Exhibit 10.10
COMMEMORATIVE BRANDS, INC.
INCENTIVE STOCK PURCHASE PLAN
SECTION 1. ESTABLISHMENT. Commemorative Brands, Inc. hereby
establishes a restricted incentive stock purchase plan for the benefit of its
employees, consultants and independent sales representatives, as described
herein, which shall be known as the "Commemorative Brands, Inc. Incentive
Stock Purchase Plan".
SECTION 2. DEFINITIONS. Whenever used herein, the following
terms shall have the meanings set forth below:
(a) "Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling (including, but not limited
to, all directors and officers of such Person), controlled by, or
under direct or indirect common control with, such Person. A
Person shall be deemed to control a corporation if such Person
has, directly or indirectly, the power to (i) vote ten percent
(10%) or more of the securities having ordinary voting power for
the election of directors of such corporation or (ii) direct or
cause the direction of the management and policies of such
corporation, whether through the ownership of voting securities,
by contract or otherwise.
(b) "Board" means the Board of Directors of Corporation.
(c) "Cause" means with respect to a Grantee
(i) a finding by the Plan Administrator that the Grantee
engaged in a criminal act involving moral turpitude, or
any criminal act or willful misconduct, which in either
case, is inconsistent with his or her employment
responsibilities or contractual relationship with the
Corporation or any or its Affiliates;
(ii) the Grantee's willful and continued failure substantially
to comply with any reasonable policy, standard or
regulation established by the Board or any senior officer
of the Corporation or any of its Subsidiaries or
substantially to comply with any reasonable order, advice
or direction of the Board or any senior officer of the
Corporation or any of its Subsidiaries or substantially to
perform his or her duties, other than due to the Disability
of such Grantee; or
(iii) acts of dishonesty, fraud or theft by the Grantee resulting
in or intending to result in personal gain or enrichment.
(d) "Change in Control" means any public offering of stock, merger,
tender offer, consolidation or sale of all or substantially all
of the stock or assets of the Corporation, or related series of
such events, as a result of which designees of Castle Harlan
Partners II, L.P. and its Affiliates cease to constitute a
majority of the Board.
(e) "Committee" means, if applicable, the committee appointed by the
Board under Section 5 to administer the Plan.
(f) "Common Stock" means the common stock, par value $.01 per share,
of the Corporation.
(g) "Corporation" means Commemorative Brands, Inc., a Delaware
corporation and any successor thereof.
(h) "Disability" means, with respect to a Grantee, a determination by
the Plan Administrator that a Grantee suffers from a physical or
mental condition which prevents such Grantee from engaging in his
or her current position or in another position commensurate with
his or her current position taking into consideration his or her
education, training, and experience for a period of three
consecutive months or for any 120 days in a 360 day period.
(i) "Fair Market Value" means, as of any date, with respect to any
class of stock that is (a) listed on a United States securities
exchange, the last sales price of such stock on such day on the
largest United States securities exchange on which such stock
shall have traded on such day, or if such day is not a day on
which such United States securities exchange was open for
trading, on the immediately preceding day on which such
securities exchange was open, (b) not listed on a United States
securities exchange but which is included in the NASDAQ Stock
Market System (including the NASDAQ National Market), the last
sales price on such system of such stock on such day, or if such
day is not a trading day, on the immediately preceding trading
day, or (c) neither listed on a United States securities exchange
nor included in the NASDAQ Stock Market System, the fair market
value of such stock as determined from time to time by the Plan
Administrator in its sole discretion.
(j) "Grantee" means any eligible person (as described in Section 4)
who shall have been offered or granted the right to acquire
restricted Shares under the Plan.
(k) "Initial Public Offering" means the first offering by the
Corporation to the public generally of Common Stock pursuant to a
registration statement filed with, and declared effective by, the
Securities and Exchange Commission, other than on Forms S-4 or
S-8 (or the equivalent thereof), upon the consummation of which
shares of Common Stock are listed on a
2
United States securities exchange or included in the NASDAQ
Stock Market System.
