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EXHIBIT 10.3.1
EMPLOYEE SHAREHOLDERS AGREEMENT
THIS EMPLOYEE SHAREHOLDERS AGREEMENT is made as of this 31st day of
May, 1995 by and among Statoil Energy, Inc., a Virginia corporation (the
"Corporation"), and the persons who have executed this agreement who are owners
of Common Stock of the Corporation ("Shareholders") and/or holders of options
to purchase Common Stock ("Option Holders").
EXPLANATORY STATEMENT
The parties believe that it is desirable and in their best interests
to provide a means for Holders to achieve liquidity for shares of the
Corporation's Common Stock owned or to be acquired by employees of the
Corporation and to restrict the ownership of the Common Stock, in each case
until such time as the Corporation completes an initial public offering of its
Common Stock.
NOW, THEREFORE, in consideration of the matters set forth in the
Explanatory Statement and the mutual covenants, promises, agreements,
representations and warranties of the parties hereto, the parties hereto do
hereby covenant, promise, agree, represent and warrant as follows:
1. Definitions. Capitalized words and phrases used in this Agreement
shall have the following meanings:
"Act" means the Securities Act of 1933, as amended.
"Agreement" means this Employee Shareholders Agreement, as amended
from time to time.
"Appraiser" shall be the appraiser that shall initially determine
the Established Value Per Share for any year, as contemplated by Section 3
hereof.
"Bradley" means Ralph L. Bradley, an individual residing in
Alexandria, Virginia.
"Cause", when used with respect to a Holder, means the Termination
of a Holder's employment by the Corporation by reason of (i) the material
breach by the Holder of any of his employment duties, as reasonably determined
by the Corporation following notice to the Holder of the details of such breach
and a period of at least thirty (30) days during which the Holder shall be
given an opportunity to cure such breach, (ii) conviction of the Holder of the
commission of any felony, (iii) alcoholism or drug addiction of the Holder
(other than addiction caused by medical treatment for illness or injury), but
only if the Holder has refused to submit to rehabilitation for such condition
upon the request of the Corporation, or (iv) violation of agreements and.
policies of the Corporation regarding non-disclosure of confidential
information, confidentiality, and anti-competitive behavior, whether pursuant
to an employment agreement or otherwise.
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"Closing" and "Closing Date" each means the date and time at
which a Closing of the purchase of Shares by the Corporation under this
Agreement occurs.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time (or any corresponding provisions of any succeeding law).
"Committee" means the Compensation Committee of the Board of
Directors of Statoil Energy, Inc.
"Common Stock" means the Corporation's authorized shares of
Common Stock, $0.01 par value per share.
"Consensus Appraisers" has the meaning set forth in Section
7.2 of this Agreement.
"Corporation" means Statoil Energy, Inc., a Virginia
corporation.
"Days" means all calendar days, inclusive of Saturdays,
Sundays and days which are legal holidays under the laws of the United States
or the State.
"Decedent" means a deceased Holder, the personal
representative or estate of which shall have certain rights pursuant to Section
6 of this Agreement.
"Established Value Per Share" means the fair market value per
share of Common Stock of the Corporation on a fully diluted basis as determined
under the provisions of Section 3 of this Agreement, or in the case of an
eligible Holder or Decedent electing to utilize the provisions of Section 7 of
this Agreement the price determined under Section 7.
"Holder" means an Option Holder or a Shareholder.
"Incentive Compensation Plan" means the Amended and Restated
Incentive Compensation Plan of Statoil Energy, Inc. as currently in effect or
as amended from time to time.
"Justification", when used with respect to a Holder, means
the resignation of a Holder from employment with the Corporation upon (i) a
substantial diminution in responsibilities, position, or salary, or (ii) the
involuntary transfer to an office or business location, in the case of a Holder
then assigned to the Corporation's headquarters offices, outside of the
Washington/Baltimore metroplex and in the case of any other Holder, by more
than 75 miles from the location of the Holder's immediately preceding office or
work location.
"LIBOR" means the London Inter-Bank Offered Rate as published
from time to time in The Wall Street Journal.
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"Note" means the Corporation's unsecured non-negotiable
promissory note issued by the Corporation in partial payment for Stock
purchased from a Holder in certain circumstances where the dollar amount of
Stock being repurchased exceeds $100,000. Sections 4.5 and 6.3 of this
Agreement describe the procedures for issuance of Notes, a form of which is
attached hereto as Exhibit A. The Note bears interest at the greatest of ten
percent (10%) per annum, 3% above the three month LIBOR or the minimum rate of
interest required by the Internal Revenue Code of 1986, as amended, to preclude
the imputation of interest.
"Option Holder" means an employee of the Corporation who
holds an option to purchase Common Stock pursuant to the Incentive Compensation
Plan. All Option Holders shall be subject to this Agreement as a condition of
the grant of Options.
"Own" when used with respect to shares of Common Stock of the
Corporation includes beneficial and record ownership of Shares.
"Person" means any individual, partnership, corporation,
trust or other entity.
"Plans" means the Incentive Compensation Plan and the Stock
Purchase Plan.
"Protected Termination" means either termination of the
Holder's employment by the Corporation without Cause or resignation of the
Holder from employment with the Corporation with Justification.
"Put Option Notice" shall be the notice, required to be given
during April or October in any year, in which a Holder commits, subject to
withdrawal in certain circumstances, to tender Put Option Shares to the
Corporation for repurchase.
"Put Option Shares" means Shares owned by a Holder for at
least six months that the Holder may tender to the Corporation (commencing in
October, 1996) for repurchase commencing January 1, 1997.
"Put Option Share Price" shall mean the price at which a
Holder's Put Option Shares are required to be purchased under Section 4.1 of
this Agreement.
"Security" has the meaning set forth in the Act.
"Shareholder" means those Persons who own shares of the
Common Stock acquired pursuant to the Incentive Compensation Plan, the Stock
Purchase Plan, or otherwise and who have entered into this Agreement.
"Shares" means all shares of Common Stock which a Holder may
own or may in the future own, whether of record or beneficially.
"State" means the Commonwealth of Virginia.
