the first sentence of Section 2.02(a).
"MAJORITY HOLDERS" means the Holders holding a majority in aggregate of the
Registrable Securities held by all Holders.
"1933 ACT" means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
"1934 ACT" means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.
"OTHER SECURITIES" has the meaning ascribed thereto in Section 2.04(a).
"PERMITTED TRANSFEREE" means any Person to whom the Registrable Securities
are transferred in accordance with Article 6.
"PERSON" means an individual, corporation, partnership, limited liability
company, association, trust or other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"REGISTRABLE SECURITIES" means (i) the Warrant Shares and (ii) any
securities issued directly or indirectly with respect to such securities by way
of a split, dividend, or other division of securities, or in connection with a
combination of securities, recapitalization, merger, consolidation or other
reorganization of the Company. As to any particular Registrable Securities, such
Registrable Securities shall cease to be Registrable Securities when they (A)
have been effectively registered under the 1933 Act and disposed of in
accordance with the registration statement covering them, (B) have been sold
pursuant to Rule 144 under the 1933 Act, (C) could immediately be sold pursuant
to Rule 144(k) under the 1933 Act or (D) have been repurchased by the Company or
otherwise cease to be outstanding.
2
"REGISTRATION EXPENSES" means any and all expenses incident to performance
of or compliance with any registration or marketing of securities pursuant to
Article 2, including (i) the fees, disbursements and expenses of the Company's
counsel and accountants in connection with this Agreement and the performance of
the Company's obligations hereunder (including the expenses of any annual audit
letters and "cold comfort" letters required or incidental to the performance of
such obligations); (ii) all expenses, including filing fees, in connection with
the preparation, printing and filing of the registration statement, any
preliminary prospectus or final prospectus, any other offering document and
amendments and supplements thereto and the mailing and delivering of copies
thereof to any underwriters and dealers; (iii) the cost of printing and
producing any agreements among underwriters, underwriting agreements, selling
group agreements and any other customary documents in connection with the
marketing of securities pursuant to Article 2; (iv) all expenses in connection
with the qualification of the securities to be disposed of for offering and sale
under state securities laws, including the reasonable fees and disbursements of
counsel for the underwriters or the Holders of securities in connection with
such qualification and in connection with any blue sky and legal investment
surveys, including the cost of printing and producing any such blue sky or legal
investment surveys; (v) the filing fees incident to securing any required review
by the National Association of Securities Dealers, Inc. of the terms of the
securities being registered pursuant to Article 2; (vi) transfer agents' and
registrars' fees and expenses and the fees and expenses of any other agent or
trustee appointed in connection with such offering; (vii) all security engraving
and security printing expenses; (viii) all fees and expenses payable in
connection with the listing of the securities on any securities exchange or
automated interdealer quotation system; (ix) the costs and expenses of the
Company and its officers relating to analyst or investor presentations, if any,
or any "road show" undertaken in connection with the registration and/or
marketing of any Registrable Securities; and (x) the reasonable fees and
expenses (up to a maximum of Thirty Thousand Dollars ($30,000) in the aggregate
for all registrations contemplated by this Agreement) of no more than one legal
counsel to the Holders selected by Holders holding a majority of the Registrable
Securities included in the relevant registration statement, as applicable. In no
event shall Registration Expenses be deemed to include underwriting discounts
and commissions, brokerage fees and transfer taxes, if any.
"REQUESTING HOLDERS" means the Holders requesting the registration of their
Registrable Securities pursuant to Section 2.02(a) or 2.02(f).
"RULE 415 OFFERING" means an offering on a delayed or continuous basis
pursuant to Rule 415 (or any successor rule to similar effect) promulgated under
the 1933 Act.
"SEC" means the Securities and Exchange Commission.
3
"SELLING HOLDER" means a Holder of Registrable Securities included in the
relevant registration statement.
"SHELF REGISTRATION STATEMENT" means a "shelf" registration statement of
the Company relating to a Rule 415 Offering which covers all of the Registrable
Securities held by the Holders, on Form S-3 under the 1933 Act, and all
amendments and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all materials incorporated by reference
therein.
"WARRANT" means the Warrant to purchase shares of Common Stock as described
in the Transaction Agreement.
"WARRANT SHARES" means the shares of Common Stock deliverable upon exercise
of the Warrant, as adjusted from time to time.
ARTICLE 2
REGISTRATION RIGHTS
Section 2.01. Shelf Registration. Provided that the Company is eligible to
file a registration statement on Form S-3, it shall, not later than 270 days
after the date hereof or, if later, as soon as is reasonably practicable after
it becomes eligible to file a registration statement on Form S-3, cause to be
filed a Shelf Registration Statement, and shall use its reasonable best efforts
to have such Shelf Registration Statement declared effective by the SEC within
one year after the date hereof or as soon as is reasonably practicable after it
becomes eligible to use Form S-3.
(b) Subject to the terms of this Agreement, the Company agrees to use
reasonable best efforts to keep the Shelf Registration Statement continuously
effective from the date the SEC declares the Shelf Registration Statement
effective until the first date that the Holders cease to hold any Registrable
Securities.
Section 2.02. Demand Registration. If at any time after the first
anniversary of the Closing or after a Change of Control (as defined in the
Warrant), a Shelf Registration Statement is not effective (subject to any
permitted postponement pursuant to Section 2.03), the Majority Holders may
request in writing that the Company effect the registration under the 1933 Act
of any or all of the Registrable Securities held by such requesting Holders,
which notice shall specify the intended method or methods of disposition of such
Registrable Securities. Except as otherwise provided herein, the Company shall
prepare and (within ninety (90) days after such request has been given) file
with the SEC a registration statement with respect to (x) all Registrable
Securities included in such request and (y) all Registrable Securities included
in any request delivered
4
by the Requesting Holders pursuant to Section 2.02(f), and thereafter use its
reasonable best efforts to effect the registration under the 1933 Act and
applicable state securities laws of such Registrable Securities for disposition
in accordance with the intended method or methods of disposition stated in such
request; provided that the Company shall not be obligated to effect any such
registration pursuant to this Section 2.02(a) if (i) within thirty (30) days of
receipt of a written request from the Requesting Holders, the Company gives
notice to the Requesting Holders that the Company intends to effect an offering
of the Company's securities for the Company's account and has taken substantial
steps (including, but not limited to, selecting a managing underwriter or
placement agent for such offering) and is proceeding with reasonable diligence
to effect such offering (provided that in such case, the Company shall, subject
to Section 2.04(c), use its reasonable best efforts to include in the
registration relating to such public offering all Registrable Securities
requested to be included by any Holder pursuant to Section 2.04(c) and, in the
event Section 2.04(c) applies to such registration, shall include in such
registration a number of such Registrable Securities that is equal to at least
25% of the shares of Common Stock (on an as-converted basis, with respect to
securities convertible into or exchangeable for Common Stock to be included in
such registration) that the Company is registering pursuant to such
registration) or (ii) the Requesting Holders propose to sell less than all
Registrable Securities then held by them pursuant to such registration statement
and the estimated aggregate price to the public of such Registrable Securities
is less than Five Million Dollars ($5,000,000).
(b) The Majority Holders may collectively exercise their rights under this
Section 2.02 on not more than three occasions.
(c) The Holders shall not have the right to require the filing of a
registration statement pursuant to this Section 2.02 while any registration
statement that has been filed pursuant to this Section 2.02 has yet to become
effective or within six months following the effectiveness of any registration
statement on Form S-1 that was filed pursuant to this Section 2.02.
(d) A registration pursuant to this Section 2.02 shall not be deemed to
have been effected (and, therefore, rights of a Requesting Holder shall be
deemed not to have been exercised for purposes of paragraph (a) above) (i) if it
has not become effective, (ii) if after it has become effective such
registration (or the use of the prospectus contained in such registration
statement) is (A) interfered with by any stop order, injunction or other order
or requirement of the SEC or other governmental agency or court for any reason
other than a misrepresentation or an omission by any Holder or underwriter or
(B) delayed, withdrawn, suspended or terminated and, in each case, as a result
thereof, the Registrable Securities requested to be registered cannot be
completely distributed in accordance with the plan of distribution set forth in
the related registration statement (until such time as the Registrable
Securities requested to be registered may be completely distributed in
accordance with the plan of distribution set forth in the related
5
registration statement) or (iii) if the conditions to closing specified in any
purchase agreement or underwriting agreement containing customary terms for
secondary offerings by selling securityholders entered into by the Company in
connection with such registration are not satisfied or waived other than because
of some act or omission by any Holder or underwriter.
(e) In the event that any registration pursuant to Section 2.02(a) shall
involve, in whole or in part, an underwritten offering, the Holders of a
majority of the Registrable Securities to be registered shall select the lead
underwriter or underwriters (which selection or selections shall be subject to
the approval of the Company, which approval shall not be unreasonably withheld),
as well as counsel for the Holders, with respect to such registration. The
parties hereto acknowledge and agree that the Company shall have sole discretion
with respect to the selection of underwriters for any registration pursuant to
Section 2.04 that involves an underwritten offering.
(f) Upon receipt of a written request from the Initial Requesting Holders
pursuant to the first sentence of Section 2.02(a), the Company shall promptly
give written notice of such requested registration to all other Holders of
Registrable Securities and the intended method or methods of disposition stated
in such request. Each other Holder may, by written notice to the Company to be
delivered within ten (10) days of the delivery of the Company's notice, request
the inclusion in such registration of any Registrable Securities held by such
other Holder. The Company shall promptly after the expiration of such 10-day
period notify each Requesting Holder of (i) the identity of the other Requesting
Holders and (ii) the number of Registrable Securities requested to be included
therein by each Requesting Holder. In the event that the Initial Requesting
Holders intend to distribute the Registrable Securities covered by their request
by means of an underwriting, the right of any Holder to include all or any
portion of its Registrable Securities in such registration shall be conditioned
upon such Holder's participation in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting to the extent provided
herein. All Holders proposing to distribute all of any portion of their
Registrable Securities through such underwriting shall enter into an
underwriting agreement in customary form (for secondary sales by selling
stockholders) with the underwriter or underwriters selected pursuant to Section
2.02(e).
(g) The Company shall have the right to cause the registration of
additional equity securities for sale for the account of any Person that is not
a Holder (including the Company and any directors, officers or employees of the
Company (such additional equity securities, the "ADDITIONAL EQUITY SECURITIES"))
in any registration of Registrable Securities requested by the Requesting
Holders; provided that if such registration is to be an underwritten
registration and such Requesting Holders are advised in writing (with a copy to
the Company) by a nationally recognized investment banking firm selected
pursuant to paragraph (e) above that, in such firm's good faith view, all or a
part of the equity securities to
6
be included in such registration (including any Additional Equity Securities)
cannot be sold and the inclusion of all or part of the equity securities that
would otherwise be included in such registration would be likely to have an
adverse effect on the price, timing or distribution of the offering and sale of
the equity securities to be included in such registration, then the Company
shall exclude from such registration such Additional Equity Securities or part
thereof, to the nearest extent possible on a pro rata basis, in which case the
Company shall include in such registration:
(i) first, up to the full number of Registrable Securities and
(ii) second, up to the full number of any other Additional Equity
Securities, if any, in excess of the Registrable Securities to be sold in
such offering which, in the good faith view of such investment banking
firm, can be so sold without so adversely affecting such offering in the
manner described above.
In the event that the number of Registrable Securities requested to be
included in a registration statement that will not include any Additional Equity
Securities by the Requesting Holders exceeds the number which, in the good faith
view of such investment banking firm, can be sold without adversely affecting
the price, timing, distribution or sale of securities in the offering, the
number shall be allocated pro rata among all of the Requesting Holders on the
basis of the relative number of Registrable Securities then held by each such
Requesting Holder (with any number in excess of a Requesting Holder's request
reallocated among the remaining Requesting Holders in a like manner).
Section 2.03. Postponement. The Company shall be entitled to postpone for a
reasonable period of time up to ninety (90) days the filing of any registration
statement or any amendment or supplement thereto otherwise required to be
prepared and filed by it pursuant to Section 2.01 or 2.02 if the Company
furnishes to the Holders a certified resolution of the Board of Directors (the
"CERTIFIED RESOLUTION") stating that the Company or any of its Subsidiaries is
engaged in confidential negotiations or other confidential business activities
(or the Board of Directors determines that the Company is at such time otherwise
in possession of material non-public information with respect to the Company or
any of its Subsidiaries), disclosure of which would be required in such
registration statement, and the Board of Directors determines in good faith that
such disclosure would be materially detrimental to the Company and its
stockholders other than the Holders. A deferral of the filing of a registration
statement pursuant to this Section 2.03 shall be lifted, and the registration
statement shall be filed forthwith, if the negotiations or other activities are
terminated or publicly disclosed (or such material non-public information has
been publicly disclosed by the Company). In order to defer the filing of a
registration statement pursuant to this Section 2.03, the Company shall promptly
(but in any event within ten (10) days), upon determining to seek such deferral,
deliver to the Holders (subject to
7
the Holders entering into a customary confidentiality obligation as to such
information, which the Holders hereby agree to do) the Certified Resolution
stating that the Company is deferring such filing pursuant to this Section 2.03
and an approximation of the anticipated delay. Notwithstanding anything to the
contrary contained herein, the Company may not postpone a filing under this
Section 2.03 more than once in any 180 day period.
Section 2.04. Piggyback Registration. In the event that the Company
proposes to register any of its Common Stock, any other of its equity securities
or securities convertible into or exchangeable for its equity securities
(collectively, including Common Stock, "OTHER SECURITIES") under the 1933 Act,
whether or not for sale for its own account, in a manner that would permit
registration of Registrable Securities for sale for cash to the public under the
1933 Act, it shall so long as Holders own Registrable Securities, give prompt
written notice to each Holder of its intention to do so and of the rights of
such Holder under this Section 2.04. Subject to the terms and conditions hereof,
such notice shall offer each such Holder the opportunity to include in such
registration statement such number of Registrable Securities as such Holder may
request. Upon the written request of any such Holder made within ten (10) days
after the receipt of the Company's notice (which request shall specify the
number of Registrable Securities intended to be disposed of and the intended
method of disposition thereof), the Company shall use its reasonable best
efforts to effect, in connection with the registration of the Other Securities,
the registration under the 1933 Act of all Registrable Securities which the
Company has been so requested to register, to the extent required to permit the
disposition (in accordance with such intended methods thereof) of the
Registrable Securities so requested to be registered. Notwithstanding the
immediately preceding sentence, in the event that the holders of the Other
Securities intend to distribute the Other Securities covered by such
registration by means of an underwriting, the right of any Holder to include all
or any portion of its Registrable Securities in such registration shall be
conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting to the
extent provided herein. All Holders proposing to distribute all or any portion
of their Registrable Securities through such underwriting shall enter into an
underwriting agreement in customary form (for secondary sales by selling
stockholders) with the underwriter or underwriters.
(b) If, at any time after giving a written notice of its intention to
register any Other Securities and prior to the effective date of the
registration statement filed in connection with such registration, the Company
shall determine for any reason not to register the Other Securities, the Company
may, at its election, give written notice of such determination to such Holders
and thereupon the Company shall be relieved of its obligation to register such
Registrable Securities in connection with the registration of such Other
Securities, without prejudice, however, to the rights of the Holders immediately
to request that such registration be effected as a registration under Section
2.02 to the extent permitted thereunder.
8
(c) If the registration referred to in the first sentence of Section
2.04(a) is to be an underwritten registration and a nationally recognized
investment banking firm selected by the Company advises the Company in writing
that, in such firm's good faith view, the inclusion of all or a part of such
Registrable Securities in such registration would be likely to have an adverse
effect upon the price, timing or distribution of the offering and sale of the
Other Securities then contemplated, the Company shall include in such
registration:
(i) first, all Other Securities the Company proposes to sell for its
own account,
(ii) second, any securities of the Company to be registered pursuant
to "demand" registration rights existing as of the date hereof, and
(iii) third, up to the full number of Registrable Securities held by
Holders of Registrable Securities in excess of the number of Other
Securities to be sold in such offering which, in the good faith view of
such investment banking firm, can be so sold without so adversely affecting
such offering in the manner described above.
(d) The Company shall not be required to effect any registration of
Registrable Securities under this Section 2.04 incidental to the registration of
any of its securities in connection with mergers, acquisitions, exchange offers,
subscription offers, dividend reinvestment plans or stock option or other
executive or employee benefit or compensation plans or in connection with the
filing of a Form S-4 or Form S-8 registration statement.