(l) "Period of Restriction" means the period during which restricted
Shares acquired hereunder are subject to certain repurchase
rights and rights of first refusal and other restrictions on
transfer as described in Sections 14, 15, 16 and 17 hereof which,
except as otherwise provided by the Plan or by a separate
agreement between the Grantee and the Plan Administrator, shall
be a period beginning on the date on which the Grantee was
provided the right to purchase the Shares and ending on the
earlier to occur of (i) the date, if any, upon which the
Corporation undergoes a Change in Control or (ii) the date, if
any, upon which the Corporation consummates an Initial Public
Offering. The Plan Administrator shall have discretion to
otherwise limit or eliminate the Period of Restriction with
respect to Shares purchased or acquired by any Grantee.
(m) "Person" means any individual, partnership, firm, trust,
corporation or other similar entity.
(n) "Plan" means the Commemorative Brands, Inc. Incentive Stock
Purchase Plan as described herein or as from time to time
hereafter amended.
(o) "Plan Administrator" means the Board or, if delegated by the
Board pursuant to Section 5, the Committee.
(p) "Series B Preferred Stock" means the Series B Preferred Stock,
par value $.01 per share, of the Corporation.
(q) "Shares" means, collectively, shares of the Series B Preferred
Stock and Common Stock.
(r) "Subsidiaries" means corporations or other entities 50% percent
or more of the equity of which is owned, directly or indirectly,
by the Corporation.
SECTION 3. PURPOSE. The purpose of the Plan is to enable the
Corporation to retain and motivate those employees, consultants and
independent sales representatives who provide valuable service to the
Corporation or its Subsidiaries, and to provide such employees, consultants
and independent sales representatives with a means of acquiring or increasing
a proprietary interest in the Corporation so that they will have an increased
incentive to work toward the attainment of the long term growth and profit
objectives of the Corporation and its Subsidiaries.
SECTION 4. ELIGIBLE PERSONS. Any employee, consultant or
independent sales representative of the Corporation or any of its
Subsidiaries selected by the Plan Administrator shall be eligible to acquire
restricted Shares under the Plan. In selecting employees, consultants and
independent sales representatives for eligibility, the Plan Administrator
shall consider (i) in the case of employees, their level of responsibility,
(ii) in the case of consultants, the benefits they provide to the Corporation
or its Subsidiaries, and (iii) in the case of independent sales
3
representatives, the level of sales historically achieved by such
representatives or other benefits they provide to the Corporation or its
Subsidiaries. The Plan Administrator may also consider (i) whether such
prospective Grantee has theretofore received an opportunity to purchase or
acquire Shares, (ii) the length of such person's historical tenure or
relationship with the Corporation and its Subsidiaries (iii) the interest of
the Corporation in further securing the Corporation's relationship with such
prospective Grantee, (iv) whether the sale of Shares to such Grantee can be
effected in compliance with, but without registration under, federal or state
securities laws and (v) such other criteria as the Plan Administrator deems
reasonable. No restricted Shares shall be purchased or acquired by a Grantee
until such Grantee consents in writing to abide by the restrictions imposed
on the Shares acquired by him or her.
SECTION 5. ADMINISTRATION. The Plan shall be administered by
the Plan Administrator. The Plan Administrator shall initially be the Board;
PROVIDED, HOWEVER, that the Board may delegate its authority to administer
the Plan, including, but not limited to, the right to determine the specific
allocation of Shares and eligibility to purchase or otherwise acquire Shares
under the Plan, to a Committee consisting of at least three (3) members. The
decision of a majority of the members of the Board or, if applicable, the
Committee shall constitute the decision of the Board or, if applicable, the
Committee, and the Board or, if applicable, the Committee may act either at a
meeting at which a majority of the members are present or by a written
consent signed by all members of the Board or, if applicable, the Committee.