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"State Acts" means the securities laws of any state or the
District of Columbia.
"Statoil" means Den norske stats oljeselskap, a.s, a
corporation organized under the laws of the Kingdom of Norway.
"Stock Purchase Plan" means Statoil Energy, Inc. 1995 Stock
Purchase Plan, pursuant to which the Corporation has initially made available
150,000 shares of Common Stock for purchase by eligible employees.
"Terminated Shareholder" means a Holder whose employment with
the Corporation has terminated.
"Termination" means the termination of a Shareholder's
employment.
"Transfer" means the sale, hypothecation pledge, assignment
or other transfer, be it voluntary or involuntary to a Shareholder or third
person, inter vivos, testamentary, by operation of the laws of devise and
descent or any other laws; PROVIDED, HOWEVER) that the pledge of Shares by a
Holder to the Corporation pursuant to the Stock Purchase Plan in order to
secure the Holder's installment purchase obligations thereunder shall not be
deemed to be a Transfer for any purpose under this Agreement.
2. GENERAL.
2.1. Termination of Prior Agreement. The parties hereto that
are parties to the Incentive Compensation Plan Stockholders Agreement dated as
of December 29, 1993 hereby agree to supersede that agreement with this
Agreement and hereby agree that agreement has been terminated as of the date of
this Agreement.
2.2. Transfer Restrictions. Each Holder covenants, promises
and agrees that he or she shall not Transfer all, any portion of, or any
interest or rights in, the Shares Owned or which in the future may become Owned
by such Holder, except pursuant to the terms and provisions of this Agreement.
Each Holder hereby acknowledges the reasonableness of the restrictions on
Transfers imposed by this Agreement in view of the purposes of the Corporation
and the relationships of the Holders. Unless the Transfer is made in
conformance with and pursuant to the terms of this Agreement, the Transfer of
any Shares by any Holder shall be deemed invalid, null and void, and of no
force or effect, and the transferee of any such shares shall not be entitled to
vote such shares receive dividends on such shares or have any other rights in
and with respect to such shares.
2.3 Permitted Transfers. A Holder may freely and without
restriction transfer Shares to another Holder who at the time of the transfer
is an employee of the Corporation, to the Corporation, to Statoil, to Bradley
or to a member of Holder's immediate family, including a trust for the benefit
of family members, provided that in the case of intra-family Transfers, all
transferees shall have executed an instrument, in form and content satisfactory
to the Corporation, undertaking to become a party to this Agreement and to be
bound by all of its
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provisions, a form of which undertaking is attached hereto as Exhibit B.
2.4 Applicability of Agreement to Bradley Shares. With
respect to Shares Owned by Bradley, this Agreement shall apply only to Shares
Bradley may acquire in the future pursuant to the Incentive Compensation Plan
or from a Holder pursuant to Section 2.3 of this Agreement.
3. COMPUTATION OF ESTABLISHED VALUE PER SHARE
3.1 Determination of Established Value Per Share. Each year
the Committee shall cause the Established Value Per Share to be determined
pursuant to the provisions of this Section 3 and the Established Value Per
Share shall be applicable for transactions occurring during such year, except
as otherwise provided in this Agreement.
3.2 Selection of Appraiser. The Committee shall select an
Appraiser who shall be directed to determine the Established Value Per Share
applicable to Common Stock which may be repurchased by the Corporation during
calendar year 1996 and each succeeding calendar year. In all instances, the
Appraiser shall be selected in good faith by the Committee and shall be
experienced in valuing energy related business enterprises.
3.3. Method of Determination of Established Value Per Share.
The Appraiser shall make a determination of the Established Value Per Share
based on its determination of the fair market value of the Corporation as of
January 1 of each calendar year, commencing January 1, 1996, determined without
any discount for minority interests or lack of liquidity of the Shares, based
upon its assessment of the most likely price to which a willing buyer and
willing seller would agree for the Corporation as a whole and its judgment as
to whether such fair market value should be based upon a going concern value
approach, a liquidation value approach, another valuation approach, or a
combination of one or more valuation approaches. The Appraiser shall also
consider in good faith such factors as may be suggested in the reasonable
discretion of the Committee with the input of management of the Corporation and
such other factors as the Appraiser, in the independent exercise of its
professional judgment, determines to be customary and appropriate under the
circumstances.
3.4 Effect of Committee Determinations of Established Value
Per Share. The Committee may waive the requirement that an Appraiser determine
the Established Value Per Share for any particular year or may override the
Appraiser's determination of the Established Value Per Share then in effect in
the event that the Committee determines, in its sole and conclusive discretion,
that another transaction in shares of the Corporation's capital stock (other
than a repurchase by the Corporation of Shares pursuant to this Agreement or a
repurchase of shares of Common Stock owned by Bradley or transferees of Bradley
pursuant to the Shareholders Agreement dated February 10, 1994, as amended)
occurring since the last computation of Established Value Per Share is fairly
representative of the current fair market value per share of the Corporation's
Common Stock. In such event, the transaction price per share of Common Stock
for such transaction shall become the Established Value Per Share for purposes
of subsequent repurchases pursuant to this Agreement occurring during the
remainder
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of the calendar year in which the Committee makes its determination and such
Established Value Per Share shall be binding unless challenged by a Holder
pursuant to Section 7 of this Agreement.
3.5 Timing of Delivery of Appraiser's Report. Unless the
Committee waives the requirement that the Appraiser determine the Established
Value Per Share as permitted pursuant to Section 3.4 of this Agreement the
Corporation shall require the Appraiser to deliver to the Corporation a written
report indicating its determination of the Established Value Per Share on or
before March 31 of each year commencing March 31, 1996 (or as soon thereafter
as audited financial statements are available).
3.6 Committee Determination for 1995 Calendar Year. With
respect to Common Stock repurchases occurring during calendar year 1995, the
Committee has conclusively determined that the Established Value Per Share
shall be $10.00 and that the Appraiser shall not be required to compute the
Established Value Per Share for any repurchases of Common Stock that may occur
during calendar year 1995 pursuant to this Agreement.