(e) No registration of Registrable Securities effected under this Section
2.04 shall relieve the Company of its obligation to effect a registration of
Registrable Securities pursuant to Section 2.01 or 2.02.
Section 2.05. Expenses. Except as provided herein, the Company shall pay
all Registration Expenses under this Article 2 with respect to a particular
offering (or proposed offering). Each Selling Holder shall bear the fees and
expenses of its own counsel as well as all underwriting discounts and
commissions, brokerage fees and taxes, except that reasonable fees and expenses
(up to a maximum of Thirty Thousand Dollars ($30,000) in the aggregate for all
registrations contemplated by this Agreement) of one counsel representing all
Selling Holders selected by the Selling Holders holding a majority of the
Registrable Securities included in the relevant registration statement, as
applicable, will constitute Registration Expenses.
Section 2.06. Registration and Qualification. If the Company is required to
effect the registration of any Registrable Securities under the 1933 Act as
provided in Section 2.01, 2.02 or 2.04, the Company shall as promptly as
practicable, but subject to the other provisions of this Agreement:
9
(a) prepare, file and use its reasonable best efforts to cause to become
effective a registration statement under the 1933 Act relating to the
Registrable Securities to be offered in accordance with the intended method of
disposition thereof;
(b) prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement continuously effective and to
comply with the provisions of the 1933 Act with respect to the disposition of
all such Registrable Securities until such time as all of such Registrable
Securities have been disposed of in accordance with the intended methods of
disposition set forth in such registration statement; provided that the Company
will, at least five (5) Business Days prior to filing a registration statement
or prospectus or any amendment or supplement thereto, furnish to each Selling
Holder copies of such registration statement or prospectus (or amendment or
supplement) as proposed to be filed (including, upon the request of such Holder,
documents to be incorporated by reference therein) which documents will be
subject to the reasonable review and comments of such Holder (and its attorneys)
during such 5 business-day period and the Company will not file any registration
statement, any prospectus or any amendment or supplement thereto (or any such
documents incorporated by reference) containing any statements with respect to
such Holder to which such Holder shall reasonably object in writing; it being
agreed that there is no need to pre-deliver or give a right to review of any
1934 Act filing that is fully incorporated by reference;
(c) furnish to the Selling Holders and to any underwriter of such
Registrable Securities such number of conformed copies of such registration
statement and of each such amendment and supplement thereto (in each case
including all exhibits), such number of copies of the prospectus included in
such registration statement (including each preliminary prospectus and any
summary prospectus), in conformity with the requirements of the 1933 Act, such
documents incorporated by reference in such registration statement or
prospectus, and such other documents as the Selling Holders or such underwriter
may reasonably request, and, upon the request of the Selling Holders or such
underwriter, a copy of any and all transmittal letters or other correspondence
to or received from, the SEC or any other governmental agency or self-regulatory
body or other body having jurisdiction (including any domestic or foreign
securities exchange) relating to such offering;
(d) after the filing of the registration statement, promptly notify each
Selling Holder in writing of the effectiveness thereof and of any stop order
issued or, to the knowledge of the Company, threatened by the SEC and use its
reasonable best efforts to prevent the entry of such stop order or to promptly
remove it if entered and promptly notify each Selling Holder of such lifting or
withdrawal of such order;
10
(e) use its reasonable best efforts to register or qualify all Registrable
Securities covered by such registration statement under the securities or blue
sky laws of such U.S. jurisdictions as may be necessary and as the Selling
Holders or any underwriter of such Registrable Securities shall reasonably
request, and use its reasonable best efforts to obtain all appropriate
registrations, permits and consents in connection therewith, and do any and all
other acts and things which may be reasonably necessary or advisable to enable
the Selling Holders or any such underwriter to consummate the disposition in
such jurisdictions of the Registrable Securities covered by such registration
statement; provided that the Company shall not for any such purpose be required
to qualify generally to do business as a foreign corporation in any such
jurisdiction wherein it is not so qualified or to consent to general service of
process in any such jurisdiction or become subject to taxation in any such
jurisdiction;
(f) use its reasonable best efforts in the event of an underwritten
offering to furnish to each Selling Holder and to any underwriter of such
Registrable Securities (i) an opinion of counsel for the Company addressed to
each underwriter and each Selling Holder and dated the date of the closing under
the underwriting agreement and (ii) a "cold comfort" letter addressed to each
underwriter and each Selling Holder and signed by the independent public
accountants who have audited the financial statements of the Company included in
such registration statement, in each such case covering substantially the same
matters with respect to such registration statement (and the prospectus included
therein) as are customarily covered in opinions of issuer's counsel and in
accountants' letters delivered to underwriters in connection with the
consummation of underwritten secondary public offerings of securities by selling
securityholders;
(g) as promptly as practicable, notify the Selling Holders in writing (i)
at any time when a prospectus relating to a registration pursuant to Section
2.01, Section 2.02 or Section 2.04 is required to be delivered under the 1933
Act of the happening of any event as a result of which the prospectus included
in such registration statement, as then in effect, includes an untrue statement
of a material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and (ii) of any
request by the SEC or any other regulatory body or other body having
jurisdiction for any amendment of or supplement to any registration statement or
other document relating to such offering, and in either such case, at the
request of the Selling Holders (but subject to Section 2.03) prepare and furnish
to the Selling Holders as promptly as practicable a reasonable number of copies
of a supplement to or an amendment of such prospectus as may be necessary so
that, as thereafter delivered to the purchasers of such Registrable Securities,
such prospectus shall not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they are made, not
misleading (and the Selling Holders agree to immediately discontinue use
11
(and cause each other person acting on its behalf to immediately discontinue
use) of the prospectus included in such registration statement following receipt
of such notice until such time as such prospectus shall have been so amended or
supplemented or such time as the Company shall have provided the Selling Holders
with a subsequent notice to the effect that such prospectus may again be used);
(h) if requested by the lead or managing underwriters or Selling Holders,
use its reasonable best efforts to list all such Registrable Securities covered
by such registration on each securities exchange and automated inter-dealer
quotation system on which the Common Stock is then listed;
(i) upon the Selling Holders' reasonable request, send appropriate officers
of the Company to attend customary "road shows" and analyst and investor
presentations scheduled in connection with any such underwritten offering of
Registrable Securities; provided, however, that attending such road show would
not unduly interfere with the operation of the Company; and
(j) furnish for delivery in connection with the closing of any offering of
Registrable Securities pursuant to a registration effected pursuant to Section
2.01, Section 2.02 or Section 2.04 unlegended certificates representing
ownership of the Registrable Securities being sold in such denominations as
shall be requested by the Selling Holders or the underwriters.
In addition, each Holder agrees that (i) in connection with any
registration of Registrable Securities pursuant to this Article 2 it will timely
provide all information reasonably necessary with respect to such Holder and its
plan of distribution, for such registration of Registrable Securities, (ii)
failure to provide such information will postpone the Company's obligations to
such Holder for the applicable registration until such information is provided
and (iii) the Company will have no obligation to update or amend selling
stockholders' information in any filing more frequently than every 90 days.
Notwithstanding anything to the contrary in this Article 2, the Company
shall not be obligated to effect any offering by means of an underwritten
offering (and, without limiting the generality of the foregoing, the Company
shall not be obligated to comply with Section 2.07 and paragraphs (f) and (i) of
Section 2.06) unless the estimated aggregate price to the public of the
securities to be sold thereunder are in excess of Fifteen Million Dollars
($15,000,000).
Section 2.07. Underwriting; Due Diligence. (a) If requested by the
underwriters for any underwritten offering of Registrable Securities pursuant to
a registration requested under this Article 2, the Company shall enter into an
underwriting agreement with such underwriters for such offering, which agreement
will contain such representations and warranties and covenants by the Company
and such other terms and provisions as are customarily contained in
12
underwriting agreements with respect to secondary distributions by selling
securityholders, including indemnification and contribution provisions
substantially to the effect and to the extent provided in Section 2.08, and
agreements as to the provision of opinions of counsel and accountants' letters
to such underwriters and Selling Holders the effect and to the extent provided
in Section 2.06(f). The Selling Holders on whose behalf the Registrable
Securities are to be distributed by such underwriters shall be parties to any
such underwriting agreement and the representations and warranties by, and the
other agreements on the part of, the Company to and for the benefit of such
underwriters, shall also be made to and for the benefit of such Selling Holders.
Such underwriting agreement shall also contain such representations and
warranties and covenants and indemnification by such Selling Holders and
underwriters and such other terms and provisions as are customarily contained in
underwriting agreements with respect to secondary distributions on the part of
selling shareholders, including indemnification and contribution provisions
substantially to the effect and to the extent provided in Section 2.08.
Notwithstanding anything to the contrary herein, such underwriting agreement
shall not require the Selling Holders to have any liability with respect to the
representations made by, the operations of or the disclosures made by the
Company.
(b) In connection with the preparation and filing of each registration
statement registering Registrable Securities under the 1933 Act under this
Article 2, upon entering into a confidentiality agreement with the Company that
is reasonably satisfactory to the Company, the Company shall give the
underwriters, if any, and underwriters' counsel, and counsel for the Holders as
selected pursuant to Section 2.02(e) or by the Selling Holders holding a
majority of the Registrable Securities included in the relevant registration
statement, as applicable, such reasonable and customary access to its books,
records and properties and such opportunities to discuss the business and
affairs of the Company with its officers and the independent public accountants
who have certified the financial statements of the Company as shall be
necessary, in the reasonable opinion of such underwriters, such underwriters'
counsel or such counsel for the Holders, to conduct a reasonable investigation
within the meaning of the 1933 Act; provided that such underwriters, such
underwriters' counsel and such counsel for the Holders shall use their
reasonable best efforts to coordinate any such investigation of the books,
records and properties of the Company and any such discussions with the
Company's officers and accountants so that all such investigations occur at the
same time and all such discussions occur at the same time.
Section 2.08. Indemnification and Contribution. The Company agrees to
indemnify and hold harmless each Selling Holder and each person, if any, who
controls each Selling Holder within the meaning of either Section 15 of the 1933
Act or Section 20 of the 1934 Act from and against any and all losses, claims,
damages and liabilities (including, subject to Section 2.08(c), any reasonable
legal or other costs, fees and expenses reasonably incurred in connection with
13
defending or investigating any such action or claim) insofar as such losses,
claims, damages or liabilities are caused by any untrue statement or alleged
untrue statement of a material fact contained in any registration statement
filed by the Company pursuant to this Agreement at the time it became effective
or any amendment thereof, any preliminary prospectus (as amended or supplemented
if the Company shall have furnished any amendments or supplements thereto) or
prospectus (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) relating to the Registrable Securities, or
caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages or liabilities are
caused by any such untrue statement or omission or alleged untrue statement or
omission which is based upon information relating to a Selling Holder or
underwriter which is furnished to the Company in writing by or on behalf of such
Selling Holder or underwriter expressly for use therein. The Company also agrees
to indemnify any underwriter of the Registrable Securities so offered and each
person, if any, who controls such underwriter on substantially the same basis as
that of the indemnification by the Company of each Selling Holder provided in
this Section 2.08(a). Notwithstanding the foregoing, (i) with respect to any
untrue statement or omission or alleged untrue statement or omission made in any
preliminary prospectus, or in any prospectus, as the case may be, the indemnity
agreement contained in this paragraph shall not apply to the extent that any
such losses, claims, damages or liabilities result from the fact that a current
copy of the prospectus (or such amended or supplemented prospectus, as the case
may be) was not sent or given to the Person asserting such losses, claims,
damages or liabilities at or prior to the written confirmation of the sale of
the Registrable Securities concerned to such Person if its is determined that
the Company has provided such current prospectus (or such amended or
supplemented prospectus, as the case may be) to any Selling Holder or
underwriter prior to such confirmation and it was the responsibility of such
Selling Holder or underwriter to provide such Person with a current copy of the
prospectus and such current copy of the prospectus (or such amended or
supplemented prospectus, as the case may be) would have cured the defect giving
rise to such losses, claims, damages or liabilities, and (ii) the indemnity
agreement shall also not apply to losses, claims, damages or liabilities
attributable to a failure of a Selling Holder, underwriter or other Person on
their behalf to comply with Section 2.06(g).
(b) Each Selling Holder agrees, to the extent Registrable Securities held
by such Selling Holder are included in the securities as to which a registration
is being effected hereunder, to indemnify and hold harmless the Company, its
directors, officers and each person, if any, who controls the Company within the
meaning of either Section 15 of the 1933 Act or Section 20 of the 1934 Act, from
and against any and all losses, claims, damages and liabilities (including,
subject to Section 2.08(c), any reasonable legal or other costs, fees and
expenses reasonably incurred in connection with defending or investigating any
such action
14
or claim) insofar as such losses, claims, damages or liabilities are caused by
any untrue statement or alleged untrue statement of a material fact contained in
such registration statement at the time it became effective or any amendment
thereof, any preliminary prospectus (as amended or supplemented if the Company
shall have furnished any amendments or supplements thereto) or prospectus (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) relating to the Registrable Securities, or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, but
only with reference to information relating to a Selling Holder furnished in
writing by or on behalf of such Selling Holder expressly for use in a
registration statement, any preliminary prospectus, prospectus or any amendments
or supplements thereto. Each Selling Holder also agrees to indemnify any
underwriter of the Registrable Securities so offered and each person, if any,
who controls such underwriter on substantially the same basis as that of the
indemnification by such Selling Holder of the Company provided in this Section
2.08(b). Notwithstanding any other provision of this Section 2.08, no Selling
Holder's obligations to indemnify pursuant to this Section 2.08 shall exceed the
amount of net proceeds received by such Selling Holder in connection with the
offering of its Registrable Securities. Each Selling Holder's obligations to
indemnify pursuant to this Section are several in the proportion that the net
proceeds of the offering received by such Selling Holder bear to the total net
proceeds of the offering received by all Selling Holders and not joint.
(c) Each party indemnified under paragraph (a) or (b) above shall, promptly
after receipt of notice of a claim or action against such indemnified party in
respect of which indemnity may be sought hereunder, notify the indemnifying
party in writing of the claim or action and the indemnifying party shall assume
the defense thereof, including the employment of counsel reasonably satisfactory
to such indemnified party, and shall assume the payment of all fees and expenses
in connection therewith; provided that the failure of any indemnified party so
to notify the indemnifying party shall not relieve the indemnifying party of its
obligations hereunder except to the extent that the indemnifying party is
materially prejudiced by such failure to notify. In any such action, any
indemnified party shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the sole expense of such indemnified
party unless (i) the indemnifying party and the indemnified party shall have
mutually agreed to the retention of such counsel or (ii) in the reasonable
judgment of such indemnified party representation of both parties by the same
counsel would be inappropriate due to material differing interests between them,
in which case the reasonable fees and expenses of such counsel shall be at the
sole expense of the indemnifying party. It is understood that the indemnifying
party shall not, in connection with any claim or action or related proceeding in
the same jurisdiction, be liable for the reasonable fees and expenses of more
than one separate firm of attorneys (in addition to any local counsel) at any
time for all
15
such indemnified parties, and that all such reasonable fees and expenses shall
be reimbursed as they are incurred. In the case of any such separate firm for
the Holders as indemnified parties, such firm shall be designated in writing by
the indemnified party that had the largest number of Registrable Securities
included in such registration. The indemnifying party shall not be liable for
any settlement of any claim or action effected without its written consent,
which consent shall not be unreasonably withheld or delayed, but if settled with
such consent, or if there be a final judgment for the plaintiff, the
indemnifying party shall indemnify and hold harmless such indemnified parties
from and against any loss or liability (to the extent stated above) by reason of
such settlement or judgment. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending
or threatened claim or action in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability arising out of such proceeding.