The Plan Administrator shall have the sole, final and conclusive authority to
determine, consistent with and subject to the provisions of the Plan:
(a) the individuals to be selected as eligible persons under
Section 4;
(b) the eligible persons to whom the right to purchase or otherwise
acquire restricted Shares will be granted, allocated or offered
under the Plan;
(c) the time when such grants, allocations or offers shall be made
hereunder;
(d) the number of Shares to be covered under each such grant,
allocation or offer;
(e) the purchase price of any restricted Shares available for
purchase under the Plan; and
(f) the terms and conditions of the respective agreements or
documents by which such grants shall be evidenced, offers or
allocations made or purchases effected.
The Plan Administrator shall also have authority to prescribe, amend and
rescind rules and regulations relating to the Plan, and to make all other
determinations necessary or advisable in the administration, of the Plan.
SECTION 6. NUMBER OF SHARES SUBJECT TO THE PLAN. The total
number of Shares that may be made available for issuance under the Plan shall
not exceed 5% of the total voting power of the Corporation. The Shares
issuable under the Plan shall include Shares previously re-acquired by the
Corporation or re-acquired simultaneously with the making of grants or
effecting
4
of sales pursuant hereto under the Plan, for the purpose of providing
additional Shares to be available for issuance under the Plan. In addition
to the foregoing limitations, the aggregate purchase price attributable to
offers of Shares outstanding under the Plan at any time PLUS securities sold
under the Plan during the preceding twelve months, shall not exceed the
greater of (a) $500,000 and (b) 15% of the Corporation's total assets
measured as of the end of the preceding fiscal year, and in no event shall
the aggregate purchase price exceed $5,000,000.
SECTION 7. UNUSED SHARES. In the event any Shares subject to
grants or offers made under the Plan are not acquired or are repurchased by
the Corporation pursuant to Section 14, 15 or 16 hereof, such Shares shall
again become available for issuance under the Plan.
SECTION 8. ADJUSTMENTS IN CAPITALIZATION. In the event of any
change in the outstanding Shares by reason of a Share dividend, Share split,
recapitalization, merger, consolidation, combination, Share rights plan or
exchange of Shares or other similar corporate change, the aggregate number of
Shares issuable under the Plan shall be appropriately adjusted by the Plan
Administrator, whose determination shall be conclusive. In such event, the
Plan Administrator shall also have discretion to make appropriate adjustments
in the price of Shares subject to the Corporation's repurchase rights under
Sections 14 and 15 hereof and in the number and type of Shares subject to
restricted Share purchase rights then outstanding under the Plan pursuant to
the terms of such rights or otherwise. Without limiting the generality of
the foregoing, if the Company's Series B Preferred Stock and or Common Stock
is recapitalized into multiple classes of preferred stock or common stock,
the kind of Shares subject to the Plan shall be converted into, and shall
thereafter be, those shares of preferred stock and/or common stock intended
for broad general ownership rather than any class of special, super-voting or
other control stock.
SECTION 9. RESTRICTED SHARE ALLOCATION. The Plan Administrator
may, consistent with the other provisions of the Plan, make available for
purchase or acquisition under the Plan restricted Shares to any eligible
persons described in Section 4. Such grants, allocations or offers shall be
subject to the following terms and conditions and to such other terms and
conditions not inconsistent herewith as the Plan Administrator, in its sole
discretion, may deem appropriate in each case:
(a) OFFERING. From time to time, the Plan Administrator may make
available for purchase or acquisition under the Plan restricted
Shares. The offering shall specify the eligible person or
persons to purchase Shares and shall specify the number of Shares
available for purchase by each such eligible person; PROVIDED,
HOWEVER, that (i) if for any offering the Corporation receives
elections to purchase a number of Shares that exceeds the
aggregate number of Shares available for purchase under such
offering, the allocation of Shares for the individuals who have
elected to purchase Shares shall be reduced by the Plan
Administrator in a manner determined by the Plan Administrator,
in its sole discretion, so that the total number of Shares
purchased does not exceed the total number of Shares subject to
the offering and (ii) if for any offering the Corporation
receives elections to purchase a number of Shares that is less
than the aggregate number of Shares offered to eligible persons
in the Offering, the Plan Administrator
5
may, in its sole discretion, reallocate and reoffer such
unpurchased Shares in any manner that the Plan Administrator,
in its sole discretion, determines to be appropriate. The Plan
Administrator shall, at the time of each offering, specify the
duration of the offering.