4. MANDATORY REPURCHASES BY THE CORPORATION FROM ACTIVE EMPLOYEES.
4.1 Exercise of Put Option. Commencing October 1, 1996, a
Holder who is an active employee of the Corporation may provide a Put Option
Notice to the Corporation by which the Holder exercises the rights provided
under this Section 4.1 to require the Corporation to purchase all or a portion
of his Shares. A Put Option Notice may be given only as to any Shares owned by
a Shareholder for at least six (6) months at the time the Put Option Notice is
given. A Put Option Notice may only be given during the months of April and
October in any year (though in no event earlier that October 1996), and the
Corporation shall not be obligated to purchase Shares as to which a timely Put
Option Notice has not been provided.
4.2 Mechanics of Exercising Put Option. Shares as to which a
timely Put Option Notice have been given shall be purchased, out of lawfully
available funds, at the Established Value Per Share determined for the calendar
year in which the Put Option Notice is given. The Corporation shall provide a
person who has timely given a Put Option Notice a written response by the May
15 or November 15 immediately following the tender of the Holder's Put
indicating whether the Corporation plans to purchase the Put Option Shares for
cash, to pay the purchase price for the Put Option Shares in installments as
permitted pursuant to Section 4.5 (only if the aggregate Established Value Per
Share for the Shares to be repurchased from the Holder in question in any
twelve month period exceeds $ 100,000), or to decline to purchase such Shares
because of a lack of lawfully available funds. (Section 9 of this Agreement
sets forth the criteria for determining that the Corporation lacks lawfully
available funds to effect a purchase.)
4.3 Right to Withdraw or Amend Put Option Notice. In the
event the Corporation elects to utilize installment payments as permitted
pursuant to Section 4.5 or the Corporation lacks lawfully available funds to
effect the repurchase of the Put Option Shares in full, the Holder shall have
the right to withdraw his Put Option Notice and terminate the
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Corporation's obligation to purchase the Put Option Shares at such time or to
amend the Put Option Notice to reduce the number of Put Option Shares to be
repurchased pursuant to the Put Option Notice, provided there is lawfully
available funds to effect the repurchase of the reduced number of Shares. Any
amendment to the Put Option Notice, as permitted by the preceding sentence,
shall be received by the Corporation no later than the May 25 or November 25
immediately following the Put Option Notice, as the case may be.
4.4 Closing of Put Option Share Purchase. Subject to the
Holder's right to withdraw the Put Option Notice pursuant to Section 4.3, the
Closing of purchases pursuant to Put Option Notices that have not been
withdrawn shall occur not later than the May 30 or November 30 immediately
following the Put Option Notice, as the case may be; provided, that the Closing
of the purchase of any Shares as to which the Put Option Notice is given in
October, 1996 shall occur on January 2, 1997 provided that the Corporation has
lawfully available funds to repurchase such shares. The Corporation shall
provide the Holder written notice as to the date of Closing under this Section
4.4.
4.5 Installment Payments. The Corporation shall have the
right to pay up to a portion, as specified herein, of the purchase price for
any shares to be repurchased pursuant to Section 4, in installments; provided,
however, that this installment payment method shall not be available if the
aggregate Established Value Per Share for the Shares to be repurchased from the
Holder in question in any twelve month period is less than or equal to
$100,000. The maximum amount of the purchase price that may be paid by the
Corporation under the installment payment method shall be seventy-five percent
(75%) of the excess of the aggregate purchase price for the Shares to be
repurchased over $100,000. Accordingly, if the aggregate purchase price for the
Put Option Shares of Holder is greater than $100,000, at least $ 100,000 and
twenty-five percent (25%) of the aggregate purchase price in excess of $100,000
shall be paid in cash on the Closing Date and the remaining portion may be paid
at Closing by the making, sealing and delivering of the Note to the Holder in a
principal amount equal to such remaining portion of the aggregate purchase
price. The Note shall be payable in 12 equal quarterly installments of
principal and interest.
4.6 Options in the Event of Lack of Lawfully Available Funds.
In the event that the Corporation lacks the lawfully available funds, as
determined pursuant to Section 9, to repurchase the shares pursuant to this
Section 4, the Holder may either (i) withdraw the Put Option Notice pursuant to
Section 4.3 and submit a new Put Option Notice pursuant to Section 4.2 when the
Corporation has lawfully available funds to repurchase the Shares or (ii) amend
the Put Option Notice to reduce the number of Put Option Shares to be
repurchased up to the amount of lawful available funds, if any, available to
repurchase such shares. If the Holder neither voluntarily withdraws nor amends
the Put Option Notice to reduce the number of Put Option Shares to be
repurchased the Put Option Notice shall be automatically terminated by the
Corporation.
4.7 Death to Affect Put Option Notice. In the event a
Shareholder dies after giving a Put Option Notice pursuant to Section 4.2 but
before the Closing for the Shares covered by such notice, the provisions of
Section 6 shall become operative as to the Shares beneficially owned by the
deceased Holder and the provisions of this Section 4 shall be inapplicable to
such Shares.
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5. MANDATORY REPURCHASES BY THE CORPORATION FROM TERMINATED
SHAREHOLDERS.
5.1 Purchases from Terminated Shareholders. Within 90 days of
a Holder's Termination, the Corporation shall purchase and the Terminated
Shareholder shall sell or cause to be sold all Shares beneficially owned by the
Terminated Employee, including Shares transferred in intra-family transfers, at
the Established Value Per Share in effect for the calendar year in which
Termination occurs, and in the case of a Protected Termination only, as of such
subsequent date as shall be provided in Section 5.5. Such purchase shall be
made only from lawfully available funds.
5.2 Form of Consideration for Terminated Shareholder's
Shares. The Corporation shall provide the Holder written notice as to the date
of Closing under this Section 5, which notice shall describe the form of
consideration to be paid. Subject to the Corporation having lawfully available
funds, the Corporation shall have the option to pay the Terminated
Shareholder's repurchase price entirely in cash, or partly in cash and partly
in installments as provided in Section 5.3 (only if the aggregate Established
Value Per Share for the Shares to be repurchased from the Holder in question in
any twelve month period exceeds $100,000).
