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Exhibit 10.41
MCM GROUP, INC.
LLC UNIT OPTION PLAN
SECTION 1. PURPOSE
The purpose of this MCM Group, Inc. LLC Unit Option Plan is to
foster and promote the long-term financial success of the Company, its
Affiliates and any Subsidiaries and to materially increase unitholder value by
(A) motivating superior performance by participants in the Plan, (B) providing
participants in the Plan with an ownership interest in the Parent LLC, and (C)
enabling the Company, its Affiliates and any Subsidiaries to attract and retain
the services of an outstanding management team upon whose judgment, interest and
special effort the successful conduct of its operations is largely dependent.
SECTION 2. DEFINITIONS
2.1. DEFINITIONS. Whenever used herein, the following terms shall have
the respective meanings set forth below:
(a) "Affiliate" means an entity controlling, controlled by or under
common control with the specified person or entity.
(b) "Alternative Option" has the meaning given in Section 8.2.
(c) "Amended and Restated Parent LLC Agreement" means the amended and
restated limited liability company agreement of the Parent LLC, dated as of
the Effective Date, as amended, supplemented, waived or otherwise modified
and in effect from time to time.
(d) "Applicable LLC Unit Valuation" means, as of any Determination
Date, the annual valuation of the LLC Units as of the last day of the
latest fiscal year of the Parent LLC ending prior to such Determination
Date performed by an independent valuation firm chosen by the LLC Board,
except that (i) in the case of a Determination Date occurring on or after
the Effective Date but prior to the first day of the fourth fiscal quarter
of the Parent LLC's fiscal year ending on June 30, 1998, the term
"Applicable LLC Unit Valuation" shall mean the value per LLC Unit as of the
Effective Date as determined pursuant to Section 1.8 of the
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Merger and Exchange Agreement, and (ii) in the case of a Determination Date
occurring during the fourth fiscal quarter of any fiscal year of the Parent
LLC beginning with the fourth fiscal quarter of its fiscal year ending on
June 30, 1998, the term "Applicable LLC Unit Valuation" shall mean the
annual valuation of the LLC Units as of the last day of such fourth fiscal
quarter performed by an independent valuation firm chosen by the LLC Board.
(e) "Board" means the Board of Directors of the Company.
(f) "C&D Fund" means The Clayton & Dubilier Private Equity Fund IV
Limited Partnership, a Connecticut limited partnership, and any successor
investment vehicle managed by Clayton, Dubilier & Rice, Inc.
(g) "Cause" means (i) the willful failure by the Participant to
perform substantially his duties as an employee of, or in connection with
his provision of services to, any member of the MGI/CERA Group (other than
any such failure due to physical or mental illness) after a demand for
substantial performance is delivered to the Participant by the executive to
whom the Participant reports or by the Board of Directors of the member of
the MGI/CERA Group by which he is employed or to which he provides
services, which notice identifies the manner in which such executive or
such Board, as the case may be, believes that the Participant has not
substantially performed his duties, (ii) the Participant's engaging in
willful and serious misconduct that is or is expected to be injurious to
the MGI/CERA Group,(iii) the Participant's having been convicted of, or
entered a plea of guilty or NOLO CONTENDERE to, a crime that constitutes a
felony, (iv) the willful and material breach by the Participant of any
written covenant or agreement with any member of the MGI/CERA Group not to
disclose any information pertaining to the MGI/CERA Group, not to compete
or interfere with the MGI/CERA Group or with respect to any take-along or
similar covenants applicable to any LLC Units owned by the Participant, or
(v) any material violation by the Participant of any material federal,
state or foreign securities laws; PROVIDED that, with respect to a
Participant who, as of the Determination Date, is employed by any member of
the MGI/CERA Group under an effective employment agreement that contains a
different definition of Cause, the definition of Cause contained in such
employment agreement shall be substituted for the definition set forth
above for all purposes herein.
(h) "CERA" means Cambridge Energy Research Associates, Inc., a
Massachusetts corporation and a wholly owned Subsidiary of the Parent LLC,
and any successor thereto.
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(i) "CERA Performance Option" means a Performance Option the vesting
and exercisability of which is conditioned in whole or in part upon the
attainment of objectives based upon the financial or operating performance
of CERA and/or its Subsidiaries.