(b) SHARE PRICE. The price per Share to be paid for Shares in an
offering shall be equal to the price set by the Plan
Administrator for such offering.
(c) PURCHASE. In order to purchase or acquire Shares under any
offering pursuant to the Plan, the Grantee must send written
notice to the Corporation and take such other action and execute
and deliver such other documents or agreements as may be required
by the terms of the offering. The purchase price for the Shares
to be purchased must be paid by the Grantee in full in cash at
the time designated in the Offering.
(d) CERTIFICATES. The certificate or certificates for the Shares (or
for interests in any voting trust with respect thereto) issuable
under the Plan shall be issued as promptly as practicable after
such purchase. A Grantee shall not have any rights as a
stockholder with respect to the Shares (or a beneficiary with
respect to any voting trust in respect thereof) until the date of
issuance of a certificate to him or her for such Shares (or for
interests in any voting trust with respect thereto). In no case
may a fraction of a Share be purchased or issued under the Plan.
(e) ADDITIONAL TERMS. The Plan Administrator may make any offering
of Shares hereunder subject to such additional terms and
conditions as it deems appropriate to comply with federal or
state securities laws or otherwise in the best interests of the
Corporation.
SECTION 10. RESTRICTIONS ON TRANSFERABILITY. Unless and until
the Corporation's rights to repurchase the Shares purchased hereunder shall
have terminated as provided in Sections 14 and 15 hereof, no Shares acquired
under the Plan may be sold, transferred, pledged, assigned or otherwise
alienated or hypothecated other than to the Company. Thereafter and until
the earlier to occur of a Change in Control or an Initial Public Offering, no
Shares acquired under the Plan may be sold or transferred except in strict
compliance with the terms of the Plan and subject to the terms thereof. All
rights granted to a Grantee under the Plan shall be exercisable during the
Grantee's lifetime only by the Grantee or the guardians or legal
representatives of the Grantee. Upon the death of a Grantee, the personal
representative or beneficiary of the Grantee may exercise the Grantee's
rights, and shall be bound by the Grantee's obligations, under the Plan.
SECTION 11. SHARES SUBJECT TO VOTING TRUST. The Plan
Administrator may, in its sole discretion, require that in any offering of
Shares hereunder, a Grantee who purchases or acquires Shares shall, as a
condition precedent to the right of such Grantee to purchase or acquire such
Shares, execute and become a party to any stockholders' agreement or voting
trust agreement with respect to the Company's Shares as the Plan
Administrator, in its sole discretion, deems advisable and to deposit such
Shares in any voting trust described therein.
6
SECTION 12. REMOVAL OF RESTRICTIONS. Except as otherwise
provided in Section 14, 15, 16 or 17 hereof or in any other legally binding
document governing such Shares (including, but not limited to the
Corporation's Certificate of Incorporation, as amended, or By-Laws, as
amended, or any Voting Trust Agreement or Stockholders' Agreement),
restricted Shares acquired under Section 9 shall become freely transferable
by the Grantee after the last day of the Period of Restriction.
SECTION 13. OTHER RESTRICTIONS. The Board or the Plan
Administrator may impose such other or additional restrictions on any Shares
issued pursuant to the Plan as it may deem advisable.