5.3 Installment Payments. The Corporation shall have the
right to pay up to a portion, as specified herein, of the purchase price any
shares to be repurchased pursuant to this Section 5, in installments; provided,
however, that this installment payment method shall not be available if the
aggregate Established Value Per Share for the Shares to be repurchased from the
Terminated Shareholder in question is less than a or equal to $ 100,000. The
maximum amount of the purchase price that may be paid by the Corporation under
the installment payment method shall be seventy-five percent (75%) of the
excess of the aggregate purchase price for the Shares to be repurchased over
$100,000. Accordingly, if the aggregate purchase price for the Shares of a
Terminated Shareholder is greater than $100,000, at least $100,000 and
twenty-five percent (25%) of the aggregate purchase price in excess of $100,000
shall be paid in cash on the Closing Date and the remaining portion may be paid
at Closing by the making, sealing and delivering of the Note to the Holder in a
principal amount equal to such remaining portion of the aggregate purchase
price. The Note shall be payable in 12 equal quarterly installments of
principal and interest.
5.4 Purchase from a Terminated Shareholder in the Event of
Lack of Lawfully Available Funds. In the event that the Corporation lacks the
lawfully available funds, as determined pursuant to Section 9, to repurchase
the shares pursuant to this Section 5, the Terminated Shareholder shall have
the right to Transfer the Shares pursuant to Section 2.3 or to Transfer the
Shares to the Corporation at a price equal to the greater of the Established
Value Per Share either (i) at the time of the Termination or (ii) at the time
when the Corporation has lawfully available funds to effect such a repurchase.
5.5 Application of Next Year's Established Value in Certain
Circumstances; Delay in Closing in Certain Circumstances. In the case of a
Holder's Protected Termination during the last three months of any calendar
year, the Holder may elect to have the new
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Established Value Per Share to be determined as of January 1 of the year
commencing after the date of the Holder's Protected Termination apply to the
repurchase of such Holder's Shares. In order to have the Established Value Per
Share for the year subsequent to the Protected Termination apply, the Holder
must provide written notice of such election to the Corporation within 45 days
of the date of such Protected Termination. In such event the Closing shall be
delayed until such new Established Value Per Share is determined. In the case
of Termination during the first calendar quarter of any year, the intention of
this Agreement is that the Established Value Per Share to be determined for
that calendar year shall be applicable, and, in the event that determination of
such Established Value Per Share shall be delayed, the Closing of the
repurchase of the shares shall be delayed accordingly.
5.6 Shares Pledged to the Corporation. The provisions of this
Section 5 shall not apply to any Shares pledged to the Corporation to the
extent the Holder notifies the Corporation, in writing, that the pledged Shares
will be used to discharge any remaining unpaid indebtedness to the Corporation
arising out of the purchase of such Shares.
6. MANDATORY REPURCHASES BY THE CORPORATION FROM DECEASED
SHAREHOLDERS.
6.1 Purchases from Deceased Shareholders. Subject to Section
6.5, within 90 days of a Holder's death, the Corporation shall purchase and the
Decedent's personal representative shall sell or cause to be sold all of the
Shares beneficially owned by the Decedent, including, without limitation, all
Shares transferred in intra-family transfers, at the Established Value Per
Share in effect for the calendar year in which the death occurred or, in the
event of the Holder's death during the last calendar quarter, the Established
Value Per Share in effect for the calendar year following the death should the
personal representative so elect as provided in Section 6.5. Such purchase
shall be made only from lawfully available funds (which are described in
Section 9). The Corporation shall provide the Decedent's personal
representative written notice as to the date of Closing under this Section 6.1.
6.2 Form of Consideration for Decedent's Shares. The
Corporation shall be required to pay the repurchase price for a Decedent's
Shares entirely in cash. To the extent the Corporation has lawfully available
funds in such circumstances such payment shall be made against tender of the
certificates representing the Decedents Shares, duly endorsed for Transfer, at
such date within the 90 day period contemplated by Section 6.1 (subject to
extension as contemplated by Section 6.5) as determined by the Corporation and
indicated in a written notice to Decedent's personal representatives.
6.3 Purchase from a Deceased Shareholder in the Event of Lack
of Lawfully Available Funds. In the event that the Corporation lacks the
lawfully available funds, as determined pursuant to Section 91, to repurchase
the shares pursuant to this Section 6, the Decedent shall have the right to
Transfer the Shares pursuant to Section 2.3 or to Transfer the Shares to the
Corporation at a price equal to the greater of the Established Value Per Share
either (i) at the time of the death of the Holder or (ii) at the time when the
Corporation has lawfully available funds to effect such a repurchase.
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6.4 Death to Affect Put Option Notice. In the event a
Shareholder dies after giving a Put Option Notice but before the Closing for
the Shares covered by such notice, the provisions of this Section 6 shall
become operative as to the Shares beneficially owned by the Holder and the
provisions of Section 4 shall be inapplicable to such Shares.
6.5 Application of Next Year's Established Value in Certain
Circumstances; Delay in Closing in Certain Circumstances. In the case of a
Holder's death during the last three months of any calendar year, the personal
representative of a deceased Holder may elect to have the new Established Value
Per Share to be determined as of January 1 of the year commencing after the
date of the Holder's death apply to the repurchase of such Holder's Shares. In
order to make the election to have the Established Value Per Share for the year
subsequent to the date of the Holder's death apply, the personal representative
of the Decedent must provide written notice of such election to the Corporation
within 45 days of the date of death of the Holder. In such event the Closing
shall be delayed until such new Established Value Per Share is determined. In
the case of death of a Holder during the first calendar quarter of any year,
the intention of this Agreement is that the Established Value Per Share to be
determined for that calendar year shall be applicable, and, in the event that
determination of such Established Value Per Share shall be delayed, the Closing
of the repurchase of the Shares shall be delayed accordingly.
6.6 Shares Pledged to the Corporation. The provisions of this
Section 6 shall not apply to any Shares pledged to the Corporation to the
extent the personal representative of the deceased Holder notifies the
Corporation, in writing, that the pledged Shares will be used to discharge any
remaining unpaid indebtedness to the Corporation arising out of the purchase of
such Shares.