(j) "Change of Control" means with respect to, the Parent LLC, the
Company or CERA, the first of the following events to occur after the
Effective Date:
(i) the acquisition by any person, entity or "group" (as defined
in Section 13(d) of the Securities Exchange Act of 1934, as amended)
(other than (v) a member of the MGI/CERA Group, (w) any employee
benefit plan of any member of the MGI/CERA Group, (x) the C&D Fund or
any of its Permitted Transferees, (y) any of Daniel H. Yergin, Joseph
A. Stanislaw or James P. Rosenfield or any of their respective
Permitted Transferees, and (z) in the event that all of the then
outstanding capital stock of the Company or CERA shall be distributed
to members of the Parent LLC, such members), of 50% or more of the
combined voting power of the then outstanding voting securities or
other voting equity interests of the Parent LLC, the Company or CERA,
as applicable;
(ii) the merger or consolidation of the Parent LLC, the Company
or CERA, as applicable, as a result of which persons who were members
of the Parent LLC or stockholders of the Company or CERA, as the case
may be, immediately prior to such merger or consolidation, do not,
immediately thereafter, own, directly or indirectly, securities or
other equity interests representing more than 50% of the combined
voting power of the merged or consolidated company's then outstanding
securities or other voting equity interests;
(iii) the liquidation or dissolution of the Parent LLC (other
than a dissolution occurring upon a merger or consolidation thereof),
the Company or CERA, as applicable, other than a liquidation of the
Company or CERA into the Parent LLC; and
(iv) the sale of all or substantially all of the assets of the
Parent LLC, the Company and its Subsidiaries, if any, or CERA and its
Subsidiaries, as applicable, to one or more persons or entities that
are not, immediately prior to such sale, Affiliates of the Parent LLC,
the Company or CERA, as applicable.
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(k) "Change of Control Price" means (x) with respect to any
transaction involving a Change of Control of the Parent LLC, the price per
LLC Unit paid in conjunction with such transaction and (y) with respect to
any transaction involving a Change of Control of the Company or CERA, the
aggregate net purchase price paid for the Company or CERA, as the case may
be, divided by the aggregate number of LLC Units outstanding, on a fully
diluted basis, immediately prior to the closing of such transaction (in
each case, as determined in good faith by the LLC Board if any part of such
price is payable other than in cash).
(l) "Company" means MCM Group, Inc., a Delaware corporation and a
wholly owned Subsidiary of Parent LLC, and any successor thereto.
(m) "Determination Date" means the date as of which the Fair Market
Value of the LLC Units is to be determined pursuant to the applicable
Option Agreement, generally the effective date of a Participant's
Termination for any reason.
(n) "Effective Date" means the effective date of the Transactions.
(o) "Employee" means any director, executive, senior officer or other
employee of, or consultant to, the Company or any Subsidiary.
(p) "Fair Market Value" means, as of any Determination Date, the fair
market value on such date per LLC Unit, as determined in good faith by the
LLC Board. In making a determination of Fair Market Value, the LLC Board
shall give due consideration to such factors as it deems appropriate,
including, without limitation, the earnings and other financial and
operating information of the MGI/CERA Group in recent periods, the
potential value of the MGI/CERA Group as a whole, the future prospects of
the MGI/CERA Group and the industries in which its members compete, the
history and management of the MGI/CERA Group, the general condition of the
securities markets, the fair market value of securities of companies
engaged in businesses similar to those of the members of the MGI/CERA Group
and the Applicable LLC Unit Valuation. The determination of Fair Market
Value will not give effect to any restrictions on transfer of the LLC Units
or the fact that such LLC Units would represent a minority interest in the
Parent LLC.
(q) "Grant Date" means, with respect to any Option, the date on which
such Option is granted pursuant to the Plan.
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(r) "Involuntary Termination" means Termination by a New Employer for
any reason.
(s) "LLC Board" means the Board of Directors of the Parent LLC.
(t) "LLC Unit" means a unit representing a limited liability company
interest in the Parent LLC, the terms and conditions of which are subject
to and governed by the Amended and Restated Parent LLC Agreement, or the
securities into which such units shall have been converted or for which
such units shall have been exchanged in any merger, consolidation,
reorganization, exchange of securities, liquidation or dissolution or
similar transaction.
(u) "Merger and Exchange Agreement" means the Plan of Merger and
Exchange Agreement, dated as of August 1, 1997, among the Company, the
Parent LLC, GDG Merger Corporation, a wholly owned Subsidiary of the Parent
LLC, the stockholders of CERA named therein and The Goldman Sachs Group,
L.P.
(v) "MGI/CERA Group" means, collectively, the Parent LLC, the Company,
CERA and each of their respective Subsidiaries.
(w) "New Employer" means the Participant's employer, or the parent or
a subsidiary of such employer, immediately following a Change of Control.