(d) If the indemnification provided for in this Section 2.08 shall for any
reason be unavailable (other than in accordance with its terms) or insufficient
to an indemnified party in respect of any loss, liability, cost, claim or damage
referred to therein, then each indemnifying party shall, in lieu of indemnifying
such indemnified party, contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, cost, claim or damage (A)
as between the Company and the underwriters, in such proportion as is
appropriate to reflect the relative fault of the indemnifying party or parties
on the one hand and of the indemnified party or parties on the other hand in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations, and (B) as between (x) the Company and the Selling Holders or
(y) the Selling Holders and the underwriters, in such proportion as is
appropriate to reflect the relative fault of the indemnifying party or parties
on the one hand and of the indemnified party or parties on the other hand in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the Company, the Selling Holders and the
underwriters shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company, by a Selling Holder or by the underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission, as well as the matters referred to in the last
sentence of Section 2.08(a). The amount paid or payable by an indemnified party
as a result of the loss, cost, claim, damage or liability, or action in respect
thereof, referred to above in this paragraph (d) shall be deemed to include, for
purposes of this paragraph (d), any legal or other costs, fees and expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such
16
action or claim. The Company and the Selling Holders agree that it would not be
just and equitable if contribution pursuant to this Section 2.08 were determined
by pro rata allocation (even if the underwriters and/or Selling Holders were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to in this
paragraph. Notwithstanding any other provision of this Section 2.08, no Selling
Holder shall be required to contribute any amount in excess of the amount by
which the net proceeds of the offering received by such Selling Holder exceed
the amount of any damages which such Selling Holder has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. Each Selling Holder's obligations to contribute pursuant to
this Section are several in the proportion that the net proceeds of the offering
received by such Selling Holder bear to the total net proceeds of the offering
received by all the Selling Holders and not joint. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
(e) Indemnification and contribution similar to that specified in the
preceding paragraphs of this Section 2.08 (with appropriate modifications) shall
be given by the Company, the Selling Holders and the underwriters with respect
to any required registration or other qualification of securities under any
state law or regulation or governmental authority.
(f) The obligations of the parties under this Section 2.08 shall be in
addition to any liability which any party may otherwise have to any other party.
(g) Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in an underwriting agreement entered
into in connection with an underwritten public offering are in conflict with the
foregoing provisions, the provisions in such underwriting agreement shall
control.
Section 2.09. Rule 144 and Form S-3. The Company shall use its reasonable
best efforts to ensure that the conditions to the availability of Rule 144 set
forth in paragraph (c) thereof shall at all times be satisfied. The Company
further agrees to use its reasonable best efforts to cause all conditions to the
availability of Form S-3 (or any successor form) under the 1933 Act for the
filing of registration statements under this Agreement to at all times be
satisfied.
Section 2.10. Lock-Up Agreements. If requested by the lead or managing
underwriters, each Holder hereby agrees that such Holder shall not sell any
Common Stock or securities convertible into or exercisable for Common Stock held
by such Holder (other than the sale pursuant to the registration statement of
those securities included in the registration) for such requested period (not to
exceed ninety (90) days) after the effective date of a registration statement
for an underwritten public offering of any of the Company's equity securities in
which
17
either (i) Registrable Securities of such Holder are included (unless
Registrable Securities sought to be included in such underwritten public
offering by such Holder were excluded pursuant to the applicable provisions of
this Article 2) or (ii) such Holder was offered the opportunity to include
Registrable Securities in such underwritten public offering pursuant to the
"piggyback" registration rights under Section 2.04 but declined to do so.
Notwithstanding the foregoing, this Section 2.10 shall not apply unless all then
officers and directors of the Company, and all stockholders of the Company who
own Common Stock representing 10% or more of the outstanding Common Stock, enter
into similar agreements. Any discretionary waiver or termination of the
requirements under the foregoing provisions made by the managing underwriters
shall apply to each Holder on a pro rata basis.
Section 2.11. Inconsistent Agreements. The Company shall not hereafter
enter into any agreement with respect to its securities which is inconsistent
with or violates the rights granted to the holders of Registrable Securities in
this Agreement.
ARTICLE 3
VOTING
Section 3.01. Voting of Warrant Shares. For so long as Ford or any of its
Affiliates holds any Warrant Shares, it hereby unconditionally and irrevocably
agrees that at any meeting of the stockholders of the Company however called (or
any action by written consent in lieu of a meeting) or any adjournment thereof,
Ford shall vote all Warrant Shares at such time beneficially owned by Ford or
any of its Affiliates (or cause them to be voted) or (as appropriate) execute
written consents in respect thereof, in the same proportions (as between votes
"for", "against" or to "abstain" on each respective matter) as the shares of
Common Stock voted by all holders of Common Stock, other than Ford and its
subsidiaries, with respect to each respective matter to be voted upon by holders
of Common Stock (or for which such consent is sought). Any vote required
pursuant to the preceding sentence shall be cast (or consent shall be given) by
Ford and its Affiliates in accordance with such procedures relating thereto so
as to ensure that it is duly counted, including for purposes of determining that
a quorum is present and for purposes of recording the results of such vote (or
consent). The Company shall establish procedures to allow Ford to vote its
Warrant Shares in accordance with this Section 3.01. This Section 3.01 shall be
inoperative and of no force or effect if Ford and its Affiliates shall acquire
more than 50% of the outstanding Common Stock of the Company without violation
of this Agreement.
18
ARTICLE 4
STANDSTILL
Section 4.01. Standstill. Ford agrees that for a period of three years
following the date hereof, neither Ford nor any of its Affiliates will, without
the Company's prior written consent:
(i) acquire, agree to acquire or offer to acquire beneficial ownership
of any securities of the Company (or options or other rights to acquire any
securities of the Company) other than Registrable Securities; provided that
the foregoing limitation shall not prohibit the acquisition of securities
issued as dividends or as a result of stock splits and similar
reclassifications or received in a consolidation, merger or other business
combination in respect of Registrable Securities held by such Persons at
the time of such dividend, split, reclassification, consolidation, merger
or business combination;
(ii) make or in any way participate in, directly or indirectly, alone
or in concert with others, any "solicitation" of "proxies" (as such terms
are used in the proxy rules of the U.S. Securities and Exchange Commission
promulgated pursuant to Section 14 of the 1934 Act) to vote any voting
securities of the Company;
(iii) form, join or any way participate in a "group" within the
meaning of Section 13(d)(3) of the 1934 Act with respect to any voting
securities of the Company;
(iv) otherwise act, alone or in concert with others, to seek to
propose to the Company or any of its stockholders any merger, share
exchange, business combination, sale of all or substantially all assets,
recapitalization or similar transaction to or with the Company or otherwise
seek, alone or in concert with others, to control, or change the
management, Board of Directors or policies of the Company or nominate any
person as a director who is not nominated by the then incumbent directors,
or propose any matter to be voted upon by the stockholders of the Company;
(v) make any request or proposal to amend, waive or terminate any
provision of this Article 4; or
(vi) take any action that would reasonably be expected to result in
the Company having to make a public announcement regarding any of the
matters referred to in clauses (i) through (v) of this Section 4.01, or
announce an intention to do, or enter into any arrangement or understanding
with others to do, any of the actions restricted or prohibited under
clauses (i) through (v) of this Section 4.01.
19
(b) Notwithstanding the provisions of this Section 4.01, if:
(i) the Company enters into a definitive agreement with an entity
other than a subsidiary of the Company providing for:
(A) a merger, share exchange, business combination or similar
extraordinary transaction as a result of which the Persons possessing,
immediately prior to the consummation of such transaction, beneficial
ownership of the voting securities of the Company entitled to vote
generally in elections of directors of the Company, would cease to
possess, immediately after consummation of such transaction,
beneficial ownership of voting securities entitling them to exercise
more than 50% of the total voting power of all outstanding securities
entitled to vote generally in elections of directors of the Company
(or, if not the Company, the surviving Person resulting from such
transaction),
(B) a sale of all or substantially all of the assets of the
Company and its subsidiaries (determined on a consolidated basis), or
(C) the acquisition (by purchase, merger or otherwise) by any
Person (including any syndicate or group deemed to be a "person" under
Section 13(d)(3) of the 1933 Act) of beneficial ownership of voting
securities of the Company entitling that Person to exercise more than
50% of the total voting power of all outstanding securities entitled
to vote generally in elections of directors of the Company (the
transactions described in clauses (A), (B) and (C) of this Section
4.01(b)being each hereinafter referred to as a "THIRD-PARTY
AGREEMENT"); or
(ii) any Person (other than the Company or a subsidiary of the
Company) commences (within the meaning of the 1934 Act), other than
pursuant to a Third-Party Agreement, a tender offer or exchange offer for
voting securities of the Company entitling the holders thereof to exercise
more than 50% of the total voting power of all outstanding securities
entitled to vote generally in elections of directors of the Company, which
offer is not withdrawn or terminated within five (5) days after it is
commenced (a "THIRD-PARTY TENDER OFFER");
then the restrictions set forth in Section 4.01(a) above shall not restrict the
Holder from (A) in the case of a Third-Party Agreement, making a non-public
proposal solely to the Board of Directors for a transaction as long as such
proposal (x) is at a price that is financially superior to the price to be paid
to the Company or its stockholders pursuant to the Third-Party Agreement, (y)
the structure of such transaction is substantially similar to that contained in
the Third-Party Agreement
20
and (z) the other non-financial terms of such transaction are not less favorable
in any material respect to the Company and its stockholders than the other
non-financial terms contained in the Third-Party Agreement, and (B) in the case
of a Third-Party Tender Offer, commencing a tender offer, or making a non-public
proposal solely to the Board of Directors for a merger, in each case at a price
that is financially superior to the price to be paid pursuant to the Third-Party
Tender Offer; provided, however, that the restrictions set forth in Section
4.01(a) shall again be fully applicable in accordance with their terms upon the
termination of the Third-Party Agreement or termination, withdrawal or final
expiration of the Third-Party Tender Offer, as the case may be, except in each
case with respect to any or offer commenced by Ford as permitted by this
sentence prior to such termination or withdrawal.
(c) The provisions of this Section 4.01 shall be inoperative and of no
force or effect following a Change of Control (as defined in the Warrant).
ARTICLE 5
HEDGING
Section 5.01. Limitations on Hedging. Ford agrees that:
(i) until the date that is the first anniversary of the Closing,
neither Ford nor its Affiliates shall engage in any Hedging Transaction
with respect to any shares of Common Stock;
(ii) between the date that is the first anniversary of Closing and the
date that is the second anniversary of Closing, neither Ford nor its
Affiliates shall engage in any Hedging Transaction with respect to more
than an aggregate of 12,500,000 shares (as adjusted for stock splits,
combinations, recapitalizations and the like) of Common Stock; and
(iii) after the second anniversary of the Closing, Ford will not be
restricted from engaging in any Hedging Transactions.
Section 5.02. Notice. Prior to engaging in any Hedging Transaction, Ford
will first offer the Company a reasonable opportunity to participate in such
transaction, to the extent consistent with market practice, as purchaser of any
Common Stock proposed to be sold by any counterparty in connection with such
Hedging Transaction.
21
ARTICLE 6
TRANSFER RESTRICTIONS
Section 6.01. Transfers; Rights of Transferees of Registrable Securities;
Legends. The Warrant and the Registrable Securities shall be transferable, in
whole or in part from time to time, subject to the following restrictions in
this Section 6.01. Each Holder agrees not to make any direct or indirect sale,
assignment, pledge, transfer or other disposition, whether or not for value
(each, a "TRANSFER"), to the same transferee or any Affiliates of a transferee
(or any member of a "group" (within the meaning of Section 13(d)(3) under the
1934 Act) of which any such transferee or Affiliate is a member) in a single
transaction or series of transactions, of all or any portion of the Warrant or
Registrable Securities (or any right or interest therein) representing (or
representing the right to acquire) a number of shares of Common Stock that is
more than 5% of the then outstanding shares of Common Stock; provided that the
foregoing restriction shall not apply to a Transfer by a Holder to an Affiliate
of the Holder; and provided further the Warrant may only be Transferred in part
in minimum denominations of Two Million (2,000,000) Warrant Shares (as adjusted
appropriately in the event of any stock split, combination, stock dividend or
similar transaction involving the Company's Common Stock, and aggregating, for
purposes of determining whether the minimum is met, any related Transfers made
to Affiliates of the transferee or any member of a "group" (within the meaning
of Section 13(d)(3) under the 1934 Act) of which such transferee or Affiliate is
a member). Each Holder further agrees not to make any Transfer of all or any
portion of the Warrant or Registrable Securities (or any right or interest
therein) unless and until there is then in effect a registration statement under
the 1933 Act covering such proposed transfer and such transfer is made in
accordance with such registration statement, such transfer is made in accordance
with Rule 144 under the 1933 Act and the Company has received an opinion of
counsel for such Holder (which opinion may rely on customary certifications as
to factual matters), reasonably satisfactory to the Company, that such transfer
is made in accordance with Rule 144 under the 1933 Act or (i) the transferee has
agreed in writing to be bound by these transfer restrictions, (ii) such Holder
shall have notified the Company of the proposed transfer and (iii) if reasonably
requested by the Company and the transferee is not an Affiliate of the Holder,
such Holder shall have furnished the Company with an opinion of counsel for such
Holder (which opinion may rely on customary certifications as to factual
matters), reasonably satisfactory to the Company, that such transfer does not
require registration of the Registrable Securities under the 1933 Act. In
connection with a transfer pursuant to clause (c) of the immediately preceding
sentence, the transferee of all or any portion of the Warrant or any Registrable
Securities will be deemed a Holder hereunder as soon as the Company receives (A)
written notice stating the name and address of the transferee and identifying
the portion of the Warrant and all number of Registrable Securities, as
applicable, transferred, (B) a written agreement, in form and substance
acceptable to the Company and Majority
22
Holders, from such transferee to the Company whereby such transferee agrees to
be bound by the terms of this Agreement as a Holder and (C) if required under
clause (c)(iii) above, the opinion referred to therein. Certificates
representing the Warrant and Registrable Securities shall bear a legend
referring to this Agreement and the transfer restrictions contained herein;
provided that such legends shall be removed in connection with any transfer
pursuant to clause (a) or (b) of this Section 6.01.
ARTICLE 7
MISCELLANEOUS
Section 7.01. Remedies. Any Person having rights under any provision of
this Agreement shall be entitled to enforce such rights specifically (without
posting a bond or other security), to recover damages caused by reason of any
breach of any provision of this Agreement and to exercise all other rights
granted by law. 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 any party may in its sole discretion apply to any court of law or equity of
competent jurisdiction (without posting any bond or other security) for specific
performance and for other injunctive relief in order to enforce or prevent
violation of the provisions of this Agreement.
Section 7.02. Waiver; Consents to Amendments. (a) Any provision of this
Agreement may be amended or waived if, but only if, such amendment or waiver is
in writing and is signed, in the case of an amendment, by the Company and the
Majority Holders (except in the case of Article 3, Article 4 and Article 5 which
may be amended only upon the written consent of the Company and Ford), or in the
case of a waiver, by the party against whom the waiver is to be effective.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.
Section 7.03. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns (which shall include, with respect
to Article 2, all Permitted Transferees) and any successor to the Company in
connection with a Change in Control (as defined in the Warrant)); provided that
the Company may not otherwise assign, delegate or otherwise transfer any of its
rights or obligations under this Agreement without the prior written consent of
the Majority Holders and (ii) the obligations of Ford under Article 3, Article 4
and Article 5 shall be binding on Ford and its successors and not any Permitted
Transferees, and Ford shall not be permitted to delegate such obligations
without the prior written consent of the Company.
23
Section 7.04. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon such
a determination, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby be consummated as originally contemplated to the fullest extent possible.
Section 7.05. Counterparts; Effectiveness; Third Party Beneficiaries. 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. This Agreement shall become effective when each party hereto shall
have received a counterpart hereof signed by all of the other parties hereto.
Until and unless each party has received a counterpart hereof signed by the
other party hereto, this Agreement shall have no effect and no party shall have
any right or obligation hereunder (whether by virtue of any other oral or
written agreement or other communication). No provision of this Agreement is
intended to confer any rights, benefits, remedies, obligations or liabilities
hereunder upon any Person other than the parties hereto and their respective
successors and permitted assigns.
Section 7.06. Descriptive Headings; Interpretation. The descriptive
headings of this Agreement are inserted for convenience only and do not
constitute a substantive part of this Agreement. The use of the words "include"
or "including" in this Agreement shall be by way of example rather than by
limitation. Reference to any agreement, document or instrument means such
agreement, document or instrument as amended or otherwise modified from time to
time in accordance with its terms.
Section 7.07. Governing Law. This Agreement shall be governed by and
construed in accordance with the law of the State of Michigan, without regard to
the conflicts of law rules of such state.