7. CERTAIN HOLDERS RIGHTS TO REVIEW PUT OPTION SHARE PRICE.
7.1 Limited Right to Initiate Review Process. Whenever a
Holder or a Decedent, as the case may be, elects to, or is required to, tender
shares to the Corporation for repurchase pursuant to this Agreement, the
purchase price for such shares shall be the Established Value Per Share, unless
the Holder or the Decedent, as the case may be, elects to utilize the
procedures specified in this Section 7 to seek to determine an alternate
Established Value Per Share. A Holder or a Decedent, as the case may be, may
utilize the provisions of this Section 7 only if the Shares to be repurchased
from the Holder or the Decedent as the case may be, has an aggregate value of
at least $250,000 based on the applicable Established Value Per Share. The
provisions of this Section 7 shall have no effect on persons who have not
affirmatively elected to be governed by its provisions.
7.2 Right to Utilize Alternate Procedures. A Holder or
Decedent, as the case may be, shall have the right to request a reconsideration
of the Established Value Per Share that would otherwise be the basis for the
purchase price of his Shares by the Corporation provided that notice to such
effect is provided to the Corporation either in the Put Option Notice or within
30 days in the case of the death or Termination of a Holder. The notice shall
include a designation of an appraiser (the "Second Appraiser") who shall review
the Established Value Per Share computed by the Appraiser or otherwise
determined pursuant to Section 3.2. The Second
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Appraiser shall be a qualified, independent appraiser selected in good faith by
the Holder or the Decedent as the case may be, and shall be experienced in
valuing energy-related business enterprises. The Appraiser and the Second
Appraiser shall select a third appraiser (the "Consensus Appraiser"), who shall
be similarly qualified, whereupon the Second Appraiser and the Consensus
Appraiser shall each independently redetermine the Established Value Per Share
using the valuation guidelines specified in Section 3.3 and submit to the
Corporation and the Shareholder or the Decedent, as the case may be, exercising
rights under this Section 7 written reports within 90 days on their respective
views on an alternate Established Value Per Share.
7.3 Recomputation of Established Value Per Share. Upon
receipt of the reports of the Second Appraiser and the Consensus Appraiser, the
Established Value Per Share shall be recomputed as follows, which Recomputation
shall govern determination of the purchase price applicable to the Holder or
the Decedent, as the case may be, who has elected to utilize the procedures of
this Section 7. First, the three determinations of the Established Value Per
Share shall be added together and divided by three to compute an initial
average Established Value Per Share; second, the Established Value Per Share
which deviates the greatest (either upward or downward) from the initial
average Established Value Per Share shall be disregarded; and, third, the
remaining two Established Value Per Shares shall be added together and divided
by two, and the result of this computation shall be the Established Value Per
Share which shall govern the transaction in question.
7.4 Effect of Determinations tinder Section 7. Any
determination of a revised Established Value Per Share based upon this Section
7 shall be binding on such Holder or Decedent, as the case may be with respect
to the Shares to be purchased by the Corporation at that time. In addition, the
determination of the revised Established Value Per Share based on this Section
7 shall be binding on a Holder as to any subsequent exercise of the Put Option
during the calendar year in which the Put Option Notice is first given, but
shall have no effect on the Established Value to be applicable to any other
Holders.
7.5 Use of Section 7 by Two or More Holders. In the event
that two or more Holders shall seek to exercise their rights under this Section
7, the provisions of Section 7 shall operate independently with respect to each
Holder, unless the Holders determine, in their sole discretion, to utilize the
same Second Appraiser and Consensus Appraiser, in which event each such Holder
shall be jointly and severally liable for all expenses required to be paid by
Holders pursuant to this Section.
7.6 Costs under Section 7. The cost of the Second Appraiser
shall be borne by the Holder exercising his rights under this Section 7. The
cost of the Consensus Appraiser shall be borne equally by the Corporation, as
to half the cost, and the Holder exercising his rights, as to the other half,
except that, in the case of Holder who is exercising his Put Option Rights
pursuant to Section 4, the full cost of the Second Appraiser and the Consensus
Appraiser shall be borne by the Option Shareholder if he subsequently withdraws
his tendering Put tender of Put Option Shares pursuant to his Put Option
Notice.
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8. FINANCIAL REPORTING.
The Corporation shall provide Holders (including Decedents
until the Corporation has purchased the Shares from the Decedents) the
following reports at the times indicated: (i) within 90 days of year end,
audited annual financial statements, prepared in accordance with generally
accepted accounting principles and accompanied by a report of a "Big Six"
accounting firm; (ii) within 45 days of the end of each of the first three
calendar quarters, quarterly reports containing unaudited financial statements;
and (iii) within 15 days after each determination of Established Value Per
Share or any change therein, a written notice concerning the determination of
Established Value Per Share and any changes thereto and Holders shall have
access to the report of the Appraiser with respect to such determination. Such
reports or notices shall be furnished to each Holder as his or her name appears
on the Corporation's stock transfer records.
9. LACK OF LAWFULLY AVAILABLE FUNDS.
9.1 The Holders acknowledge (i) that Section 13.1-653 of the
Virginia General Stock Corporation Act restricts the Corporation's ability to
make distributions, including redemptions and repurchases of Common Stock, if
after giving effect thereto the Corporation would not be able to pay its debts
as they become due in the usual course of business or if the Corporation's
total assets would be less than the sum of its total liabilities and the
liquidation preference of its preferred stock (the latter being approximately
$39.9 million as of the date hereof), and that such computations may be done on
a book value or a fair market value approach; and (ii) the terms of the
Corporation's current bank credit agreement limit dividends and distributions,
including redemption and stock repurchase payments, to an aggregate of $2
million plus cumulative net income earned by the Corporation since December 31,
1994. To the extent that any of the foregoing prohibit the redemption of
Shares, the Corporation shall be deemed to not have lawfully available funds
available for the repurchase of Shares, in which event the Corporation shall
not be obligated to purchase the Shares pursuant to this Agreement. The lack of
lawfully available funds shall not prejudice a Holder's rights to cause his
Shares to be repurchased whenever lawfully available funds become available
(for purposes of transactions by Terminated Shareholders and on behalf of
Decedents pursuant to Sections 5 and 6, respectively) and when the Holder is
next permitted pursuant to Section 4 to tender a Put Option Notice. The Holders
also acknowledge that Statoil has no obligation to invest additional capital in
the Corporation for any purpose, including without limitation for the purpose
of providing the Corporation with lawfully available funds under this
Agreement.