(x) "Option" means the right granted pursuant to the Plan to purchase
one LLC Unit from the Company at a price and on terms and conditions
determined in accordance with Section 6.
(y) "Option Agreement" means an agreement between the Company and the
Participant embodying the terms of any Options granted hereunder, which
agreement shall, unless the Board otherwise determines, be substantially in
the form attached hereto as Exhibit A.
(z) "Parent LLC" means Global Decisions Group LLC, a Delaware limited
liability company and the sole stockholder of the Company, and any
successor thereto.
(aa) "Participant" means any Employee designated by the Board, in
consultation with the LLC Board, to participate in the Plan.
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(bb) "Performance Option" means an Option granted pursuant to the Plan
which becomes exercisable in accordance with the provisions of the
applicable Option Agreement based upon the financial or operating
performance of one or more members of the MGI/CERA Group.
(cc) "Permanent Disability" means a physical or mental disability or
infirmity that prevents the performance by the Participant of substantially
all of his duties lasting for a continuous period of six months or longer.
The good faith judgment of the Board as to the Participant's Permanent
Disability shall be final and shall be based on the determination
(evidenced by a written report or certificate) by a physician selected by
the Company or its insurers, and acceptable to the Participant or the
Participant's legal representative (such acceptance not to be unreasonably
withheld), to advise the Board; PROVIDED that, with respect to a
Participant who, as of the Determination Date, is employed by any member of
the MGI/CERA Group under an effective employment agreement that contains a
different definition of Permanent Disability, Disability or Disabled, the
definition contained in such employment agreement shall be substituted for
the definition set forth above for all purposes herein.
(dd) "Permitted Transferee" shall have the meaning assigned to such
term in Section 1.1 of the Amended and Restated Limited Liability Company
Agreement of the Parent LLC, dated as of ________, 1997, as the same may be
amended from time to time, except that, for purposes of the Plan, the term
Permitted Transferee shall not include any transferee described in clause
(v) of the definition of such term.
(ee) "Plan" means this MCM Group, Inc. LLC Unit Option Plan, as the
same may be amended from time to time.
(ff) "Principal Member" means each of the C&D Fund, Daniel H. Yergin,
Joseph A. Stanislaw and James P. Rosenfield (the "Original Principal
Members") and each of their respective Permitted Transferees who are
"accredited investors" within the meaning of rule 501(a) of Regulation D of
the Securities Act of 1933, as amended; PROVIDED, HOWEVER, that a Principal
Member shall cease to be a Principal Member at such time as such person or
entity shall not beneficially own at least 20% of the LLC Units that such
Member (or the applicable Original Principal Member in the case of a
Permitted Transferee) beneficially owned on the Effective Date, and,
PROVIDED, FURTHER, that, solely for the purposes, under this Section
2.1(ff) and Section 7.4, of calculating the number of LLC Units
beneficially owned by a Principal Member who is an individual,
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such number of LLC Units shall be deemed to include any LLC Units held in a
trust the only actual beneficiaries under which are such Principal Member
and/or his brothers and sisters (whether by whole or half blood), spouse,
ancestors and lineal descendants.
(gg) "Public Offering" means the first day as of which sales of LLC
Units are made to the public in the United States pursuant to an
underwritten public offering of such LLC Units led by one or more
underwriters, at least one of which is of nationally recognized standing.
(hh) "Retirement" means a Participant's voluntary Termination at or
after age 60 or such other age as may be specified in the applicable Option
Agreement or, in the case of a Participant who, as of the Determination
Date, is employed by any member of the MGI/CERA Group under an effective
employment agreement that contains a different definition of Retirement,
the definition contained in such employment agreement shall be substituted
for the definition set forth above for all purposes herein.
(ii) "Service Option" means an Option granted pursuant to the Plan
which becomes exercisable in accordance with the provisions of the
applicable Option Agreement based upon a Participant's completion of
service with the applicable member or members of the MGI/CERA Group.
(jj) "Special Termination" has the meaning specified in Section 7.1.
(kk) "Subsidiary" means, with respect to any person, any corporation
or other entity a majority of whose outstanding voting securities or other
voting equity interests is owned, directly or indirectly, by such person.
(ll) "Termination" means the termination of a Participant's employment
with the member of the MGI/CERA Group that employs such Participant, or, in
the case of a Participant who is not an employee of any member of the
MGI/CERA Group, the termination of such Participant's provision of services
to the member of the MGI/CERA Group for which such Participant has been
engaged to perform services.