Section 7.08. Dispute Resolution. (a) If a dispute arises between the
parties relating to this Agreement, the following shall be the sole and
exclusive procedure for enforcing the terms hereof and for seeking relief,
including but not limited to damages, injunctive relief and specific
performance:
(i) The parties promptly shall hold a meeting of senior executives
with decision-making authority to attempt in good faith to negotiate a
mutually satisfactory resolution of the dispute; provided that no party
shall be under any obligation whatsoever to reach, accept or agree to any
such resolution; provided further, that no such meeting shall be
24
deemed to vitiate or reduce the obligations and liabilities of the parties
or be deemed a waiver by a party hereto of any remedies to which such party
would otherwise be entitled.
(ii) If the parties are unable to negotiate a mutually satisfactory
resolution as provided above, then upon request by either party, the matter
shall be submitted to binding arbitration before a sole arbitrator in
accordance with the CPR Rules, including discovery rules, for
Non-Administered Arbitration. Within five (5) Business Days after the
selection of the arbitrator, each party shall submit its requested relief
to the other party and to the arbitrator with a view toward settling the
matter prior to commencement of discovery. If no settlement is reached,
then discovery shall proceed. Upon the conclusion of discovery, each party
shall again submit to the arbitrator its requested relief (which may be
modified from the initial submission) and the arbitrator shall select only
the entire requested relief submitted by one party or the other, as the
arbitrator deems most appropriate. The arbitrator shall not select one
party's requested relief as to certain claims or counterclaims and the
other party's requested relief as to other claims or counterclaims. Rather,
the arbitrator must only select one or the other party's entire requested
relief on all of the asserted claims and counterclaims, and the arbitrator
shall enter a final ruling that adopts in whole such requested relief. The
arbitrator shall limit his/her final ruling to selecting the entire
requested relief he/she considers the most appropriate from the requests
submitted by the parties.
(iii) Arbitration shall take place in the City of Dearborn, Michigan
unless the parties agree otherwise or the arbitrator selected by the
parties orders otherwise. Punitive or exemplary damages shall not be
awarded. This Section 7.08 is subject to the Federal Arbitration Act, 28
U.S.C.A. Section 1, et seq., or comparable legislation in non-U.S.
jurisdictions, and judgment upon the award rendered by the arbitrator may
be entered by any court having jurisdiction.
Section 7.09. Jurisdiction. Subject to Section 7.08, the parties hereto
agree that any suit, action or proceeding seeking to enforce any provision of,
or based on any matter arising out of or in connection with, this Agreement or
the transactions contemplated hereby shall be brought in any federal court
sitting in Michigan or any Michigan State court sitting in Wayne County or
Oakland County, Michigan, so long as one of such courts shall have subject
matter jurisdiction over such suit, action or proceeding, and that any cause of
action arising out of this Agreement shall be deemed to have arisen from a
transaction of business in the State of Michigan. Each of the parties hereby
irrevocably consents to the jurisdiction of such courts (and of the appropriate
appellate courts therefrom) in any such suit, action or proceeding and
irrevocably waives, to the fullest extent permitted by law, any objection that
it may now or hereafter have to
25
the laying of the venue of any such suit, action or proceeding in any such court
or any objection that any such suit, action or proceeding brought in any such
court has been brought in an inconvenient forum. Process in any such suit,
action or proceeding may be served on any party anywhere in the world, whether
within or without the jurisdiction of any such court.
Section 7.10. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
Section 7.11. Addresses and Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including facsimile
transmission and electronic mail ("E-MAIL") transmission, so long as a receipt
of such e-mail is requested and received) and shall be given,
if to Ford, to:
Ford Motor Company
Office of the Secretary
One American Road
11th Floor World Headquarters
Dearborn, Michigan 48126
Facsimile No.: (313) 248-8713
E-mail: psherry@ford.com
with a copy to:
Ford Motor Company
Office of the General Counsel
One American Road
320 World Headquarters
Dearborn, Michigan 48126
Facsimile No.: (313) 337-3209
E-mail: mnunn@ford.com
and to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention: Paul R. Kingsley
Facsimile No.: (212) 450-3800
E-mail: paul.kingsley@dpw.com
26
if to the Company, to:
Visteon Corporation
One Village Center Drive
Van Buren Township, Michigan 48111
Attention: John Donofrio, General Counsel
Facsimile No.: (734) 710-7132
E-mail: jdonofri@visteon.com
with a copy (which shall not constitute notice) to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
Attention: Michael E. Lubowitz
Facsimile No.: (212) 310-8007
E-mail: michael.lubowitz@weil.com
or such other address, facsimile number or e-mail address as such party may
hereafter specify for the purpose by notice to the other parties hereto. If to
any other Holder, to the address or facsimile set forth on the books of the
Company or any other address or facsimile number as a party may hereafter
specify for such purpose to the Company. Notwithstanding the foregoing, no
Holder or its counsel shall be entitled to notice if such Holder holds less than
1% in the aggregate of the Registrable Securities held by all Holders.
All such notices, requests and other communications shall be deemed
received on the date of receipt by the recipient thereof if received prior to
5:00 p.m. in the place of receipt and such day is a Business Day in the place of
receipt. Otherwise, any such notice, request or communication shall be deemed
not to have been received until the next succeeding Business Day in the place of
receipt.
Section 7.12. Business Days. If any time period for giving notice or
taking action hereunder does not expire on a Business Day, the time period shall
automatically be extended to the immediately following Business Day.
27
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
FORD MOTOR COMPANY
By: /s/ Donat R. Leclair
------------------------------------
Name: Donat R. Leclair
Title: Executive Vice President
and Chief Financial Officer
VISTEON CORPORATION
By: /s/ James F. Palmer
------------------------------------
Name: James F. Palmer
Title: Executive Vice President and
Chief Financial Officer
28
Exhibit 10.3
ESCROW AGREEMENT
THIS ESCROW AGREEMENT is dated as of October 1, 2005 (this
"AGREEMENT"), and is entered into among FORD MOTOR COMPANY ("FORD"), VISTEON
CORPORATION ("VISTEON"), and DEUTSCHE BANK TRUST COMPANY AMERICAS ("ESCROW
AGENT").
A. Ford and Visteon have entered into a Master Agreement dated as of
September 12, 2005 (the "MASTER AGREEMENT") and a Visteon "A" Transaction
Agreement dated as of September 12, 2005 (the "VISTEON "A" TRANSACTION
AGREEMENT"). As part of the consideration under the Visteon A Transaction
Agreement, Ford is required to place into escrow with the Escrow Agent Four
Hundred Million Dollars ($400,000,000) for use by Visteon to restructure its
businesses.
B. Ford and Visteon desire to more fully set forth in this Agreement
the terms and conditions applicable to the amount so retained in escrow.
NOW, THEREFORE, in consideration of the above premises and the mutual
covenants herein contained, and for other good and valuable consideration given
by each party hereto to the other, the sufficiency and receipt of which are
hereby acknowledged, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. ESTABLISHMENT OF ESCROW.
1.1 Amount of Deposit. Pursuant to the Visteon "A" Transaction
Agreement, Ford shall deposit with the Escrow Agent on the date hereof (or, if
the date hereof is not a Business Day, on the next Business Day thereafter) the
sum of Four Hundred Million Dollars ($400,000,000). This amount shall constitute
a separate escrow fund (together with such other amounts that may be deposited
by Ford with the Escrow Agent pursuant to the terms of the Reimbursement
Agreement (as defined below), the "ESCROW FUND") to be governed by the terms of
this Agreement.
1.2 Investment of Escrow Fund. The Escrow Agent shall hold the Escrow
Fund in a segregated account and shall invest and reinvest any part thereof and
accumulate the interest, income, and earnings thereon (the "ESCROW EARNINGS") in
Liquid Investments (defined below) as Visteon in its sole discretion, either
directly or through its agent, shall direct. Any Escrow Earnings, for all
purposes of this Agreement, will be treated the same as (and will be considered
to be) a part of the Escrow Fund. The Escrow Agent shall hold and safeguard the
Escrow Fund during the term hereof and shall treat the Escrow Fund as a trust
fund in accordance with the terms of this Agreement.
1.3 Liquid Investments. "LIQUID INVESTMENTS" mean (a) money market
instruments, negotiable certificates of deposit, time deposits issued by, or
issued on the credit and backing of, any United States commercial bank with
capital and surplus in excess of $250,000,000; (b) obligations issued or
directly or indirectly guaranteed as to principal and interest by the United
States of America or any agency thereof and having a maturity of not more than
two years from the date of acquisition; (c) commercial paper which is rated not
less than prime-one or A-1 or their equivalents by Moody's Investor Service,
Inc.("MOODY'S") or Standard & Poor's Corporation ("S&P") or their successors;
(d) repurchase agreements or reverse repurchase agreements secured by any one or
more of the investments permitted by
-1-
clauses (a), (b) and (c) above, and (e) one or more money market funds
registered under the Investment Company Act of 1940, as amended, with the
highest investment rating available from Moody's or S&P or their successors and
investing in securities referenced in clauses (a)-(d) above.
1.4 Investment Procedures. The Escrow Agent shall use best efforts to
invest or reinvest the Escrow Fund if deposited with the Escrow Agent after
11:00 a.m. (E.S.T.) on such day of deposit but shall have no obligation to do
so. Instructions received after 11:00 a.m. (E.S.T.) will be treated as if
received on the following Business Day. The Escrow Agent shall have no
responsibility for any investment losses resulting from the investment,
reinvestment or liquidation of the Escrow Fund if invested in accordance with
the terms of this Agreement. Any interest or other income received on such
investment and reinvestment of the Escrow Fund shall become part of the Escrow
Fund and any losses incurred on such investment and reinvestment of the Escrow
Fund shall be debited against the Escrow Fund. If a selection is not made and a
written direction not given to the Escrow Agent, the Escrow Fund shall remain
uninvested with no liability for interest therein. It is agreed and understood
that the entity serving as Escrow Agent may earn fees associated with the
investments outlined above in accordance with the terms of such investments.
Notwithstanding the foregoing, the Escrow Agent shall have the power to sell or
liquidate the foregoing investments whenever the Escrow Agent shall be required
to release all or any portion of the Escrow Fund pursuant to this Agreement. In
no event shall the Escrow Agent be deemed an investment manager or adviser in
respect of any selection of investments hereunder. It is understood and agreed
that the Escrow Agent or its affiliates are permitted to receive additional
compensation that could be deemed to be in the Escrow Agent's economic
self-interest for (1) serving as investment adviser, administrator, shareholder
servicing agent, custodian or sub-custodian with respect to certain of the
investments, (2) using affiliates to effect transactions in certain investments
and (3) effecting transactions in Liquid Investments.
1.5 Report on Investments. The Escrow Agent shall prepare and deliver
to Visteon and Ford a report on or before the 10th day after the end of each
month while funds remain in the Escrow Fund, which report shall set forth:
- Beginning balance of the Escrow Fund
- The Escrow Earnings during the applicable month
- All disbursements
- Additional deposits
- Fees to the Escrow Agent
- Ending balance of the Escrow Fund
- Investment activity
- A list of individual investments, including investment type, par
amount, maturity date and CUSIP or ISN (if available)
Each of Visteon and Ford and its respective representatives shall have the right
to audit, at its expense, the Escrow Fund, including all disbursements and
income, upon reasonable advance written notice given to the Escrow Agent and the
other party.
2. DISBURSEMENTS.
2.1 Request for Escrow Reimbursement. While funds remain in the Escrow
Fund, Visteon shall deliver a copy of a request for reimbursement from the
Escrow Fund (each, a "REQUEST FOR ESCROW REIMBURSEMENT") to the Escrow Agent and
to Ford at the same time, provided, however, that Visteon shall not be entitled
to make a Request for Escrow Reimbursement seeking reimbursement for a
-2-
specific category of Reimbursable Restructuring Costs if a Final Award (defined
herein) previously rendered ruled that such category was not eligible for
reimbursement hereunder. At Visteon's request, a Request for Escrow
Reimbursement shall be submitted no more often than once each calendar month on
or before the tenth (10th) Business Day following the end of such month. Each
Request for Escrow Reimbursement shall only cover Reimbursable Restructuring
Costs and shall contain the following information:
(a) A certification by an officer of Visteon substantially in the
form attached hereto as Exhibit A that the Request for Escrow
Reimbursement covers only Reimbursable Restructuring Costs as
defined herein; and
(b) Supporting documentation provided by Visteon to Ford (but not the
Escrow Agent) showing the Reimbursable Restructuring Costs that
have been incurred, which documentation shall be consistent with
the documentation required to support the expense under FAS No.
146 "Accounting for Costs Associated with Exit or Disposal
Activities", FAS No. 112 "Employer's Accounting for
Postemployment Benefits", FAS No. 87 "Employers' Accounting for
Pensions", FAS No. 106 "Employers' Accounting for Postretirement
Benefits Other than Pensions" or FAS No. 88 "Employers'
Accounting for Settlements and Curtailments of Defined Benefit
Pension Plans and for Termination Benefits", as applicable; or in
each case any successor standard; and
(c) A summary of the Reimbursable Restructuring Costs incurred for
each facility and for each separate restructuring action.
The term "REIMBURSABLE RESTRUCTURING COSTS" means costs incurred after May 24,
2005 by Visteon or its subsidiaries related to those activities to exit the
production of certain commodities or to transfer the production of certain
commodities, close or sell certain manufacturing, technical and/or other
administrative support facilities, or combine facilities, operations, or
workforce, in order to eliminate redundant capabilities, improve future
operations, and/or reduce overall costs, including those directly associated
with exit or disposal activities or related to involuntary and voluntary
employee separation programs that are accounted for in accordance with FAS No.
146 "Accounting for Costs Associated with Exit or Disposal Activities", employee
severance costs incurred as a result of restructuring actions in accordance with
FAS No. 112 "Employer's Accounting for Postemployment Benefits", pension and
other postemployment benefits costs incurred in accordance with FAS No. 87
"Employers' Accounting for Pensions", FAS No. 106 "Employers' Accounting for
Postretirement Benefits Other than Pensions", voluntary separation benefits or
curtailment costs incurred in accordance with FAS No. 88 "Employers' Accounting
for Settlements and Curtailments of Defined Benefit Pension Plans and for
Termination Benefits", amounts related to accrued fringe benefits that require
settlement in cash due to employee separation actions, such as for vacation
benefits, and/or any Separation Costs (as defined in the Reimbursement Agreement
(as defined below)) but only to the extent that Ford is no longer required to
pay for any Separation Costs under the Reimbursement Agreement.
Reimbursable Restructuring Costs do not include costs for routine or ongoing
repositionings and redeployments of productive facilities or workforce (e.g.,
normal plant rearrangement or employee relocation), nor do they include costs
for other routine or ordinary activities that would otherwise have been incurred
(e.g., planning and analysis, general or recurring financial and administrative
support).
The following are illustrative examples (but are not the exclusive examples) of
Reimbursable Restructuring Costs:
-3-
- - Severance pay for employees, including costs related to other benefits such
as out-placement services and continuation of benefits such as medical
coverage
- - Special termination pension and other postemployment benefits
- - The cost of early retirement incentive payments or other voluntary
termination programs that may be offered, including reimbursements to Ford
pursuant to Section 3.01(c)(ii) of the Amended and Restated Employee
Transition Agreement between Ford and Visteon dated as of April 1, 2000 and
restated as of December 19, 2003 and as amended as of the date hereof.
- - Employee retraining costs
- - Relocation expense for retained employees
- - Costs to transfer, relocate and rearrange plants and equipment
- - Cancellation costs, including leased equipment or obligations to perform
under purchase orders
- - Professional costs related to establishing and implementing restructuring
actions
- - Costs that will continue to be incurred under the contract for its
remaining term without economic benefit to the entity (e.g. Fidelity or IT
contracts)
The following are illustrative examples (but are not the exclusive examples) of
costs that do not constitute Reimbursable Restructuring Costs:
- - Pension fund contributions, except as permitted above
- - Non-cash expenses for write-off of capital equipment or inventory
- - Capital spending
- - Debt repayment or interest expense on debt
- - Changes in reserves for environmental, warranty or product liability
- - Wages, salaries, overhead, etc., associated with ongoing operations
2.2 Excess Funds. (a) If any funds remain in the Escrow Fund after
December 31, 2012, then the Escrow Agent shall disburse the balance of the
Escrow Fund, including Escrow Earnings, if any, to Visteon, provided however, if
at any time prior to December 31, 2012 the Escrow Agent receives a written
notice from Ford that Visteon has undergone a Change of Control (defined herein)
then the Escrow Agent shall disburse such funds remaining in the Escrow Fund
after December 31, 2012 to Ford. If the funds remaining in the Escrow Fund after
December 31, 2012 would otherwise be required to be disbursed to Visteon under
the terms of this subsection, then such funds shall not be disbursed to Visteon
until all outstanding Requests for Disbursement shall first be deducted from the
funds remaining or, if any Request for Disbursement is being contested by
Visteon, a final settlement by the parties or a Final Award (defined herein) by
an arbitrator has been made and funds disbursed in accordance with such
settlement or award. If the funds remaining in the Escrow Fund after December
31, 2012 would otherwise be required to be disbursed to Ford under the terms of
this subsection, then such funds shall not be disbursed until all outstanding
Requests for Escrow Reimbursement have been deducted from the funds remaining
or, if any Request for Escrow Reimbursement is being contested by Ford, a final
settlement by the parties or a Final Award by an arbitrator has been made and
funds disbursed in accordance with such settlement or award. The Escrow Agent
shall disburse the balance of the Escrow Fund in accordance with the procedure
set forth in subsection 2.2(b).