9.2 Partial Lack of Lawfully Available Funds. The provisions
of Section 9.1 notwithstanding, if the Corporation has lawfully available funds
in an amount insufficient to complete an entire purchase pursuant to Sections
4, 5 and 6, the amount which may lawfully be paid shall be paid immediately to
the Decedents and the Terminated Shareholders based on when the repurchase
obligation arose. In the case of Decedents, the repurchase obligation is deemed
to have arisen on the date of death of the Holder and in the case of Terminated
Shareholders, the repurchase obligation is deemed to have arisen on the date of
Termination. Any remaining lawfully available funds will be paid to the Holders
who have amended their Put Option Notice pursuant to Section 4.3 and will be
paid to such Holders in order or priority based on when the
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repurchase obligation arose (i.e., when Put Option Notices were received by the
Corporation). All other Put Option Notices will automatically be terminated due
to the lack of lawfully available funds.
9.3 Additional Reporting. In addition to its reporting
obligations under Section 8, whenever the Corporation is unable to purchase
Shares because lawfully available funds are not available, there affected
Holders quarterly updates Corporation shall send to the regarding the status of
any change in lawfully available funds together with any changes in the
Established Value Per Share.
9.4 Requirement to Give Effect to Insurance Proceeds. In
determining whether the Corporation has lawfully available funds with respect
to a Decedent's Shares required to be repurchased, the determination of
lawfully available funds shall include and give effect to any insurance
proceeds payable to the Corporation with respect to the life of the Decedent.
10. DELIVERY OF CERTIFICATES.
10.1 Closing Date. Any Closing shall take place at 10:00 A.M.
on the date identified in the Corporation's notice pursuant to Sections 4.4,
5.2 or 6.1, as applicable, at the offices of the Corporation. At the Closing,
the stock certificate or certificates representing the Shares shall be
delivered to the Corporation duly endorsed in blank or with stock powers
attached, and the Corporation shall pay the purchase price therefor in cash or,
if permitted by Section 4.5 or Section 5.3 of this Agreement, by paying the
applicable cash portion and making, sealing and delivering the Note for the
remaining portion of the purchase price.
10.2 Effect of Refusal to Close. If a tender of the purchase
price in cash or in cash together with the Note, if applicable, shall be
refused; or the stock certificate or certificates representing the Shares, duly
executed, as aforesaid, shall not be so delivered, the Corporation may deposit
the purchase price in escrow in a commercial bank with offices in Alexandria,
Virginia or Washington, D.C., and, upon such tender, the Shares represented by
such certificates shall thereupon be deemed to have been repurchased.
Thereafter, the Holder or his assigns shall have no rights with respect to such
Shares, other than the right to collect the purchase price from the escrow
contemplated by this Section 10.2.
11. SECURITIES LAWS; RESTRICTIVE TRANSFER LEGENDS.
11.1 Acknowledgment of Restrictions. The Holders severally
acknowledge that the Common Stock owned by them has not been registered under
the Act or any State Acts, The Holders severally represent and wan-ant that
they will acquire their shares of the Common Stock without a view to the offer,
offer for sale, or the sale in connection with the public distribution of such
shares of Common Stock and that they will hold such shares of Common Stock
indefinitely unless (i) the shares of Common Stock are transferred in
accordance with this Agreement, (ii) the shares of Common Stock are
subsequently registered under the Act and the State Acts, or (iii) an exemption
from such registration is available and an opinion of counsel for the
Corporation, in
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form and substance satisfactory to the Corporation, is obtained to that effect.
11.2 Legends. Due to the applicability of federal and state
securities laws and the restrictions imposed by this Agreement, all
certificates representing shares of Common Stock subject to this Agreement
shall be legended conspicuously in substantially the following form:
THE OFFERING AND SALE OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
APPLICABLE STATE SECURITIES LAWS. ANY SALE, TRANSFER, PLEDGE OR OTHER
DISPOSITION OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE
MADE ONLY (I) IN A TRANSACTION REGISTERED UNDER SAID ACT AND ANY
APPLICABLE STATE SECURITIES LAWS, (II) IF AN EXEMPTION FROM
REGISTRATION UNDER SAID ACTS IS AVAILABLE AND THE CORPORATION HAS
RECEIVED AN OPINION OF COUNSEL TO SUCH EFFECT REASONABLY SATISFACTORY
TO IT OR (III) PURSUANT TO THAT CERTAIN EMPLOYEE SHAREHOLDERS
AGREEMENT DATED AS OF MAY 31,1995, AS AMENDED FROM TIME TO TIME.
THE COMPANY WILL FURNISH A FULL STATEMENT OF ALL OF THE
DESIGNATIONS, PREFERENCES, LIMITATIONS AND RELATIVE RIGHTS OF THE
SHARES OF EACH CLASS OF STOCK OR SERIES THEREOF OF THE COMPANY TO ANY
SHAREHOLDER UPON WRITTEN REQUEST TO THE CORPORATION AT ITS PRINCIPAL
PLACE OF BUSINESS OR REGISTERED OFFICE.
THE TRANSFER OF SHARES REPRESENTED BY THIS CERTIFICATE IS
ALSO RESTRICTED BY THE TERMS OF THAT CERTAIN EMPLOYEE SHAREHOLDERS
AGREEMENT DATED MAY 31, 1995, AS AMENDED, AMONG CERTAIN SHAREHOLDERS
OF THE CORPORATION, WHICH AGREEMENTS ALSO CONTAINS OTHER IMPORTANT
PROVISIONS RELATING TO SUCH SHARES, INCLUDING RIGHTS OF THE
CORPORATION TO REPURCHASE THE SHARES IN CERTAIN CIRCUMSTANCES. COPIES
OF THE AGREEMENT ARE ON FILE AT THE CORPORATIONS PRINCIPAL PLACE OF
BUSINESS AND REGISTERED OFFICE AND MAY BE OBTAINED WITHOUT CHARGE UPON
REQUEST TO THE CORPORATION AT ITS PRINCIPAL PLACE OF BUSINESS OR
REGISTERED OFFICE. BY ACCEPTANCE OF THIS CERTIFICATE, THE HOLDER
HEREOF AGREES TO BE BOUND BY THE TERMS OF SUCH AGREEMENT.