SECTION 14. EFFECT OF TERMINATION OF EMPLOYMENT OR CONSULTANCY
OR INDEPENDENT SALES REPRESENTATIVE STATUS WITHOUT CAUSE OR DUE TO DEATH,
TOTAL DISABILITY OR RETIREMENT. In the event a Grantee terminates his or her
employment or, if applicable, his or her association with the Corporation as
a consultant or independent sales representative because of death, Disability
or retirement or the Grantee's employment or association with the Corporation
as a Consultant or independent sales representative is terminated by the
Corporation without Cause during the Period of Restriction, the Corporation,
or its permitted assigns, shall have the right to repurchase, in whole or in
part, such Grantee's Shares within the 180 calendar day period following such
Grantee's termination of employment or association with the Corporation at
the then Fair Market Value thereof. The purchase of the Shares pursuant to
the foregoing may, at the discretion of the Plan Administrator, and subject
to any applicable debt restrictions binding on the Corporation, be paid for
either in cash or partly in cash with the balance payable under a note to be
issued by the Corporation to the Grantee having such terms as the Plan
Administrator in its sole discretion deems appropriate. If the Corporation
or its permitted assigns elects to repurchase such Grantee's Shares, then
from and after the date that the Corporation or its permitted assigns shall
have tendered to such Grantee, or his or her representative, the
consideration payable for such repurchase, all rights and privileges incident
to the ownership of such Shares (including, but not limited to, the right to
receive dividends thereon) shall cease, except the right to receive the
purchase price therefor plus a sum equal to dividends, if any, declared but
remaining unpaid on the date of purchase, without interest, and from and
after such date the Corporation shall be at liberty to cancel the certificate
or certificates representing such Shares upon the books of the Corporation.
If neither the Corporation nor its permitted assigns elects to exercise the
right granted in the foregoing sentences, the Corporation's right to
repurchase such Grantee's Shares shall automaically terminate. The
Corporation may, at its option, assign any of its rights to repurchase under
this Section 14 to Castle Harlan Partners II, L.P. ("CHPII") or any of its
Affiliates. Notwithstanding anything contained herein to the contrary, the
repurchase rights provided under this Section 14 are not intended, and should
not be construed, to supersede any existing and ongoing rights of first
refusal that the Corporation may have with respect to the Shares under
Section 16 hereof or outside of the Plan.
SECTION 15. OTHER TERMINATION OF EMPLOYMENT OR CONSULTANCY OR
INDEPENDENT SALES REPRESENTATIVE STATUS. In the event that a Grantee's
employment or, if applicable, his or her association with the Corporation as
a consultant or independent sales representative is terminated by the
Corporation for Cause, or by the Grantee for reasons other than death,
Disability or retirement during the Period of Restriction, then any Shares
still subject to restrictions at the date of such termination shall be made
available to the Corporation, or its permitted assigns, for
7
repurchase, in whole or in part, for the 180 calendar day period commencing
at the date such Grantee's employment or association is terminated for a
price equal to the lesser of (a) the then current Fair Market Value of such
Shares and (b) the purchase price paid therefor by the Grantee; PROVIDED,
HOWEVER, that if after the initial purchase of the Shares by the Grantee
there has been a change in the capitalization of the Corporation described in
Section 8 hereof, the repurchase price shall be appropriately adjusted by the
Plan Administrator, if necessary, consistent with such change in
capitalization. The Corporation shall exercise its repurchase rights by
notifying the Grantee of the number of Shares which the Corporation desires
to repurchase and by providing payment equal to the repurchase price for such
Shares within the one hundred eighty (180) calendar day period. The purchase
of the Shares by the Corporation pursuant to the foregoing, may, at the
discretion of the Plan Administrator and subject to any applicable debt
restrictions binding on the Corporation, be paid for either in cash or
partially in cash with the balance payable under a note issued by the
Corporation having such terms as the Plan Administrator, in its sole
discretion, deems appropriate. If the Corporation or its permitted assigns
elects to purchase such Grantee's Shares, then from and after the date that
the Corporation shall have tendered the purchase price payable therefor to
the Grantee or his or her representative, all rights and privileges incident
to the ownership of such Shares (including, but not limited to the right to
receive dividends thereon) shall cease, except the right to receive the
purchase price therefor plus a sum equal to dividends, if any, declared but
remaining unpaid on the date of purchase, without interest, and from and
after such date the Corporation shall be at liberty to cancel the certificate
or certificates representing such Shares upon the books of the Corporation.