(b) Within five Business Days after December 31, 2012, the Escrow
Agent shall give written notice to Ford and Visteon of the Escrow Agent's intent
to disburse the remaining balance of the Escrow Fund. Within fifteen (15)
Business Days after receipt of such notice, each of Ford and Visteon
-4-
shall then give written notice to Escrow Agent and to the other party indicating
which party is entitled to receive the balance of the Escrow Fund. In the event
of a dispute between Ford and Visteon as to the party entitled to the remaining
balance, the matter shall be submitted for dispute resolution in accordance with
subsection 3.3 hereof.
(c) As used in this Section, the term "CHANGE OF CONTROL" means (i) a
liquidation or dissolution of Visteon; (ii) the sale, lease, transfer,
conveyance or other disposition, in one or a series of related transactions, of
all or substantially all of the assets of Visteon and its subsidiaries, taken as
a whole; (iii) a merger, consolidation, share exchange, business combination or
similar extraordinary transaction as a result of which the persons possessing,
immediately prior to the consummation of such transaction, beneficial ownership
of the voting securities of Visteon entitled to vote generally in elections of
directors of Visteon, cease to possess, immediately after consummation of such
transaction, beneficial ownership of voting securities entitling them to
exercise at least 50% of the total voting power of all outstanding securities
entitled to vote generally in elections of directors of Visteon (or, if not
Visteon, the surviving entity resulting from such transaction); or (iv) a
transaction or series of transactions (including by way of merger,
consolidation, sale of stock or otherwise) the result of which is that any
Person or "group" (as defined in Section 13 of the Securities Exchange Act of
1934) becomes the "beneficial owner" (as such term is defined in Rule 13d-3 and
Rule 13d-5 promulgated under the Securities Exchange Act of 1934), directly or
indirectly, of more than 50% of the voting power of the outstanding voting stock
of Visteon.
2.3 Instructions. All instructions to the Escrow Agent shall be in
writing, signed by an authorized representative of the party(ies) giving the
instructions.
2.4 Disbursements. All disbursements shall be made by the Escrow Agent
by wire transfer of immediately available funds initiated within three (3)
Business Days after the Escrow Agent is entitled to make reimbursement under
this Agreement. The Escrow Agent shall provide to Ford a statement of each
disbursement made to Visteon at the time that such disbursement is made and
shall provide to Visteon a statement of each disbursement made to Ford at the
time such disbursement is made.
2.5 No Further Deposits Required. Except pursuant to that certain
Reimbursement Agreement dated as of the date hereof between Ford and Visteon
(the "REIMBURSEMENT AGREEMENT") and other than by Ford as stated in subsection
2.6 below, neither Ford nor Visteon is required to deposit any funds in the
Escrow Fund other than as stated in subsection 1.1.
2.6 Disbursements to Ford. If, (i) pursuant to an arbitration award,
court order or written settlement agreement executed by Ford and Visteon or
written instructions from Visteon to the Escrow Agent to make a disbursement to
Ford from the Escrow Fund, Ford or its subsidiaries or affiliates becomes
entitled to recover from Visteon or its subsidiaries or affiliates as a result
of any indemnification obligation contained in, or any breach or default arising
under, any of the Transaction Documents ("VISTEON OBLIGATION"), and (ii) Ford or
the applicable subsidiary or affiliate shall not have received the full amount
of the Visteon Obligation within the time frame provided in such award, order or
agreement, then Ford or the applicable subsidiary or affiliate shall have a
right to deliver a copy of a request for disbursement (each, a "REQUEST FOR
DISBURSEMENT") to the Escrow Agent and to Visteon at the same time. Each Request
for Disbursement shall be accompanied by a copy of the arbitration award, court
order, settlement agreement or written instructions and, in the case of the
submission of an arbitration award, court order or written settlement agreement,
a certificate addressed to the Escrow Agent and Visteon executed by an officer
of Ford stating that Ford is entitled to the amounts set forth in the Request
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for Disbursement based upon such award, order or agreement and the terms of this
Agreement. Upon receipt of such Request for Disbursement and such certificate,
if applicable, the Escrow Agent shall disburse to Ford the amount requested in
the Request for Disbursement. If, however, the award or order that served as the
basis for a disbursement to Ford hereunder is overruled or otherwise vacated by
a final, non-appealable order or pursuant to a written settlement agreement
executed by Ford and Visteon, then Ford shall redeposit into the Escrow Fund the
amounts previously disbursed to Ford hereunder with respect to which the award
or order was overruled or vacated or with respect to which Ford and Visteon have
reached agreement pursuant to such written settlement together with interest at
the applicable rate if so prescribed in such award, order or settlement
agreement. Any disbursements to Ford pursuant to this subsection shall be deemed
to reduce the portion of Escrow Fund that is subject to disbursement at a 50%
rate as provided in subsection 3.1(iii) below, provided, however, that if such
portion is inadequate to cover any such disbursement, the uncovered portion of
the disbursement shall be deemed to reduce the remainder of the Escrow Fund. Any
amounts redeposited by Ford into the Escrow Fund in accordance with this
subsection 2.6 shall be deemed to have been redeposited in the same manner as
they were deemed to have been disbursed.
3. PROCEDURE FOR REIMBURSEMENT.
3.1 Uncontested Reimbursements. If, within fifteen (15) Business Days
after a Request for Escrow Reimbursement is received by the Escrow Agent and
Ford pursuant to subsection 2.1, Ford has not delivered its objection to such
Request for Escrow Reimbursement in writing to Visteon and the Escrow Agent,
then the Escrow Agent shall distribute to Visteon from the Escrow Fund the
amount requested in the Request for Escrow Reimbursement; provided, however,
that (i) until such time that the disbursements from the Escrow Fund exceed Two
Hundred Fifty Million Dollars ($250,000,000) (the "Initial Date"), the Escrow
Agent shall disburse 100% of any Request for Escrow Reimbursement, (ii) after
the Initial Date, an amount equal to the Escrow Earnings as of the Initial Date
(less any amounts paid or payable to the Escrow Agent or other third parties
pursuant to subsection 3.3 and Sections 4, and 7 of this Escrow Agreement up to
and including the Initial Date) ("SPECIAL ESCROW EARNINGS") will also be
available for disbursement at 100% of any Request for Escrow Reimbursement,
(iii) after the Initial Date and the disbursement of all Special Escrow Earnings
in accordance with this Agreement, the Escrow Agent shall disburse only 50% of
any Requests for Escrow Reimbursement up to a total of One Hundred Fifty Million
Dollars ($150,000,000), and (iv) any remaining amounts in the Escrow Fund will
be available for disbursement at 100% of any Request for Escrow Reimbursement.
For example, if, after the Initial Date and the disbursement of all of the
Special Escrow Earnings, Visteon submits a Request for Escrow Reimbursement in
the amount of $5 million, then the Escrow Agent shall disburse only $2.5 million
with respect to such request. If, however, after the disbursement of the Special
Escrow Earnings and Four Hundred Million Dollars ($400,000,000), Visteon submits
a Request for Escrow Reimbursement in the amount of $5 million, then the Escrow
Agent shall disburse to Visteon with respect to such request the lesser of the
amounts remaining in the Escrow Fund and $5 million. If Ford has delivered its
objection to all or any portion of such Request for Escrow Reimbursement, then
notwithstanding the foregoing provisions of this subsection, the Escrow Agent
may distribute to Visteon from the Escrow Fund only such amounts permitted under
subsection 3.2 hereof.
3.2 Contested Reimbursements. If Ford gives Visteon and the Escrow
Agent written notice contesting all or any portion of a Request for Escrow
Reimbursement (a "CONTESTED REIMBURSEMENT") within the fifteen (15) Business Day
period specified in subsection 3.1, then such Contested Reimbursement shall be
resolved by either (i) a written settlement agreement executed by Ford and
Visteon as provided in subsection 3.4 below or (ii) in the absence of such a
written settlement
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agreement, by binding arbitration between Ford and Visteon in accordance with
the terms and provisions of subsection 3.3, provided, however, that Ford shall
not be entitled to contest any portion of a Request for Escrow Reimbursement to
the extent that such portion of the request seeks reimbursement for a specific
category of Reimbursable Restructuring Costs that a Final Award (defined herein)
had ruled was eligible for reimbursement hereunder. Each Contested Reimbursement
shall set forth in reasonable detail the basis for Ford's contest of a Request
for Reimbursement. In the event of a Contested Reimbursement, Ford and Visteon
shall attempt in good faith to agree upon the rights of the respective parties
with respect to such claim. If Visteon and Ford should so agree, "Settlement
Instructions" will be prepared, delivered, and performed in accordance with
subsection 3.4 below. The Escrow Agent shall retain Escrow Funds covered by the
contested portion of the Contested Reimbursement until receipt of a Settlement
Instruction (defined herein) pertaining to such portion of the Contested
Reimbursement from Visteon and Ford or a copy of the Final Award. The Escrow
Agent shall disburse any uncontested portion of the Request for Escrow
Reimbursement in accordance with subsection 2.4 hereof.
3.3 Arbitration of Disputes. If a dispute arises between the parties
relating to this Agreement, the following shall be the sole and exclusive
procedure for enforcing the terms hereof and for seeking relief hereunder:
(i) CPR. Following good faith negotiations between the parties hereto (or,
with respect to a Contested Reimbursement, between Ford and Visteon in
accordance with subsection 3.2 hereof), any dispute arising among the
parties relating to this Agreement including any Contested
Reimbursement that is not resolved in accordance with subsection
3.2(i) will be submitted to mandatory, final and binding arbitration
before a sole arbitrator in accordance with the CPR Rules, including
discovery rules, for Non-Administered Arbitration, as follows. Within
five (5) Business Days after the selection of the arbitrator, each
party shall submit its requested relief to the other parties (except
that in the case of a Contested Reimbursement notice only has to be
given to Ford or Visteon as the case may be) and to the arbitrator
with a view toward settling the matter prior to commencement of
discovery. If no settlement is reached, then discovery shall proceed
subject to the authority of the arbitrator to resolve discovery
disputes between the parties. Upon the conclusion of discovery, each
party shall again submit to the arbitrator its requested relief (which
may be modified from the initial submission) and, in the case of a
Contested Reimbursement, the arbitrator shall select only the entire
requested relief submitted by one party or the other, as the
arbitrator deems most appropriate. The arbitrator shall not select one
party's requested relief as to certain claims or counterclaims and the
other party's requested relief as to other claims or counterclaims;
rather, the arbitrator must only select one or the other party's
entire requested relief on all of the asserted claims and
counterclaims, and the arbitrator will enter a final ruling that
adopts in whole such requested relief, provided, however, that with
respect to a Request for Escrow Reimbursement the arbitrator may act
separately upon each portion of such request that has been contested
under subsection 3.2 hereof. The arbitrator will limit his/her final
ruling to selecting the requested relief he/she considers the most
appropriate from those submitted by the parties.
(ii) Location of Arbitration. Arbitration shall take place in the City of
Dearborn, Michigan unless the parties agree otherwise or the
arbitrator selected by the parties orders otherwise. Punitive or
exemplary damages shall not be awarded. This clause is subject to the
Federal Arbitration Act, 28 U.S.C.A. Section 1, et seq., and judgment
upon the
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award rendered by the arbitrator may be entered by any court having
jurisdiction as set forth in section 13 hereof.
(iii) Payment of Costs. Ford, on the one hand, and Visteon, on the other
hand, will initially fund such deposits and advances as may be
required by the arbitrator in equal proportions, but either party may
advance such amounts. The arbitrator will determine in the Final Award
(defined herein) the party who is the prevailing party and the party
who is not the prevailing party (the "NON-PREVAILING PARTY"). The
Non-Prevailing Party will pay all reasonable costs, fees and expenses
related to the arbitration, including reasonable fees and expenses of
attorneys, accountants and other professionals incurred by the
prevailing party, the fees of each arbitrator, the administrative fee
of the arbitration proceedings and any amounts advanced by the
prevailing party for such items, provided, however, that if the
arbitrator determines that requiring the Non-Prevailing Party to bear
the reasonable costs, fees and expenses set forth in the preceding
sentence would result in manifest injustice, the arbitrator may
apportion such costs, fees and expenses between the parties in such a
manner as the arbitrator deems just and equitable (such costs, fees
and expenses as may be apportioned by the arbitrator pursuant to the
preceding clause, the "ARBITRATION EXPENSES"). If Visteon is the
Non-Prevailing Party, then Visteon and Ford shall instruct the Escrow
Agent to disburse to Ford from the Escrow Fund the Arbitration
Expenses. If the amount of such Arbitration Expenses exceeds the
amount remaining in the Escrow Fund, then Visteon shall pay to Ford,
by wire transfer, such excess as promptly as possible but in no event
later than ten (10) Business Days after the Final Award (defined
herein) is rendered pursuant to subparagraph (v) below. If Ford is the
Non-Prevailing Party, then Ford shall pay to Visteon, by wire
transfer, the Arbitration Expenses as promptly as possible but in no
event later than ten (10) Business Days after such Final Award is
rendered.
(iv) Burden of Proof. Except as may be otherwise expressly provided herein,
for any Contested Reimbursement or any other matter submitted to
arbitration hereunder, the burden of proof will be as it would have
been if the claim were litigated in a judicial proceeding in a
Michigan state court and governed exclusively by the internal laws of
the State of Michigan, without regard to the principles of choice of
law or conflicts of law of any jurisdiction.
(v) Award. Upon the conclusion of any arbitration proceedings hereunder,
the arbitrator will render findings of fact and conclusions of law and
a final written arbitration award setting forth its resolution of the
matters submitted for resolution, the basis and reasons therefor and
the Arbitration Expenses (the "FINAL AWARD") and will deliver such
documents to the parties together with a signed copy of the Final
Award. Subject to the provisions of subparagraph (vii) below, the
Final Award will constitute a conclusive determination of all issues
in question that shall be, binding upon the parties hereto, and shall
include an affirmative statement to such effect. To the extent that
the Final Award determines that Visteon or Ford is entitled to any
monies from the Escrow Fund then the Escrow Agent shall make the
disbursement in accordance with the terms of such Final Award.
(vi) Timing. The parties and the arbitrator will conclude each arbitration
pursuant to subsection 3.3 as promptly as possible.
-8-
(vii) Terms of Arbitration. The arbitrator chosen in accordance with these
provisions will not have the power to alter, amend or otherwise affect
the terms of these arbitration provisions or the other provisions of
this Agreement.
3.4 Settled Claims. If a dispute hereunder is settled by a written
settlement agreement executed by Visteon and Ford (a "SETTLED CLAIM"), then
Visteon and Ford will promptly deliver such executed settlement agreement to the
Escrow Agent together with written instructions executed by both an officer of
Ford and an officer of Visteon to the Escrow Agent ("SETTLEMENT INSTRUCTIONS")
which will, in accordance with and subject to the terms of the written
settlement agreement, instruct the Escrow Agent either: (i) to release a stated
amount of the Escrow Fund to Visteon or to Ford pursuant to such settlement
agreement; and/or (ii) in the case of a Contested Reimbursement, that no action
need be taken by the Escrow Agent with respect to such request. On the third
(3rd) Business Day following its receipt of Settlement Instructions, the Escrow
Agent will promptly release from the Escrow Fund and transfer to Visteon or Ford
that amount of the Escrow Fund that Ford and Visteon have agreed in the
Settlement Instructions will be transferred to such party.