(mm) "Transactions" means the acquisition by the Parent LLC pursuant
to the Merger and Exchange Agreement of (x) all of the outstanding capital
stock of the Company pursuant to the merger of GDG Merger Corporation, a
Delaware corporation and a wholly owned subsidiary of the Parent LLC, with
and into the
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Company, with the Company as the surviving corporation, and (y) all of the
outstanding capital stock of CERA and certain of the limited partnership
interests of Cambridge Energy Research Associates Limited Partnership, a
Delaware limited partnership, pursuant to the exchange of such capital
stock and such partnership interests for LLC Units and certain other
contingent interests in the Parent LLC.
2.2. GENDER AND NUMBER. Except when otherwise indicated by the
context, words in the masculine gender used in the Plan shall include the
feminine gender, the singular shall include the plural, and the plural shall
include the singular.
SECTION 3. ELIGIBILITY AND PARTICIPATION
Participants in the Plan shall be those Employees selected by the
Board, in consultation with the LLC Board, to participate in the Plan. The
selection of an Employee as a Participant shall neither entitle such Employee to
nor disqualify such Employee from participation in any other award or incentive
plan of any member of the MGI/CERA Group.
SECTION 4. POWERS OF THE BOARD
4.1. POWER TO GRANT. The Board shall determine the Participants to
whom Options shall be granted and the terms and conditions of any and all
Options granted to Participants, PROVIDED that (i) such determinations shall be
made by the Board in consultation with the LLC Board and (ii) an Option may be
granted only if the Parent LLC shall have agreed to issue to or at the direction
of the Company, upon any exercise of such Option, such number of LLC Units as
may be issuable upon such exercise. Nothing in the Plan shall limit the right of
members of the Board (or of the LLC Board) who are Employees to receive awards
hereunder.
4.2. ADMINISTRATION. The Board shall be responsible for the
administration of the Plan. Any authority exercised by the Board under the Plan,
other than in respect of matters required hereunder to be considered in
consultation with the LLC Board, shall be exercised by the Board in its sole
discretion, and any authority exercised by the Board under the Plan in respect
of matters required hereunder to be considered in consultation with the LLC
Board shall be exercised by the Board subject only to such consultation. Subject
to the terms of the Plan, the Board, by majority action thereof, is authorized
to prescribe, amend and rescind rules and regulations relating to the
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administration of the Plan, to provide for conditions and assurances deemed
necessary or advisable to protect the interests of the members of the MGI/CERA
Group, and to make all other determinations necessary or advisable for the
administration and interpretation of the Plan in order to carry out its
provisions and purposes. Determinations, interpretations or other actions made
or taken by the Board pursuant to the provisions of the Plan shall be final,
binding and conclusive for all purposes and upon all persons.
4.3. DELEGATION BY THE BOARD. All of the powers, duties and
responsibilities of the Board specified in the Plan may, to the full extent
permitted by applicable law, be exercised and performed by any duly constituted
committee of the Board, in any such case, to the extent authorized by the Board
to exercise and perform such powers, duties and responsibilities, PROVIDED, THAT
with respect to any Option granted to or exercised by an officer or director of
the Parent LLC or the Company, such committee shall mean a committee of two or
more non-employee directors, each of whom (I) is not an officer or employee of
the Parent LLC or any other member of the MGI/CERA Group and (II) is not
directly or indirectly receiving compensation from the Parent LLC other than for
services performed as a director.
SECTION 5. OPTIONS SUBJECT TO PLAN
5.1. NUMBER. Subject to the provisions of Sections 5.2 and 5.3, the
maximum number of Options (and the maximum number of LLC Units subject to
Options) granted under the Plan at any time may not exceed 154,233, MINUS such
number of options to purchase LLC Units (and number of LLC Units subject to such
options) as may have been granted and are then outstanding or have been
exercised (the "CERA Options") under the Cambridge Energy Research Associates,
Inc. LLC Unit Option Plan, but only to the extent that such number of CERA
Options (and the number of LLC Units subject to such CERA Options) exceeds
308,466.
5.2. CANCELED, TERMINATED OR FORFEITED OPTIONS. Any Option (and the
LLC Unit subject to such Option) which for any reason is canceled, terminated or
otherwise forfeited, in whole or in part, without having been exercised, shall
again be available for grant under the Plan to the extent so canceled,
terminated or otherwise forfeited.