If neither the Corporation, nor its permitted assigns, elects to exercise the
right granted in the foregoing sentences, the Corporation's right to
repurchase such Grantee's Shares shall automatically terminate. The
Corporation may, at its option, assign any of its rights to repurchase under
this Section 15 to CHPII or any of its Affiliates. Ntwithstanding anything
contained herein to the contrary, the repurchase rights provided under this
Section 15 are not intended, and should not be construed, to supersede any
existing and ongoing rights of first refusal that the Corporation may have
with respect to the Shares under Section 16 hereof or outside of the Plan.
SECTION 16. RIGHT OF FIRST REFUSAL. (a) If at any time any
Grantee wishes to transfer any Shares held by him or her, to the extent
permissible hereunder, then such Grantee must deliver to the Corporation and
CHPII a written notice of his or her desire to so transfer (a "Notice of
Intention") such Shares, accompanied by a copy of a bona-fide third party
offer (an "Offer") relating to such transfer, setting forth such Grantee's
desire to make such transfer pursuant to the terms of the Offer, the number
of shares of Common Stock and Series B Preferred Stock proposed to be
transferred (the "Offered Shares") and the price (the "Offer Price") at which
such Grantee proposes to transfer such stock. Shares of Common Stock and
Series B Preferred Stock may only be transferred in units consisting of one
share of Series B Preferred Stock and one share of Common Stock each.
(b) Upon receipt of the Notice of Intention, the Corporation shall
have the right to purchase at the price specified in the Notice of Intention,
all or any portion of the Offered Shares, exercisable by the delivery of
notice to such Grantee (the "Notice of Exercise"), with a copy to CHPII,
within 30 days from the date of receipt of the Notice of Intention. In the
event the Corporation elects not to exercise its right to purchase the
Offered Shares (or if the Corporation fails to provide the Notice of Exercise
within such 30-day period), CHPII or its
8
Affiliates may exercise the right set forth in this Section 16 to purchase
the Offered Shares by providing a Notice of Exercise within 45 days after the
date of its receipt of the Notice of Intention. The rights of the
Corporation and CHPII and its Affiliates pursuant to this Section 16 shall
terminate if not exercised within 30 days, in the case of the Corporation, or
45 days, in the case of CHPII and its Affiliates, after receipt of the Notice
of Intention.
(c) In the event the Corporation or CHPII or any of its Affiliates
exercises its rights to purchase all or a portion of the Offered Shares, then
such Grantee must sell the Offered Shares to the Corporation or CHPII or its
Affiliate, as applicable, after not less than 30 days and not more than 60
days from the date of the delivery of the Notice of Exercise received by such
Grantee.
(d) If the Notice of Intention has been duly given and the
Corporation and CHPII and its Affiliates elect not to exercise their rights
or wish to exercise their rights only as to a portion of the Offered Shares,
then the Grantee shall have the right for a period of up to 60 days from the
expiration of the 45 day period commencing on the date of delivery of the
Notice of Intention (unless such Grantee is notified prior to such date by
both the Corporation and CHPII that neither intends to exercise its rights
under this Section 16 in which case the Grantee shall have the right for a
period of up to 60 days from the date it has been so notified by both the
Corporation and CHPII) to sell the Offered Shares (or any portion thereof not
purchased by the Corporation or CHPII) to any such third party for a price
not less than the Offer Price and on the same terms and conditions as
provided in the Notice of Intention; provided, that upon consummation of such
sale, such third party is required to execute (i) an appropriate agreement
with the Company agreeing to be bound by all of the restrictions on such
Shares contained in the Plan, including, without limitation, Sections 16 and
17 thereof, and any other agreement between the Company and the Grantee with
respect to the Shares and (ii) an appropriate supplement to the Voting Trust
Agreement agreeing to become a party to, and to be bound by the terms and
provisions of, the Voting Trust Agreement.
(e) In the event the Corporation and CHPII and its Affiliates do
not exercise their rights under this Section 16 to purchase the Offered
Shares and the Grantee shall not have sold the Offered Shares to the third
party within the above-provided 60-day period, then such Grantee shall not be
permitted to give another Notice of Intention for a period of 180 days from
the last day of such 60-day period.