4. LIMITATION OF THE ESCROW AGENT'S LIABILITY.
4.1 Limitation of Liability. The Escrow Agent shall only have those
duties as are expressly set forth in this Agreement, which duties are merely
ministerial in nature, and no implied duties shall be read into this Agreement
other than as set forth in the last sentence of this subsection. The Escrow
Agent shall incur no liability with respect to any action taken or suffered by
it in reliance upon any notice, direction, instruction, consent, statement or
other document reasonably believed by it to be genuine and duly authorized, nor
for any other action or inaction, except its own willful misconduct, fraud or
gross negligence. The Escrow Agent shall have no duty to inquire into or
investigate the validity, accuracy or content of any document delivered to it.
The Escrow Agent shall not be responsible for the validity or sufficiency of
this Agreement. In all questions arising under this Agreement, the Escrow Agent
may rely on the advice or opinion of counsel, and for anything done, omitted or
suffered in good faith by the Escrow Agent based on such advice, the Escrow
Agent shall not be liable to anyone. The Escrow Agent shall not be required to
take any action hereunder involving any expense unless it shall have been
furnished with reasonably acceptable indemnification. The Escrow Agent shall
have no duties or responsibilities other than those expressly set forth in this
Agreement and the implied duty of good faith and fair dealing.
4.2 Resolution of Conflicting Demands. In the event conflicting
demands are made or conflicting notices are served upon the Escrow Agent with
respect to the Escrow Fund, the Escrow Agent shall have the absolute right, at
the Escrow Agent's election, to do any of the following: (i) resign so a
successor escrow agent can be appointed pursuant to Section 8; submit the matter
to binding arbitration in accordance with subsection 3.3 hereof, or (ii) give
written notice to Ford and Visteon that it has received conflicting instructions
and is refraining from taking action until it receives instructions consented to
in writing by both Ford and Visteon.
4.3 Indemnification. Each of Ford and Visteon, jointly and severally
(each an "INDEMNIFYING PARTY" and together the "Indemnifying Parties"), hereby
covenants and agrees to reimburse, indemnify and hold harmless the Escrow Agent,
the Escrow Agent's officers, directors, employees, counsel and agents (severally
and collectively, the "ESCROW AGENT INDEMNITEES"), from and against any loss,
damage, liability or loss suffered, incurred by, or asserted against the Escrow
Agent Indemnitees (including amounts paid in settlement of any action, suit,
proceeding, or claim brought or
-9-
threatened to be brought and including reasonable expenses of legal counsel)
arising out of, in connection with or based upon any act or omission by the
Escrow Agent Indemnitees relating in any way to this Agreement or the Escrow
Agent's services hereunder. This indemnity shall exclude any damage, liability
or loss arising out of willful misconduct, fraud or gross negligence on the part
of an Escrow Agent Indemnitee.
4.4 Defense. Each Indemnifying Party may participate at its own
expense in the defense of any claim or action that may be asserted against the
Escrow Agent Indemnitees. The Escrow Agent Indemnitees' right to indemnification
hereunder shall survive the Escrow Agent's resignation or removal as the Escrow
Agent and shall survive the termination of this Agreement by lapse of time or
otherwise.
4.5 Notice to Indemnifying Parties. The Escrow Agent hereby agrees
that the Escrow Agent shall notify each Indemnifying Party by letter or
facsimile, confirmed by letter, and by e-mail of any receipt by an the Escrow
Agent Indemnitee of a written assertion of a claim against the Escrow Agent
Indemnitee, or any action commenced against the Escrow Agent Indemnitee, within
ten (10) days after the Escrow Agent Indemnitee's receipt of written notice of
such claim. However, the Escrow Agent's failure to so notify each Indemnifying
Party shall not operate in any manner whatsoever to relieve an Indemnifying
Party from any liability that it may have otherwise on account of this Section
4, except to the extent that such Indemnifying Party is prejudiced by the Escrow
Agent's failure.
4.6 Use of Agents. The Escrow Agent may execute any of its powers or
responsibilities hereunder and exercise any rights hereunder either directly or
by or through its agents or attorneys.
4.7 Damages. In no event shall the Escrow Agent be liable for any
indirect, punitive, special or consequential damages, whether or not the Escrow
Agent shall have been informed of the likelihood of such damages, or any amount
in excess and regardless of the form of action.
4.8 Deemed Notice. The Escrow Agent shall not be deemed to have notice
of any Request for Escrow Reimbursement, response thereto, demand with respect
thereto or other fact or claim unless it is actually known by an officer charged
with responsibility for administering this Agreement or unless it is set forth
in a writing received by the Escrow Agent and making specific reference to this
Agreement. If any notice, certificate or other document is required to be
delivered to the Escrow Agent and any other person, the Escrow Agent may assume
without inquiry (unless the Escrow Agent has written notice to the contrary)
that any such document which the Escrow Agent has received has also been
received by such other person.
4.9 Survival of Indemnification. All indemnification contained in this
Agreement shall survive the resignation or removal of the Escrow Agent, and
shall survive the termination of this Agreement.
4.10 Liability for Other Parties. In no event shall the Escrow Agent
have any liability for any failure or inability of any of the other parties
hereto to perform or observe its duties under the Agreement, or by reason of a
breach of this Agreement by any of the other parties hereto. In no event shall
the Escrow Agent be obligated to take any action against any of the other
parties hereto to compel performance hereunder.
-10-
4.11 Arbitration. The Escrow Agent shall in no instance be obligated
to commence, prosecute or defend any legal or arbitration proceedings in
connection herewith. The Escrow Agent shall be authorized and entitled, however,
to submit to arbitration pursuant to subsection 3.3 hereof any matter or dispute
it may deem appropriate in order, to obtain a necessary declaration of rights,
or to appoint a successor upon resignation (and after failure by Visteon to
appoint a successor, as provided hereinafter).
4.12 Ambiguity. In the event of any ambiguity or uncertainty under
this Agreement, the Escrow Agent may, in its discretion, refrain from taking
action, and may retain the Escrow Fund then held by it until and unless it
receives written instruction signed by Ford and Visteon that eliminates such
uncertainty or ambiguity.
4.13 Self-Dealing. The Escrow Agent is hereby authorized, in making or
disposing of any investment permitted by this Agreement, to deal with itself (in
its individual capacity) or with any one or more of its affiliates, whether it
or such affiliate is acting as a subagent of the Escrow Agent or for any third
person or dealing as principal for its own account.
4.14 Distribution. Notwithstanding any term appearing in this
Agreement to the contrary, in no instance shall the Escrow Agent be required or
obligated to distribute any portion of the Escrow Fund (or take other action
that may be called for hereunder to be taken by the Escrow Agent) sooner than
two (2) Business Days after (i) it has received the applicable documents
required under this Agreement in good form, or (ii) passage of the applicable
time period (or both, as applicable under the terms of this Agreement), as the
case may be.
4.15 Denomination of Payment. All payments to or by the Escrow Agent
hereunder shall be in U.S. dollars.
5. NOTICES. All notices, requests and other communications to any party
hereunder shall be in writing (including facsimile transmission and electronic
mail ("E-MAIL") transmission, so long as a receipt of such e-mail is requested
and received) and shall be given,
If to Ford: Ford Motor Company
11th Floor
One American Road
Dearborn, Michigan 48121
Attn: Secretary
Facsimile: 1-313-248-8713
psherry@ford.com
with a copy to: Ford Motor Company
320 WHQ
One American Road
Dearborn, Michigan 48121
Attn: Marcia Nunn, Managing Counsel
Facsimile: 1-313-337-3209
mnunn@ford.com
If to Visteon Visteon Corporation
One Village Center Drive
Van Buren Twp., MI 48111
-11-
Attn: John Donofrio, General Counsel
Facsimile 1-734-710-7132
jdonofri@visteon.com
with a copy to: Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
Attn: Michael E. Lubowitz
Facsimile: 1-212-310-8007
michael.lubowitz@weil.com
If to Escrow Agent: Deutsche Bank Trust Company Americas
60 Wall Street, 27th Floor, Mail Stop: NYC60-2710
New York, NY 10005
Attn: Aldrin Bayne, Escrow Team
Fax: 1-732-578-4593
or such other address, facsimile number or e-mail address as such party may
hereafter specify for the purpose by notice to the other parties hereto. All
such notices, requests and other communications shall be deemed received on the
date of receipt by the recipient thereof if received prior to 5:00 p.m. in the
place of receipt and such day is a Business Day in the place of receipt.
Otherwise, any such notice, request or communication shall be deemed not to have
been received until the next succeeding Business Day in the place of receipt.
6. GENERAL.
6.1 Governing Law. The internal laws of the State of Michigan,
irrespective of its choice of law principles, shall govern the validity of this
Agreement, the construction of its terms, and the interpretation and enforcement
of the rights and duties of the parties hereto, provided however, that the
rights, duties and indemnities of the Escrow Agent shall be interpreted under
New York law.
6.2 Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
6.3 Entire Agreement. This Agreement and the exhibits hereto ( and
with respect to Ford and Visteon only, the Reimbursement Agreement) constitute
the entire understanding and agreement of the parties hereto with respect to the
subject matter hereof and supersede all prior and contemporaneous agreements or
understandings, inducements or conditions, express or implied, written or oral,
between the parties with respect hereto. The express terms hereof control and
supersede any course of performance or usage of the trade inconsistent with any
of the terms hereof.
6.4 Waivers. No waiver by any party hereto of any condition or of any
breach of any provision of this Agreement shall be effective unless in writing.
No waiver by any party of any such condition or breach, in any one instance,
shall be deemed to be a further or continuing waiver of any such condition or
breach or a waiver of any other condition or breach of any other provision
contained herein.
6.5 Certain Definitions. As used herein, (a) the term "BUSINESS DAY"
means a day, other than a Saturday, Sunday or other day on which commercial
banks in Detroit, Michigan and New
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York, New York are authorized or required by law to close; and (b) the term
"TRANSACTION DOCUMENTS" shall mean the Master Agreement, the Contribution
Agreement Transaction Documents as defined in that certain Contribution
Agreement dated as of September 12, 2005 between Visteon and Automotive
Components Holdings, Inc. (f/k/a VFH Holdings, Inc.); the Visteon "B"
Transaction Documents as defined in that certain Visteon "B" Purchase Agreement
dated as of September 12, 2005 between Ford and Visteon and the Visteon "A"
Transaction Documents as defined in that certain Visteon "A" Transaction
Agreement dated as of September 12, 2005. Whenever the words "include",
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation", whether or not they are in fact
followed by those words or words of like import. When a reference is made in
this Agreement to a Section, subsection, Exhibit or Schedule, such reference
shall be to a Section or subsection of, or an Exhibit or Schedule to, this
Agreement unless otherwise indicated. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the singular is used herein, the same
shall include the plural, and whenever the plural is used herein, the same shall
include the singular, where appropriate.
6.6 U. S. Patriot Act. The parties hereto acknowledge that, in
accordance with Section 326 of the USA Patriot Act the Escrow Agent, like all
financial institutions, is required to obtain, verify, and record information
that identifies each person or legal entity that opens an account. The parties
to this Agreement agree that they will provide the Escrow Agent with such
information as it may reasonably request in order for the Escrow Agent to
satisfy the requirements of the USA Patriot Act.
7. COMPENSATION AND EXPENSES OF THE ESCROW AGENT. All fees and expenses of the
Escrow Agent incurred in the ordinary course of performing its responsibilities
hereunder, as set forth on the Escrow Agent's fee schedule attached hereto as
Exhibit B, and any other fees and expenses incurred by the Escrow Agent for
which it is permitted to be reimbursed hereunder (except as specified in the
following sentence), shall be paid from the Escrow Fund. Any fees or expenses
(including the reasonable fees or expenses of outside counsel to the Escrow
Agent) incurred by the Escrow Agent in connection with a dispute over the
distribution of Escrow Fund or the validity of a Request for Escrow
Reimbursement shall be paid by the Non-Prevailing Party within thirty (30) days
after Escrow Agent has supplied a written invoice to the Non-Prevailing Party.
8. SUCCESSOR TO THE ESCROW AGENT. In the event the Escrow Agent becomes
unavailable or unwilling to continue in its capacity herewith, the Escrow Agent
may resign and be discharged from its duties or obligations hereunder by giving
notice of its resignation to the parties to this Agreement, specifying a date
not less than thirty (30) days following such notice date of when such
resignation shall take effect. If, and only if, a successor escrow agent is
appointed pursuant to the resignation of the Escrow Agent the Escrow Agent shall
refund to the Escrow Fund any prepaid but unearned fees previously paid from the
Escrow Fund to the Escrow Agent hereunder. Visteon, with the consent of Ford,
which shall not be unreasonably withheld or delayed, shall designate a successor
escrow agent prior to the expiration of such thirty-day period by giving written
notice to the Escrow Agent and Ford. Visteon may at any time appoint any
successor escrow agent with the consent of Ford, which consent shall not be
unreasonably withheld or delayed. If no successor escrow agent is named by
Visteon, the Escrow Agent may apply to a court of competent jurisdiction for the
appointment of a successor escrow agent. The Escrow Agent shall promptly
transfer the Escrow Fund to such designated successor.
It is further understood that any corporation into which the Escrow
Agent in its individual capacity may be merged or converted or with which it may
be consolidated, or any corporation resulting
-13-
from any merger, conversion or consolidation to which the Escrow Agent in its
individual capacity shall be a party, or any corporation to which substantially
all the corporate trust business of the Escrow Agent in its individual capacity
(including the administration of this Agreement) may be transferred, shall be
the Escrow Agent under this Agreement without further act.
9. LIMITATION OF RESPONSIBILITY. The Escrow Agent's duties are limited to those
set forth in this Agreement and applicable laws, and the Escrow Agent, acting as
such under this Agreement, is not charged with knowledge of or any duties or
responsibilities under any other document or agreement.
10. FORCE MAJEURE. If either party hereto is rendered unable, wholly or in part,
by Force Majeure (as defined herein) to perform its obligations hereunder (other
than the obligation to pay money), such party shall give prompt notice to the
other party with reasonable particulars including the probable extent of the
inability to perform such obligation. Upon the giving of such notice, the
obligation of such party shall be suspended but only to the extent and for the
same time period it is affected by such Force Majeure. The affected party shall
use all possible diligence to remove the effect of such Force Majeure. For
purposes of this Agreement, the term "FORCE MAJEURE" shall mean acts of God,
strikes, lockouts, riots, acts of war, epidemics, governmental regulations
superimposed after the fact, fire, acts of terror, communication line failures,
computer viruses, power failures, earthquakes or other disasters.
11. REPRODUCTION OF DOCUMENTS. This Agreement and all documents relating
thereto, including, without limitation, (a) consents, waivers and modifications
which may hereafter be executed, and (b) certificates and other information
previously or hereafter furnished, may be reproduced by any photographic,
photostatic, microfilm, optical disk, micro-card, miniature photographic or
other similar process. The parties hereto agree that any such reproduction shall
be admissible in evidence as the original itself in any judicial or
administrative proceeding, whether or not the original is in existence and
whether or not such reproduction was made by a party in the regular course of
business, and that any enlargement, facsimile or further reproduction shall
likewise be admissible in evidence.
12. AMENDMENT. This Agreement may be amended by the written agreement of Ford,
the Escrow Agent and Visteon; provided that, if the Escrow Agent does not agree
to an amendment agreed upon by Ford and Visteon (except an amendment adversely
affecting the rights or protections of the Escrow Agent), the Escrow Agent shall
resign and Visteon shall appoint, with the consent of Ford, which consent shall
not be unreasonably withheld or delayed, a successor to the Escrow Agent in
accordance with Section 8 above.
13. CONSENT TO JURISDICTION AND SERVICE RELATING TO DISPUTES The parties hereby
absolutely and irrevocably consent and submit to the jurisdiction of the courts
in the State of Michigan (and of any federal court located in said state) in
connection with any actions or proceedings to enter a judgment upon the Final
Award entered by the arbitrator hereunder or to award injunctive relief as
provided in Section 17 below. In any such action or proceeding, the parties
hereby absolutely and irrevocably waive personal service of any summons,
complaint, declaration or other process and hereby absolutely and irrevocably
agree that the service thereof may be made by certified or registered
first-class mail directed to the parties hereto at their respective addresses in
accordance with Section 5 hereof.