5.3. ADJUSTMENT IN CAPITALIZATION. The number and class of Options
(and the number of LLC Units available for issuance upon exercise of such
Options) granted under the Plan, and the number, class and exercise price of any
outstanding Options (and the number of LLC Units subject to outstanding
Options), may be adjusted by the Board,
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in consultation with the LLC Board, if it shall deem such an adjustment to be
necessary or appropriate to reflect (i) any distribution of LLC Units to members
of the Parent LLC after the Effective Date, any LLC Unit split or combination,
or any recapitalization, merger, consolidation, exchange of LLC Units,
liquidation or dissolution of the Parent LLC, (ii) any distribution by the
Parent LLC of all of the outstanding capital stock of the Company or CERA to
members of the Parent LLC or (iii) in the case of Options other than CERA
Performance Options, the occurrence of any event that would constitute a Change
of Control of CERA.
SECTION 6. TERMS OF OPTIONS
6.1. GRANT OF OPTIONS. Options may be granted to Participants at such
time or times upon or following the Effective Date as shall be determined by the
Board, in consultation with the LLC Board. The Board may provide that different
terms apply to Options granted to a Participant on the same or different Grant
Dates. Each Option granted to a Participant shall be evidenced by an Option
Agreement that shall specify the exercise price at which an LLC Unit may be
purchased pursuant to such Option, the duration of such Option, and such other
terms consistent with the Plan as the Board shall determine, including customary
representations, warranties, and covenants with respect to securities law
matters. Unless otherwise determined by the Board at the Grant Date, such Option
Agreement shall also state that upon exercise of any Options granted thereby and
upon admission to the Parent LLC as a member of the Parent LLC, the holder of
the LLC Units issued upon such exercise will be entitled to the benefits of and
bound by the obligations set forth in the Parent LLC Agreement, to the extent
set forth therein. Such Option Agreement shall, unless the Board otherwise
determines, be substantially in the form attached hereto as Exhibit A.
6.2. EXERCISE PRICE. The exercise price per LLC Unit to be purchased
upon exercise of an Option shall be determined by the Board, in consultation
with the LLC Board, but shall not be less than the Fair Market Value on the
Grant Date.
6.3. EXERCISE OF OPTIONS. (a) SERVICE OPTIONS. Unless otherwise
determined by the Board, in consultation with the LLC Board, at the Grant Date
and as provided in the Option Agreement evidencing the Options granted
hereunder, [20%] of any Service Options granted to a Participant at any time
shall become exercisable on each of the first [five] anniversaries of the Grant
Date of such Service Options, subject in each such case to the Participant's
continued employment with, or, in the case of a Participant who is not an
employee of the Company or any Subsidiary of the Company, continued provision of
services to, any member of the MGI/CERA Group until such
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anniversary date; PROVIDED that 100% of such Service Options shall become
exercisable to the extent provided in Section 8.1.
(b) PERFORMANCE OPTIONS. Any Performance Options granted to a
Participant shall become vested and exercisable as determined by the Board in
consultation with the LLC Board and as provided in the Option Agreement
evidencing such Performance Options granted hereunder.
(c) CONDITIONS TO EXERCISE; DISCRETIONARY AUTHORITY. Notwithstanding
any other provision herein, the Board may accelerate the vesting and/or
exercisability of any Option, all Options or any class of Options, at any time
and from time to time. On or before the date upon which any Participant will
exercise any Option, the Company and such Participant shall enter into a
Management LLC Unit Subscription Agreement substantially in the form attached
hereto as Exhibit B. Notwithstanding any other provision of the Plan, each
Option shall terminate and shall not be exercisable on or after the tenth
anniversary of the Grant Date of such Option.
6.4. PAYMENT. The Board shall establish procedures governing the
exercise of Options, which procedures shall generally require that written
notice of the exercise thereof be given to the Company and that the exercise
price thereof be paid in full in cash or cash equivalents, including by personal
check, at the time of exercise. If so determined by the Board in its sole
discretion at or after the Grant Date, the exercise price of any Options
exercised after there has been a Public Offering may be paid in full or in part
in the form of LLC Units which have been owned by the Participant for at least
six months, based on the Fair Market Value of such LLC Units on the date of
exercise. As soon as practicable after receipt of a written exercise notice and
payment in full of the exercise price of any exercisable Options, the Company
shall deliver to the Participant a certificate or certificates representing the
LLC Units acquired upon the exercise thereof.
SECTION 7. TERMINATION OF EMPLOYMENT
OR CESSATION OF PROVISION OF SERVICES
7.1. SPECIAL TERMINATION. Unless otherwise provided in the Option
Agreement or otherwise determined by the Board after the Grant Date, in the
event of a Termination by reason of the Participant's death, Permanent
Disability or Retirement (each a "Special Termination"), then any Options held
by the Participant that are or become vested and exercisable as of the date of
such Special Termination as provided in the applicable Option Agreement shall
remain exercisable, subject to Section 7.4, solely until the first to occur of
(x) the first anniversary of such Special Termination, or (y) the
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expiration of the term of the Option. Any Options held by the Participant that
are not or have not become vested and exercisable as of the date of the Special
Termination shall terminate and be canceled immediately upon such Special
Termination, and any Options described in the preceding sentence that are not
exercised within the period described in such sentence shall terminate and be
canceled upon the expiration of such period.