SECTION 17. RIGHTS TO COMPEL SALE. (a) In the event that at
any time CHPII proposes to sell (a "Compelled Sale") to an unaffiliated third
party (a "Compelled Sale Purchaser") any of the shares of Series B Preferred
Stock or Common Stock and any other equity securities (including, without
limitation, warrants, options and preferred stock) of the Corporation (each,
an "Investment Unit" and collectively, "Investment Units") held by it, then
CHPII, at its option, may require a Grantee to sell the same percentage or
all of the Investment Units then held by such Grantee, to the Compelled Sale
Purchaser, for the equivalent consideration per Investment Unit (a "Compelled
Sale Offer Price(s)") and otherwise on the same terms and conditions upon
which CHP sells its Investment Units.
(b) If CHP elects to exercise its right to compel a sale pursuant
to this Section 17, CHPII shall deliver a written notice (a "Compelled Sale
Notice") of the Compelled
9
Sale to each Grantee and the Corporation at least twenty (20) days prior to
the consummation of any such sale, setting forth the Compelled Sale Offer
Price(s), the identity of the Compelled Sale Purchaser and the other terms
and conditions thereof. The closing of the Compelled Sale shall take place
on such date and at such time as CHPII specifies to the Grantee. Each Grantee
shall deliver to CHPII in escrow, not less than five Business Days before the
proposed date of consummation of the Compelled Sale Offer, the duly endorsed
certificate or certificates representing the requisite number of the
Investment Units owned by such Grantee, together with a limited power of
attorney authorizing CHPII to transfer such Investment Units to the Compelled
Sale Purchaser pursuant to the terms of the Compelled Sale Offer at the
Compelled Sale Offer Price(s), and in accordance with the provisions hereof.
(c) The closing of the Compelled Sale shall take place on such
date and at such time as CHPII specifies to the Grantee. Immediately after
completion of any such sale pursuant to this Section 17, CHPII shall notify
the Corporation and each Grantee of such completion and shall furnish such
evidence of such sale (including time of completion) and the terms thereof as
the Corporation or any Grantee may reasonably request. CHPII shall
substantially concurrently with such closing also remit to each Grantee the
proceeds of such sale attributable to the sale of such Grantee's Investment
Units immediately upon receipt thereof.
(d) No Grantee required to sell Investment Units pursuant to a
Compelled Sale Offer shall be required to make any representation or warranty
in connection with such Compelled Sale Offer other than as to such Grantee's
ownership and authority to transfer, free and clear of all liens, claims,
encumbrances and rights of third parties, the Investment Units proposed to be
sold by it.
SECTION 18. CERTIFICATE LEGEND. Each certificate representing
restricted Shares granted pursuant to the Plan, or interests in any voting
trust with respect thereto, shall bear, in addition to any other legend
provided for herein, the following legend:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD UNLESS THE
REGISTRATION PROVISIONS OF SUCH LAWS HAVE BEEN COMPLIED WITH OR THE
COMPANY RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO IT THAT SUCH
REGISTRATION IS NOT REQUIRED.
"THE SALE, TRANSFER, PLEDGE OR OTHER DISPOSITION OF THE SECURITIES
EVIDENCED BY THIS CERTIFICATE OR OF ANY INTEREST THEREIN, WHETHER
VOLUNTARY, INVOLUNTARY, OR BY OPERATION OF LAW, IS SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER AND REPURCHASE RIGHTS AND RIGHTS OF FIRST
REFUSAL SET FORTH IN THE INCENTIVE STOCK PURCHASE PLAN (THE "PLAN") OF
COMMEMORATIVE BRANDS, INC. (THE "COMPANY") AND CERTAIN AGREEMENTS
EXECUTED IN CONNECTION THEREWITH. NO TRANSFER, SALE, ASSIGNMENT,
10
PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES EVIDENCED
BY THIS CERTIFICATE OR ANY INTEREST THEREIN MAY BE MADE EXCEPT IN
ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF THE PLAN AND SUCH
AGREEMENTS. COPIES OF THE PLAN AND SUCH AGREEMENTS ARE ON FILE WITH
THE COMPANY."