14. TAX REPORTING DOCUMENTATION.
(a) Visteon and Ford each shall provide the Escrow Agent with its tax
identification numbers and other forms and documents that the Escrow Agent may
reasonably request
-14-
(collectively, "TAX REPORTING DOCUMENTATION") to the Escrow Agent within thirty
(30) days of the date of receipt of the Escrow Fund by the Escrow Agent. The
parties hereto understand that, if such Tax Reporting Documentation is not so
certified to the Escrow Agent, the Escrow Agent shall be required by the
Internal Revenue Code, as it may be amended from time to time, to withhold a
portion of any interest or other income earned on the investment of monies or
other property held by the Escrow Agent pursuant to this Agreement.
(b) The parties hereto agree that, for tax reporting purposes, all
Escrow Earnings, if any, attributable to the Escrow Fund held in the Escrow Fund
by the Escrow Agent pursuant to this Agreement shall be allocable to Visteon.
15. AUTHORIZED PERSONS. For purposes of sending and receiving instructions or
directions hereunder, all such instructions or directions shall be, and the
Escrow Agent may conclusively rely upon such instructions or directions,
delivered, and executed by representatives of Visteon and Ford designated on
Schedule I attached hereto and made a part hereof (each such representative, an
"Authorized Person") which such designation shall include specimen signatures of
such representatives, as such Schedule I may be updated from time to time.
16. SEVERABILITY. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or other governmental
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated so
long as the economic or legal substance of the transactions contemplated hereby
is not affected in any manner materially adverse to any party. Upon such a
determination, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby be consummated as originally contemplated to the fullest extent possible.
17. SPECIFIC PERFORMANCE. The parties hereto agree that irreparable damage would
occur if any provision of this Agreement were not performed in accordance with
the terms hereof and that the parties hereto shall be entitled to an injunction
or injunctions to prevent breaches of this Agreement or to enforce specifically
the performance of the terms and provisions hereof in the courts specified in
Section 13 hereof, in addition to any other remedy to which they are entitled at
law or in equity.
-15-
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date set forth above.
FORD MOTOR COMPANY VISTEON CORPORATION
By: /s/ Donat R. Leclair By: /s/ James F. Palmer
--------------------------------- ------------------------------------
Title: Executive Vice President and Title: Executive Vice President and
Chief Financial Officer Chief Financial Officer
ESCROW AGENT:
DEUTSCHE BANK TRUST COMPANY AMERICAS
By: /s/ Richard L. Buckwalter
---------------------------------
Title: Vice President
-16-
Exhibit 10.4
REIMBURSEMENT AGREEMENT
THIS REIMBURSEMENT AGREEMENT is dated as of October 1, 2005 (this
"AGREEMENT") and is entered into between FORD MOTOR COMPANY ("Ford") and VISTEON
CORPORATION ("VISTEON").
A. Ford and Visteon have entered into a Master Agreement dated as of
September 12, 2005 (the "MASTER AGREEMENT") and a Visteon "A" Transaction
Agreement dated as of September 12 2005 (the "VISTEON "A" TRANSACTION
AGREEMENT"). As part of the consideration, Ford is required to reimburse Visteon
up to One Hundred Fifty Million Dollars ($150,000,000) for certain separation
costs incurred by Visteon in connection with Visteon salaried employees who are
assigned to work at Automotive Components Holdings, LLC (f/k/a VFH Holdings,
LLC) ("NEWCO LLC") pursuant to that certain Visteon Salaried Employee Lease
Agreement between Visteon and Newco LLC dated as of the date hereof (the
"EMPLOYEE LEASE AGREEMENT").
B. Ford and Visteon desire to more fully set forth in this Agreement
the terms and conditions applicable to the reimbursement obligation.
NOW, THEREFORE, in consideration received to their full satisfaction,
Ford and Visteon agree as follows:
1. Separation Costs. Subject to the terms of this Agreement, all
Separation Costs for Eligible Employees shall be subject to reimbursement
hereunder.
As used herein the term "SEPARATION COSTS" means:
(a) the amounts payable to Eligible Employees under the terms of the
Visteon Separation Program ("VSP") as described in Section
2.06(a) of the Employee Lease Agreement, as that Section 2.06(a)
may be amended, modified, waived or supplemented from time to
time, (or similar program applicable to Eligible Employees who
are entitled to benefits under other separation programs of
Visteon because they are based in other countries although
working in the United States); and
(b) the cost of COBRA continuation coverage and life insurance
premiums to cover the obligations to pay medical benefits and
life insurance under the applicable salaried employee separation
program; and
(c) the cost of outplacement services in accordance with the
applicable salaried employee separation plan, and
(d) costs incurred in accordance with FAS No.88 "Employer's
Accounting for Settlements and Curtailments of Defined Benefit
Pension Plans and for Termination Benefits" as determined and
supported by an external actuary; and
(e) reimbursements to Ford pursuant to Section 3.01(c)(ii) of the
Amended and Restated Employee Transition Agreement between Ford
and Visteon dated as of April 1, 2000 and restated as of December
19, 2003 and as amended as of the date hereof.
As used herein the term "ELIGIBLE EMPLOYEE" means an employee of Visteon or a
subsidiary of Visteon who is (a) leased to Newco LLC pursuant to the Employee
Lease Agreement; and (b) whose employment with Visteon has been terminated and
such employee either:
- ----------
A. has not been offered employment by a buyer of the Automotive
Components Holdings, Inc. (f/k/a VFH Holdings, Inc.) ("ACH")
businesses, or
B. has been offered employment by Visteon or by a buyer of the Newco
businesses but has not accepted the employment offer because the
position is not a comparable position as agreed by Ford and
Visteon,
provided, however, that an employee who is terminated for an offense that would
justify a "for cause" termination under Visteon's Personnel policies or for
failure to achieve acceptable performance under the Visteon Performance
Improvement Program is not an Eligible Employee.
Notwithstanding the foregoing, Ford shall have no obligation to reimburse
Visteon or any of its subsidiaries pursuant to this Agreement after the earlier
of (x) December 31, 2009; and (y) the date on which there are no employees
leased pursuant to the Employee Lease Agreement. If Ford has not expended One
Hundred Fifty Million Dollars ($150,000,000) for Separation Costs by such date,
then the difference between the amount of Separation Costs actually paid by Ford
to such date and One Hundred Fifty Million Dollars ($150,000,000) shall be paid
by Ford within five (5) Business Days into the Escrow Fund, as that term is
defined in that certain Escrow Agreement dated as of the date hereof among the
parties and Deutsche Bank Trust Company Americas, as Escrow Agent (the "ESCROW
AGREEMENT").
2. Request for Reimbursement. Visteon shall deliver a copy of a
request for reimbursement of Separation Costs (each, a "REQUEST FOR
REIMBURSEMENT") to Ford, provided, however, that Visteon shall not be entitled
to make a Request for Reimbursement seeking reimbursement for a specific
category of Separation Costs if a Final Award (defined herein) previously
rendered in favor of Ford ruled that such category was not eligible for
reimbursement hereunder. A Request for Reimbursement shall be submitted no more
often than once each calendar month on or before the tenth (10th) Business Day
following the end of such month. Each Request for Reimbursement shall contain
the following information:
(a) A certification by an officer of Visteon (or other person
designated by Visteon and reasonably acceptable to Ford)
substantially in the form attached hereto as Exhibit A that the
Request for Reimbursement covers only Separation Costs as defined
herein; and
(b) Supporting documentation showing the Separation Costs that have
been incurred, which will contain a description of the
restructuring action and related cost(s) and which will identify
the number and identity (including their name, global
identification number, organization name, organization code, and
date of termination of employees to be terminated, their
locations, the expected completion date, and a description of the
benefit arrangement that employees will receive upon termination
(including cash payments and special termination benefits) (such
employee information, "EMPLOYEE DATA"). If Separation Costs are
incurred in connection with an involuntary retirement program
where the identity of the participants is not yet known and
Visteon is required to publicly report such costs in its
financial statements covering the period in which the costs are
incurred, then a description of the affected group of employees
may be provided in lieu of the Employee Data, provided, however,
that Visteon shall deliver to Ford the Employee Data as soon as
it is available.
3. Disbursements. All disbursements shall be made by Ford to Visteon
or its designee by wire transfer to an account specified by Visteon initiated
within fifteen (15) Business Days after Ford's receipt of a properly documented
Request for Reimbursement, subject to Ford's rights under Section 5 hereof and
its right to contest a Request for Reimbursement under subsection 6.2 hereof.
2
4. Reporting Obligations. Within forty-five (45) days after the end of
each calendar year,
(a) Ford shall provide to Visteon a statement indicating the following:
- Total obligation for Separation Costs ($150,000,000) less
- Amounts disbursed during the preceding calendar year
- Amounts disbursed during prior calendar years
- Total amount remaining eligible for funding Separation Costs
Ford shall provide such statements until its obligation to fund Separation Costs
hereunder has expired.
and
(b) Visteon shall provide to Ford a statement indicating the following which
shall show, in each category, an amount for both the preceding calendar year and
prior calendar years:
- Total amount of Separation Costs actually incurred by
Visteon for which Ford was billed 100% of the expense
- Total amount of Separation Costs actually incurred by
Visteon for which Ford was billed 50% of the expense
Visteon shall provide such statements until the Employee Lease Agreement is
terminated.
5. Reductions in Reimbursement Obligation. If, (i) pursuant to an
arbitration award, court order or written settlement agreement executed by Ford
and Visteon, Ford or its subsidiaries or affiliates becomes entitled to recover
from Visteon or its subsidiaries or affiliates as a result of any
indemnification obligation contained in, or any breach or default arising under,
any of the Transaction Documents ("VISTEON Obligation"), and (ii) Ford or its
subsidiaries or affiliates has not received the full amount of the Visteon
Obligation within the time frame provided in such award, order or settlement
agreement, then Ford shall have a right to deliver to Visteon a notice (each, a
"NOTICE OF SET-OFF") accompanied by a copy of the award, order, settlement
agreement or written instructions and Ford's obligation to reimburse Visteon
hereunder will be immediately reduced by the amount set forth in such award,
order, settlement agreement or written instruction. If, however, the award or
order that served as the basis for a reduction in reimbursement obligation
hereunder is overruled or otherwise vacated by a final, non-appealable order or
upon written settlement agreement executed by Ford and Visteon, then Ford's
obligation to reimburse Visteon hereunder shall be increased by the amount by
which the award or order was overruled or vacated or with respect to which Ford
and Visteon have reached agreement pursuant to such written settlement.
3
6. PROCEDURE FOR REIMBURSEMENT.
6.1 Uncontested Reimbursements. If, within fifteen (15) Business Days
after a Request for Reimbursement is received by Ford, Ford has not delivered
its objection to such Request for Reimbursement in writing to Visteon, then Ford
shall reimburse to Visteon the amount requested in the Request for
Reimbursement; provided, however, that after the first Fifty Million Dollars
($50,000,000) is reimbursed, Ford shall thereafter reimburse only one-half of
the total amount contained in each such Request for Reimbursement. The total
amount of reimbursements made by Ford hereunder shall not exceed One Hundred
Fifty Million Dollars ($150,000,000) or such lesser amount if Ford's
reimbursement obligation is reduced in accordance with Section 5 hereof. If Ford
has delivered its objection to only a portion of such Request for Reimbursement,
then Ford shall distribute to Visteon the uncontested amount.
6.2 Contested Reimbursements. If Ford gives Visteon written notice
contesting all or any portion of a Request for Reimbursement (a "CONTESTED
REIMBURSEMENT") within the fifteen (15) Business Day period specified in
subsection 6.1, then such Contested Reimbursement shall be resolved by either
(i) a written settlement agreement executed by Ford and Visteon or (ii) in the
absence of such a written settlement agreement, by binding arbitration between
Ford and Visteon in accordance with the terms and provisions of subsection 6.3,
provided, however, that Ford shall not be entitled to contest any portion of a
Request for Reimbursement to the extent that such portion of the request seeks
reimbursement for a specific category of Separation Costs that a Final Award
(defined herein) had ruled was eligible for reimbursement hereunder. Each
Contested Reimbursement shall set forth in reasonable detail the basis for
Ford's contest of a Request for Escrow Reimbursement. In the event of a
Contested Reimbursement, Ford and Visteon shall attempt in good faith to agree
upon the rights of the respective Parties with respect to such claim. If a
Contested Reimbursement is settled by a written settlement agreement executed by
Visteon and Ford, then Visteon and Ford shall abide by the terms of such
settlement agreement.
6.3 Arbitration Disputes. If a dispute arises between the parties
relating to this Agreement, the following shall be the sole and exclusive
procedure for enforcing the terms hereof and seeking relief hereunder.
(i) CPR. Following good faith negotiations between Ford and Visteon in
accordance with subsection 6.2 hereof or otherwise, any Contested
Reimbursement that is not resolved in accordance with subsection
6.2(i) or any other dispute arising between the parties relating to
this Agreement will be submitted to mandatory, final and binding
arbitration before a sole arbitrator in accordance with the CPR Rules,
including discovery rules, for Non-Administered Arbitration, as
follows. Within five (5) Business Days after the selection of the
arbitrator, each party shall submit its requested relief to the other
party and to the arbitrator with a view toward settling the matter
prior to commencement of discovery. If no settlement is reached, then
discovery shall proceed subject to the authority of the arbitrator to
resolve discovery disputes between the parties. Upon the conclusion of
discovery, each party shall again submit to the arbitrator its
requested relief (which may be modified from the initial submission)
and the arbitrator shall select only the entire requested relief
submitted by one party or the other, as the arbitrator deems most
appropriate. The arbitrator shall not select one party's requested
relief as to certain claims or counterclaims and the other party's
requested relief as to other claims or counterclaims; rather, the
arbitrator must only select one or the other party's entire requested
relief on all of the asserted claims and counterclaims, and the
arbitrator will enter a final ruling that adopts in whole such
requested relief, provided, however, that with respect to a Request of
Reimbursement, the arbitrator may act separately upon each portion of
such request that has been contested under subsection 6.2 hereof. The
4
arbitrator will limit his/her final ruling to selecting the entire
requested relief he/she considers the most appropriate from those
submitted by the parties.
(ii) Location of Arbitration. Arbitration shall take place in the City of
Dearborn, Michigan unless the parties agree otherwise or the
arbitrator selected by the parties orders otherwise. Punitive or
exemplary damages shall not be awarded. This clause is subject to the
Federal Arbitration Act, 28 U.S.C.A. Section 1, et seq., and judgment
upon the award rendered by the arbitrator may be entered by any court
having jurisdiction as set forth in Section 13.
(iii) Payment of Costs. Ford, on the one hand, and Visteon, on the other
hand, will initially fund such deposits and advances required as may
be required by the arbitrator in equal proportions, but either party
may advance such amounts. The arbitrator will determine in the Final
Award (defined herein) the party who is the prevailing party and the
party who is not the prevailing party (the "NON-PREVAILING PARTY").
The Non-Prevailing Party will pay all reasonable costs, fees and
expenses related to the arbitration, including reasonable fees and
expenses of attorneys, accountants and other professionals incurred by
the prevailing party, the fees of each arbitrator and the
administrative fee of the arbitration proceedings and any amounts
advanced by the Prevailing Party for such items, provided, however,
that if such an award would result in manifest injustice, the
arbitrator may apportion such costs, fees and expenses between the
parties in such a manner as the arbitrator deems just and equitable
(such costs, fees and expenses as may be apportioned by the arbitrator
pursuant to the preceding clause, the "ARBITRATION EXPENSES"). If
Visteon is the Non-Prevailing Party, then Ford may reduce its
reimbursement obligation hereunder by the amount of the Arbitration
Expenses. If the amount of the Arbitration Expenses exceeds the amount
of Ford's reimbursement obligation hereunder, then Visteon shall pay
such excess as promptly as possible but in no event later than ten
(10) Business Days after the Final Award (defined herein) is rendered
pursuant to subparagraph (v) below. If Ford is the Non-Prevailing
Party, then Ford shall pay to Visteon, by wire transfer, the
Arbitration Expenses as promptly as possible, but in no event later
than ten (10) Business Days after such Final Award is rendered.
(iv) Burden of Proof. Except as may be otherwise expressly provided herein,
for any Contested Reimbursement or any other matter submitted to
arbitration hereunder, the burden of proof will be as it would have
been if the claim were litigated in a judicial proceeding in a
Michigan state court and governed exclusively by the internal laws of
the State of Michigan, without regard to the principles of choice of
law or conflicts of law of any jurisdiction.