7.2. TERMINATION FOR CAUSE. Unless otherwise provided in the Option
Agreement or otherwise determined by the Board after the Grant Date, in the
event of a Termination for Cause, any Options held by such Participant (whether
or not then vested or exercisable) shall terminate and be canceled immediately
upon such Termination.
7.3. OTHER TERMINATION OF EMPLOYMENT. Unless otherwise provided in the
Option Agreement or otherwise determined by the Board after the Grant Date, in
the event of a Termination for any reason other than (i) a Special Termination
or (ii) for Cause, any Options held by such Participant that are or become
vested and exercisable as of the date of such Termination shall remain
exercisable, subject to Section 7.4, for a period of 60 days following such
Termination (or, if shorter, for the remaining term of the Options). Any Options
held by the Participant that are not and do not become vested and exercisable as
of the date of the Participant's Termination shall terminate and be canceled
immediately upon such Termination, and any Options described in the preceding
sentence that are not exercised within the period described in such sentence
shall terminate and be canceled upon the expiration of such period.
7.4. CERTAIN RIGHTS UPON TERMINATION OF EMPLOYMENT PRIOR TO PUBLIC
OFFERING. Unless otherwise provided in the Option Agreement or otherwise
determined by the Board in consultation with the LLC Board after the Grant Date,
each Option Agreement governing Options granted hereunder shall provide that (i)
the Company and (ii) the Principal Members (as a group) shall have successive
rights to purchase from the Participant Options held by such Participant upon
any Termination of such Participant prior to a Public Offering that are or then
become vested and exercisable for a purchase price per Option equal to the
excess, if any, of (x) the Fair Market Value of an LLC Unit on the date of
Termination over (y) the exercise price per LLC Unit pursuant to such Option,
and upon such additional terms and conditions as are set forth in the Option
Agreement(s) evidencing such Options; PROVIDED, that each Principal Member shall
have the right to elect to purchase from the Participant only its or his pro
rata portion (determined as of the date of Termination and on a partially
diluted basis taking into account only such options to purchase LLC Units as are
then exercisable and held by the applicable Principal Member) of such Options;
PROVIDED, FURTHER, that if the Principal Members in the aggregate do not elect,
within the time period set forth in the applicable Option Agreement, to purchase
all of such Options, each Principal Member that had
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elected to purchase all of its or his pro rata portion of such Options shall
have the right to purchase a portion of the remainder of such Options, in an
amount equal to either (i) the product of (x) the aggregate number of such
remaining Options and (y) a fraction, the numerator of which shall be the number
of LLC Units held by such Principal Member (on a partially diluted basis taking
into account only such options to purchase LLC Units as are then exercisable and
held by such Principal Member) and the denominator of which shall be the
aggregate number of LLC Units then held by each Principal Member that had
elected to purchase all of its or his pro rate portion of such Options (on a
partially diluted basis taking into account only such options to purchase LLC
Units as are then exercisable and held by any such Principal Member) or (ii)
such other amount as shall be agreed upon by all such Principal Members. If the
rights of the Company and the Principal Members to purchase all of the vested
and exercisable Options held by such Participant are not fully exercised, other
than as a result of the inability of the Company to complete a purchase due to
restrictions under Delaware law or any applicable financing arrangement of any
member of the MGI/CERA Group, such Participant (or such Participant's estate)
shall be entitled to retain and exercise any vested and exercisable Options not
so purchased, subject to all of the provisions of the Plan and the Option
Agreement evidencing such Options.
SECTION 8. CHANGE OF CONTROL
8.1. ACCELERATED EXERCISABILITY AND PAYMENT. Unless otherwise provided
in the Option Agreement or otherwise determined by the Board in the manner set
forth in Section 8.2, (i) in the event of a Change of Control with respect to
the Parent LLC or the Company, each Service Option (whether or not then vested
and exercisable), each Performance Option that shall have become vested and
exercisable prior to such Change of Control and, as and to the extent provided
in the applicable Option Agreement, a proportionate share, if any, of each
Performance Option that shall not have become vested and exercisable prior to
such Change of Control, and (ii) in the event of a Change of Control solely with
respect to CERA, each CERA Performance Option that shall have become vested and
exercisable prior to such Change of Control and, as and to the extent provided
in the applicable Option Agreement, a proportionate share, if any, of each CERA
Performance Option that shall not have become vested and exercisable prior to
such Change of Control, shall be canceled in exchange for a payment in cash of
an amount equal to the excess, if any, of the Change of Control Price over the
exercise price for such Option. All other outstanding Performance Options or, in
the event of a Change of Control with respect to CERA, CERA Performance Options
shall be canceled and forfeited as of the closing date of the transaction
constituting such Change of Control.