11.3 Acknowledgment Regarding Resales. Each Holder realizes
that the Corporation does not file, and does not in the foreseeable future
contemplate filing, periodic reports in accordance with the provisions of
Sections 13 and 15(d) of the Securities Exchange Act of 1934, as amended, or
making publicly available all of the information required by such
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reports, and also understands that, except as contemplated by the Amended and
Restated Registration Rights Agreement dated as of May 2, 1995, the Corporation
has not agreed to register any of its securities for distribution in accordance
with the provisions of the Act or to take any actions respecting the obtaining
of an exemption from registration for such securities or any transaction with
respect thereto. Hence, by virtue of the applicable federal and state
securities laws, the Common Stock acquired by any Holder pursuant to this
Agreement or otherwise must be held indefinitely unless and until subsequently
registered under the Act and/or the State Acts, unless an exemption from such
registration is available, in which case the amount of the Common Stock that
may be sold may be limited or pursuant to this Agreement.
12. STOCK OR OPTIONS ISSUED IN THE FUTURE. Unless otherwise determined
by the Committee, this Agreement shall apply, automatically and without further
action on the part of any party hereto, to all Shares hereafter acquired by all
Holders. Whenever any Holder acquires any shares of Common Stock pursuant to
the Incentive Compensation Plan, the Stock Purchase Plan or otherwise (and
whether or not permitted under any applicable agreement or instrument), such
shares of Common Stock so acquired shall be subject to the terms of this
Agreement, and the certificates therefor shall be surrendered to the
Corporation for legended in accordance with Section 11 of this Agreement,
unless already so legended.
13. LOOK-BACK RIGHTS. If within one year from the date of repurchase
of the Common Stock hereunder upon a Protected Termination (a "Protected
Repurchase"), (i) the Corporation shall make an underwritten public offering of
newly-issued Common Stock or Common Stock owned by Statoil, (ii) Statoil shall
sell to a third party in one or a series of transactions at least 25% of the
capital stock of the Corporation owned by it or (iii) the Corporation shall
undertake any of the following transactions: merger, consolidation, share
exchange, sale, transfer, or other disposition of all or substantially all of
its assets, and as a result of such transactions the shareholders of the
Corporation before the transaction cease to own a majority of the capital stock
of the successor corporation (or the entity to which such assets have been sold
or transferred), the Corporation shall be obligated immediately to pay to any
Holder or former Holder who has participated in such a Protected Repurchase
cash in an amount equal to the number of shares of Common Stock repurchased
multiplied by the excess, if any, of (i) the value of a share of Common Stock
indicated by the terms of such transaction (net of applicable underwriting
discounts) over (ii) the repurchase price for said shares. The payment under
this Section 13 shall be made within five (5) days of the closing of the
transaction referred to in the foregoing sentence.
14. TERMINATION. This Agreement shall be perpetual until the happening
of any of the events listed below, upon the first to occur of which all rights,
duties and obligations, other than the duties and obligations relating to
registration under or exemption from the Act and the State Acts, as set forth
in Section 11 of this Agreement, and rights, duties and obligations respecting
payment under any outstanding Notes to any one or more of the Shareholders,
shall cease:
14.1 The agreement in writing of the Corporation and all
holders of the outstanding shares of Common Stock who are parties to, or who
are bound by, this Agreement to terminate this Agreement.
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14.2 The dissolution of the Corporation.
14.3 The closing of an initial public offering of Common
Stock of the Corporation, whether of newly-issued shares or pursuant to a
secondary offering of shares,
14.4 In the event that there is a merger, consolidation, or
share exchange, or transfer or sale of all or substantially all of the assets
of the Corporation, if, as a result of such transaction, the shareholders of
the Corporation before the transaction cease to own a majority of the Capital
stock of the successor corporation (or the entity to which such assets have
been sold or transferred).
15. NOTICES. Any notice, payment, demand or communication required or
permitted to be given by any provision of this Agreement shall be in writing
and shall either be: (a) delivered personally to the party or to an officer of
the party to whom it is directed, in which case a signed receipt therefor shall
be received; or (b) sent by certified mail, return receipt requested, postage
prepaid, addressed as follows if to the Corporation or if to the Stock or
Option Holders, at the addresses set forth below their several signatures, or
to such other address or addresses as may be designated from time to time in
accordance with this Section 15. Any such notice shall be deemed to be
delivered, given and received for all purposes of this Agreement as of : (i)
the date noted on the signed receipt if delivered personally; or (ii) the date
deposited in a regularly maintained receptacle for the deposit of the United
States mail, if sent by certified mail.
16. ADDITIONAL ACTIONS AND DOCUMENTS. Each of the parties hereto
agrees to take or cause to be taken such further actions, to execute,
acknowledge, seal and deliver or cause to be executed, acknowledged, sealed and
delivered such further instruments and documents, including without limitation
a Registration Rights Agreement, and to use their reasonable efforts to obtain
such requisite consents as any other party may from time to time reasonably
request in order to fully effectuate the purposes and fulfill the intent of
this Agreement.
17. INTEGRATION. This instrument contains the entire integrated
agreement among the parties and supersedes all prior oral or written
agreements, commitments or understandings with respect to the matters provided
for herein (including but not limited to the Original Agreement), and no
modification shall be binding upon the party affected unless set forth in
writing and duly executed by each party affected.
18. SUCCESSORS AND ASSIGNS. Each of the covenants and agreements in
this Agreement by or on behalf of any of the parties hereto shall bind and
inure to the benefit of their respective heirs, guardians, personal and legal
representatives, successors and permitted assigns.
19. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws
of the Commonwealth of Virginia.
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20. SPECIFIC PERFORMANCE. In the event of a breach of this Agreement,
any non-breaching party hereto may maintain an action for specific performance
against the party or parties hereto who are alleged specific performance
against the party or parties hereto have breached any of the terms, conditions,
representations, warranties, provisions, covenants or agreements herein
contained, and it is hereby further agreed that no objection to the form of
action in any proceeding for specific performance of this Agreement shall be
raised by any party hereto so that such specific performance of this Agreement
may not be obtained by the aggrieved party. Anything contained herein to the
contrary notwithstanding, this Section 20 shall not be construed to limit in
any manner whatsoever any other rights and remedies that an aggrieved party may
have by virtue of any breach of this Agreement.
21. HEADINGS. The descriptive headings of the several sections and
subsections of this Agreement are inserted for convenience only, do not
constitute a substantive part of this Agreement, and are not intending to
describe, interpret, define, or limit the scope, extent or intent of this
Agreement as a whole, or any provision hereof. All schedules and exhibits
referred to in this Agreement are hereby deemed a substantive part of this
Agreement.
22. WORD USAGE. Unless the context otherwise requires, whenever used
in this Agreement, the singular shall include the plural, the plural shall
include the singular, and the masculine gender shall include the neuter and
feminine gender, and vice versa. Whenever used in this Agreement, words such as
"herein," "hereinafter," "hereof," "hereto, and "hereunder" refer to this
Agreement as a whole, unless the context otherwise requires.
23. COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be an original, but all of which shall together constitute one
document.
24. SEVERABILITY. Each and every term and provision of this Agreement
is intending to be severable. If any term or provision hereof is illegal or
invalid for any reason whatsoever, such illegality or invalidity shall not
affect the legality or validity of the remainder of this Agreement.
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IN WITNESS WHEREOF, the parties hereunto have executed,
sealed and delivered this Agreement or caused this Agreement to be executed,
sealed and delivered on this 6th day August, 1998.
ATTEST/WITNESS: STATOIL ENERGY, INC.
/s/ KYLA DEAN /s/ DAVID A. DRESNER
David A. Dresner
President and
Chief Executive Officer
ATTEST/WITNESS:
Name:
Shareholder/Option Holder
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Exhibit A
NON-NEGOTIABLE PROMISSORY NOTE
Alexandria, Virginia
, 199
-------------- --
$
-----------------
FOR VALUE RECEIVED, Statoil Energy, Inc., a corporation organized
under the laws of the Commonwealth of Virginia (the "Corporation"), promises to
pay to ________________ (the "Holder") at ______________ or at such other place
as the Holder may from time to time designate in writing, the principal sum of
_______________ Dollars ($ ____________ ), with interest payable thereon as
hereinafter set forth. Interest and principal shall be payable in lawful money
of the United States of America, which shall be legal tender in payment of all
debts, public and private, at the time of payment as follows:
The Corporation shall repay the principal sum, together with interest
at the greatest of ten percent (10%) per annum, 3% above the three month London
Inter-Bank Offered Rate (LIBOR), as published from time to time in the Wall
Street Journal, or the minimum rate of interest required by the Internal
Revenue Code of 1986, as amended, to preclude the imputation of interest, in
twelve (12) equal quarterly installments of $ ______________ beginning on the
first day of the first calendar month following the expiration of sixty (60)
days from the date hereof, and continuing until 19__ , when the unpaid balance
of the principal sum and all unpaid interest thereon shall be paid in full.
All payments received shall be applied first to the payment of accrued
and unpaid interest and any balance to the payment of principal. Interest shall
be computed on the basis of a 360-day per year factor applied to actual days
elapsed.
The Corporation may prepay the principal sum in whole or in part at
any time without premium or penalty, by paying, in addition to the amount
prepaid, interest accrued to the date of prepayment.
Upon default in any payment of interest or of principal and interest,
such unpaid amount shall bear interest thereafter at a rate which is at all
times equal to two percent (2%) per annum in excess of the then current rate of
interest under this Note until the default is cured.
The Corporation shall also pay (i) a late charge of one twentieth
(1/20) of any payment of interest or principal and interest provided above if
such payment is made more than fifteen (15) calendar days after the due date
thereof and (ii) prior to judgment, costs of collection, including a reasonable
attorney's fee, if this Note is referred to an attorney for collection after
default, whether suit be brought or not.
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The rights and remedies of the Holder provided herein shall
be cumulative and concurrent and may be pursued singularly, successively or
together at the sole discretion of the Holder, and may be exercised as often as
occasion therefor shall occur, and the failure to exercise any such right or
remedy shall in no event be construed as a waiver or release of the same.
In the event that any one or more of the provisions of this
Note shall for any reason be held to be invalid, illegal or unenforceable, in
whole or in part or in any respect, or in the event that any one or more of the
provisions of this Note operate or would prospectively operate to invalidate
this Note, then and in either of those events, such provision or provisions
only shall be deemed null and void and shall not affect any other provisions
(or remaining part of the affected provision) of this Note and the remaining
provisions (or remaining part of the affected provision) of this Note shall
remain operative and in full force and effect and shall in no way be affected,
prejudiced or disturbed thereby.
WITNESS the signature and seal of the Corporation by its duly
authorized officer as of the day and year first above written.
[SIGNATURE BLOCK TO COME]
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Exhibit B
UNDERTAKING TO BE BOUND BY
EMPLOYEE SHAREHOLDER AGREEMENT
The undersigned, as the owner of an option to acquire shares
of Common Stock of the Corporation or as the owner of shares of such Common
Stock, hereby acknowledges and agrees that he or she has read and is familiar
with the Employee Shareholders Agreement dated as of May 31, 1995 of Statoil
Energy, Inc., (the "Agreement") that the undersigned agrees to be a Stock or
Option Holder under the Agreement, and that the undersigned or the
undersigned's heirs, executors, administrators, successors, and assigns shall
be bound by the provisions of the Agreement.
ATTEST/WITNESS:
Name
Shareholder/Option Holder