At the end of the Period of Restriction, the Grantee or its permitted
transferees, if any, shall be entitled to have the legend required by this
Section 18 (other than to the extent it refers to any then existing
restrictions under applicable federal and state securities laws) removed from
such Share certificate(s) or Voting Trust certificates with respect thereto.
SECTION 19. DIVIDENDS AND OTHER DISTRIBUTIONS. During the
Period of Restriction, Grantees holding restricted Shares granted hereunder
shall be entitled to receive all dividends and other distributions, if any,
paid with respect to those Shares while they are so held. If any such
dividends or distributions are paid in Shares, such Shares shall be subject
to the same restrictions on transferability and other terms and restrictions
as the restricted Shares with respect to which they were paid.
SECTION 20. NO RIGHT TO CONTINUED SERVICE. Nothing in the Plan
or in any agreement entered into pursuant hereto shall confer on any person
any right to continue in the employ or service of, or to continue his or her
other association with, the Corporation or any Subsidiary or affect any
rights the Corporation or the stockholders of the Corporation or any of their
respective Subsidiaries or Affiliates may have to terminate his or her
employment, services or association at any time.
SECTION 21. AMENDMENT AND TERMINATION. The Board may at any
time amend, modify, alter, or terminate the Plan; PROVIDED, HOWEVER, that no
such amendment, modification, alteration or termination shall adversely
affect any Shares which have already been offered and/or purchased before the
date such amendment, modification, alteration or termination is approved.
SECTION 22. INDEMNIFICATION. No person who is or shall have
been a member of the Board or any Committee of the Board shall be personally
liable by reason of any action taken or any agreement made or any other
contract or other instrument executed by such member or on such member's
behalf in connection with the administration or interpretation of the Plan or
for any mistake of judgment made in good faith. The Corporation will
indemnify and hold harmless each current and former employee, officer or
director of the Corporation to whom any duty or power relating to the
administration or interpretation of the Plan may be allocated or delegated
from and against any loss, cost, liability or expense that may be imposed
upon or reasonably incurred by him or her in connection with or resulting
from any claim, action, suit, or proceeding to which he or she may be a party
or in which he or she may be involved by reason of any action taken or
failure to act under the Plan, other than any such loss, cost, liability or
expense arising out of or caused by such person's own fraud or bad faith, and
against and from any and all amounts paid by him or her in settlement thereof
with the Corporation's approval or paid by him or her in satisfaction of a
judgment in any such action, suit or proceeding against him or her, provided
he or she shall give the Corporation an opportunity, at its own expense, to
handle and
11
defend the same before he or she undertakes to handle and defend it on his or
her behalf. The foregoing right of indemnification shall not be exclusive of
any other rights of indemnification to which such persons may be entitled
under the Corporation's Certificate of Incorporation, as amended, or By-Laws,
as amended, as a matter of law, or otherwise, or any power that the
Corporation may have to indemnify them or hold them harmless.
SECTION 23. GOVERNING LAW. The Plan, and all grants and other
documents delivered hereunder, shall be construed in accordance with and
governed by the laws of the state of Delaware.
SECTION 24. EXPENSES OF PLAN. The expenses of administering
the Plan shall be borne by the Corporation.
SECTION 25. SUCCESSORS. The Plan shall be binding upon the
successors and assigns of the Eligible Persons.
SECTION 26. WITHHOLDING. Whenever the Corporation proposes or
is required to issue or transfer Shares under the Plan, the Corporation shall
have the right to require the Grantee or his or her legal representative to
remit to the Corporation any amount sufficient to satisfy any federal, state
and/or local withholding tax requirements prior to the delivery of any
certificate or certificates for such Shares.
SECTION 27. EFFECTIVE DATE. This Plan shall be effective as of
July 7, 1998.
12