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8.2. ALTERNATIVE OPTIONS. Notwithstanding Section 8.1, no
cancellation, acceleration of exercisability, vesting or cash settlement or
other payment shall occur with respect to any Option as a result of the
occurrence of the applicable Change of Control if the Board reasonably
determines in good faith, prior to the occurrence of such Change of Control,
that such Option shall be honored or assumed, or new rights substituted therefor
(such honored, assumed or substituted Option being hereinafter referred to as an
"Alternative Option") by the New Employer, PROVIDED that any such Alternative
Option must:
(a) provide the Participant that held such Option with rights and
entitlements substantially equivalent to or better than the material
rights, terms and conditions applicable under such Option, including, but
not limited to, an identical or better exercise and vesting schedule, and
identical or better timing and methods of payment;
(b) have substantially equivalent economic value to such Option
(determined at the time of the applicable Change of Control and taking into
account any payment that may be made to the Participant in respect of such
Option); and
(c) have terms and conditions which provide that in the event that
such Participant suffers an Involuntary Termination within two years
following a Change of Control with respect to the Parent LLC or the Company
in case of an Option other than a CERA Performance Option, or with respect
to the Parent LLC, the Company or CERA in the case of a CERA Performance
Option:
(i) any conditions to such Participant's rights under, or any
restrictions on transfer or exercisability applicable to, each such
Alternative Option shall be waived or shall lapse, as the case may be;
or
(ii) such Participant shall have the right to surrender such
Alternative Option within 30 days following such Termination in
exchange for a payment in cash equal to the excess of the Fair Market
Value of the securities subject to the Alternative Option over the
price, if any, that such Participant would be required to pay to
exercise such Alternative Option.
8.3 CERTAIN TAKE-ALONG RIGHTS PRIOR TO A PUBLIC OFFERING. Unless
otherwise provided in the Option Agreement or otherwise determined by the Board
after the Grant Date, each Management LLC Unit Subscription Agreement evidencing
LLC
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Units issued upon the exercise of Options granted hereunder shall provide that,
upon certain transactions described therein, the Participant will be required to
sell such LLC Units then owned by him for a payment per LLC Unit equal to the
Change of Control Price, and upon such additional terms and conditions as are
set forth in such subscription agreement.
SECTION 9. AMENDMENT, MODIFICATION AND
TERMINATION OF THE PLAN
The Board at any time may terminate or suspend the Plan, and from
time to time may amend or modify the Plan, provided that in the case of any
provision requiring consultation with the LLC Board, such provision may only be
amended or modified after prior consultation with the LLC Board, and with
respect to any provision regarding action to be taken by the LLC Board or
impacting the rights or obligations of the LLC Board, any member of the MGI/CERA
Group other than the Company or its Subsidiaries, or any Principal Member, such
provision may only be amended or modified with the prior approval of the LLC
Board. No amendment, modification, termination or suspension of the Plan shall
in any manner adversely affect any Option theretofore granted under the Plan,
without the consent of the Participant holding such Option. Shareholder approval
of any such amendment, modification, termination or suspension shall be obtained
to the extent mandated by applicable law, or if otherwise deemed appropriate by
the Board.
SECTION 10. MISCELLANEOUS PROVISIONS
10.1. NONTRANSFERABILITY OF AWARDS. No Options granted under the Plan
may be sold, transferred, pledged, assigned, encumbered or otherwise alienated
or hypothecated, other than (i) by a Participant to the Company or one or more
Principal Members pursuant to Section 7.4, or (ii) by will or by the laws of
descent and distribution and provided that the deceased Participant's
beneficiary or the representative of his estate acknowledges and agrees in
writing, in a form reasonably acceptable to the Company, to be bound by the
provisions of the Plan (including the purchase rights described in Section 7.4
and the take-along rights described in Section 8.3) and the Option Agreement
covering such Options as if such beneficiary or estate were the Participant. All
rights with respect to Options granted to and held by a Participant under the
Plan shall be exercisable during his lifetime only by such Participant or his
legal representative. Following a Participant's death, all rights with respect
to such Options
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that were exercisable at the time of such Participant's death and have not
terminated shall be exercisable by his designated beneficiary or by his estate.