(v) Award. Upon the conclusion of any arbitration proceedings hereunder,
the arbitrator will render findings of fact and conclusions of law and
a final written arbitration award setting forth its resolution of the
matters submitted for resolution, the basis and reasons therefor and
the Arbitration Expenses (the "FINAL AWARD") and will deliver such
documents to the parties together with a signed copy of the Final
Award. Subject to the provisions of subparagraph (vii) below, the
Final Award will constitute a conclusive determination of all issues
in question that shall be binding upon the parties hereto and shall
include an affirmative statement to such effect. To the extent that
the Final Award determines that Visteon is entitled to the Contested
Reimbursement, then, subject to any reduction in its reimbursement
obligation in accordance with Section 5 hereof, Ford shall reimburse
Visteon the full amount of the Contested Reimbursement or, if Ford is
obligated pursuant
5
to Section 6.1 to reimburse only one-half of the Request for
Reimbursement, then Ford shall reimburse one-half of the Contested
Reimbursement.
(vi) Timing. The parties and the arbitrator will conclude each arbitration
pursuant to subsection 6.3 as promptly as possible.
(vii) Terms of Arbitration. The arbitrator chosen in accordance with these
provisions will not have the power to alter, amend or otherwise affect
the terms of these arbitration provisions or the other provisions of
this Agreement.
7. NOTICES. All notices, requests and other communications to any
party hereunder shall be in writing (including facsimile transmission and
electronic mail ("E-MAIL") transmission, so long as a receipt of such e-mail is
requested and received) and shall be given,
If to Ford: Ford Motor Company
11th Floor
One American Road
Dearborn, Michigan 48121
Attn: Secretary
Facsimile: 1-313-248-8713
psherry@ford.com
with a copy to: Ford Motor Company
320 WHQ
One American Road
Dearborn, Michigan 48121
Attn: Marcia Nunn, Managing Counsel
Facsimile: 1-313-337-3209
mnunn@ford.com
If to Visteon Visteon Corporation
One Village Center Drive
Van Buren Twp., MI 48111
Attn: John Donofrio, General Counsel
Facsimile: 1-734-710-7132
jdonofri@visteon.com
6
with a copy to: Weil,Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
Attn: Michael E. Lubowitz
Facsimile: 1-212-310-8007
michael.lubowitz@weil.com
or such other address, facsimile number or e-mail address as such party may
hereafter specify for the purpose by notice to the other parties hereto. All
such notices, requests and other communications shall be deemed received on the
date of receipt by the recipient thereof if received prior to 5:00 p.m. in the
place of receipt and such day is a Business Day in the place of receipt.
Otherwise, any such notice, request or communication shall be deemed not to have
been received until the next succeeding Business Day in the place of receipt.
8. GENERAL.
8.1 Governing Law. The internal laws of the State of Michigan,
irrespective of its choice of law principles, shall govern the validity of this
Agreement, the construction of its terms, and the interpretation and enforcement
of the rights and duties of the parties hereto.
8.2 Counterparts. This Agreement may be executed in counterparts, and
by the different parties hereto in separate counterparts, each of which when
executed shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.
8.3 Entire Agreement/Amendment. This Agreement and the exhibits hereto
and the Escrow Agreement constitute the entire understanding and agreement of
the parties hereto with respect to the subject matter hereof and supersede all
prior and contemporaneous agreements or understandings, inducements or
conditions, express or implied, written or oral, between the parties with
respect hereto. The express terms hereof control and supersede any course of
performance or usage of the trade inconsistent with any of the terms hereof.
This Agreement may be amended only by the written agreement of Ford and Visteon.
8.4 Waivers. No waiver by any party hereto of any condition or of any
breach of any provision of this Agreement shall be effective unless in writing.
No waiver by any party of any such condition or breach, in any one instance,
shall be deemed to be a further or continuing waiver of any such condition or
breach or a waiver of any other condition or breach of any other provision
contained herein.
8.5 Certain Definitions. As used herein, (a) the term "BUSINESS DAY"
means a day, other than a Saturday, Sunday or other day on which commercial
banks in Detroit, Michigan are authorized or required by law to close; and (b)
the term "TRANSACTION DOCUMENTS" shall mean the Master Agreement, the
Contribution Agreement Transaction Documents as defined in that certain
Contribution Agreement dated as of September 12, 2005 between Visteon and ACH,
the Visteon "B" Transaction Documents as defined in that certain Visteon "B"
Purchase Agreement dated as of September 12, 2005 between Ford and Visteon and
the Visteon "A" Transaction Documents as defined in that certain Visteon "A"
Transaction Agreement dated as of September 12, 2005. Whenever the words
"include", "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation", whether or not they are
in fact followed by those words or words of like import. When a reference is
made in this Agreement to a Section, subsection or Exhibit, such reference shall
be to a Section or subsection of, or an Exhibit to, this Agreement unless
otherwise indicated. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning
7
or interpretation of this Agreement. Whenever the singular is used herein, the
same shall include the plural, and whenever the plural is used herein, the same
shall include the singular, where appropriate.
9. FORCE MAJEURE If either party hereto is rendered unable, wholly or
in part, by Force Majeure (as defined herein) to perform its obligations
hereunder (other than the obligation to pay money), such party shall give prompt
notice to the other party with reasonable particulars including the probable
extent of the inability to perform such obligation. Upon the giving of such
notice, the obligation of such party shall be suspended but only to the extent
and for the time period it is affected by such Force Majeure. The affected party
shall use all possible diligence to eliminate the effect of such Force Majeure.
For purposes of this Agreement, the term "FORCE MAJEURE" shall mean acts of God,
strikes, lockouts, riots, acts of war, epidemics, governmental regulations
superimposed after the fact, acts of terror, communication line failures,
computer viruses, power failures, earthquakes or other disasters.
10. REPRODUCTION OF DOCUMENTS. This Agreement and all documents
relating thereto, including (a) consents, waivers and modifications which may
hereafter be executed, and (b) certificates and other information previously or
hereafter furnished, may be reproduced by any photographic, photostatic,
microfilm, optical disk, micro-card, miniature photographic or other similar
process. The parties hereto agree that any such reproduction shall be admissible
in evidence as the original itself in any judicial or administrative proceeding,
whether or not the original is in existence and whether or not such reproduction
was made by a party in the regular course of business, and that any enlargement,
facsimile or further reproduction shall likewise be admissible in evidence.
11. SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other
governmental authority to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such a determination, the parties shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner in order that the transactions
contemplated hereby be consummated as originally contemplated to the fullest
extent possible.
12. SPECIFIC PERFORMANCE. The parties hereto agree that irreparable
damage would occur if any provision of this Agreement were not performed in
accordance with the terms hereof and that the parties hereto shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement or to
enforce specifically the performance of the terms and provisions hereof in the
courts specified in Section 13 hereof, in addition to any other remedy to which
they are entitled at law or in equity.
13. CONSENT TO JURISDICTION AND SERVICE RELATING TO DISPUTES The
parties hereby absolutely and irrevocably consent and submit to the jurisdiction
of the courts in the State of Michigan (and of any federal court located in said
state) in connection with any actions or proceedings to enter a judgment upon
the Final Award entered by the arbitrator hereunder or to award injunctive
relief as provided in Section 12 hereof. In any such action or proceeding, the
parties hereby absolutely and irrevocably waive personal service of any summons,
complaint, declaration or other process and hereby absolutely and irrevocably
agree that the service thereof may be made by certified or registered
first-class mail directed to the parties hereto at their respective addresses in
accordance with Section 7 hereof.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date set forth above.
8
FORD MOTOR COMPANY VISTEON CORPORATION
By: /s/ Donat R. Leclair By: /s/ James F. Palmer
--------------------------------- ------------------------------------
Title: Executive Vice President and Title: Executive Vice President and
Chief Financial Officer Chief Financial Officer
------------------------------ ------------------------------
9
EXHIBIT 99.1
[AUTOMOTIVE COMPONENTS HOLDINGS, LLC LOGO]
NEWS
CONTACT: Della DiPietro Eric Mitchell
c: 313-585-2481 o: 313-845-3302
o: 313-206-2101
ddipietr@ford.com emitch15@ford.com
AUTOMOTIVE COMPONENTS HOLDINGS, LLC BEGINS OPERATIONS AFTER VISTEON
TRANSFERS 23 FACILITIES
o Ford Motor Company closes transaction with Visteon; transfer of 17 plants
and 6 facilities is complete.
o Automotive Components Holdings, LLC -- a Ford-managed, temporary business
entity -- is open for business.
o Automotive Components Holdings will prepare most of the acquired businesses
for sale, while protecting Ford Motor Company's supply of critical
components.
DEARBORN, Mich., October 1, 2005 - Automotive Components Holdings, LLC began
operations today after assuming control of 17 plants and six other facilities in
the U.S. and Mexico from Visteon Corporation.
Automotive Components Holdings -- a temporary business managed by Ford Motor
Company -- is being created to protect the flow of critical parts and components
in the near-term, and over time improve Ford's sourcing flexibility. Its mission
is to prepare most of the acquired businesses for sale to companies with the
capital and expertise to supply Ford with high-quality components and systems at
competitive prices.
Go to http://media.ford.com for news releases and high-resolution photographs.
The formation of Automotive Components Holdings is an essential part of Ford
North America's strategy to accelerate its restructuring, improve its cost
structure and boost profitability.
"Given our business conditions, we believe this is the best strategy to protect
the flow of parts to Ford and, longer term, to help address Ford's material
costs by preparing most of these facilities for sale as efficient,
high-performing business units," said Al Ver, Ford vice president and chief
executive and chief operating officer, Automotive Components Holdings, LLC. "We
have assembled a team of seasoned veterans with proven track records to reshape
and rebuild these businesses for sale to buyers who can take them forward."
ACH will have no employees of its own in the U.S. About 5,000 Visteon salaried
employees, located mostly at facilities that are part of the transfer, will
initially be leased from Visteon and work directly with ACH. About 80 Ford
salaried employees have been assigned to the new company, along with some 18,000
Ford UAW hourly employees who work in the former Visteon facilities. Ford is
expected to implement 5,000 buyouts over time for UAW employees at ACH
facilities.
The three Mexican affiliates of ACH will employ about 1,850 hourly and salaried
personnel.
Automotive Components Holdings, LLC begins operations under financial
arrangements announced on May 25 as part of the Memorandum of Understanding. Its
financial information will be consolidated into Ford Motor Company quarterly
financial reports.
###
Go to http://media.ford.com for news releases and high-resolution photographs.
AUTOMOTIVE COMPONENTS HOLDINGS, LLC
Plants - 17
Other facilities - 6
PLANTS
Autovidrio Plant - Mexico - glass
Chesterfield Plant - Chesterfield Twp, MI - seating foam
El Jarudo Plant - Mexico - powertrain
Indianapolis Plant - Indianapolis, IN - steering components
Kansas City Plant - Kansas City, MO - IP/lamp final assembly/sequencing
Lamosa Plants I & II - Mexico - chassis
Milan Plant - Milan, MI - powertrain
Monroe Plant - Monroe, MI - chassis
Nashville Glass Plant - Nashville, TN - glass
Rawsonville Plant - Ypsilanti, MI - powertrain & Rawsonville GTC
Saline Plant - Saline, MI - interiors
Sandusky Plant - Sandusky, OH - lighting/air induction/fuel vapor storage
Sheldon Road Plant - Plymouth, MI - climate control
Sterling Plants I & II - Sterling Heights, MI - chassis & Sterling Test Labs
Tulsa Glass Plant - Tulsa, OK - glass
Utica Plant - Shelby Twp, MI - interiors, exteriors
Ypsilanti Plant - Ypsilanti, MI - chassis
RESEARCH, TESTING AND OTHER FACILITIES
Bellevue Site - Bellevue, OH - aftermarket parts assembly & distribution
Carlite Warehouse - Lebanon, TN - glass distribution center
Commerce Park S. - Bldg D - Dearborn, MI - chassis engineering/glass lab
Glass Systems Main Office - Allen Park, MI - glass
Product Assurance Center - Dearborn, MI - R & D, testing
Technical Center-Dearborn, MI - research & product development
###
October 1, 2005
Go to http://media.ford.com for news releases and high-resolution photographs.
EXHIBIT 99.2
RESEARCH UPDATE: FORD MOTOR CO., FORD CREDIT 'BB+' RATINGS
PLACED ON WATCH NEGATIVE
PUBLICATION DATE: 03-Oct-2005
PRIMARY CREDIT ANALYSTS: Scott Sprinzen, New York (1) 212-438-7812;
scott_sprinzen@standardandpoors.com
Robert Schulz, CFA, New York (1) 212-438-7808;
robert_schulz@standardandpoors.com
CREDIT RATING: BB+/Watch Neg/B-1
RATIONALE
On Oct. 3, 2005, Standard & Poor's Ratings Services placed its 'BB+'
long-term and 'B-1' short-term ratings on Ford Motor Co., Ford Motor
Credit Co., and all related entities on CreditWatch with negative
implications. (Hertz Corp.'s ratings had already been placed on
CreditWatch negative on Sept. 13, 2005, pending completion of Ford's plan
to divest Hertz). Consolidated debt outstanding totaled $158 billion at
June 30, 2005.
The CreditWatch placement reflects our increased concerns about Ford's
ability to effect a turnaround at its troubled North American automotive
operations amid sharply deteriorating product mix and sales volume, and
prospects for persisting severe pricing pressure.
We currently plan to resolve this review by mid-January, following
Ford's announcement of its fourth-quarter results. We presently believe the
rating is unlikely to be lowered below 'BB/B-2'.
We believe soaring gasoline prices after Hurricanes Katrina and Rita
are leading to an accelerating decline in demand for SUVs. Given Ford's
disproportionate reliance on SUV-related earnings, its ability to return to
meaningful profitability in its automotive business will be heavily influenced
by the performance of its SUV models, despite efforts it is taking to strengthen
its product offerings in other segments.
More broadly, we are increasingly concerned about the sales and pricing
outlook for Ford's products amid signs of waning consumer confidence. Ford's
"Family Plan" was highly effective in boosting sales during July and August and
enabled Ford to eliminate its excess dealer stocks. However, Ford likely only
"pulled forward" sales from subsequent months, as its weak sales in September
attests.
The remainder of Ford's automotive operations and Ford Credit are
performing roughly in line with our expectations, and so are not central factors
in this review. However, the performance of these units is not sufficient to
offset to the problems the company faces in its North American operations.
Ford's liquidity should be sufficient relative to near-term
requirements. We believe consolidated parent-level cash automotive cash flow
should be around break-even in 2005. Ford has a large liquidity position,
composed of the following:
- Cash, marketable securities, and short-term assets in its VEBA
trust (which it could use to meet certain near-term benefits
costs, thereby freeing up other cash) totaled $21.8 billion at
June 30, 2005 (excluding Ford Credit);
- As of July 1, 2005, Ford had $7.1 billion of committed credit
facilities with various banks, most of which are committed
through June 30, 2010;
- Parent-level debt maturities are moderate for the near term
(about $1 billion for the 12 months from June 30, 2005), and
long-term debt has an exceptionally high average maturity of
about 25 years; and
- Ford faces no ERISA-mandated pension fund contributions for
the next few years, nor the need to make contributions to
avoid Pension Benefit Guaranty Corp. variable-rate premiums.
At June 30, Ford had a net cash position of $3.7 billion and
this net cash position will improve following receipt of
approximately $5.6 billion, pretax, from the expected sale in
2005 of its Hertz unit.
As part of this review, Standard & Poor's will assess Ford's sales
performance over the next few months, as well as its third- and fourth-quarter
financial performance. We will also seek to meet with Ford's management to
discuss the company's marketing strategy and new initiatives aimed at addressing
the heightened challenges it faces in North America.
RATINGS LIST
To From
Ford Motor Co.
Ford Motor Credit Co.
Corporate credit rating BB+/Watch Neg/B-1 BB+/Negative/B-1
Complete ratings information is available to subscribers of RatingsDirect,
Standard & Poor's Web-based credit analysis system, at www.ratingsdirect.com.
All ratings affected by this rating action can be found on Standard & Poor's
public Web site at www.standardandpoors.com; under Credit Ratings in the left
navigation bar, select Find a Rating, then Credit Ratings Search.
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Services) are the result of separate Activities designed to preserve the
independence and objectivity of ratings opinions. The credit ratings and
observations contained herein are solely statements of opinion and not
statements of fact or recommendations to purchase, hold, or sell any securities
or make any other investment decisions. Accordingly, any user of the information
contained herein should not rely on any credit rating or other opinion contained
herein in making any investment decision. Ratings are based on information
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