10.2. BENEFICIARY DESIGNATION. Each Participant under the Plan may
from time to time name any beneficiary or beneficiaries (who may be named
contingently or successively) by whom any right under the Plan is to be
exercised in case of his death. Each designation will revoke all prior
designations by the same Participant, shall be in a form reasonably prescribed
by the Board, and will be effective only when filed by the Participant in
writing with the Board during his lifetime.
10.3. NO GUARANTEE OF EMPLOYMENT OR PARTICIPATION. Nothing in the Plan
or in any Option Agreement shall interfere with or limit in any way the right of
any member of the MGI/CERA Group to terminate any Participant's employment or
provision of services at any time, or confer upon any Participant any right to
continue in the employ of or to provide services to any member of the MGI/CERA
Group. No Employee shall have a right to be selected as a Participant or, having
been so selected, to receive any Options.
10.4. TAX WITHHOLDING. The Company or any other member of the MGI/CERA
Group (as the case may be) employing or engaging the services of a Participant
shall have the power to withhold, or to require such Participant to remit to the
Company or such other member of the MGI/CERA Group, subject to such other
arrangements as the Board may set forth in the Option Agreement to which such
Participant is a party, an amount sufficient to satisfy all federal, state,
local and foreign withholding tax requirements in respect of any Option granted
under the Plan or any LLC Unit purchased upon the exercise of any such Option.
10.5. INDEMNIFICATION. Each person who is or shall have been a member
of the Board or the LLC Board or any committee of the Board or the LLC Board
shall be indemnified and held harmless by the Company and its Subsidiaries to
the fullest extent permitted by law from and against any and all losses, costs,
liabilities and expenses (including any related attorneys' fees and advances
thereof) in connection with, based upon or arising or resulting from any claim,
action, suit or proceeding to which he may be made a party or in which he may be
involved by reason of any action taken or failure to act under the Plan and from
and against any and all amounts paid by him in settlement thereof, with the
Company's approval, or paid by him in satisfaction of any judgment in any such
action, suit or proceeding against him, PROVIDED that he shall give the Company
or, with the consent of the Company, another member of the MGI/CERA Group an
opportunity, at its own expense, to defend the same before he undertakes to
defend it on his own behalf. The foregoing right of indemnification shall
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not be exclusive and shall be independent of any other rights of indemnification
to which such persons may be entitled under the Company's or any such
Subsidiary's certificate of incorporation or by-laws, by contract, as a matter
of law, or otherwise.
10.6. NO LIMITATION ON COMPENSATION. Nothing in the Plan shall be
construed to limit the right of the Company or any other member of the MGI/CERA
Group to establish other plans or to pay compensation to its employees, in cash
or property, in a manner that is not expressly authorized under the Plan.
10.7. REQUIREMENTS OF LAW. The granting of Options and the issuance
of LLC Units pursuant to such Options shall be subject to all applicable laws,
rules and regulations, and to such approvals by any governmental agencies or
national securities exchanges as may be required. No Options shall be granted
under the Plan, and no LLC Units shall be issued upon exercise of any Options
granted under the Plan, if such grant or exercise would result in a violation of
applicable law, including the federal securities laws and any applicable state
or foreign securities laws.
10.8. FREEDOM OF ACTION. Subject to Section 9, nothing in the Plan or
any Option Agreement shall be construed as limiting or preventing any member of
the MGI/CERA Group from taking any action that it deems appropriate or in its
best interest.
10.9. TERM OF PLAN. Subject to the consummation of the Transactions,
the Plan shall be effective as of the Effective Date. The Plan shall thereafter
continue in effect, unless sooner terminated pursuant to Section 9, until the
tenth anniversary of the Effective Date. The provisions of the Plan, however,
shall continue thereafter to govern all outstanding Options theretofore granted.
10.10. NO VOTING RIGHTS. Except as otherwise required by law, no
Participant holding any Options granted under the Plan shall have any right, in
respect of such Options, to vote on any matter submitted to the Parent LLC's
members until such time as the LLC Units issuable upon exercise of such Options
have been so issued and such Participant has been admitted to the Parent LLC as
a member of the Parent LLC.
10.11. GOVERNING LAW. The Plan, and all agreements hereunder, shall be
construed in accordance with and governed by the laws of the State of Delaware,
regardless of the law that might be applied under principles of conflict of
laws.
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EXHIBIT A
* To be filed by amendment.
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EXHIBIT B
* To be filed by amendment.
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